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(Alliance News) - Crest Nicholson Holdings PLC said on Thursday that its interim revenue and pretax profit both fell, though it expects a stronger second half.
The Surrey-based housebuilder swung to a pretax profit of GBP28.4 million for the half-year ended April 30, from a loss of GBP52.2 million at the same point last year.
Crest Nicholson's adjusted pretax profit fell to GBP20.9 million, down from GBP52.5 million in profit the previous year. This was due to a GBP7.5 million net exceptional credit relating to combustible materials.
The exceptional charge was related to the government's Build Safety Act 2022, following the Grenfell Tower disaster. The act was introduced on April 28 last year, and addressed the issue of dangerously flammable cladding, ensuring that housebuilder's fix life-critical fire safety issues.
The company says it expects its full-year adjusted pretax profit to be in line with its consensus of GBP73.7 million.
Revenue fell to GBP282.7 million from GBP364.3 million the prior year, and home completions dropped by 18% to 894 from 1,096 the previous year. The company said this reflected the economic uncertainty and lower confidence in the housing market.
The company's average sales outlets were 48 against 58 at this point last year, and sales per outlet week were 0.54, down from 0.72. Crest Nicholson explained that the strong environment of the previous two years have depleted housebuilders land portfolios, leading to a reduction in outlets. This has led to a lower risk appetite for more land.
Crest Nicholson said forward sales as of June 2 were 2,354 units, down from 2,891 units at the same point last year. Forward sales at this point in time are GBP597.4 million in value, down from GBP814.9 million in value last year. The company said that approximately 85% of financial year 2023 revenue is covered.
"The housing market is undoubtedly experiencing softer demand than the previous year. As we emerged from the restrictive impacts of the pandemic, home movers were searching for more space and were encouraged by the temporary cut in stamp duty," explained Chief Executive Peter Truscott.
Crest Nicholson declared an interim dividend of 5.5 pence per share, unchanged from this point last year, and said that the total dividend for the financial year should be in line with last year at 17.0p per share.
Looking ahead, the company said it expects the second half trading environment to be more stable, that inflation should start to recede, and economic growth revised upwards.
"We have successfully navigated a difficult first half and continue to lay the foundations for future growth," said Chief Executive Truscott.
"We now have a land pipeline to deliver our growth ambitions over the medium term, including our expansion into new geographies."
Shares in Crest Nicholson were down 6.2% at 234.00 pence in London on Thursday.
By Will Neill, Alliance News reporter
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