Crest Nicholson has seen its share price drop by over 10% after stating that its profit before tax for the full year is expected to be at the "lower end of, or marginally below" its £28m to £38m guidance range.

In its trading update for the year to 31 October, the housebuilder said this figure reflects a subdued housing market and uncertainty ahead of the Autumn Budget.

Crest Nicholson stated that it has made progress in a number of areas following the introduction of its transformation plan, Project Elevate, in March, which is set to lead to "positive financial contributions".

As a result, it has successfully disposed of five land parcels from larger sites and its self-help initiatives are helping to drive better cost performance.

However, as part of Project Elevate, Crest Nicholson has launched a consultation around the proposed closure of one of its divisional offices, with around 50 roles at risk of redundancy.

Chief executive officer at Crest Nicholson, Martyn Clark, said: "A key focus area of our strategy is the balance sheet where we have tightened our grip on inventory and cost control. We also committed to take action to address our land bank to ensure it is right-sized and better aligned to our strategy and product offering.

"We are therefore pleased by the positive progress on land sales on good economic terms in the second half of the year, which, in combination with our cash focus, has seen us finish the year with net debt at the better end of the guidance range of £40m to £90m. These land transactions support our ongoing efforts to strengthen the balance sheet and provide greater flexibility to invest in and acquire mid-premium land opportunities. This positions us well to grow our outlets in the years ahead."

In its guidance ahead of its full-year results, the housebuilder said that its full-year completions volume totalled 1,691 units, which is below its guidance of between 1,700 and 1,900 units, with around 35% being affordable housing and private rental sector units.

As a result, its adjusted profit before tax is set to reach the low end, or marginally below, its guidance range of between £28m and £39m.

Head of investment at interactive investor, Victoria Scholar, concluded: "Higher for longer interest rates have hit housing affordability and buyer demand. Plus, there is a lot of uncertainty for the sector ahead of the Autumn Budget, with speculation about possible changes to National Insurance contributions on rental profits and changes to the Stamp Duty Land Tax.

"Shares have plunged around 10% this morning, extending recent losses having already shed 15% over the past six months before today’s update."

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