By Pushkala Aripaka and Yadarisa Shabong
(Reuters) - British homebuilder Crest Nicholson <CRST.L> on Thursday warned that annual profit would fall by a third as prices flatten on Brexit-hit consumer confidence and as the company's new leadership embarks on changes to the business.
The company, which builds houses and flats in London and across the southern half of England, said new Chief Executive Peter Truscott wants to develop more projects and rely less on land sales in the coming years.
Crest Nicholson now expects to make pretax profit of between £120 million and £130 million for the year to Oct. 31, down as much as 32% year on year.
Analysts had expected pretax profit of £152.9 million this year, Refinitiv data shows, and shares in the company tumbled 11% in response.
Shares of rivals Bovis Homes <BVS.L>, Berkeley <BKGH.L>, Barratt Development <BDEV.L> and Persimmon <PSN.L> all fell by about 1%.
"While current market conditions remain uncertain, the prospects for Crest Nicholson over the medium term remain highly attractive," said Truscott, who took the reins in September.
Homebuilders, seen as among the businesses most vulnerable to a no-deal Brexit, have warned repeatedly of pressures from the uncertainty over the proposed departure from the European Union. Barratt this month reporting a dip in values of homes sold while signs of weakening prices also chimed with warnings from Bellway.
UK house prices rose at the slowest pace in more than six years last month and Crest said it would trim the value of its older London sites by £10 million.
"The company has experienced a volatile sales environment in some of its regional businesses, driven largely by ongoing customer uncertainty relating to Brexit and the economic outlook in the UK," it said in a statement.
British voters will go to the polls in December after Prime Minister Boris Johnson failed to force through a deal to leave the EU in time for Thursday's third Brexit deadline.
Crest, which has been also hit by higher building costs, expects to take a £17 million cash charge in the current financial year related to change in government guidance on combustible materials.
It also said profit for its 2020 financial year would be between £110 million and £120 million and expects earnings to recover in 2021 as its strategy begins to pay off, adding that Crest would continue to pay a dividend of 33 pence per share next year.
Liberum analysts pointed to Truscott's track record of margin improvement at previous employer Linden Homes <GFRD.L>.
"While the timing of the trading update surprises, it can be argued the resetting of expectations by the new management team is not," said analysts at brokerage Jefferies.
(Reporting by Pushkala Aripaka and Yadarisa Shabong in Bengaluru; Editing by Shounak Dasgupta and David Goodman)