Crest Nicholson stock fell sharply on Wednesday.
Crest Nicholson (LON:CRST) shares fell on Wednesday morning after the company issued a profit warning.
The company said full-year profit would be at the lower end of its expectations.
This can be attributed to inflationary pressures as well as a flat pricing environment.
Specifically, operating margin is expected to be 18% this year, near the high end of the group’s previous forecast range of 18% to 20%.
The group added that while most sales locations performed well, sales at higher price points proved more subdued.
As a result, Crest Nicholson expects next financial year’s profit margin to be in a similar range.
Despite this, year-to-date forward sales are currently up 11% year-over-year. This means revenue is expected to grow by 15% in the year to the end of October.
In the six months to the end of April, forward sales were £441.7m, up 6.3% from £415.6m, with 1,251 homes completed.
“The Group achieved good sales performance in the first half of this year. The business continues to increase the number of residential constructions, and with steady store growth and future sales growth, we look forward to the second half of 2018. We continue to see positive momentum,” said CEO Patrick Bergin.
“Although uniform pricing has had a negative impact on profit margins, sales volumes in the new homes market remain strong and Crest Nicholson will continue to increase sales volumes to deliver the homes Britain needs. “We remain well-positioned in the housing market while remaining focused on delivering strong returns to our shareholders,” Bergin added.
The company’s stock price was trading at -14.22% as of 10:37 a.m. GMT.
