TIDMCRST
RNS Number : 2013O
Crest Nicholson Holdings PLC
16 May 2018
16(th) May 2018
Crest Nicholson Holdings plc
Trading Update
Crest Nicholson Holdings plc ("Crest Nicholson" or the
"Company") today issues a trading update in respect of the six
months ended 30(th) April 2018, ahead of its half year results
announcement on 12(th) June 2018.
Highlights
HY2018 HY2017 Change
Unit completions 1,251 1,064 +17.6%
Open-market ASPs
(excluding PRS) GBP439k GBP418k +5.0%
Gross development value of
land pipeline - GBPm
- short term 5,872 5,883 -
- strategic 5,960 5,229 +14.0%
Total 11,832 11,112 +6.5%
Forward sales - Units 2,079 1,975 +5.3%
Forward sales - GBPm GBP441.7 GBP415.6 +6.3%
Current trading
Crest Nicholson has delivered strong growth in revenues and
housing unit numbers in the first six months of 2018. The business
has maintained a keen focus on return on capital, sustaining sales
volumes in a generally flat pricing environment and securing a
strong contribution to volumes in the first half from PRS
completions.
The experience of generally flat pricing against a backdrop of
continuing build cost inflation at 3-4% will mean that operating
margins for the full year are expected to be around 18%, at the
bottom end of our 18-20% guided range.
Forward sales for the 2018 year including year to date
completions are 11% ahead of the same period last year. Overall, we
anticipate growth in reported revenues for the year to be over
15%.
Open-market average selling prices (ASP) have increased by 5.0%
to GBP439k (excluding PRS), primarily due to changes in product and
location mix. This is expected to represent a peak level for the
business. Current land investments across the business are in
locations with a lower prevailing ASP, in line with our
strategy.
Sales rates, as measured by Sales per Outlet Week (SPOW),
reflect the change in product and location mix, with higher ASP
product selling at a slower rate. For the first six months of the
year, the SPOW (excluding PRS) has averaged 0.72, compared with
0.81 for the first half of 2017 and 0.77 for the whole of 2017.
Whilst most of our sales outlets have been performing well,
sales at higher price points have proved to be more difficult to
achieve. This in part reflects the greater interdependency of
higher-value sales with transactions in the second-hand market,
where activity has been more subdued and property chains have been
taking longer to complete.
Sales outlets continue to grow steadily and for the first half
of 2018, averaged 52, a 6% increase on the 49 outlets in operation
at 30(th) April 2017. This growth, along with further outlet
openings in the second half of the year, will support the delivery
of our forecast full-year revenues.
Half-year debt of GBP77.5m (2017: GBP34.5m) reflects our
investment in the new Midlands division, which has acquired seven
sites to date and will make a positive contribution this year.
Outlook
Housing market volumes continue to be generally robust across
the Group's principal operating areas. Strong levels of employment
and low interest rates, combined with good mortgage access,
continue to help many purchasers into new homes.
Sales at higher price points will continue to be impacted by a
slow second-hand market and this is likely to restrain overall
price growth in the near term. As a result, margins for next year
are expected to be at a similar level to this year.
The business continues to explore opportunities to address its
cost base and the overall efficiency of its operations, to protect
margins and address areas of production constraint in the medium
term.
Crest Nicholson has a strong balance sheet, is securing land at
good margins and operates a disciplined business model, generating
good returns whilst also contributing to the much-needed supply of
housing in the UK.
Against this market backdrop the Board remains confident that
the business is well positioned to continue to deliver a strong
operational and financial performance in the medium term.
Commenting on today's statement, Patrick Bergin, Chief Executive
said:
"The group has delivered a good sales performance in the first
half of the year. The business continues to increase the number of
homes built and carries positive momentum into the second half of
2018, with steady outlet growth and higher forward sales.
Flat pricing has had a negative impact on margins, but volumes
in the new build housing market continue to be robust and Crest
Nicholson remains well positioned to grow volumes and deliver the
homes that the UK needs, while continuing to focus on delivering
strong returns for shareholders."
There will be a conference call for analysts at 8.30 a.m. (BST),
hosted by Patrick Bergin, Chief Executive and Robert Allen, Finance
Director. The dial-in details are:
Dial-in: +44 (0) 20 3003 2666
Title: Crest Nicholson Trading Update
Password: Crest Nicholson
For further information please contact:
Crest Nicholson Holdings +44 (0) 1932
plc 580555
Patrick Bergin
Robert Allen
+44 (0) 20 7251
Finsbury 3801
Faeth Birch
James Bradley
Philip Walters
The information contained in this announcement is deemed by the
Company to constitute 'inside information' under the Market Abuse
Regulation (596/2014). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
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 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.
About Crest Nicholson
Crest Nicholson is firmly established as a leading developer
with a passion for not only building homes, but also for creating
vibrant sustainable communities. With a southern-based bias, the
FTSE250 Group has a track record spanning more than 50 years and a
broad portfolio of developments which range in size and scale, from
contemporary, large scale mixed-use developments to smaller, more
traditional housing schemes. As a pioneer of its own Garden Village
principles, the Company advocates a holistic approach to
development embracing social, environmental and economic factors to
create homes for all segments of the community. These developments
are founded on good design, high-quality green spaces, and the
greater involvement of local people in both vision and long term
management.
In line with its commitment to help meet housing demand,
apprentices make up c.10% of Crest Nicholson's entire workforce,
and the Group supports the development of jobs and skills at every
level. The Group's focus on upskilling its workforce has led to its
Graduate Training scheme being awarded 'Best Company to work for'
by The Job Crowd 2017 and its industry leading Site Management
Academy was also named 'Best Training or Recruitment Initiative' at
the Housebuilder Awards 2017. The Company is consistently listed in
the FTSE4Good index.
Visit www.crestnicholson.com
Follow us on:
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Facebook facebook.com/CrestNicholson
Instagram @crestnicholsonplc
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This information is provided by RNS
The company news service from the London Stock Exchange
END
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