.jpg)
1 hour ago
3
Article content
(Bloomberg) — Crest Nicholson Holdings Plc’s shares plunged the most on record after cutting earnings guidance in the face of elevated economic uncertainty unleashed by the Iran war.
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
SUBSCRIBE TO UNLOCK MORE ARTICLES
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
REGISTER / SIGN IN TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account
- Share your thoughts and join the conversation in the comments
- Enjoy additional articles per month
- Get email updates from your favourite authors
Sign In or Create an Account
or
Article content
The UK homebuilder downgraded its sales guidance to a range of 1,400 to 1,500 for the year, down from 1,550 to 1,700 previously, according to a statement Tuesday. The company also warned of a “marked softening in sentiment among prospective land purchasers” as well as increased buyer caution.
Article content
Article content
Article content
Trading in the company’s shares was temporarily suspended as they tumbled as much as 45%, their biggest loss since their debut in 2013.
Article content
By signing up you consent to receive the above newsletter from Postmedia Network Inc.
Article content
Higher energy costs due to the Iran war have raised inflation expectations, prompting a spike in mortgage costs. That’s clouded an anticipated recovery in the UK housing market, which had been expecting a gradual increase in sales this year. Instead, a slew of housebuilders have warned of the war’s impact and some including Berkeley Group Holdings Plc signaling they will hold off on buying more land.
Article content
“Macro-uncertainty has increased, with the ongoing conflict in the Middle East contributing to the prospect of a more prolonged higher interest rate environment, renewed cost pressures and a deterioration in consumer confidence,” the company said in the statement.
Article content
The group expects an impact on profits, with earnings before interest and taxes for the financial year seen in a range of £5 million ($6.7 million) to £15 million.
Article content
As a result Crest is now in early talks with lenders, seeking “temporary banking covenant relaxation.” The company’s revised expectations for its net debt position for the end of the financial year is now £100 million to £120 million.
Article content
“Crest’s profit warning comes with the added spice of conversations with its lenders, sparking wholesale flight from the shares,” IG chief market analyst Chris Beauchamp wrote in a note Friday. “Questions about the long-term future are bound to crop up once again, especially after a decline that has seen the company lose 90% of its value in under a decade”
Article content
(Updates with revised profit expectations, talks with lenders from sixth paragraph.)
Article content
English (US)