Brexit and exceptional items blamed for falls
Housebuilders Crest Nicholson and McCarthy & Stone saw profits tumble last year as Brexit and exceptional items took their toll on the pair’s bottom line.
Crest said pre-tax profit sank 39% to £102.7m in the year to October 2019 on revenue flat at £1.1bn.
In a statement, the firm said: “During the second half of the year, there was increased volatility in the number of site visits, reservations and completions, and elevated cancellation rates as customers continued to cite concerns over political and economic uncertainty stemming from Brexit.”
The number of completions was down 4% to 2,912 while chief executive Peter Truscott, who joined from Galliford Try last year, said it had carried out a rejig of its business to improve efficiency.
He admitted: “Currently, we are inconsistent with many aspects of our operations, often doing things differently from site to site and from one division to another.
“This has led to higher build costs than necessary, inconsistent quality and delivery, excessive overheads and selling costs, and inefficient use of working capital.”
Meanwhile, specialist retirement housebuilder McCarthy & Stone said pre-tax profit also slumped by 25% to £43.4m in the 14 months to October 2019.
It blamed the fall on £17m of exceptional costs to do with land that will no longer be developed. It also said this figure included £4m of redundancy costs and £6m in consultants fees following a strategic review it launched in September 2018.
Revenue during the period was up 8% to £725m. The number of completions grew from 2,134 in 2018 to 2,301 last year.