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Investing.com -- UK homebuilder Crest Nicholson Holdings plc (LON:CRST) announced Tuesday it expects its annual profit to come in at the low end of, or marginally below, its previous guidance range of £28-38 million, citing a subdued housing market through the summer and uncertainty around government tax policy ahead of the upcoming Budget.
The company reported it will deliver approximately 1,691 housing units for the fiscal year ending October 31, at the lower end of its 1,700-1,900 unit guidance.
Despite challenging market conditions, Crest Nicholson achieved a 5% increase in open market sales units to 1,095, with an open market sales rate of 0.51 for the year, up from 0.48 in the previous year.
The company has made progress on its strategic priorities outlined at its Capital Markets Day in March, including positive movement on land sales. Year-end net debt is expected to be at the better end of the £40-90 million guidance range, with approximately £50 million of land receipts secured for the next fiscal year.
"We launched our new strategic priorities at our Capital Markets Day in March this year and have made good progress in executing our transformation plan, Project Elevate," said CEO Martyn Clark.
"A key focus area of our strategy is the balance sheet where we have tightened our grip on inventory and cost control."
The company also disclosed an anticipated opening reserves adjustment to inventory of approximately £8 million, reflecting overstated profit related to one development in the Eastern division between fiscal years 2022 and 2024.
As part of its transformation efforts, Crest Nicholson has proposed closing one divisional office and placing about 50 roles at risk of redundancy across overhead functions.