16th Nov 2006 07:01
Crest Nicholson PLC16 November 2006 16th November 2006 Crest Nicholson Plc Year End Trading Statement Crest Nicholson PLC (Crest) the residential and mixed use development company,is providing the following trading update in advance of its results for the yearended 31st October 2006 expected to be announced in January 2007. Commenting today, Stephen Stone, Chief Executive said: "Trading for the full year 2006 has been in line with our expectations. We arepleased with the 22% increase in housing completions achieved in 2006. "While interest rate increases could moderate house price inflation in 2007, thefundamentals of the housing market remain good with low unemployment and acontinuing shortage of supply in our main areas of operation in southern Englandand the Midlands. With total forward sales at a new record high of over £400mand a 9% improvement in open market forward sales for 2007 vs 2006, we are wellplaced to deliver a c. 15% increase in both open market and affordable housingcompletions in the year ahead. "The Business Improvement Initiative has helped to put a sharper commercial edgeon our business and we expect it to underpin improvements in our operations.This, coupled with our market position in both urban regeneration andtraditional housebuilding and the quality of our land banks, offers excellentprospects for future growth and increased value." HOUSING Total housing completions in 2006 were c. 22% higher than in 2005 at 2,946 units(2005: 2,417) Open market housing completions of 2,035 were slightly ahead of the 2,000 wepredicted at the interim results and the 2005 comparative of 1,960. As expected,we have doubled affordable unit completions to 911 (2005: 457) As predicted, the average sale price was just under £200k, down from £225k in2005, largely due to this increased proportion of affordable units. For 2007, we are on track to increase both open market and affordable housingcompletions by c.15% as our regeneration business begins to make a fullcontribution. The average sale price is expected to be similar to 2006. Thevolume gains will principally benefit the second half because of the pattern ofapartment completions. Forward sales at the financial year end were £400.6m (2005: £389.6m) MIXED USE COMMERCIAL Commercial property sales from our mixed use schemes were c. 55% of the £92.3mrecorded in 2005 because of planning delays to the Camberley project. Due, inpart, to this, 2007 commercial property sales are expected to exceed 2006. LAND SALES Crest's unit volumes are showing good growth rates and the planning system isshowing no signs of easing. We therefore intend to retain a greater proportionof our land with development consent. As predicted at the interim results, landsales in 2006 were about 15% lower than the £62.7m recorded in 2005. The trendtowards lower land sales is expected to continue in 2007. LAND BANKS The land market remains competitive but our strong reputation and track recordhas enabled us to maintain the short term housing land bank at over 16,000 plotsafter excluding the Heartlands project in West Lothian which has not becomeunconditional within the prescribed contract period. The quality of the strategic portfolio has improved during the year. Of the c.12,000 strategic plots, we now have c. 2,000 plots with planning applicationslodged and good prospects for further conversions to the short term housing landbank. MARKET OUTLOOK While interest rate increases could moderate house price inflation in 2007, thefundamentals of the housing market remain good with low unemployment and acontinuing shortage of supply in our main areas of operation in southern Englandand the Midlands. With total forward sales at a new record high of over £400m and a 9% improvementin open market forward sales, we are well placed to produce good returns for ourshareholders and we are confident that 2007 will be a year of growth for CrestNicholson. Enquiries to Stephen Stone, Chief Executive Andrew Fenwick/Kate MillerPeter Darby, Finance Director Robert GardenerCrest Nicholson Plc Brunswick Group LLPTel: 01932 580555 Tel: 0207 404 5959 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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