Finance chief quits as Crest warns on profits

THERE was a tale of two housebuilders on the FTSE 350 as major developers disagreed over the state of the property market.

South of England-focused firm Crest Nicholson sacked its finance boss and reported the environment was ‘more difficult than previously anticipated’.

But Barratt Developments, the UK’s largest housebuilder, claimed market conditions were good.

Crest said profit would be in the range of £170m to £190m for the full year, down from the £205m it was guiding in June and the £207m it pulled in last financial year.

Barratt, on the other hand, upped its total dividend for the year from 41.7p per share last year to 43.8p, and repeated its plan to grow the volume of houses it builds by 3pc to 5pc per year.

Chief executive David Thomas told investors: ‘ The group has started the new financial year in a strong position, with a good sales rate, healthy forward order book and customer demand supported by an attractive lending environment.’

But despite the differences in tone, Russ Mould of savings firm AJ Bell said Barratt showed worrying signs too.

The number of new developments launched since July had slipped from 62 last year to 53, while the average number of people making a reservation per building development each week – a key metric for the industry – edged down from 0.74 to 0.72.

Over at Crest, the bosses took the blame for the disappointing results. Crest’s board asked chairman Stephen Stone to take personal command in an executive role, while finance director Robert Allen was ousted completely. Stone is implementing a new strategy, prioritising cash flow and dividends and increasing efficiency. The firm said it would aim to maintain profitability at last year’s levels.

Crest’s shares dropped by 8.2pc, or 26.6p, to 296.4p while Barratt’s edged down a more marginal 0.8pc, or 4p, to 510p. The downbeat tone sent shares in other major UK housebuilders sliding, which dragged the FTSE 100 down by 0.07pc, or 4.8p, to 7054.6p.

Easyjet led the blue-chip fallers, as a profit warning from smaller rival Flybe sparked investor nerves. Easyjet took a 5pc or 60p dive, to 1150.5p.

The pound also fell against the dollar, to around $1.315, as figures showed UK inflation was weaker than expected.

In the FTSE 250, shares in private healthcare company Mediclinic were looking sickly as they plummeted 17pc or 80.7p to 394p.

The firm said revenue per bed in its Switzerland facilities was down 2.8pc due to regulatory changes, and revenue growth in the Middle East was set to be lower than expected.

Softcat, the IT provider, took an 11.5pc or 91p dive to 700p – despite announcing a final dividend of 8.8p, up 44.3pc from the previous year. Vijay Anand, an analyst at Jefferies, called the results a ‘strong finish to the year’ as operating profit climbed 35.6pc to £68m. Investors may have been expecting more – or could just have been bagging their profits after a strong run for the shares. On London’s junior market AIM,

Solid State – which manufactures electrical components such as batteries and antennas – said revenue for the first six months of its financial year would be up from £22.5m to £23.5m.

Going into the second half of the year, it said its prospects should exceed market expectations.

Solid State’s order book stood at a new record of £29.6m at the end of September, which got the thumbs-up from investors as the share price lifted by 13.3pc, or 38p, to 323p.