Housebuilder Crest Nicholson is to cut 130 jobs to save £5m a year, after posting a £51.2m pre-tax loss for the six months to 30 April 2020.
The firm saw a 52.2% reduction in its turnover on the previous period to £240m, after it grappled with the effects of the coronavirus pandemic.
The business warned that it found itself in a “highly uncertain” operating environment despite an improvement in trading in recent weeks.
Crest Nicholson had expected a strong spring selling season following the certainty created by the general election in December last year. But covid-19 has “significantly impacted” its half year performance, with revenue and profit both lower than anticipated, with a “substantial number” of private completions planned for the end of April postponed.
By 9 April, Crest Nicholson closed all its sites and furloughed 75% of its employees on full pay. All of them were unfurloughed on 31 May, with many continuing to work remotely.
Revealing its updated strategy as the coronavirus lockdown now eases, Crest Nicholson said it would merge its Crest Strategic Projects (CSP) and Crest Nicholson Partnerships and Regeneration (CNPR) divisions, with both to be based in its Chertsey head office. Plans for a new division called Crest Nicholson Southern Counties have been shelved.
Peter Truscott, chief executive of Crest Nicholson, said: "Before lockdown the business was performing well and trading in line with our expectations. We were continuing to recognise further improvements to margin in our current developments and short-term land portfolio. We were also delighted to be awarded five-star status by the HBF customer satisfaction scheme in March this year.
"However, we cannot ignore the risks that covid-19 presents to the UK housing market even if we cannot predict with certainty what the impact of those risks will be. Therefore, we have adapted our strategy by deferring the planned opening of an additional division and targeting further reductions in overheads. Taking decisive action now will ensure Crest Nicholson is able to flourish in whatever market conditions may emerge in the future including if the market quickly returns to growth."
