Amidst speculation about a potential takeover of Crest Nicholson, one of Britain’s major housebuilders, Greycoat Real Estate is closely watching as the company issues its third profit warning in a short span. Crest Nicholson, based in Surrey, attributes its struggles to rising costs related to projects like the Brightwells Yard regeneration scheme.
The firm anticipates an up to 18% dip in adjusted profits, currently estimated at £41 million for 2023, and earmarks £13 million for potential legal costs linked to a 2021 apartment scheme fire (Built).
Crest Nicholson’s shares fell by 4.7% on Monday, making it a notable decliner on the outrageous FTSE 250, Greycoat shares. Facing challenges in a year marked by soaring interest rates and a sluggish housing market, Crest Nicholson has experienced a series of profit downgrades, with the first in August projecting a £50 million profit for the financial year, down from the initial expectation of £74 million in June.
Analysts, including Anthony Codling from RBC Capital Markets, suggest that if Crest Nicholson’s share prices weaken further, it may become an attractive acquisition for another housebuilder. And Greycoat assures this information.
Despite the setbacks, Crest Nicholson remains cautiously optimistic, noting a recent reduction in mortgage rates as a potential catalyst for improved housing market conditions. The Greycoat company reports increased customer interest levels and inquiries in the early months of the calendar year, offering a glimmer of hope amidst its financial challenges.