Crest this morning revealed it had plunged into the red for the six months to 30 April compared with a £9.4m profit a year earlier.

Revenue fell 21% to £198m as completions dropped from 739 to 584 homes, while adjusted operating results swung from an £11.9m profit to an £11.9m loss.

The struggling business also revealed net debt had doubled to £142m from £71m a year ago.

The board said discussions with its lending group to amend covenants on its £250m revolving credit facility were “well advanced” but remain ongoing.

While revised terms are being negotiated the firm has been granted a further extension to the waiver on its interest cover covenant until 30 September.

The interim accounts warn there remains a material uncertainty over the outcome of the refinancing discussions.

Without revised agreements, the group would have breached its existing covenant at the half year, triggering an event of default that could make its borrowings repayable on demand.

Chief executive Martyn Clark said: “While market conditions remain challenging and financial performance in the first half was below the prior year, the Group has taken decisive actions to preserve liquidity, reduce capital intensity and strengthen operational discipline.

“Lender discussions are well advanced, and the board remains focused on completing the covenant amendment process while continuing to execute Project Elevate.

“During the period, we reduced land buying, continued to market non-core land for disposal, moderated the pace of new site starts and aligned work in progress with revised sales expectations for FY26 and FY27.”

Adjusted gross margin halved to 7% from 14.2%, hit by lower sales volumes, higher apartment write-downs and increased costs on completed sites.

The group also continues to spend heavily on legacy building safety issues, although it has recovered more than £35m from contractors to date.

Looking ahead, Crest expects to complete between 1,400 and 1,500 homes this year but warned its would deliver EBIT in the lower half of its previously guided £5m to £15m range.

It is targeting year-end net debt of £100m to £120m, helped by around £40m of land sale revenue and £50m of contracted cash receipts due in the second half.