TIDMCRST
RNS Number : 1477P
Crest Nicholson Holdings PLC
15 November 2016
15(th) November 2016
Crest Nicholson Holdings plc
Trading Update
Strong growth continuing
Crest Nicholson Holdings plc (Crest Nicholson) today issues a
trading update in respect of the financial year ended 31(st)
October 2016, ahead of its preliminary results announcement on
24(th) January 2017.
Highlights
2016 2015 Change
Unit completions 2,870 2,725 +5%
Open-market ASPs GBP371k GBP309k +20%
Gross development value of land pipeline
- GBPm
- short term 5,480 5,355 +2%
- strategic 5,166 5,111 +1%
Total 10,646 10,466 +2%
Forward sales - Units 1,773 1,680 +6%
Forward sales - GBPm GBP344.5m GBP328.9m +5%
Overview
Crest Nicholson has continued to grow housing volumes in 2016,
with open-market unit completions at 2,292 up 7% and overall
housing delivery up by 5%. Open-market average selling prices have
increased by 20% to GBP371k*, in line with our well established
strategy to re-position the business by 2016 at broadly this
level.
As a consequence, we anticipate reported revenues for the year
to be approximately GBP1billion, in line with our stated target and
a landmark achievement for the business.
Underlying sales rates for the year, excluding PRS, averaged
0.81 sales per outlet week (2015: 0.90). The reduction in sales
rates in part reflects the higher average selling price of the
locations and product which we have been selling this year. In
addition, during June and July, either side of the referendum on UK
membership of the EU, sales volumes temporarily reduced alongside
an increase in the level of cancellations, as uncertainties raised
during the referendum and following the vote to leave, had an
impact on purchaser confidence.
By the beginning of August, purchaser confidence had largely
recovered and sales rates across the last quarter of the year have
averaged 0.77 (2015: 0.77), in spite of the mix being oriented
towards higher ASP product. Site numbers have also continued to
grow, and as a result, Q4 2016 open-market sales revenues
(excluding PRS) are 44% higher than the equivalent quarter last
year.
The average number of sales outlets across the year was 47, an
increase of 7% over the 44 achieved in 2015.
The business has continued to make selective additions to its
short-term land pipeline, whilst also achieving planning consents
on seven strategic sites in the period and transferring them into
the short-term land pipeline. A further 20 of our strategic sites
are included in allocations or draft allocations and progressing
through the planning process. Maintaining momentum through planning
is a major challenge for the industry and continues to be a key
focus for the business, as it enables us to increase site numbers
and grow our contribution to housing delivery.
The gross development value of both our short-term and strategic
land pipelines have increased modestly in the period and provide a
strong underpin for delivering on our stated growth targets.
* Excluding PRS impact
Net debt
For the first time since flotation in 2013, the business had net
cash balances of GBP77.0m at 31(st) October 2016 (2015: net debt of
GBP30.3m), reflecting the ongoing focus on cash generation and
maintaining prudent levels of borrowing.
The Company is confident in re-iterating its commitment to
reduce dividend cover to 2.0x in respect of 2017 earnings.
Current trading
Sales in the month of October, excluding PRS, have continued at
similar levels to the last quarter as a whole, averaging 0.77 sales
per outlet week (2015: 0.75). The slight increase in sales rates
year-on-year, combined with a higher number of outlets and higher
ASP, generated an increase in reservations of 17% and an increase
in revenues of 57% compared to October 2015.
Forward sales at GBP344.5m are 5% higher than 2015 (GBP328.9m),
impacted initially by the reduced number of sales in June and July
but now reflecting the return of a more confident market.
Succession Planning
The Board of Crest Nicholson places great importance on
management succession throughout the business and careful long term
planning. Accordingly, the Company announces that Patrick Bergin,
Group Chief Financial Officer, is appointed to the role of Group
Chief Operating Officer with immediate effect. Patrick will have
responsibility for day to day operations and negotiating land
acquisitions alongside Chief Executive, Stephen Stone. Having
delivered on the target to build 2,500 units per annum as set out
at time of the initial public offering in 2013, Stephen and Patrick
will continue to work together to deliver Crest Nicholson's targets
of 4,000 homes and revenues of GBP1.4 billion by 2019. Crest
Nicholson has started the search for a new Chief Financial Officer,
in the meantime Patrick will continue to administer the role.
Outlook
Attractive housing market conditions continue to underpin sales
rates and revenue growth. In spite of initial uncertainty arising
after the referendum in June, purchasers are largely returning to
the market, as high employment, good mortgage access and low
interest rates continue to make this a very good time to buy a
home.
Sales price and build cost inflation have both moderated in the
latter part of the year, which will help to maintain affordability
and support a stable housing market.
With a strong balance sheet, good land pipeline and robust
business model, Crest Nicholson remains well placed to continue on
its growth trajectory and contributing to the much-needed supply of
housing in the UK.
Against this backdrop, the Board is confident that the business
is well positioned to deliver a strong operational and financial
performance.
Commenting on today's statement, Stephen Stone, Chief Executive
said: "I am pleased to report that we are increasing the number of
homes built, opening new sites and ensuring that the pipeline of
land that fuels our business is progressing steadily through
planning.
I am delighted with Patrick's appointment as Chief Operating
Officer. Patrick and I have worked together successfully for ten
years. We have delivered on the challenging targets set for Crest
Nicholson and its employees since our IPO in 2013 and will continue
to work closely together as we target 4,000 homes and revenues of
GBP1.4 billion for 2019. There has never been a better time for
housebuilding and Crest Nicholson remains well positioned to grow
volumes and deliver the homes that the UK needs and create
shareholder value over the medium to long term."
There will be a conference call for analysts at 8.00 (GMT),
hosted by Stephen Stone, Chief Executive, and Patrick Bergin,
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 plc +44 (0) 1932 580555
Stephen Stone
Patrick Bergin
Finsbury +44 (0) 20 7251 3801
Faeth Birch
James Bradley
Philip Walters
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 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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