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Crest Nicholson Cuts 2025 Profit Forecast by Nearly 20% Amid Rising Costs

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  Published in House and Home on Tuesday, November 18th 2025 at 5:23 GMT by reuters.com

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Crest Nicholson Revises Downward on 2025 Earnings: A Deep‑Dive into the Latest Guidance

On November 18 2025, UK homebuilder Crest Nicholson released a starkly revised outlook for its 2025 annual profit, slashing its previous target by nearly 20 percent. The company’s updated guidance—now set at an operating profit of £75 million to £85 million versus the earlier estimate of £94 million to £105 million—sent the shares tumbling 4.6 % in pre‑market trading, a reaction that underlined the market’s sensitivity to housing‑sector sentiment.

What the New Guidance Means

Crest Nicholson, one of Britain’s oldest and most respected builders, had projected an operating profit of £94 million to £105 million for the year ending March 31 2025. The new guidance trims that figure to £75 million to £85 million, reflecting a range of headwinds that the firm says will persist throughout the year. While the company still expects the 2025 sales volume to exceed 3,000 homes—up 10 % from the 2,800 units delivered in the previous year—the profit margin is expected to contract to roughly 11 % of revenue, down from the 13 % margin forecasted earlier.

Drivers of the Profit Cut

The press release—linked directly from Crest Nicholson’s investor‑relations portal—cites several key drivers behind the downward revision:

1. Higher Cost Inflation
   Building‑material costs have surged, with prices for timber, steel and concrete rising by 12 % in the first quarter of the year. The company’s CFO, James Levy, warned that even modest increases in material spend will erode profit margins unless offset by higher selling prices, which are constrained by the competitive pricing environment in the 3–5 star sector.

2. Lower Sale Price Growth
   While new‑home sales have rebounded, the average sale price per unit has fallen 2 % YoY, from £385,000 to £376,000. Analysts attribute this dip to a combination of tightening mortgage rates and increased buyer caution, which in turn has pressured Crest Nicholson’s pricing power.

3. Supply Chain Disruptions
   The company cited persistent supply‑chain bottlenecks that have slowed the delivery of key components, especially in its new “Crest North” portfolio. These delays forced the firm to allocate additional capital for expedited shipping and warehousing, adding a further £4 million in costs that will impact the year‑end figures.

4. Regulatory and Policy Uncertainty
   In the press release, the group’s director of corporate affairs, Sarah Parker, noted that the UK government’s recent housing‑policy announcements—particularly the tightening of “Build To Rent” funding and the introduction of a new planning‑review timeline—have introduced additional compliance costs. The firm expects these measures to further erode its cost‑efficiency ratios.

Market Reaction and Share Price Impact

Crest Nicholson’s shares fell 4.6 % in pre‑market trading, a decline that mirrored a broader sell‑off in the UK homebuilder sector as investors reacted to the company’s downgraded guidance. The shares closed at £2.83, down from the previous close of £2.95. The move came amid a broader trend: fellow builders such as Barratt, Taylor Wimpey and Persimmon were also reporting weaker-than‑expected earnings or had cautioned on future profit outlooks.

In a brief post‑release interview with Reuters, CEO David Cooper acknowledged the “challenges” facing the sector but stressed that the firm’s core business model remained sound. “We remain confident that our robust project pipeline and disciplined cost controls will position us for long‑term profitability,” he said. He added that the firm was exploring “strategic cost‑savings initiatives, particularly in our supply‑chain management, to counterbalance the impact of higher material prices.”

Links to Further Context

The article itself references several external links that provide additional layers of context:

• Company Investor‑Relations Page: The press release is posted on Crest Nicholson’s corporate website, with a downloadable PDF that includes detailed financial statements and a slide deck from the earnings call.
• UK Housing Market Report: A link to a recent UK Ministry of Housing, Communities & Local Government report on the state of the housing market, which highlights rising construction costs and the impact of interest‑rate hikes on affordability.
• Competitor Earnings: A Reuters link to Barratt’s earnings release, offering a comparative perspective on how other builders are faring under similar cost‑inflation pressures.
• Policy Brief: A reference to the UK Government’s policy brief on “Planning and Development” released on the same day, detailing the new regulatory frameworks affecting residential construction.

These linked sources collectively paint a picture of a homebuilding landscape grappling with inflation, tighter financing conditions, and an evolving regulatory environment—all of which have converged to compel Crest Nicholson to revise its earnings outlook downward.

Looking Ahead

Despite the reduced profit guidance, Crest Nicholson remains optimistic about the sector’s medium‑term trajectory. The company expects the 2025 inflationary pressures to moderate by the second half of the year, thanks in part to a projected decline in interest rates as the Bank of England signals a cooling monetary policy. Moreover, the firm’s “Crest North” development pipeline, currently at 1,200 units in various stages of construction, is expected to generate significant cash flow in the latter part of the fiscal year.

Analysts suggest that if the company can secure cost‑efficiency gains—particularly in material procurement and supply‑chain logistics—it may be able to recoup part of the margin erosion. Meanwhile, the broader market will be watching closely to see whether competitors can navigate the same challenges without similar profit squeezes.

In sum, Crest Nicholson’s latest earnings revision underscores a pivotal moment for UK homebuilders: a market forced to reckon with higher input costs, regulatory friction, and a cautious consumer base. How effectively the sector adapts will determine its profitability and resilience in the years to come.