(Alliance News) - Crest Nicholson Holdings PLC on Thursday said it expects profit for its recently ended financial year to be ahead of market consensus, as the company marks the completion of its first step towards its turnaround.
Shares in the Chertsey, Surrey-based housebuilder were up 2.6% at 342.60 pence on Thursday in London, the second best performer in the FTSE 250.
For the year that ended October 31, Crest Nicholson anticipates adjusted pretax profit to be marginally ahead of consensus expectations, set at GBP101.2 million, driven by a stronger contribution from Longcross Film Studio than initially anticipated.
In May, the group sold its 50% interest in the studio to Longcross General Partner Ltd, an Aviva Investors company.
Crest Nicholson posted adjusted pretax profit of GBP45.9 million in financial 2020 and GBP121.9 million in financial 2019.
In addition, Crest Nicholson reported a strong sales performance throughout the second half of the year, as the sales rate remained robust across all regions.
As at November 12, forward sales were 2,503 units at a gross development value of GBP623.9 million, compared to 2,330 units at a GDV of GBP496.6 million the same date a year prior.
Looking ahead, Crest Nicholson said it has completed the first stage of its turnaround plan, with the planned introduction of new house types with around 6,000 units.
The group has now started its strategy to establish new division in Yorkshire and East Anglia from 2022 onwards.
Crest Nicholson's overall strategy is to achieve gross margin rate accretion and volume growth from existing divisions through to the financial year ending October 31, 2024, as phase one. After that, in phase two, the company said it will aim for volume growth from the three new divisions, which will span from the 2024 financial year to 2026.
"The group has performed strongly in the second half of the year with our full year underlying profit before tax marginally ahead of our expectations. While the trading environment remains robust, it has been a challenging operational environment for our sector as we have emerged from the pandemic, with disruption to supply chains and the availability of materials," said Chief Executive Peter Truscott.
"I am delighted that our teams have remained focused on implementing our strategy and have managed to successfully navigate our way through these issues," Truscott added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Crest Nicholson (CRST)