Final Results

Crest Nicholson Holdings plc

(the "Group" or "Crest Nicholson")

FULL YEAR RESULTS IN LINE WITH NOVEMBER 2025 TRADING UPDATE

BALANCE SHEET FOCUS DRIVING INVENTORY IMPROVEMENTS

EARLY SIGNS OF IMPROVING HOUSING MARKET

Crest Nicholson Holdings plc ('Crest Nicholson' or 'Group') today announces its Preliminary Results for the year ended 31 October 2025.

Martyn Clark, CEO commented:

'2025 has been a year of transition and transformation for Crest Nicholson. Despite the ongoing market challenges, we have made meaningful progress against each of the key strategic priorities set out at our Capital Markets Day, repositioning the Group to the mid-premium market segment. During the year, we took significant steps to implement our transformation plan, Project Elevate, which will support improved financial returns and underpin delivery of our medium-term ambitions.

A key early priority has been strengthening the balance sheet. We completed several land sales on attractive economic terms and introduced tighter inventory and cash management controls across the business which saw us finish the year with an indebtedness position that was better than our guidance. Since the year end, the Group has successfully renewed its £250m revolving credit facility with its existing lenders on a four-year term to October 2029. Our land bank remains a core asset, with high-quality sites in affluent areas and strong embedded margins that underpin our confidence in the Group's ability to deliver long-term shareholder value.

Operationally, we have continued to enhance our build quality and our customer service metrics - critical foundations for competing in the mid-premium market. The sustained implementation of our 'Right first time' initiatives will deliver greater cost improvements as the plan progresses.

We have made substantial progress on our fire remediation programme, achieving the survey completion date agreed by the industry with Government. Work is now well underway on the buildings requiring remediation and we continue to execute in line with our overall cost expectations.

While the housing market remains subdued, we are starting to see some early signs of improvement. Interest rates are easing and inflation has moderated, which should gradually support affordability and consumer confidence. With these fundamentals improving, and with our deliberate and differentiated strategy, Crest Nicholson is well positioned to deliver a year of profitable growth and make progress towards our medium-term targets.'

1. Adjusted basis represents the 2025 and 2024 statutory figures adjusted for exceptional items as disclosed in note 4. Adjusted performance metrics and net debt are non-statutory alternative performance measures (APMs) used by the Directors to manage the business which they believe should be shared for a greater understanding of the performance of the Group. The definitions of these APMs and the reconciliation to the statutory numbers are included below.

2. Net debt is defined as cash and cash equivalents less interest-bearing loans and borrowings. See note 25 to the consolidated financial statements. 

3. See note 28 of the consolidated financial statements for an explanation of the prior year restatement.

Financial highlights

· Housing metrics:

· Land sales: Revenue of £78.8m, gross margin £17.1m, and 1,119 plots as the land bank is reconfigured for the mid-premium strategy and optimising the balance sheet

· Inventory: Reduced by £73.0m (6.5%) to £1,056.1m, driven particularly by improvements across land, part exchange and completed units

· APBT: £26.5m, reflecting a weaker than expected housing market in H2

· Legal claim: settlement achieved after year end in line with the provision relating to a low-rise bespoke apartment block built by the Group which was damaged by fire in 2021

· Reserves adjustment: Opening reserves adjustment to inventory of £8.3m reflecting overstated profit in relation to one development in the Eastern division between 2022 and 2024

· Land creditors: Reduced to £73.2m (2024: £131.6m)

· Net debt: £38.2m, better than guidance, supported by inventory reduction and disciplined cash management. 

· Financing: After year end, the Group renewed its £250m revolving credit facility with existing lenders on a four-year term to October 2029

Operational and Project Elevate highlights

· Planning: Secured key planning consents, reinforcing our high-quality land pipeline, underpinning future outlet growth and margin expansion. Encouraging improvements in the planning environment, with 66% of the strategic land bank now allocated or in draft allocation (2024: 47%)

· Land acquisition: Acquired 4 sites with 483 units at an accretive forecast gross margin

· Sales transformation: Continued transformation of sales function, including launch of the new website. Significant interest in Arteva, our new upgrade range.

· Cost base: Closed one divisional office in December 2025 to streamline operations, resulting in c.50 redundancies across the division and selected Group functions

· Customer experience: Strengthened through enhanced training, technology investment and an improved customer journey; on track to maintain HBF five star rating

· Build quality: Reduction of NHBC reportable items (RIs) from 0.35 to 0.26 per inspection; externally recognised through five award nominations from NHBC Premier including winning the Premier development of the year (101-150 units) for Curbridge Meadows

· New house types: Portfolio now finalised. Designs reflect mid-premium customer expectations and the Group's strategic repositioning. Adopted for all planning applications from January 2026, with production rollout from 2027

· Cost inflation: Low single digit build cost inflation consistent with sector trends

Fire remediation

The Group completed its fire provision assessment programme for all affected buildings within the scope of the Developer Remediation Programme in July 2025. Expected costs, after recoveries, have increased by a net £4.1m. Physical remediation continues to progress well, with external works commenced on around one third of the buildings requiring remediation. Detailed quotes secured for a further one third of the buildings, with the procurement process progressing on the remainder.

Current trading and outlook

Trading conditions at the start of the 2026 financial year mirror the subdued conditions seen in H2 2025, reflecting ongoing consumer caution and the absence of demand side stimulus following the Budget. However, since Boxing Day, forward indicators, including website visits, enquiries and appointment conversion, show early signs of improving activity levels. January sales rates have strengthened, supported by improving customer engagement as interest rates gradually ease, affordability improves and our enhanced customer proposition gains traction.

The forward order book for 2026 at 25 January 2026 stood at 848 units, reflecting both the Group's strategic decision to move away from bulk transactions and the soft trading environment in the Autumn.

The Group expects to increase its outlet position in the H2 2026 with the launch of new margin accretive sites. These sites are anticipated to support progressive gross margin improvement as the transformation plan is delivered.

Guidance

The Group provides the following guidance for 2026:

Analyst and investor meeting and webcast details

There will be a meeting for analysts at 9.00 am today at Norton Rose Fulbright, 3 More London Riverside, London SE1 2AQ hosted by Martyn Clark, Chief Executive Officer and Bill Floydd, Chief Financial Officer. To join the presentation, please use the following link: Crest Nicholson Webcast

For further information, please contact:

Crest Nicholson

Jenny Matthews, Head of Investor Relations +44 (0) 7557 842720

Teneo

James Macey White / Ollie Simmonds +44 (0) 207 260 2700

Cautionary statement regarding forward-looking statements

This release may include statements that are, or may be deemed to be, 'forward-looking statements'. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms 'believes', 'estimates', 'plans', 'projects', 'anticipates', 'expects', 'intends', 'may', 'will' or 'should' or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this release and include, but are not limited to, statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the Group's results of operations, financial position, liquidity, prospects, growth, strategies and expectations of the industry.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the development of the markets and the industry in which the Group operates may differ materially from those described in, or suggested by, any forward-looking statements contained in this release. In addition, even if the development of the markets and the industry in which the Group operates are consistent with the forward-looking statements contained in this release, those developments may not be indicative of developments in subsequent periods. A number of factors could cause developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, commodity prices, changes in law or regulation, changes in its business strategy, political and economic uncertainty. Save as required by the Listing Rules and Disclosure Guidance and Transparency Rules, the Company is under no obligation to update the information contained in this release. Past performance cannot be relied on as a guide to future performance.

Crest Nicholson Holdings plc

Registered no. 6800600

The person responsible for arranging the release of this announcement on behalf of the Company is Penny Thomas, Group Company Secretary.

Chief Executive Officer's statement

We are focused on improving all stakeholders' experience through the delivery of our differentiated mid-premium strategy, ensuring better build quality, enhanced customer experience and improved financial performance.

A year of renewal, transition and strategic progress

2025 has been a year of renewal, transition and strategic progress for Crest Nicholson. It has been a period defined by delivery of our new strategy, based on a deliberate focus on the attractive mid-premium market segment, and strengthening of the foundations that will support our next phase of growth. At the same time, we have made steady progress in addressing a number of legacy and historical issues that have, for too long, constrained our performance.

While market conditions have been challenging, and are likely to remain so in the near term, we are encouraged by the continued commitment from government to support the housing sector. This provides a significant opportunity for us to drive growth in the years ahead.

The results we are reporting reflect the successful commencement of the transition outlined at our Capital Markets Day in March 2025. They demonstrate encouraging progress across the areas we said we would focus on, and tangible early signs that the actions we are taking are beginning to deliver meaningful improvement. Our future performance and profitability will be underpinned by disciplined operational management and a continuous focus on cash management, quality and striving for exceptional customer service.

I would like to thank my colleagues for their hard work and commitment during this year and look forward to another year of progress. 

Market context

The financial year began on a positive note for the housing market, underpinned by improving sentiment and stable levels of demand. As the year progressed, consumer confidence softened, demand for Section 106 affordable homes remained weak, and the broader economic outlook became more challenging. Despite these near-term headwinds, the sector continues to benefit from long-term government supply side commitment and a clear recognition of the critical role that housing delivery plays in supporting national economic growth, even if the impact of such support will take time to materialise.

2025 performance and inventory optimisation

In 2025 we delivered 1,691 homes with adjusted profit before tax at £26.5m. Net debt was at the better end of our guidance range at £38.2m.

While profitability was marginally below the lower end of the guidance, reflecting weaker market conditions in the second half of the year, we have delivered strong progress in inventory optimisation through tighter alignment of build programmes with forecast sales, planning, and outlet activity. As part of our strategy to right-size our land portfolio, we have successfully completed several land sales during the year on good economic terms and have used the funds to acquire new sites more aligned with our strategy. Working closely with our existing lenders, we have recently extended our revolving credit facility of £250m to October 2029, strengthening our platform for sustainable growth.

Repositioning to the mid-premium market

As part of our strategy to deliver more sustainable and higher-quality returns, we are transitioning into the mid-premium market. This housing segment has consistently demonstrated greater resilience and stronger performance than the traditional volume-led housebuilding market, particularly through periods of economic uncertainty. Demand in the mid-premium segment is supported by more affluent, less price-sensitive buyers, resulting in steadier sales rates and firmer pricing. Crest Nicholson is well positioned to capitalise on this change in focus, with land holdings in the right locations across its divisions, typically characterised by stronger local market conditions and brand heritage that people associate with quality. This strategic focus will allow us to differentiate our new house type range, have less reliance on volume-driven incentives, and deliver more sustainable value over the medium to long term.

Delivering on the new opportunity: Project Elevate

During the year, we set out and began to execute our transformation plan and strengthen the foundations for the next phase of our growth. Central to this is Project Elevate, a comprehensive, business-wide change programme designed to improve our operations, culture, and performance. The programme is owned and sponsored by the Executive Committee, and is already making a material difference.

Project Elevate is focused on four strategic priorities:

Optimising the value of our land bank

During the year, we have made significant progress towards ensuring that our land bank will be aligned to our mid-premium strategy and long-term growth ambitions. We completed a comprehensive review of our portfolio to assess the financial, operational, and strategic fit of each site within our new framework.

As part of this process, we made successful disposals of five land parcels from larger sites, in line with our land strategy. These sites primarily require substantial upfront infrastructure investment, which, while viable, would have constrained returns on capital and diverted focus from higher returning opportunities. We have also been active in purchasing land which aligns with our mid-premium strategy with forecast embedded margins ahead of our medium-term guidance. This disciplined approach allows us to balance the economics of our outlets more effectively, prioritising sites that deliver stronger margins, faster asset turn, and a more balanced risk profile across the portfolio.

Our strategic land holdings continue to represent a key lever for future margin expansion and sustainable growth. Over the year, we experienced improvements in the planning environment, with 66% of our strategic land bank allocated or in draft allocation stage (2024: 47%). This pipeline underpins our ability to deliver outlet and margin growth in the coming years, supporting both operational flexibility and enhanced financial performance.

We are embedding a more data-driven and disciplined approach to land acquisition, underpinned by enhanced governance and rigorous review by our Investment Committee. This ensures that decisions we make align with our strategic priorities, maximise value creation, and position Crest Nicholson to capitalise on opportunities as market conditions improve.

Delivering outstanding customer experience

We remain firmly committed to delivering an exceptional, customer-centric experience across every stage of the home buying journey. Over the year, we have made good progress in strengthening our sales capability and customer engagement, with enhanced training programmes for our sales teams focused on consistency, communication and care, to provide a service standard that reflects the mid-premium market.

We continue to invest in our people and in the technology that supports them, ensuring our teams have the tools and insight to provide customers with a seamless, responsive, and informed service. From first enquiry through to post-completion support, we are focused on delivering the highest standards of professionalism and attention to detail. To support this, we enhanced our customer-facing website, and launched Arteva, an upgrade range to enable customers to personalise their home, which is attracting a lot of interest and positive feedback.

This renewed emphasis on service excellence is becoming a hallmark of the Crest Nicholson brand, reinforcing trust with our customers and supporting our ambition to be recognised as one of the most customer-focused homebuilders in the sector.

Building exceptional quality homes, efficiently - developing and delivering the right product

We have finalised the development of our new range of homes, which will reflect the mid-premium positioning of the Crest Nicholson brand and set a new standard for quality and design within our markets. Following extensive market research and leveraging our own industry knowledge to understand and establish what our targeted customer base wants, this new product range will exhibit excellence in build quality, design, and aspirational lifestyle, and deliver architecturally detailed homes that feel distinctively mid-premium. We are excited to begin introducing these new homes across selected developments, providing a tangible step forward in our strategy to deliver homes that combine premium character with enduring value, incorporating design principles that anticipate future energy and performance expectations.

We continue to ensure that we deliver our homes efficiently and responsibly, with streamlined construction processes that minimise delays and waste. We take a balanced approach to align sales to our build rate to avoid unnecessary capital being used. We are continuing to develop strong partnerships with suppliers and contractors, and to train the build team to achieve the mid-premium standard.

Operational and commercial excellence

The Group has continued to strengthen operational discipline and efficiency across the business, ensuring that our structure, processes, and systems are fully aligned with our strategic priorities. During the year, we continued the upgrade of our Cost Value Recognition process. This will enable us to have greater focus on future planned productivity throughout the organisation, supported by clearer accountability and improved decision-making. In parallel, we are reviewing our operating model within the mid-premium segment to ensure it remains fit for purpose as the business grows. These actions will help us build a leaner, more agile organisation capable of delivering sustained performance improvement.

We have streamlined operations and managed overheads carefully, maintaining a clear focus on cost control and productivity. As part of this process, we have simplified parts of the organisation to maximise productivity, including merging the Yorkshire division with the Midlands division, and the closure of the Chiltern division in December 2025. While this has unfortunately involved some redundancies, some of which will be implemented in the 2026 financial year, these changes were strategically necessary to create a more focused and efficient operating model, and will help reduce our overhead costs going forward, as part of Project Elevate.

This disciplined approach will enable Crest Nicholson to deliver improved operational performance. We are already seeing tangible improvements across key stages of our value chain, from build quality to sales performance and customer satisfaction. Build standards and inspection outcomes have continued to improve, reflecting our increased focus on quality and consistency on site. Throughout the year, we achieved significant external recognition for our build quality. Notably, we received accolades from the National House-Building Council (NHBC) and Premier for five of our sites including winning the Premier national award for development of the year (101-150 units) for Curbridge Meadows. Our independent Construction Quality Review ratings have seen an increase of 5.3% within a 12-month period and the number of reportable items, as measured by the warranty provider, NHBC, has improved markedly, dropping from 0.35 last year to 0.26, a 26% decrease. With the hard work and commitment of our colleagues, we regained our Home Builders Federation (HBF) 5 star customer service rating for 2024, and during the year have consistently exceeded the threshold for a 5 star rating when measured against the new HBF scoring matrix.

Sales in a challenging macro environment, particularly in the second half of the year, were supported by more disciplined pricing and reduced reliance on discounting. However, work undertaken through Project Elevate will enable us to build on this. Customer satisfaction scores have shown a positive upward trend, driven by better communication, enhanced service standards, and a more joined-up approach between our construction and customer service teams. These improvements, though still early in the transformation journey, demonstrate the growing impact of Project Elevate and the collective effort of our people to deliver lasting change across the business.

Strengthening culture, people and leadership

Our people and culture remain at the heart of Crest Nicholson's transformation. Over the past year, we have made meaningful progress in building a stronger, more engaged organisation and one that is aligned behind a shared purpose and our new strategic priorities. Leadership engagement has been a particular area of focus, with our restructured Executive Committee fully committed to driving change and embedding the principles of Project Elevate across the business.

Through Group-wide senior leadership conferences, divisional roadshows, and ongoing communication, we have continued to nurture and develop openness, collaboration, and an accountability culture that supports our ambition to be a high-quality, customer-focused homebuilder, recognised for both its results and its integrity.

Old Crest Nicholson: managing our legacy issues

We continued to make steady progress in managing and resolving the legacy issues that have affected the business in recent years. This remains a significant area of focus and will continue to feature through 2026 and beyond as we work diligently to bring these matters to conclusion.

Fire remediation

On fire safety, our assessment programme was completed by the July 2025 deadline set out in the government's Remediation Acceleration Plan targets. We have reassessed the required provision with further detail set out in the Financial review. We remain focused on delivery, working closely with residents, contractors, and relevant authorities to ensure that all projects are completed to the highest standards and in line with the Remediation Acceleration Plan. We will vigorously continue to pursue liable third parties to recover costs, and we recouped £12.4m in the year.

Completed sites provisions and low-margin sites

Completed sites provisions relate to legacy obligations and issues on previously completed sites, including remediation of historical building defects, completing and maintaining roads and infrastructure prior to handover to management control or local authority adoption, and fulfilling other outstanding planning requirements. Although the work is time-consuming, we are progressing it as effectively as possible to ensure full compliance with our obligations.

Finally, we continue to trade through low-margin sites, managing these in line with our financial guidance and strategic objectives. These sites are becoming a smaller proportion of overall revenue, which will help reduce their distorting effect on the Group's gross margins.

Outlook: cautious yet confident in our direction

We remain confident in the medium-term targets set out in March 2025 and in the Group's capacity to deliver sustainable growth. We recognise that the trajectory of unit completions and profit will not be linear over the period, and that 2026 will remain a transitional year in a difficult market. Nevertheless, we continue to implement a wide range of self-help measures and improvements within Project Elevate to enhance margins and operational efficiency. As with the rest of the sector, we anticipate that a supportive housing market will provide additional stimulus to realise the full benefits of our strategy.

Our actions over the past year have positioned Crest Nicholson to navigate this environment with resilience and discipline. We have strong leadership, refreshed strategies, and a clear purpose guiding our decisions and priorities. The operational progress delivered through Project Elevate, combined with a sharper focus on capital allocation and cost control, is ensuring that the business remains stable and well managed despite external headwinds. The foundations we have established and are building in our land strategy, customer experience, new house types, product offering and culture, are robust, and we are confident these will enable Crest Nicholson to succeed in the mid-premium market over the medium term.

Martyn Clark

Chief Executive Officer

Financial review

The progress made towards implementing our new strategy and our operating framework has driven greater resilience and efficiency as we transform the business through challenging market conditions.

Completions and revenue

Open market private completions were 1,095 (2024: 1,047), open market bulk completions were 159 (2024: 331) and affordable completions were 437 (2024: 495). As a result, total home completions were 1,691 (2024: 1,873), down 9.7%, as our strategy to rebalance the open market portfolio away from bulk and towards private completion has begun to take effect. However, overall sales levels did reflect continued low levels of confidence in the UK housing market as a result of macroeconomic uncertainty, despite the four 0.25% reductions in the Bank of England base rate through the year.

The total weighted average selling price for the Group was £323k (2024: £344k). The reduction reflects a change in the mix of open market sales with an increase in lower value apartment sales and a reduction in higher value housing sales, which is expected to reverse in 2026. Prices were stable on a like-for-like basis.

The open market sales rate, as measured by sales per outlet per week, was 0.51 for the year compared with 0.48 in 2024. The housing market remained sluggish throughout 2025 compared with much of the previous decade, with comparatively high mortgage rates, low consumer confidence and an absence of meaningful government support all contributing to the depressed levels of demand.

While the government has begun loosening monetary policy, persistent uncertainty and low economic growth has restricted improvements to the sales environment. Average sales outlets were 40 (2024: 44). Planning matters continue to take much longer to progress sites to operational development, and associated environmental impacts such as water and nutrient neutrality further delay planning decisions. As a result of these factors, revenue from housing totalled £529.4m (2024: £572.5m), a reduction of 8%. However, we expect an increase in our sales outlets in 2026 and, as a result, we expect an improvement in housing revenue.

We completed £78.8m (2024: £44.7m) of land sales on five sites as we effect our strategy to focus our land bank and site developments.

Total revenue for the year was £610.8m, compared with £618.2m in 2024, a decrease of 1.2%.

Gross profit

Adjusted gross profit was £85.3m (2024: £84.7m1). This reflected the continued weak sales environment, more than offset by higher land sales. During the year £3.7m net inventory impairments were recognised within adjusted gross profit (2024: £8.5m), the reduction from the prior year largely driven by the non-recurrence of legacy development costs.

Gross profit on land sales was £17.1m (2024: £9.9m). Adjusted gross profit margin was 14.0% (2024: 13.7%1). Statutory gross profit was £81.3m (2024: gross loss £73.7m1).

Operating profit and margin

Adjusted operating profit of £34.7m (2024: £29.2m1) was an increase of £5.5m (18.8%) as a result of the gross profit increase of £0.6m and a £4.9m reduction in overheads. The statutory operating profit for the year was £24.2m after a net exceptional items charge of £10.5m (2024: £130.8m1 statutory operating loss after a net exceptional items charge of £160.0m).

Fire remediation

The Group has now performed external wall and internal fire safety assessments for all of the identified buildings within the scope of the Developer Remediation Contract, other than two, where governmental support has been requested to gain access. The buildings identified have been regularly updated during 2025 as surveys concluded that no further works were required on certain buildings, and a small number of additional buildings were identified as further investigative exercises took place.

In the previous year the Group recorded a combustible materials charge of £131.7m, mainly relating to the estimated costs of non-surveyed buildings at that time based on the increased level of information that the Group had gathered to reasonably estimate any provision required. During the year, as the number of surveyed buildings nears completion, this estimate has been updated, reflecting the outcome of surveys, along with changes in forecast build cost scope and price over the duration of remediation for previously surveyed buildings. This has resulted in a net charge in the year of £10.6m, comprising a provision of £39.9m, and a release of £29.3m. The release primarily relates to buildings where surveys performed in the year confirmed that no remedial works are required.

While nearly all buildings have now been surveyed, detailed cost plans and work tenders need to be finalised for approximately 30% of the buildings, and the estimate for these buildings has been made in a similar manner to the prior year, updated for the latest cost experience of the Group. Combustible materials net charge of £12.8m per note 4 of the financial statements includes a £2.2m professional fees charge incurred by the Group in pursuing third parties where it has a contractual right of recourse. The provision is measured on a nominal basis with an assumed level of inflation over the period that the remediation will take place. A discount rate of 3.8% (2024: 4.4%) based on UK gilts rates of equivalent cash flow profiles to that estimated of the provision, has been applied. The reduction to the discount rate increased the discounted provision, resulting in a charge to cost of sales of £1.1m in the period. The discounting applied to the provision unwinds to the consolidated income statement as finance expense over the expected duration of the provision.

The Group spent £62.8m in the year on investigative costs and remediation works, including balcony and cladding-related works. The Group expects to have completed any required remediation within a five-year period, using £ 95.9m of the remaining provision within one year, which includes £19.1m repayable to the Building Safety Fund (BSF). The timing of the expenditure is based on the Directors' best estimates of the timing of remediating buildings and repaying the BSF incurred costs. Actual timing may differ due to delays in agreeing scope of works, obtaining licences, tendering works contracts, and the BSF payment schedule differing to our forecast.

The Group will continue to assess the magnitude and utilisation of this provision in future reporting periods and the Group recognises that required remediation works could be subject to further inflationary pressures and cash outflows. If forecast remediation costs on buildings currently provided for are 10.0% higher/lower than provided, the pre-tax exceptional items charge in the consolidated income statement would be £20.3m higher/lower.

The Group is continuing to review the recoverability of costs incurred from third parties where it has a contractual right of recourse. In the year £12.4m was recovered from third parties by the Group. Recoveries are not recognised until they are virtually certain to be received. See note 4 of the financial statements for the consolidated income statement disclosure.

Exceptional items

Exceptional items are those which, in the opinion of the Directors, are material by size and/or are non-recurring in nature. During the year the key items were the net combustible materials charge of £4.1m, including costs of £3.7m incurred in joint ventures, legal, professional and other costs of £1.9m incurred in finalising and settling the legacy legal claim related to fire damage of an apartment scheme in 2021, completed site costs of £1.7m related to sites completed before 2019 which are no longer part of the core strategy, restructuring related expenses of £4.3m, and defined benefit pension costs of £2.2m as a result of a review of historic scheme documentation in relation to the scheme rules on guaranteed minimum pension equalisation.

Financing, liquidity and inventory reduction

At 31 October 2025, the Group had net debt of £38.2m (2024: £8.5m). Net debt including land creditors was £111.4m (2024: £140.1m). Return on capital employed for the year was 4.7% (2024: 3.8%1) reflecting the improved adjusted operating profit compared with the prior year.

The Group's inventory balance reduced by £73.0m to £1,056.1m driven particularly by improvements in land, part exchange and completed units. 

The Group made good progress on improving its cash management during the year, with the disposal of five parcels of land that the Group was unable to access for many years, and increased discipline on part exchange and inventory controls, which continue to deliver benefits to cash flow.

The Group's debt facilities include a £250m revolving credit facility and a £65m private placement. After the year end, the Group extended the term of the revolving credit facility with its existing lenders to October 2029. The private placement matures in two further tranches, £50m in August 2027 and £15m in August 2029.

Going concern

The Directors have assessed the Group's going concern position, analysing a base case and a range of adverse scenarios that are deemed to be Severe But Plausible (SBP), including aggregates of multiple factors.

The base case scenario utilised rolling forecasts up to 30 April 2027 (the going concern period) that reflect the Group's current financial position and the prevailing economic landscape, taking into account that the Group has already secured a proportion of sales for 2026 by way of its forward order book. The SBP downside conditions incorporate potential macroeconomic scenarios which could be experienced by the UK, industry-wide dynamics, and Group-specific risks. The assessment also evaluated the anticipated effectiveness of proposed mitigating actions that are within the Group's control.

While the Group forecasts to meet all its covenants in the base case scenario, the SBP downside case indicates that the Group would not meet its interest cover covenant during the going concern period, with the first measurement date in April 2026. The Group maintains good relationships and a regular dialogue with all its lenders and is confident that an amendment to its covenants would be secured if necessary, however, this is not guaranteed and therefore this represents a material uncertainty related to going concern. In all scenarios, except where the interest cover covenant is breached and a covenant amendment is not agreed, the Group forecasts adequate liquidity.

In reviewing the assessment, and notwithstanding the material uncertainty related to the going concern position outlined above, the Directors are confident that the Group has the necessary resources and mitigations available to continue operations and discharge its obligations as they fall due for at least 12 months from the date of approval of the financial statements. Accordingly, the consolidated financial statements continue to be prepared on a going concern basis. Further detail can be found in note 1 to the consolidated financial statements.

Pension

The Group operates a defined benefit pension scheme. At 31 October 2025, the surplus under IAS 19 was £13.7m (2024: £19.5m) with the reduction attributable to the asset returns underperforming the discount rate and the rectification of scheme obligations explained above in exceptional items.

Taxation

The effective tax rate applied to the profit before tax (2024: loss before tax) for the year was 24.1% (2024: 28.0%). Full details are set out in note 8 to the consolidated financial statements.

Earnings per share

Adjusted basic earnings per share was 7.8 pence (2024: 5.0 pence1), reflecting the increase in the Group's earnings on prior year. Basic statutory earnings per share was 0.9 pence (2024: statutory loss per share 41.0 pence1).

Dividend

The Board proposes to pay a final dividend of 1.8 pence per share for the financial year ended 31 October 2025 which, subject to shareholder approval, is expected to be paid on 24 April 2026 to shareholders on the Register of Members at the close of business on 27 March 2026. This is in addition to the interim dividend of 1.3 pence per share that was paid on 10 October 2025.

Restatement of 2024 financial statements

As noted in the trading update on 18 November 2025, the 2024 full-year results and opening reserves have been restated to reflect the impact of cost forecasting on a single site in the Eastern division, reducing the 2024 adjusted and reported profit before tax by £2.1m and opening reserves by £6.4m. This restatement is not material to the income statement in any of the three prior years, however, the cumulative impact is material to the balance sheet. The results for the 2025 half year will be restated when the Group announces its results for the 2026 half year. This will reduce adjusted and reported profit before tax in the 2025 half year by approximately £0.3m. A thorough review of the other sites in the Eastern division has been undertaken and no similar issues exist on those other sites.

Increased cost projections for a complex, multi-phase site in the Eastern division were identified through the Cost Value Recognition (CVR) process. Following a thorough review, I am satisfied the matters within the Eastern division are isolated and are not indicative of more pervasive issues across the Group. I am satisfied that the increased oversight of the CVR process implemented through 2025 is effective and is driving appropriate rigour and consistency through the Group's CVR processes.

Control environment

During 2023 we identified that controls were not operating effectively in two divisions. The control weaknesses related to the divisions' management and forecasting of build costs and margin.

At the end of 2023, the Group completed the rollout of a new enterprise resource management (ERP) system that strengthened the key financial and commercial controls across the business. Subsequently, further controls and cultural improvements have been implemented within the business, led by the Chief Executive Officer, new Group Managing Director, Executive Committee and myself. During 2025, cost movements in another division in relation to one specific activity were not appropriately recognised and this was identified and corrected as part of the year end process. Further enhancements to the control environment are planned for the year ahead.

As a result, the control environment is operating effectively and will continue to be strengthened in the year ahead.

Land and planning

At 31 October 2025, the short-term land portfolio comprised 11,083 (2024: 13,935) plots and the Group's strategic land portfolio totalled 18,461 (2024: 17,700) plots, meaning the total land portfolio at 31 October 2025 was 29,544 plots (2024: 31,635). The total gross development value of the portfolio is £11.0bn (2024: £11.5bn).

The Group is well placed with our consented land bank to meet our completion expectations. The Group has a well-developed land bank for 2027 and is working to obtain the relevant planning consents to enable it to meet its development plans for 2027. The Group is undertaking a thorough review of its land bank to determine its overall suitability for the business's medium-term needs and strategic direction.

Bill Floydd

Chief Financial Officer

1 See note 28 of the financial statements for an explanation of the prior year restatement.

Principal Risks

The Group's principal risks are contained in the 2025 Annual Report to be published in February 2025.

http://www.rns-pdf.londonstockexchange.com/rns/8168Q_1-2026-1-28.pdf

Statement of Directors' responsibilities in respect of the financial statements

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with UK-adopted international accounting standards and the Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 'Reduced Disclosure Framework', and applicable law).

Under company law, Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period. In preparing the financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently

· state whether applicable UK-adopted international accounting standards have been followed for the Group financial statements and United Kingdom Accounting Standards, comprising FRS 101, have been followed for the Company financial statements, subject to any material departures disclosed and explained in the financial statements

· make judgements and accounting estimates that are reasonable and prudent, and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

The Directors are responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements and the Directors' remuneration report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' confirmations

The Directors consider that the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's and Company's position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed on pages 59-60 of the 2025 Annual Report to be published in February 2026, confirm that, to the best of their knowledge:

· the Group financial statements, which have been prepared in accordance with UK-adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Group

· the Company financial statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS 101, give a true and fair view of the assets, liabilities and financial position of the Company, and

· the Strategic report includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that it faces.

In the case of each Director in office at the date the Directors' Report is approved:

· so far as the Director is aware, there is no relevant audit information of which the Group's and Company's auditors are unaware, and

· they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group's and Company's auditors are aware of that information.

On behalf of the Board

Martyn Clark

Chief Executive Officer

28 January 2026

AUDITED FINANCIAL INFORMATION

The consolidated financial statements and notes 1 to 28 for the year ended 31 October 2025 are derived from the Group's annual financial statements which have been audited by PricewaterhouseCoopers LLP. The unmodified audit report is available for inspection at the Group's registered office.

CREST NICHOLSON HOLDINGS PLC

Consolidated Income Statement

For the year ended 31 October 2025

1 See note 28 for an explanation of the prior year restatement.

The notes below form part of these consolidated financial statements.

CREST NICHOLSON HOLDINGS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

1 See note 28 for an explanation of the prior year restatement.

The notes below form part of these consolidated financial statements.

CREST NICHOLSON HOLDINGS PLC

Consolidated Statement of Changes in Equity

For the year ended 31 October 2025

1 See note 28 for an explanation of the prior year restatement.

The notes on below form part of these consolidated financial statements.

CREST NICHOLSON HOLDINGS PLC

Consolidated Statement of Financial Position

As at 31 October 2025

1 See note 28 for an explanation of the prior year restatement.

The notes on below form part of these consolidated financial statements.

These consolidated financial statements were approved by the Board of Directors on 28 January 2026.

On behalf of the Board

Martyn Clark Bill Floydd

Director Director

CREST NICHOLSON HOLDINGS PLC

Consolidated Cash Flow STATEMENT

For the year ended 31 October 2025

1 See note 28 for an explanation of the prior year restatement.

The notes on below form part of these consolidated financial statements.

CREST NICHOLSON HOLDINGS PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Basis of preparation

Crest Nicholson Holdings plc (the Company) is a public limited company incorporated, listed and domiciled in the UK. The address of the registered office is 500 Dashwood Lang Road, Bourne Business Park, Addlestone, Surrey, KT15 2HJ. The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the Group) and include the Group's interest in jointly controlled entities. The parent company financial statements present information about the Company as a separate entity and not about its Group.

The financial statements are presented in pounds sterling and amounts are denominated in millions (£m), unless otherwise stated.

The Group financial statements have been prepared and approved by the Directors in accordance with UK-adopted international accounting standards, and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards, and have been prepared on the historical cost basis except for financial assets at fair value through profit and loss, which are as otherwise stated. The parent company financial statements are presented below.

The preparation of financial statements in conformity with UK-adopted international accounting standards requires the Directors to make assumptions and judgements that affect the application of policies and reported amounts within the financial statements. Assumptions and judgements are based on experience and other factors that the Directors consider reasonable under the circumstances. Actual results may differ from these estimates.

Judgements made by the Directors, in the application of these accounting policies that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed below.

Going concern

In determining the appropriateness of the basis of preparation, the Directors have considered whether the Group can continue to meet its liabilities and other obligations for the foreseeable future. These include its ability to meet the financial covenants as required under its sustainability-linked revolving credit facility (RCF) and senior loan notes as detailed in note 23. The Directors consider the possibility of breaching one of the three financial covenants (gearing, tangible net worth and interest cover) as being the first sign that the Group could be in distress, and is the basis of its going concern assessment in this year's financial statements.

The Directors have assessed the Group's going concern position through to 30 April 2027 (the going concern period), which aligns with its half-year reporting for the 2027 financial year. The going concern model is made up of a Board-approved base case and a Severe But Plausible (SBP) downside case. Within the base case, the Group has already secured a proportion of sales for 2026 by way of its forward order book. The base case forecast is that the Group maintains sufficient liquidity headroom throughout the going concern period and will be compliant from a covenant perspective for all required reporting periods.

The base case has then been used to model a number of adverse factors that are deemed to be plausible downside conditions as outlined below. These incorporate potential macroeconomic scenarios that could be experienced by the UK, industry-wide dynamics, and Group-specific risks.

The SBP downside case combines the impacts of multiple risk factors which would interact with each other in a downside scenario, rather than modelling the impact of individual assumptions. In conducting this test, the Directors drew on extensive prior experience in navigating economic downturns, including the COVID-19 pandemic, and considered the implications of current market conditions. This assessment also evaluates the anticipated effectiveness of proposed mitigating actions that are within the Group's control and can be enacted in good time, ensuring a robust framework for managing potential disruptions and safeguarding the Group's financial stability.

Risk factors applied against future forecasts

The following risk factors have been applied in combination in reaching the SBP downside case.

· Reduction in sales volumes (Principal risks: Market conditions, solvency and liquidity)

A potential decline in macroeconomic conditions in the UK, which negatively impacts the UK residential property market and reduces the ability for people to buy homes. The Directors have considered a 23% reduction in unreserved open market sales volumes for the 2026 financial year and a 15% reduction for the remainder of the assessment period. Given the importance of completions to achieving the Group's forecasts, this assumption has the most impact on the downside case modelled.

· Fall in sales price (Principal risks: Market conditions, solvency and liquidity)

A reduction in sales prices during an economic slowdown and/or lack of mortgage availability/affordability for homebuyers. A 3% reduction in average unreserved open market house selling prices and a 10% reduction in land sale revenues compared to the current base case.

· Increase in build cost (Principal risks: Supply chain, build cost and margin, combustible materials and legacy obligations)

Unexpected costs occurring cause a 5% increase in cash outflows on build cost expenditure.

Mitigation options and considerations

The Directors have considered the mitigations that could be applied in a deteriorating trading environment to either increase profit or conserve cash to reduce interest cost. Some of these measures are implicit outcomes of a downturn (such as reduction in build spend) rather than mitigating actions which the Group would have to apply.

The Group has experience of applying such mitigations in the past, which include but are not limited to:

· a reduction in the Group's headcount driving a reduction in overheads, site and sales and marketing spend to reflect the lower build and selling activity in a weaker trading environment

· reducing build spend, including mothballing unproductive and/or capital-intensive schemes

· reduction or elimination of management incentives

· a reduction in discretionary land acquisitions and therefore land expenditure as the Group would require less land to replenish the land portfolio

· removal of dividends after April 2026 to conserve cash.

Conclusion on going concern

While the Group forecasts to meet all its covenants in the base case scenario, the SBP downside scenario indicates that the Group would not meet its interest cover covenant during the going concern period, with the first measurement date in April 2026. If this covenant breach were to occur, it would constitute an event of default under the terms of the revolving credit facility agreement and senior loan notes. The gearing and tangible net worth covenants are forecast to be met in all reporting periods in the SBP downside case. The Group maintains good relationships and a regular dialogue with all its lenders, as shown by recently extending the revolving credit facility to October 2029, and is confident that an amendment to its covenants would be secured if necessary, however, this is not guaranteed and therefore this represents a material uncertainty related to going concern. In all scenarios, except where the interest cover covenant is breached and a covenant amendment is not agreed, the Group forecasts adequate liquidity.

In reviewing the assessment outlined above, the Directors are confident that the Group has the necessary resources and mitigations available to continue operations and discharge its obligations as they fall due for at least 12 months from the date of approval of the financial statements. Accordingly, the consolidated financial statements continue to be prepared on a going concern basis. However, a material uncertainty exists, in particular with respect to the ability to achieve the covenant amendments which may be required, that may cast significant doubt on the Group's ability to continue as a going concern. The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.

Critical accounting estimates and judgements

The preparation of the consolidated financial statements under UK-adopted international accounting standards requires the Directors to make estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses and related disclosures. In applying the Group's accounting policies, the key judgements that have a significant impact on the financial statements are described below.

· The judgement to present certain items as exceptional (see note 4).

· The identification of performance obligations where a revenue transaction involves the sale of both land and residential units, and revenue on the units is subsequently recognised over time where the land sale element takes place at the start of the contract (see note 3 for the split of revenue recognised at a point in time and recognised over time, and also the more detailed revenue accounting policy).

· The identification of performance obligations in land sales, where Crest retains a portion of the land and where infrastructure is incomplete at the transaction date.

· The judgement of development phases to be combined for the purpose of determining cost of sales with reference to equalised profitability across the development.

· The recognition of the defined benefit pension scheme net surplus (see note 15).

· The current and non-current presentation of the combustible materials provision.

· The presentation of completed site liabilities as either accruals or provisions.

The key estimates that have a significant impact on the financial statements are described below.

· Carrying value of inventories.

· Estimation of development profitability and cost of sales recognised in the period.

· Completed site costs.

· Valuation of the pension scheme assets and liabilities.

· Cost to remediate sites with combustible materials present.

Estimates and associated assumptions affecting the financial statements are based on historical experience and various other factors that are believed to be reasonable under the circumstances. The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the estimate was based or as a result of new information.

Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year, or in the year of revision and future years if the revision affects both current and future years.

The Directors have made consistent estimates and assumptions in reviewing the going concern basis as those detailed above. The Directors consider the key sources of estimation uncertainty that have a risk of causing a material adjustment to the carrying value of assets and liabilities as described below.

Carrying value of inventories

Inventories of land, work-in-progress, completed buildings, including show homes and part exchange inventories, are stated in the consolidated statement of financial position at the lower of cost or net realisable value (NRV). On a regular basis, management updates estimates of future revenue and expenditure for each development. Future revenue and expenditure may differ from estimates which could lead to an impairment of inventory if there are adverse changes. Where forecast revenues are lower than forecast total costs, an inventory provision is made. This provision may be reversed in subsequent periods if there is evidence of sustained improved revenue or reduced expenditure forecast on a development. If forecast revenue was 10.0% lower on sites within the short-term portfolio (total land portfolio excluding strategic land) as at 31 October 2025, the impact would have reduced profit before tax by £14.7m (2024: the impact would have increased loss before tax by £13.1m).

Estimation of development profitability

Due to the nature of development activity and, in particular, the length of the development cycle, the Group has to make estimates of the costs to complete developments, in particular those which are multi-phase and/or may have significant infrastructure costs. These estimates are reflected in the margin recognised on developments in relation to sales recognised in the current and future years. There is a degree of inherent uncertainty in making such estimates as well as the judgement is to determine the phases over which the costs are spread. The Group has established internal controls that are designed to ensure an effective assessment of estimates is made of the costs to complete developments and the judgement to determine the phases of a multi-phase site. The Group considers estimates of the costs to complete on longer-term sites, which typically have higher upfront shared infrastructure costs, to have greater estimation uncertainty than sites of shorter duration with fewer infrastructure requirements. A change in estimated margins on sites, for example due to changes in estimates of build cost inflation or a reduction in house prices, could alter future profitability. If forecast costs were 10.0% higher on sites which contributed to the year ended 31 October 2025 and which are forecast to still be in production beyond the year ending 31 October 2027 (2024: beyond the year ending 31 October 2026), cost of sales in the current year would have been £27.7m (2024: £29.1m) higher.

The Group has assessed the potential financial impacts of transitional and physical climate-related risks and opportunities. The primary known climate-related policy that will affect our product is the Future Homes Standard, due to be legislated in 2026, which will increase build costs for individual units. Anticipated additional build costs are incorporated into project acquisition appraisals. These costs are not expected to have a material impact on the carrying value of inventories or their associated project margins or the value of goodwill. Flood risk and broader planning requirements are also evaluated and accounted for during new project acquisitions. Longer-term climate-related costs are beyond the time horizon of the Group's contracted projects and therefore do not impact the carrying value of inventories or their associated project margins. Additional information on climate-related risks and opportunities is provided on pages 45-53 of our 2025 Annual Report to be published in February 2026. The impact of climate change is therefore considered an area of estimation rather than a critical accounting estimate.

Completed site costs

Completed site costs include completed site accruals, which is predominantly the cost to complete outstanding site infrastructure and amenities within developments where the last housing unit has been completed, and completed site provisions, which is the forecast cost to complete remedial works on buildings where faults have been identified and the Group is responsible to remedy. Completed site provisions and accruals can require a number of estimates and assumptions in their calculation. The Group has to make estimates of the costs to complete outstanding site infrastructure and amenities within developments and the cost of remediation required where faults have been identified post completion. The Group has internal controls that are designed to ensure an effective assessment of estimates is made of the costs to finalise completed developments. If forecast completed site costs are 10.0% higher than provided, the charge in the consolidated income statement would be £2.0m higher for completed site accruals and £1.5m higher for completed site provisions.

Valuation of the pension scheme assets and liabilities

In determining the valuation of the pension scheme assets and liabilities, the Directors utilise the services of an actuary. The actuary uses key assumptions being inflation rate, life expectancy, discount rate and Guaranteed Minimum Pensions, which are dependent on factors outside the control of the Group. To the extent that such assumptions differ to that expected, the pension liability would change. See note 15 for additional details.

Combustible materials

The combustible materials provision requires a number of key estimates and assumptions in its calculation. During the year, the combustible materials provision has been increased to reflect the latest assessment of these costs.

The key assumptions used to determine the provision include, but are not limited to, identification of the properties impacted through the period of construction considered. The key estimates then applied to these properties include the potential costs of investigation, replacement materials and works to complete, along with the timing of forecast expenditure. The Directors have used a combination of Building Safety Fund (BSF) cost information, other external information and internal assessments as a basis for the estimated remedial costs. The Group has used estimates and assumptions to evaluate the probable remediation works required to non-surveyed buildings after applying experience gained from buildings with surveys and applying risk categories to groups of buildings with similar characteristics. These estimates are inherently uncertain due to the highly complex and bespoke nature of the buildings. The actual costs may differ to the amounts notified by the BSF-costed projects, and fire safety reports in progress may require different levels of remediation and associated costs than those currently estimated. If forecast remediation costs on buildings currently provided for are 10.0% higher/lower than provided, the pre-tax exceptional items charge in the consolidated income statement would be £20.3m higher/lower. See notes 4 and 21 for additional details.

Adoption of new and revised standards

The Group adopted the following new standards and amendments to standards, which have had no material impact on the Group's results or financial statement disclosures:

· amendments to IAS 1 'Non-current Liabilities with Covenants' and 'Classification of Liabilities as Current or Non-current'

· amendments to IFRS 16 'Lease Liability in a Sale and Leaseback'

· amendments to IAS 7 and IFRS 7 'Supplier Finance Arrangements'.

Impact of standards and interpretations in issue but not yet effective

The following new accounting standards and amendments to existing standards have been issued but are not yet effective or have not yet been endorsed by the UK:

· amendments to IAS 21 'Lack of exchangeability'

· IFRS 18 'Presentation and Disclosure in Financial Statements'

· IFRS 9 and IFRS 7 'Amendments to the Classification and Measurement of Financial Instruments'

· amendments to IFRS 9 and IFRS 7 'Contracts Referencing Nature dependent Electricity'

· Annual Improvements to IFRS Accounting Standards - Volume 11

· IFRS 19 'Subsidiaries without Public Accountability: Disclosures'.

Effective dates will be subject to the UK endorsement process.

The Group is currently assessing the impact of the above standards, but they are not expected to have a material impact other than potentially in respect of the IFRS 9 and IFRS 7 'Amendments to the Classification and Measurement of Financial Instruments' and IFRS 18.

The IFRS 7 and IFRS 9 measurements clarify when a financial liability is derecognised, specifically at the settlement date. This has the potential to affect the classification of financial liabilities and cash around a balance sheet date depending on the nature and timing of year end transactions. The Group is in the process of assessing the full impact of the amendments to existing policies and practices.

IFRS 18 replaces IAS 1 and requires that companies classify all income and expenses into five categories in the statement of profit or loss, namely the operating, investing, financing, discontinued operations and income tax categories. Management-defined performance measures are disclosed in a single note and enhanced guidance is provided on the aggregation and disaggregation of information presented in the financial statements. The Group is in the process of assessing the impact of IFRS 18 and anticipates changes to certain presentational and disclosure-related matters in its consolidated financial statements in future periods.

The Group has not adopted any other standard, amendment or interpretation that has been issued but is not yet effective.

Other accounting policies

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these Group financial statements.

Alternative performance measures (APMs)

The Group has adopted various APMs, as presented below. These measures are not defined by International Financial Reporting Standards (IFRS) and therefore may not be directly comparable with other companies' APMs, and should be considered in addition to, and are not intended to be a substitute for, or superior to, IFRS measurements.

Consolidation

The consolidated financial statements include the financial statements of Crest Nicholson Holdings plc, its subsidiary undertakings and the Group's share of the results of joint ventures and joint operations. Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation.

(a) Subsidiaries

Subsidiaries are entities in which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns through its power over the entity. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The profits and losses of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The acquisition method of accounting is used by the Group to account for the acquisition of subsidiaries that are a business under IFRS 3. On acquisition of a subsidiary, all of the subsidiary's separable, identifiable assets and liabilities existing at the date of acquisition are recorded at their fair values reflecting their condition at that date. All changes to those assets and liabilities and the resulting gains and losses that arise after the Group has gained control of the subsidiary are charged to the post-acquisition consolidated income statement or consolidated statement of comprehensive income. Accounting policies of acquired subsidiaries are changed where necessary, to ensure consistency with policies adopted by the Group.

Acquisitions of subsidiaries which do not qualify as a business under IFRS 3 are accounted for as an asset acquisition rather than a business combination. Under such circumstances the fair value of the consideration paid for the subsidiary is allocated to the assets and liabilities purchased based on their relative fair value at the date of purchase. No goodwill is recognised on such transactions.

(b) Joint ventures

A joint venture is a contractual arrangement in which the Group and other parties undertake an economic activity that is subject to joint control and these parties have rights to the net assets of the arrangement. The Group reports its interests in joint ventures using the equity method of accounting. Under this method, interests in joint ventures are initially recognised at cost and adjusted thereafter to recognise the Group's share of the post-acquisition profits or losses and movements in other comprehensive income. The Group's share of results of the joint venture after tax is included in a single line in the consolidated income statement. Where the share of losses exceeds the Group's interest in the entity and there is no obligation to fund these losses, the carrying amount is reduced to nil and recognition of further losses is discontinued, unless there is a long-term receivable due from the joint venture, in which case, if appropriate, the loss is recognised against the receivable. If an obligation to fund losses exists, the further losses and a provision are recognised. Unrealised gains on transactions between the Group and its joint ventures are eliminated on consolidation. Accounting policies of joint ventures are changed where necessary, to ensure consistency with policies adopted by the Group.

(c) Joint operations

A joint operation is a joint arrangement that the Group undertakes with other parties, in which those parties have rights to the assets and obligations of the arrangement. The Group accounts for joint operations by recognising its share of the jointly controlled assets and liabilities and income and expenditure on a line-by-line basis in the consolidated statement of financial position and consolidated income statement.

Goodwill

Goodwill represents the excess of what was paid to acquire CN Finance plc on 24 March 2009 over the fair value of their net assets at the acquisition date, less subsequent impairments. We assess whether goodwill is recoverable by performing an impairment review annually or more frequently if events or changes in circumstances indicate a potential impairment on the acquisition. The goodwill is allocated to the whole group of cash generating units within the Group; this is the lowest level within the entity at which the goodwill is monitored for internal management purposes.

The recoverable amount is equal to the higher of value in use and fair value less costs of disposal. The value in use is estimated as the present value of the forecast cash flows of the Group. The forecast considers the likelihood and scale of permitted development, forecast build costs, forecast selling prices and site procurement in line with the Group's committed strategic model and in line with current market conditions and projections covering a period of 5 years to 2030 before applying a terminal value. Cash flows related to uncommitted future restructurings and enhancement capital expenditure are excluded from the projections.

Revenue and profit recognition

Revenue comprises the fair value of the consideration received or receivable, net of value added tax and discounts.

Revenue is recognised on open market and apartment sales at legal completion. For affordable and other sales in bulk, revenue recognition is dependent on freehold legal title being passed to the customer as it is considered that, upon transfer of freehold title the customer controls the work-in-progress. Where freehold legal title and control is passed to the customer, revenue is recognised on any upfront sale of land (where applicable) and then on the housing units as the build of the related units progresses, via surveys of work performed on contract activity. Where freehold legal title is not passed to the customer, revenue is not recognised on any upfront sale of land and the revenue on the housing units and sale of land is recognised at handover of completed units to the customer. The transaction price for all housing units is derived from contractual negotiations. Variable consideration is recognised within revenue to the extent that it is highly probable that a significant reversal will not occur, and estimates are reassessed at each reporting date.

Revenue on specification upgrades paid for by the customer or on the cost of specification upgrades offered to the customer as part of the purchase price is recognised as revenue when legal title of the upgraded property passes to the customer.

Revenue is predominantly recognised on land sales when legal title passes to the customer. If the Group has remaining performance obligations, such as the provision of services to the land, an element of revenue is allocated to these performance obligations with reference to the relative standalone selling price of the performance obligations and recognised as the obligations are performed. Where variable consideration exists, revenue is recognised to the extent that it is highly probable that a significant reversal will not occur, and estimates are reassessed at each reporting date.

Revenue recognition on commercial property sales is dependent on freehold legal title being passed to the customer, as it is considered that, upon transfer of freehold title the customer controls the work-in-progress. Where freehold legal title is passed to the customer, revenue is recognised on any upfront sale of land (where applicable) and then on the development revenue over time as the build of the related commercial units progresses. Where freehold legal title is not passed to the customer, revenue is not recognised on any upfront sale of land and the revenue on the commercial property is recognised at handover of the completed commercial unit to the customer.

Cost of sales

Cost of sales are recognised by reference to the gross margin forecast across the related development site. Due to the development cycle often exceeding one financial year, margins are forecast, taking into account the allocation of site-wide development costs such as infrastructure, and estimates required for the cost to complete such developments.

Other operating income

Other operating income comprises rental income, joint venture and other management fee income and the income associated with part exchange sales. The Group has made a judgement to not recognise revenue on the proceeds received on the disposal of properties taken in part exchange against a new property as they are incidental to the main revenue-generating activities of the Group. As part exchange sales are deemed incidental, the income and expenses associated with part exchange properties are recognised in other operating income and other operating expenses in the consolidated income statement. Part exchange income is recognised when legal title is passed to the customer. Rental income is recognised over the term of the rent agreement. Management fee income is recognised over time, in line with when management services are provided.

Other operating expenses

Other operating expenses represent cost of sales of part exchange properties.

Exceptional items

Exceptional items are those which, in the opinion of the Directors, are material by size and/or non-recurring in nature such as significant costs and settlements associated with combustible materials, significant legal matters, changes in estimate of costs associated with completed sites which are no longer part of the core strategy, significant costs associated with corporate bid approaches, restructuring, clarification of historical pension scheme terms and the write down of freehold inventories. Where appropriate, the Directors consider that items should be considered as categories or classes of items, such as any credits/costs impacting the consolidated income statement which relate to combustible materials or certain site costs, notwithstanding where an item may be individually immaterial. The Directors believe that these items require separate disclosure within the consolidated income statement in order to assist the users of the financial statements to better understand the performance of the Group, which is also how the Directors and chief operating decision maker internally manage the business. Additional charges/credits (including reversals) to items classified as exceptional items in prior years will be classified as exceptional in the current year, unless immaterial to the financial statements. As these exceptional items can vary significantly year on year, they may introduce volatility into the reported earnings. The income tax impacts of exceptional items are reflected at the actual tax rate related to these items.

Net finance expense

Interest income is recognised on a time-apportioned basis by reference to the principal outstanding and the effective interest rate. Interest costs associated with financing facilities are recognised in the consolidated income statement on an accruals basis using the effective interest method. Imputed interest expense on deferred land creditors and combustible materials is recognised over the life of associated cash flows, with reference to the effective interest rate.

Income and deferred tax

Income tax comprises current tax and deferred tax. Income tax is recognised in the consolidated income statement except to the extent that it relates to items recognised in other comprehensive income, in which case it is recognised in other comprehensive income. Current tax is the expected tax payable on taxable profit for the year and any adjustment to tax payable in respect of previous years. Taxable profit is profit before tax per the consolidated income statement after adjusting for income and expenditure that is not subject to tax, and for items that are subject to tax in other accounting periods. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the consolidated statement of financial position date. Current tax assets are recognised to the extent that it is probable the asset is recoverable.

Deferred tax is provided in full on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits.

Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax liabilities are recognised for all temporary differences. Deferred tax is calculated using tax rates that have been substantively enacted by the consolidated statement of financial position date.

Dividends

Final and interim dividend distributions to the Company's shareholders are recorded in the Group's financial statements in the earlier of the period in which they are approved by the Company's shareholders, or paid.

Employee benefits

(a) Pensions 

The Group operates a defined benefit (DB) scheme (closed to new employees since October 2001 and to future service accrual since 30 April 2010) and also makes payments into a defined contribution scheme for employees.

In respect of the DB scheme, the retirement benefit deficit or surplus is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods, such benefits measured at discounted present value, less the fair value of the scheme assets. The rate used to discount the benefits accrued is the yield at the consolidated statement of financial position date on AA credit rated bonds that have maturity dates approximating to the terms of the Group's obligations. The calculation is performed by a qualified actuary using the projected unit method. The operating and financing costs of such plans are recognised separately in the consolidated income statement; past service costs and financing costs are recognised in the periods in which they arise. The Group recognises expected scheme gains and losses via the consolidated income statement and actuarial gains and losses are recognised in the period they occur directly in other comprehensive income, with associated deferred tax.

The retirement benefit deficit or surplus recognised in the consolidated statement of financial position represents the deficit or surplus of the fair value of the scheme's assets over the present value of scheme liabilities, with any net surplus recognised to the extent that the employer can gain economic benefit as set out in the requirements of International Financial Reporting Interpretations Committee 14.

Payments to the defined contribution scheme are accounted for on an accruals basis.

(b) Share-based payments

The fair value of equity-settled, share-based compensation plans is recognised as an employee expense with a corresponding increase in equity. The fair value is measured as at the date the options are granted and the charge amended if vesting does not take place due to non-market conditions (such as service or performance) not being met. The fair value is spread over the period during which the employees become unconditionally entitled to the shares and is adjusted to reflect the actual number of options that vest. At the consolidated statement of financial position date, if it is expected that non-market conditions will not be satisfied, the cumulative expense recognised in relation to the relevant options is reversed.

The proceeds received are credited to share capital (nominal value) and share premium when the options are exercised if new shares are issued. If treasury shares are used the proceeds are credited to retained reserves. There are no cash-settled share-based compensation plans.

Own shares held by Employee Share Ownership Trust (ESOT)

Transactions of the Company-sponsored ESOT are included in both the Group financial statements and the Company's own financial statements. The purchase of shares in the Company by the ESOT are charged directly to equity.

Software as a Service (SaaS) arrangements Implementation costs, including costs to configure or customise a cloud provider's application software, where the Group determines that there is no control over the asset in development, are recognised as administrative expenses when the services are received.

Property, plant and equipment 

Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition. Depreciation is calculated to write off the cost of the assets on a straight-line basis to their estimated residual value over its expected useful life as follows:

Fixtures and fittings 10 years

Computer equipment and non-SaaS software 3-5 years

The asset residual values, carrying values and useful lives are reviewed on an annual basis and adjusted if appropriate at each consolidated statement of financial position date.

Right-of-use assets and lease liabilities

The Group assesses at lease inception whether a contract is, or contains, a lease. The Group recognises a right-of-use asset and a lease liability at lease commencement.

The right-of-use asset is initially recorded at the present value of future lease payments and subsequently measured net of depreciation, which is charged to the consolidated income statement as an administrative expense over the shorter of its useful economic life or its lease term on a straight-line basis. The right-of-use asset is also reduced for impairment losses.

The Group recognises lease liabilities at the present value of future lease payments, discounted at the rate implicit in the lease or the Group's incremental borrowing rate as determined with reference to the most recently issued financial liabilities carrying interest. The discount is subsequently unwound and recorded in the consolidated income statement over the lease term as a finance expense. The lease term comprises the non-cancellable period of the contract, together with periods covered by an option to extend the lease where the Group is reasonably certain to exercise that option.

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Inventories

Inventories are stated at the lower of cost and net realisable value (NRV).

Land includes land under development, land options purchased and land exchanged on an unconditional basis with or without planning consent.

Work-in-progress and completed buildings including show homes comprise direct materials, sub-contract work, labour costs, site overheads, associated professional fees and other attributable overheads, but excludes interest costs.

Part exchange inventories are held at the lower of cost and NRV, which includes an assessment of costs of resale.

Land inventories and the associated land payables are recognised in the consolidated statement of financial position from the date of unconditional exchange of contracts. Land payables are recognised as part of trade and other payables.

Options purchased in respect of land are recognised initially as a prepayment within inventories and written down on a straight-line basis over the life of the option. If planning permission is granted and the option exercised, the option is not written down during that year and its carrying value is included within the cost of land purchased.

Provisions are established to write down inventories where the estimated net sales proceeds less costs to complete exceed the current carrying value. Adjustments to the provisions will be required where estimated net selling prices or costs to complete change. NRV for inventories is assessed by estimating selling prices and costs, taking into account current market conditions.

Financial assets

Financial assets are initially recognised at fair value and subsequently classified into one of the following measurement categories:

· at amortised cost

· subsequently at fair value through profit or loss (FVTPL)

· subsequently at fair value through other comprehensive income (FVOCI).

The classification of financial assets depends on the Group's business model for managing the asset and the contractual terms of the cash flows. Assets that are held for the collection of contractual cash flows that represent solely payments of principal and interest are measured at amortised cost, with any interest income recognised in the consolidated income statement using the effective interest rate method.

Financial assets that do not meet the criteria to be measured at amortised cost are classified by the Group as measured at FVTPL. Fair value gains and losses on financial assets measured at FVTPL are recognised in the consolidated income statement and presented within administrative expenses. The Group currently has no financial assets measured at FVOCI.

Financial assets at fair value through profit and loss

Financial assets at fair value through profit and loss (FVTPL) (which comprise shared equity receivables) are classified as being held to collect and initially recognised at fair value. Changes in fair value relating to the expected recoverable amount are recognised in the consolidated income statement as a finance income or expense. These assets are held as current or non-current based on their contractual repayment dates.

Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less provision for impairment. A provision for impairment of trade and other receivables is established based on an expected credit loss model applying the simplified approach, which uses a lifetime expected loss allowance for all trade and other receivables. The amount of the loss is recognised separately in the consolidated income statement. Current trade and other receivables do not carry any interest and are stated at their amortised cost, as reduced by appropriate allowances for estimated irrecoverable amounts. Non-current trade and other receivables are discounted to present value when the impact of discounting is deemed to be material, with any discount to nominal value being recognised in the consolidated income statement as interest income over the duration of the deferred payment.

Contract assets

Contract assets represent unbilled work-in-progress on affordable and other sales in bulk on contracts in which revenue is recognised over time. Contract assets are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less provision for impairment. Contract assets do not carry any interest and are stated at their amortised cost, as reduced by appropriate allowances for estimated irrecoverable amounts.

Cash and cash equivalents

Cash and cash equivalents are cash balances in hand and in the bank and are carried in the consolidated statement of financial position at nominal value.

Interest-bearing loans and borrowings

Interest-bearing loans and borrowings are recognised initially at fair value, net of direct transaction costs, and subsequently measured at amortised cost. Finance charges are accounted for on an accruals basis in the consolidated income statement using the effective interest method, and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise or are included within interest accruals.

Financial liabilities

Financial liabilities are initially recognised at fair value and subsequently classified into one of the following measurement categories:

· at amortised cost

· subsequently at FVTPL.

Non-derivative financial liabilities are measured at FVTPL when they are considered held for trading or designated as such on initial recognition. The Group has no non-derivative financial liabilities measured at FVTPL.

Land payables

Land payables are recognised in the consolidated statement of financial position from the date of unconditional exchange of contracts. Where land is purchased on deferred settlement terms then the land and the land payable are discounted to their fair value using the effective interest method in accordance with IFRS 9. The difference between the fair value and the nominal value is amortised over the deferment period, with the financing element being charged as an interest expense through the consolidated income statement.

Trade and other payables

Trade and other payables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method. Trade and other payables on deferred terms are initially recorded at their fair value, with the discount to nominal value being charged to the consolidated income statement as an interest expense over the duration of the deferred period. Included within trade and other payables are completed site accruals.

Contract liabilities

Contract liabilities represent payments on account, received from customers, in excess of billable work-in-progress on affordable and other sales in bulk on contracts. Contract liabilities are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

Provisions

A provision is recognised in the consolidated statement of financial position when the Group has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount can be reliably estimated. Provisions are discounted to present value on a discounted cash flow basis using an interest rate appropriate to the class of the provision, where the effect is material. Included within provisions are completed site provisions.

Seasonality

In common with the rest of the UK housebuilding industry, activity occurs throughout the year, with peaks in sales completions in spring and autumn. This creates seasonality in the Group's trading results and working capital.

2 SEGMENTAL REPORTING

The Board has been identified as the chief operating decision maker as defined under IFRS 8 Operating Segments. Financial information is reported to the Board for the UK housebuilding business as a whole and the Board makes decisions regarding resource allocation on that basis. Accordingly, the Group has a single UK housebuilding operating segment.

Contract assets have decreased to £nil from £7.6m in 2024, reflecting less unbilled work-in-progress on affordable and other sales in bulk at the year end. This is in line with the trading of the Group and the contractual arrangements in the Group's contracts. Contract liabilities have increased to £10.2m from £6.9m in 2024.

Based on historical trends, the Directors expect a significant proportion of the contract liabilities total to be recognised as revenue in the next reporting period.

Included in revenue during the year was £3.5m (2024: £2.9m) that was included in contract liabilities at the beginning of the year.

During the year £nil (2024: £nil) of revenue was recognised from performance obligations satisfied or partially satisfied in previous years.

As at 31 October 2025 there was £95.0m (2024: £151.9m) of transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied on contracts exchanged with customers. Based on forecasts, the Group expects to recognise £50.9m (2024: £111.3m) of transaction prices allocated to performance obligations that are unsatisfied on contracts exchanged with customers within one year, £42.6m (2024: £40.6m) within two to five years, and £1.5m (2024: £nil) over five years.

4 EXCEPTIONAL ITEMS

Exceptional items are those which, in the opinion of the Directors, are material by size and/or non-recurring in nature such as significant costs and settlements associated with combustible materials, significant legal matters, changes in estimate of costs associated with completed sites which are no longer part of the core strategy, significant costs associated with corporate bid approaches, restructuring, clarification of historical pension scheme terms and the write down of freehold inventories. Where appropriate, the Directors consider that items should be considered as categories or classes of items, such as any credits/costs impacting the consolidated income statement which relate to combustible materials or certain site costs, notwithstanding where an item may be individually immaterial. The Directors believe that these items require separate disclosure within the consolidated income statement in order to assist the users of the financial statements to better understand the performance of the Group, which is also how the Directors and chief operating decision maker internally manage the business. Additional charges/credits (including reversals) to items classified as exceptional items in prior years will be classified as exceptional in the current year, unless immaterial to the financial statements. As these exceptional items can vary significantly year on year, they may introduce volatility into the reported earnings. The income tax impacts of exceptional items are reflected at the marginal tax rate related to these items.

Net combustible materials charge

Following the Group's signing of the Developer Remediation Contract on 13 March 2023, the Group assumed contractual obligations with the government to identify and remediate all buildings it has developed that may contain life-critical fire safety defects. The combustible materials net charge of £12.8m represents forecast changes in build costs, costs of remediating buildings surveyed in the year and changes in the provision discount, and includes a £2.2m professional fees charge incurred by the Group in pursuing third parties where it has a contractual right of recourse. During the year, the Group recovered £12.4m (2024: £4.4m) from third parties in respect of defective design and workmanship. See note 21 for further information.

Legal provision and professional fees

The Group is subject to a legal claim relating to a low-rise bespoke apartment block built by the Group which was damaged by fire in 2021. The Group has incurred professional fees in the year in relation to the claim. In 2023 the Group recognised its estimate of the potential liability, which has been updated at 31 October 2025 to represent the Group's latest estimate. See note 21 for further information.

Following the year end a settlement was reached with the claimant in respect of the building damaged by the fire in 2021 and a remedial works agreement was agreed with respect to other buildings identified with defects through this case. The final terms of the settlement and remedial works agreement are consistent with the amounts provided for at the balance sheet date, although the final cost of remedial works will continue to be subject to estimation uncertainty.

Completed site costs

During the first half of the prior financial year, the Group became aware of certain build defects initially identified on four sites that were completed prior to 2019 which are no longer part of the core strategy. Following a thorough review of all completed sites in association with third-party consultants, an exceptional charge of £25.0m was recognised in the prior year. During the year, a net exceptional charge of £1.7m has been recognised which represents an update to the estimate of costs required to remediate these build defects.

Freehold inventories write off

During the prior year, the Group provided £5.7m to write off the value of its remaining freehold reversionary interests in buildings previously constructed by the Group. The remaining value is £nil and therefore this is a non-recurring item. The market for freehold reversionary interests remains uncertain given proposed legislative changes in this area and the impact of some freehold buildings requiring fire remediation works. The cost was recognised as exceptional due to its size.

Aborted transaction costs

During the prior year the Group received an unsolicited bid from Bellway plc. On 13 August 2024 Bellway plc withdrew from the proposed acquisition. Costs related to this aborted transaction are classified as exceptional due to their non-recurring nature, with £nil recognised during the year (2024: £1.6m).

Restructuring related expenses

The Group has commenced a business transformation programme to deliver the benefits of its new strategy as set out in its Capital Markets Day on 20 March 2025. The programme is expected to conclude by 31 October 2026, as such the costs are considered to be one-off in nature, material, and not part of the day-to-day operations of the Group. These costs include redundancy costs and third-party advisory fees.

The Chiltern division's closure was announced in November 2025 as part of the transformation programme. This represents a non-adjusting post balance sheet event and the associated costs will be recognised in 2026 as exceptional items.

Pension costs

A review of historical scheme documentation identified inconsistencies in the basis of estimating obligations and underlying scheme documentation. Obligations have been estimated with reference to the clarified terms of the pension scheme. Changes to the obligations have been recognised as exceptional costs in the year as they are one-off in nature and are outside of the ordinary course of the Group's activities.

Net finance expense

The combustible materials imputed interest reflects the unwind of the imputed interest on the provision to reflect the time value of the liability.

Share of post-tax loss of joint ventures

The combustible materials charge in respect of joint ventures represents the Company's share of an exceptional combustible materials provision recognised by one of the Group's joint ventures. The provision was recognised in the year following an independent fire engineer's report that recommended remedial works.

Taxation

An exceptional income tax credit of £5.9m (2024: £48.2m) has been recognised in relation to the above exceptional items using the marginal tax rate applicable to these items.

1 See note 28 for an explanation of the prior year restatement.

The audit fees payable in 2025 included £100,000 (2024: £220,000) in relation to additional costs for the 2024 audit.

Fees payable to the Group's auditors for non-audit services included £140,000 (2024: £130,000) in respect of an independent review of the half-year results.

In addition to the above, PricewaterhouseCoopers LLP provide audit services to the Crest Nicholson Group Pension and Life Assurance Scheme. The fees associated with the services to the Crest Nicholson Group Pension and Life Assurance Scheme are £36,080 (2024: £35,505).

The Directors consider all employees of the Group to be employed within the same category of Development.

Key management comprises the Executive Committee (which includes the Executive Directors of the Board) and Non-Executive Directors as they are considered to have the authority and responsibility for planning, directing and controlling the activities of the Group.

Further information relating to Directors' remuneration, incentive plans, share options, pension entitlement and the highest paid Director, appears in the Directors' remuneration report, which is presented on pages 82-104 of our 2025 Annual Report to be published in February 2026.