UK homebuilder Crest Nicholson slashes forecasts as Iran war bites, shares tumble

Tue, 21st Apr 2026 10:32

* Annual home sales seen at 1,400-1,500 units

* Land sales revenue forecast at about 40 million pounds

* Year-end net debt forecast raised to 100-120 million pounds

* Talks underway with lenders

* Rules out equity ‌raise for now

April 21 (Reuters) - Crest Nicholson cut its annual forecasts for land and home sales on Tuesday, sending ⁠the British homebuilder's shares down over 40%, as the fallout ⁠from the Iran war pushes up interest rates and further depresses sentiment in an already weak housing market. Bigger British rivals including Berkeley and Vistry have already warned that the conflict will lead to higher building costs and risk keeping interest rates elevated, hurting demand and profit.

"Buyers have become ‌more cautious in the face of the uncertain outlook, resulting in reduced engagement in bidding processes and an increased reluctance to transact at market values," Crest said.

It forecast annual adjusted operating profit of between 5 million pounds and 15 million pounds ($6.8 million-$20.3 million), which analysts at JPMorgan and Jefferies said equates to between breakeven and a loss of 10 million pounds at the pretax level. Crest in January had forecast an annual pretax profit ‌of between 32 million and 40 million pounds, while analysts in a company compiled consensus expected 34.8 million pounds.

Shares fell as much as 44.4% to a ‌record low of 60 pence and were 38% lower by 0915 GMT.

FUNDING BARGAINS Without giving further details Crest said it was in early talks with its lenders to relax its banking commitments, having warned in January that it may breach its interest-cover covenant as early as April in a severe downturn.

On a call with investors and analysts, Crest ‌ruled out the need to raise further equity at the current time, while it prioritises cash and balance sheet strength.

RBC Capital Markets analysts said while they don't expect lenders to withdraw funds, the company would likely have ⁠to pay higher ⁠interest rates on its debt.

Crest expects net debt to rise to ‌between 100 million and 120 million pounds by the end of its financial year on October 31, much higher than the 15 million to 65 million pounds it previously forecast.

Home sales volumes for the financial year are expected to be 1,400 ‌to 1,500 units, with land sales revenue of about 40 million pounds, down from its previous forecast of 1,550 to 1,700 units and 75 million to 100 million pounds, respectively.