A builder told Lewes Crown Court how a friend had allegedly confessed to strangling a woman.
Matthew Mitchell, of Petworth, said Jarno Cable told him he had killed the woman for her money.
The body of 35-year-old Karen Heywood was found in woods in Houghton, near Arundel. Cable, 25, also known as Lenny Cable, of Laurel Grove, Bognor, denies murdering Mrs Heywood on January 1.
The court was told Cable had visited Mr Mitchell and, after a few drinks in the local pub, confessed he had killed for cash.
Mr Mitchell said when Cable arrived he was an emotional mess and had scratches on his face following a row with his girlfriend.
Mr Mitchell said: "He said he'd done something wrong and he had to talk to me about it. He was upset.
"He felt he was in a lot of trouble and he had done something quite bad. He said: 'Matt, I've killed somebody'."
The court was told Cable often came to Mr Mitchell, a childhood friend, to borrow money and he initially thought it was an invented story to get him to hand over cash.
Mr Mitchell told the jury: "I was a bit taken aback. I honestly didn't believe for a minute that Jarno was involved in anything like that."
He believed Cable wanted money to go and visit a friend.
But Mr Mitchell later heard a police report that a body had been found at the same spot where Cable had described dumping the body of the mother-of-two.
The court heard Cable had told Mr Mitchell that Mrs Heywood had bank savings of £12,000. Cable told Mr Mitchell he and some friends had taken Mrs Heywood to a spot and demanded cash.
But they realised it was New Year's Day and so the banks were closed and did not want to be prosecuted for kidnap, so decided to kill her.
The court heard Cable told Mr Mitchell he had strangled Mrs Heywood with his bare hands and had given him a demonstration of the act.
Mrs Heywood had come to Bognor to plan her wedding to Bill Janes, a friend of Cable's, and had recently got a divorce settlement of £14,000.
The case continues.
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