Crest Nicholson confident despite tough trading conditions
Crest Nicholson Holdings described its forward sales position as “encouraging” on Tuesday, as a result of stable pricing in its key markets and a sales rate consistent with its previous guidance, as its shareholders gathered for the company’s annual general meeting.
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The FTSE 250 housebuilder had given details of its refreshed strategy in January, with the board focussing on shareholder returns by prioritising cash flow and dividends, maximising value in its portfolio and improving operational efficiency.
On Tuesday, it said it had already secured over 50% of its open market sales for the year, adding that at £686m, its total forward sales positioned the firm well to deliver both revenue and volumes similar to last year, and continue to improve its cash generation.
It said the recent launch of its new ‘Aurora’ housing range, coupled with its ongoing off-site manufacturing scale trials, would continue to contribute operational efficiencies across the business in the medium term.
Additionally, it said it was on target to increase its partnerships, explaining that its new strategy benefitted from the framework of ‘strategic partnerships’ introduced by Homes England.
Crest Nicholson said that had created a positive backdrop for the public and private sector to work together to increase the delivery of new homes of different tenures.
Finally, the company said its annualised Home Builders Federation ‘recommend a friend’ score rose to 89.2% in 2018, which the board said was “testament” to its delivery platform and focus on customer satisfaction.
“As we have previously noted, the business has faced challenges with dampened customer demand in higher price point areas, amid ongoing political and macro-economic uncertainty,” the Crest Nicholson board said in its statement.
“This is likely to continue as political uncertainty prevails.
“Nevertheless, with employment levels at record highs, a wide range of available mortgages and a structural undersupply of new housing, we are confident in the long term future of our core housing markets.”
The company said its revised business strategy and focus on cash generation underpinned its confidence in generating sustainable shareholder returns.