The firm told investors it remained in ‘constructive discussions’ to amend the terms of its agreements
Housebuilder Crest Nicholson has been granted extra time by its lenders as it works to fortify its balance sheet after falling into unprofitable territory.
The London-listed business confirmed that a temporary waiver covering a section of its credit arrangement has been prolonged until 30 November.
Crest informed shareholders that it continues to engage in "constructive discussions" with banking partners to "amend its covenants and ensure that it has the appropriate level of funding and liquidity going forwards".
The business has been taking action to pay down its debts at an accelerated rate, while simultaneously seeking short-term relief on the terms governing its loan facilities.
It anticipates that debt by the close of the financial year will stand between £70 million and £90 million – representing an improvement of about £30 million on earlier projections.
The update follows a pre-tax loss of £35.2 million recorded for the six-month period ending in April, with the company continuing to warn of an annual loss.
It comes as the housebuilder has flagged tougher conditions in the housing market and said it had been a quieter summer than it was expecting.
Consumer confidence has been squeezed by affordability constraints and took a hit in the spring as a result of wider political and economic uncertainty, the firm said.
The company expects to deliver between 1,350 and 1,400 home completions over the current financial year, down from previous guidance of 1,400 to 1,500.
It also said it is set for a loss in earnings before interest and tax of around £10 million, having previously guided towards a profit of between £5 million and £10 million.
It is the third time the company has reduced its earnings guidance since April.
The firm blamed lower expected completions driven by weaker demand on the open market and pricing pressure.
Building material prices remain about 3 to 4 per cent higher on average.
Crest Nicholson added that it is reducing its debt levels quicker than expected, cutting its previous debt guidance by around £30 million.
Chief executive Martyn Clark said: “While the trading backdrop has remained difficult through the summer, we are making tangible progress on the actions within our control.
“Our cash optimisation programme is delivering with the expected year-end net debt position now materially better.
“Although the timing of a broader market recovery remains uncertain, the group is taking the right actions to protect liquidity and improve operational execution, while positioning the business for recovery when market conditions normalise.”
