3rd Nov 2020 09:36
(Alliance News) - Shares in Crest Nicholson Holdings PLC rose on Tuesday as it expects profit for its recently ended financial year to be significantly ahead of consensus expectations, due to a positive trading environment following the Spring virus lockdown.
Shares in the FTSE 250 housebuilder were 18% higher at 256.60 pence on Tuesday in London.
For the year to the end of October, Crest expects adjusted pretax profit to be significantly ahead of consensus expectations of GBP37.9 million, and at the upper end of the previously guided range of GBP35 million to GBP45 million.
As at October 31, forward sales were 2,289 units with a gross development value of GBP480.5 million, compared to 2,013 units and GBP378.0 million the same date the year before.
Crest reported a good sales performance in the second half, with reservation rates slightly ahead of the pre-Spring lockdown level, due to the release of pent up demand. The private sales per outlet week for the period from July to September was 0.54, reflecting an improvement from the first half figure of 0.37.
In addition, the trading environment was considered positive, due to near-term confidence levels rising from the benefits of Stamp Duty holiday, and a change in customer attitudes as a result of the pandemic.
For the year, Crest has 63 average outlets, up from 59 the year before.
Looking ahead, Crest Nicholson said it expects to reinstate a dividend with effect from its interim results for the 2021 financial year.
In addition, the housebuilder said it has completed its internal reorganisation, delivering GBP15 million in annualised overhead savings compared to the prior year. Also, Crest has over 5,500 future units in its short-term land portfolio planned with a new house type range.
"Since the Spring lockdown we have traded well and as a result are pleased to announce an upgrade to earnings for the year. We also enter next year with a strong forward order book. Our disciplined focus on cash generation and capital allocation has ensured we close the year with an excellent cash position and a robust balance sheet. Accordingly, we are pleased to be reinstating our dividend in the next financial year," said Chief Executive Peter Trustcott.
"Although the macro-economic outlook is uncertain our strategy will remain unchanged. We will maintain our strong focus on delivering operational efficiencies and if our trading becomes significantly disrupted we will act decisively again to protect our enhanced balance sheet. However, we expect the housing market to remain resilient to the impacts of Covid-19 and as such we are well positioned to capitalise on that demand, particularly considering our product range and focus in Southern England," Trustcott added.
By Dayo Laniyan; [email protected]
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