January 28, 2020 / 7:30 AM / a month ago

Crest Nicholson posts lower profit, outlook for sector encouraging

(Reuters) - Crest Nicholson Holdings (CRST.L) on Tuesday reported a drop in annual pretax profit, but said the outcome of Prime Minister Boris Johnson’s sweeping victory should provide some support for the sector in the near term.

Crest Nicholson, which operates in Southern half of England, was hit by weaker consumer confidence during the year which led to Britons buying fewer houses.

The company, under new Chief Executive Officer Peter Trustcott, is looking to shore up its business and return to profit growth after it suffered a Brexit-driven drop in prices. Problems have been further compounded by rising costs that have pressured margins.

The company said on Tuesday that it saw some “encouraging signs” and that traffic and visitors at its sites had increased.

Shares are up 1.1% to 445.2 pence at 0816 GMT.

Analysts believe that Johnson’s win in December has boosted the mood for consumers and could encourage housing demand - pushing up home prices and helping housebuilder margins.

Crest also took an exceptional charge of 18.4 million pounds ($24.18 million) in the current financial year for a change in government guidance on combustible materials.

Crest delivered 2,912 homes during the year ended Oct. 31, while reporting a 3% fall in revenue to 1.09 billion pounds.

Pretax profit fell 39% to 102.7 million pounds.

The company reiterated its profit expectations for 2020.

Reporting by Samantha Machado in Bengaluru; Editing by Bernard Orr

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