A see-saw week or so for the housebuilders continues. Mid cap operator Crest Nicholson (CRST) saw its share price fall 4.4% to 496.2p after flagging weakness in central London house prices on Wednesday.
Larger peer Barratt Developments (BDEV), a FTSE 100 company, is also seeing slight weakness in its share price on flat first quarter sales.
RISK TO FORECASTS
Shore Capital analyst Robin Hardy says the pre-close update from Crest suggests full year profit could come in slightly below consensus – or in other words this is a mild profit warning. Hardy had pencilled in a margin of 20.4% but today’s statement suggests it could be nearer 20% or even short of this.
Sales were down slightly year-on-year and average selling prices were up 5.4% against growth of 20% in the October 2016 financial year. Both reflecting a softer central London market. Results will be published in full on 24 January 2018.
CALLS FOR HELP IN BUDGET
Like several sector constituents, Crest is calling for Government support in next week’s Budget (22 Nov), particularly on the issue of planning. ‘We would like to see a renewed energy in the forthcoming Budget and a commitment to fully implement the 2017 Housing and Planning White Paper.’
Barratt, down 0.4% to 626.5p, reports sales rates roughly in line with the previous quarter at 0.74 net private reservations per outlet per week. Encouragingly forward sales were up 8.4% year-on-year and the outlook commentary was notably less cautious than that delivered recently by rivals Redrow (RDW) and Persimmon (PSN).