Crest Nicholson PLC (LSE:CRST) has warned full-year profit will be hit as costs of developing some legacy sites have come in higher than expected.
Updating on Monday, the housebuilder said a comprehensive review into the Brightwells Yard project in Farnham and other legacy sites had identified additional costs.
This will impact full-year adjusted pre-tax profit, the group said, which is now expected to come in at £41 million, rather than the guided range of £45 million to £50 million.
Crest Nicholson previously updated in November that the Farnham site had incurred £11 million in incremental building costs as the project neared completion.
Further information will be offered in full preliminary results, due on 23 January, the company said.
Crest Nicholson also highlighted a legal claim relating to a 2021 fire in one of its apartment blocks, which will likely result in an exceptional charge after the year end of £13 million.
Crest Nicholson did point to encouraging signs for the wider housing market, however.
“The recent reduction in mortgage rates has provided a more constructive backdrop for house buyers and the wider housing market,” the group added.
“Although it is too early to gauge customer behaviour, we have been encouraged by an increase in customer interest levels and inquiries this calendar year.”
Shares fell 3.6% to 208.80p as the market opened.