Crest Nicholson shares plummet amid profit warning

Housebuilder, Crest, has failed to exploit a benign backdrop in recent years. Should it now merge with rival Bellway? Matthew Partridge reports

Flags at the entrance to a Crest Nicholson Holdings Plc new housing development in Tiptree, UK, on Thursday, Jan. 21, 2021.
(Image credit: Bloomberg / Contributor)

Shares in homebuilder Crest Nicholson fell by 11% last Thursday after the company unveiled yet another profit warning, says Melissa Lawford in The Telegraph. But they clawed back most of the lost ground a day later after Crest’s new CEO Martyn Clark said it had turned down an unsolicited £650 million takeover bid from rival Bellway that “significantly undervalued” the business. 

However, experts warned that Crest’s recent poor performance means that Clark “will face a difficult turnaround job. Shareholders may have wished management had asked their opinion” before rejecting the bid. Even though Bellway’s all-share offer works out at a 30% premium over Crest’s share price in May, Clark clearly thinks that this is too little, says Joshua Oliver in the Financial Times

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri