Crest Nicholson holds guidance amid falling mortgage costs

(Sharecast News) - House builder Crest Nicholson on Thursday held annual guidance after a rise in adjusted half-year earnings amid an easing in mortgage costs as interest rates fall. Adjusted pre-tax profit rose to £7.9m from £2.6m. Completions fell to 739 from 788 as the company switched focus to open market homes in the mid premium segment to increase profitability. Forward orders for the full year were 763 units at the end of May.

On a statutory basis, the company swung to a £9.4m profit after a £31m loss last year.

"Trading in the first half of the financial year was in line with expectations with a stronger than anticipated balance sheet position at the period end. sales have continued to progress in line with expectations in the first few weeks of the second half of the financial year," the company said.

"We remain mindful of volatility in the macroeconomic backdrop, which continues to impact consumers through concerns around affordability and job security. However, the market is now starting to benefit from increased lender support and better mortgage affordability as the interest rate environment starts to ease."

"Planning reforms continue to move slowly but positively. As such, we anticipate further stabilisation in the trading environment in the second half of the year."

Crest added that it was not experiencing any major build cost inflationary pressures, either from wages or materials prices.

Reporting by Frank Prenesti for Sharecast.com