Chairman's Introduction

In November 2007 under new ownership Crest Nicholson was looking forward with optimism to delivering our new Mission Statement – "to be the market leader in the design and development of sustainable housing and mixed use communities."

We knew there were clouds on the financial horizon, with global economic factors exerting pressure on both volumes and prices. However, it is a fact that the last 12 months have brought unprecedented strain to the UK housebuilding industry. The sudden collapse in mortgage availability, and the associated rapid decline in sales values and prices, created an economic spiral of decline which has challenged the sustainability of the construction industry generally and the financial robustness of housebuilders in particular. The pricing and structure of the mortgage market has changed making it very difficult for first time buyers, the lifeblood of the industry, to access the market.

The challenge for Crest Nicholson is to manage strategically through this downturn. We must preserve core strengths and capabilities, and ensure that we still integrate the environmental and social dimensions of sustainability into a decision-making process that has to be focussed primarily on economic viability.

We are continuing to summarise both financial and non-financial performance within our sustainability report, and the challenges we and the sector face are amply illustrated by the performance data. Despite the adverse market conditions, we have striven to deliver the stretching sustainability targets set last year. We feel we have made considerable progress which we present in this report, again with an open discussion of our forward strategy and the challenges we face.

You will see that building sustainable communities remains at the heart of what we do. We have remained focussed on our exemplar projects with expert partners to ensure we build the skills and knowledge base required to deliver the Government's Code for Sustainable Homes.

In the months following the close of our last financial year, Crest Nicholson successfully concluded a financial restructuring. The company now has a strong and stable base from which to grow, and to continue with our fundamental strategy to design and deliver a sustainable built environment to benefit communities now - and for years to come.

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The Chief Executive's Review.