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(Alliance News) - Housebuilder Crest Nicholson on Tuesday said it beat its own profit guidance and set out plans to reinstate its dividend.
Revenue for the financial year to October 31 was GBP677.9 million, down from GBP1.09 billion the year before due to Covid-19 disruption.
The company swung to a pretax loss of GBP13.5 million versus a profit of GBP102.7 million the year prior. Adjusted pretax profit of GBP45.9 million, though down from GBP121.1 million, was ahead of Crest's GBP35 million to GBP45 million guidance range.
Crest said it has entered the new year with a strong forward order book and "enhanced" balance sheet. It had net cash of GBP142.2 million on October 31, up from GBP37.2 million a year before and ahead of its November guidance.
"Looking forward, through 2021 and 2022, the next phase of Crest Nicholson's recovery will be improving operating margins to be in line with industry peers. Gross profit margins in 2021 will continue to be impacted by some of our more complex legacy sites and we will also need to invest the necessary capital to complete these. However, the group still expects to deliver strong profit growth and cash flow generation," the company said, adding that this backdrop supports the reinstatement of its dividend.
Crest plans to reinstate its dividend at two and a half times cover, effective from its half-year results. It declared no dividend for financial 2020, compared to 11.2p the year before.
The housebuilder said reservations have been in line with expectations so far in January. Forward sales as of January 15 were 2,435 units with GBP564.5 million gross development value.
The stock was up 1.8% early Tuesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 6,659.63
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Hang Seng: down 2.4% at 29,433.69
Nikkei 225: closed down 1.0% at 28,546.18
DJIA: closed down 36.98 points, 0.1%, at 30,960.00
S&P 500: closed up 0.4% at 3,855.36
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GBP: down at USD1.3614 (USD1.3655)
EUR: soft at USD1.2114 (USD1.2125)
Gold: up at USD1,851.47 per ounce (USD1,848.02)
Oil (Brent): flat at USD55.58 a barrel (USD55.50)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
US Federal Open Market Committee meeting begins
World Economic Forum's Davos Agenda meeting continues with ECB President Ursula von der Leyen, German Chancellor Angela Merkel and French President Emmanuel Macron speaking
1100 GMT UK CBI Distributive Trades Survey
0855 EST US Johnson Redbook Retail Sales Index
0900 EST US monthly house price index
1000 EST US Richmond Fed business activity survey
1000 EST US consumer confidence index
1630 EST US API weekly statistical bulletin
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Level Five lockdown measures in England will continue until at least early March, under proposals to go before Cabinet on Tuesday. A Cabinet sub-committee met on Monday night to consider a range of new measures to combat the pandemic, including extending lockdown until March 5th – in line with Northern Ireland. Mandatory quarantine of 14-days will be enforced for international travellers who arrive in the UK without a negative PCR test taken in the previous 72-hours. Passengers from Brazil and South Africa, where new variants of Covid-19 have emerged, will also be subject to quarantine, according to UK government sources. Daily UK case tallies have dropped significantly in recent weeks due to lockdown measures, with 1,372 cases reported on Monday, compared to a high of 8,248 cases on January 8.
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The EU has threatened to impose tight controls on the export of coronavirus vaccines made in the bloc, potentially impacting the UK's supply of Pfizer jabs. Coronavirus vaccines were administered in the UK at a rate of 250 a minute in the last week, to total more than 6.6 million first doses.
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The UK unemployment rate edged up by less than expected in November, figures from the Office for National Statistics showed on Tuesday. The unemployment rate for the three months to November came in at 5.0%, up from 4.9% in the three months to October but beating consensus, according to FXStreet, of a steeper rise to 5.1%. "The single-month and weekly estimates of the unemployment rate suggest that the rate has increased through September and October 2020, but was fairly flat in November 2020," the ONS said. Early estimates for December indicate that the number of payrolled employees fell by 2.7% compared with a year ago, marking a fall of 793,000 employees, the ONS said. Since February - being the month before the coronavirus pandemic gripped the UK - 828,000 fewer people were in payrolled employment.
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BROKER RATING CHANGES
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EXANE RAISES COMPASS GROUP TO 'NEUTRAL' ('UNDERPERFORM') - PRICE TARGET 1,295 (1,100) PENCE
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HSBC CUTS TUI TO 'REDUCE' (HOLD)
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COMPANIES - FTSE 100
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JD Sports confirmed it is mulling an equity placing. Sky News on Monday reported the sportswear retailer was in talks over an around GBP400 million share sale to fund its expansion. JD confirmed Tuesday it is exploring additional funding options with a view to "increasing its flexibility to invest in future strategic opportunities", and this may involve a non pre-emptive equity placing. The company didn't put a figure on the potential raise.
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Rolls-Royce said new coronavirus strains and the tighter travel restrictions introduced in their wake is creating short-term uncertainty. Trading in December was broadly in line with expectations across all business units, the jet engine maker said, and there was "good progress" on its restructuring programme. Full-year free cash outflow was in line with previous guidance, the firm added. While continued progress on vaccine roll-outs is encouraging for the medium-term recovery of air traffic and economic activity, new virus variants are creating uncertainty in the near-term. "Enhanced restrictions are delaying the recovery of long-haul travel over the coming months compared to our prior expectations, placing further financial pressure on our customers and the wider aviation industry, all of which are impacting our own cash flows in 2021," said Rolls-Royce. Its current forecasts indicate free cash outflow in the region of GBP2 billion in 2021. This is based on widebody engine flying hours for this year at around 55% of 2019 levels, compared to a base case of 70% presented in October. "We continue to expect to turn cash flow positive at some point during the second half, reflecting our forecasted profile of flying hours as they recover from today's low base," the company said.
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COMPANIES - FTSE 250
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Consumer products firm PZ Cussons held its interim dividend unchanged as it reported pretax profit from continuing operations in the half-year to November 30 of GBP36.3 million, broadly steady from GBP36.8 million a year before. Revenue rose 10% to GBP312.9 million from GBP284.0 million. PZ Cussons said revenue from Focus Brands jumped 22%, led by Carex, Morning Fresh, Cussons Baby and St Tropez.
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COMPANIES - GLOBAL
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Novartis reported earnings growth in 2020 and said that it expects further improvement going forward. The Swiss pharmaceutical firm said its net sales for the three months to the end of 2020 grew to USD12.77 billion from USD12.40 billion reported a year earlier. Net income, meanwhile, jumped to USD2.10 billion from USD1.13 billion year-on-year. For 2020, Novartis reported net sales increase to USD48.66 billion from USD47.45 billion, resulting in net income growth of 13% to USD8.07 billion from USD7.15 billion. In 2021, the company said it expects net sales to grow low to mid single digits, with core operating income expected to grow mid single digits. Novartis declared a dividend of CHF3.00 per share for 2020, an increase of 1.7% year-on-year.
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UBS Group said earnings multiplied in the final quarter of 2020, leading to double-digit growth in the full year. The Swiss bank reported pretax profit for the three months to the end of 2020 of USD2.06 billion, more than doubled year-on-year. Net profit attributable to shareholders also more than doubled to USD1.71 billion. Return on common equity tier 1 capital was 17.5%. For the full-year, UBS said pretax profit increased by 47% on the prior year to USD8.23 billion, while net profit attributable to shareholders was USD6.63 billion, up 54%. Return on CET1 capital was 17.6%. UBS said it intends to propose a 2020 dividend of USD0.37 per share after it also had repurchased USD400 million in shares in 2020. UBS intends to repurchase up to USD1.1 billion worth of shares in the first quarter of 2021.
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Tuesday's Shareholder Meetings
Polar Capital Global Healthcare Trust PLC - AGM
UDG Healthcare PLC - EGM re replacement of CREST with Euroclear
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
