28th Jan 2014 07:56
LONDON (Alliance News) - Housebuilder Crest Nicholson Holdings PLC Tuesday reported an increase in profit and revenue for the full year citing the UK government's flagship, but contentious, mortgage-financing scheme as a catalyst for renewed interest in new builds.
The firm saw pretax profit jump 40% to GBP80.9 million for the period ended October 31, 2013, from GBP62.1 million a year earlier, despite exceptional costs of GBP5.9 million connected with its initial public offering in February 2013.
It said sales rates across the year have averaged 0.90 sales per outlet per week, from 0.67 a year earlier, a 34% improvement.
This gain was particularly marked in the second half of the year, following the introduction of the government's Help to Buy scheme, which has driven some of the increase in volumes for 2013.
The first phase of the Help to Buy scheme in England started in April 2013, making buyers of newly built homes eligible for a 20% equity loan from the government on top of their 5% deposit. The second phase, which started in the Autumn, guarantees a portion of a buyer's mortgage.
"The stimulus from government schemes has served to reduce mortgage pricing and increase loan availability, creating the consumer confidence which has then supported the delivery of more new homes to meet pent-up housing demand," the firm said.
In turn, revenue increased 29% to GBP525.7 million compared with GBP408.0 million in 2012, which Crest said reflected the strong housing market.
Housing revenues rose 32% to GBP491.2 million, from GBP372.2 million a year earlier, whilst unit completions increased 15% to 2,172 from 1,882.
Higher average selling prices contributed significantly to revenue growth, reflective of the change in product and location mix, including the first unit contributions from its new London-centric division, Crest Nicholson said.
Open-market average selling prices were up 9% at GBP250,000 from GBP230,000 in 2012 reflecting the mix of product being sold as well as increases in sales prices.
However, revenues from commercial and land sales combined amounted to GBP34.5 million, down from GBP35.9 million.
Overall, the company said its land bank made strides, with 30,713 units under contract last year, up from 29,582 in 2012.
Financially, the group had net cash of GBP42.5 million at the end of October, compared with a net debt of GBP30.3 million in 2012.
The board said it was pleased to mark its return as a listed company by proposing a final dividend of 6.5 pence per share.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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