Published by Global Banking & Finance Review®
Posted on April 21, 2026
3 min readLast updated: April 21, 2026
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Crest Nicholson is seeking a relaxation of its banking covenants amid rising construction costs and weakening demand due to the Iran war. Sales and land sale forecasts have been significantly reduced, underscoring pressure on margins and liquidity.
By Prerna Bedi
April 21 (Reuters) - Crest Nicholson cut its annual forecasts for land and home sales on Tuesday, sending the British homebuilder's shares down over 40%, as the fallout from the Iran war pushes up interest rates and further depresses sentiment in an already weak housing market.
Bigger British rivals including Berkeley and Vistry have already warned that the conflict will lead to higher building costs and risk keeping interest rates elevated, hurting demand and profit.
"Buyers have become more cautious in the face of the uncertain outlook, resulting in reduced engagement in bidding processes and an increased reluctance to transact at market values," Crest said.
It forecast annual adjusted operating profit of between 5 million pounds and 15 million pounds ($6.8 million-$20.3 million), which analysts at JPMorgan and Jefferies said equates to between breakeven and a loss of 10 million pounds at the pretax level.
Crest in January had forecast an annual pretax profit of between 32 million and 40 million pounds, while analysts in a company compiled consensus expected 34.8 million pounds.
Shares fell as much as 44.4% to a record low of 60 pence and were 38% lower by 0915 GMT.
Without giving further details Crest said it was in early talks with its lenders to relax its banking commitments, having warned in January that it may breach its interest-cover covenant as early as April in a severe downturn.
On a call with investors and analysts, Crest ruled out the need to raise further equity at the current time, while it prioritises cash and balance sheet strength.
RBC Capital Markets analysts said while they don't expect lenders to withdraw funds, the company would likely have to pay higher interest rates on its debt.
Crest expects net debt to rise to between 100 million and 120 million pounds by the end of its financial year on October 31, much higher than the 15 million to 65 million pounds it previously forecast.
Home sales volumes for the financial year are expected to be 1,400 to 1,500 units, with land sales revenue of about 40 million pounds, down from its previous forecast of 1,550 to 1,700 units and 75 million to 100 million pounds, respectively.
($1 = 0.7396 pounds)
(Reporting by Prerna Bedi in Bengaluru; Writing by Pushkala Aripaka; Editing by Mrigank Dhaniwala, Kirsten Donovan)
Crest Nicholson is seeking relaxation of its banking commitments due to stress in the UK housing market linked to the Iran war, impacting sales and building costs.
The company warned it may breach its interest-cover covenant as early as April if the market downturn worsens.
Sales volumes for the year ending October 2026 are now expected to be between 1,400 and 1,500 units, down from the previously expected 1,550 to 1,700 units.
The conflict has increased building costs and risks keeping interest rates high, which affects margins for UK homebuilders like Crest Nicholson.
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