Crest Nicholson profits triple as housing market shows signs of recovery

Daily Mail​

3 days ago

Profits at Crest Nicholson more than tripled in the last six months as lower mortgage rates and improved consumer confidence boosted the UK housing market.
Crest reported an adjusted pre-tax profit of £7.9million for the six months ending 30 April, up from £2.6million a year ago.
On a statutory basis, the housebuilder swung to a £9.4million profit after posting losses of £30.9million last year.
On Wednesday, Chancellor Rachel Reeves announced an additional £10billion investment in the housing sector, which came on top of a £39billion 10-year programme announced earlier in the week.
A greater share of Crest's new build sales during the quarter were 'affordable' homes, driving revenues down slightly to £249.5million.
Home completions also slipped to 739, against 788 at the same point a year ago.
The total weighted average selling price of properties across the group was £342,000, down from £349,000 by the same point a year ago.
On lower average selling prices, the group said: 'The reduction reflected a higher proportion of affordable units in the overall mix. Open market private ASPs increased modestly to £422,000 (HY24: £421,000).'
On 20 March, the group said it had launched a 'business transformation programme', which has led to some redundancies.
Martyn Clark, chief executive of Crest, said: 'The housing market continues to show signs of stabilisation with an incrementally easing planning system, improving affordability and strong support from lenders.
'Customer appetite for the mid premium segment of the market, which is characterised by high-quality, well-designed homes in sought-after locations, and which is our focus segment remains robust.'
He added: 'This places Crest Nicholson in a strong position to navigate the market with confidence and clarity of purpose, as we progress towards the delivery of our 2029 targets and with it, attractive and sustained value creation.'
Last year, Crest Nicholson set aside £132million for fire safety work but is now clawing back some of that cash from supply chain firms with £11.8million recovered during the period. The group maintained its annual guidance.
Clark said: 'I remain confident that with our experienced management team and dedicated workforce, we are well positioned to benefit as the market improves, reshape the business for long-term success.'
In June 2024, the group unveiled its first profit warning in a twelve month period.
Crest Nicholson shares rose 1.06 per cent or 2 per cent to 191.30p on Thursday, having fallen around 20 per cent in the last year.
Adam Vettese, an analyst at eToro, said: 'Crest Nicholson's half-year report showcases a strong rebound amid a tentative UK housing market recovery.
'[With] signs that the housing market could be set to stabilise and potentially improve into the second half of the year, some investors may see the current price to book ratio an attractive prospect, although the dividend remains modest.'
He added: 'Net debt has climbed and there are still fire remediation concerns to address, which Crest Nicholson will have to navigate carefully.
'Despite this, shares have opened positively this morning and shareholders will be hoping this can be a platform to recover levels seen last year some 30 per cent higher.'