Crest Nicholson Holdings plc (Crest Nicholson) today issues a trading update in respect of the six months ended 30th April 2015, ahead of its half year results announcement on 16th June 2015.
Trading during the first six months has been strong, buoyed initially by revisions to the stamp duty regime and then further by increasingly competitive pricing in the mortgage market.
Sales per outlet week for the six month period were 0.93, a 12% increase on the 0.83 achieved for the first six months of 2014.
In addition, Crest Nicholson sold 97 units at Bath Riverside to M&G Real Estate, who have purchased the homes for private rental. This transaction is intended to form part of a longer term relationship between the parties.
The business continues to grow its outlet breadth and operated from 44 sales outlets year-to-date (2014: 42), an increase of 5%.
Unit completions of 1,124 are 3% ahead of prior year, with open market completions up 8%.
Average open-market selling prices of £322,000 are 20% higher than the £269,000 achieved in the first half of 2014, reflecting an element of price inflation but also as the product and location mix of the business evolves in line with our intended strategy.
Forward sales for all years at 30th April were 1,786 units and £336m, up 25% and 29% respectively on the 1,430 units and £260m in hand at 30th April 2014.
With the benefit of already strong land holdings, the business continues to apply a disciplined approach to land buying. Acquisitions in the first half have focused on our strategic land pipeline, where six sites and a net 2,575 plots have been added in the first six months of the year. A further four sites and 191 plots have been acquired to top up our short term site numbers.
Stephen Stone, Chief Executive commented “Purchaser appetite to secure a new home remains strong and conditions to support this level of demand are very favourable. The business is well positioned to continue to grow volumes and revenues in line with our previously stated targets and make its contribution to the delivery of the new homes that the country needs.”
With purchaser confidence currently high, supported by economic recovery, good mortgage access and a rise in disposable incomes, our expectation is that sales rates will continue to be strong.
Production capacity, clearance of planning conditions and skills availability remain the critical constraints on volume delivery and a subject of focus across the sector.
Strong rates of sale will support both current year outputs and the forward sales position, but challenges in the supply chain – particularly shortages of skilled labour – will limit the level of volume growth achieved in any one year.
A level of disruption to the normal process of securing planning is commonly experienced in the run-up to a general election and this year has been no different; now that the election is decided, it is expected that we will see a return to a more consistent level of engagement and also reap the benefits of policy continuity.
Sales price inflation continues to offset pressures from cost increases in the supply chain, albeit that build costs are showing some signs of acceleration as the market picks up pace.
Against this backdrop, the Board is confident that the business is well positioned to deliver a strong operational and financial performance.
There will be a conference call for analysts at 08.30 (BST), 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 UpdatePassword: Crest Nicholson
For further information, please contact:
Crest Nicholson Holdings plc
+44 (0) 1932 580555
+44 (0) 20 7251 3801