Crest Nicholson’s profit soars – but it warns about cost pressures and falling house prices in central London
Crest Nicholson's share price remained largely flat as the company reported a 27 per cent jump in profit.
The builder said it was selling more homes at higher prices – but warned of pricing pressures in central London and cost inflation due to the Brexit vote.
The figures
The housebuilder's profit jumped 27 per cent in the year ending 31 October, reaching £195m, as compared to £154m the year before.
Read more: Bag a bargain: Here's how much high-end London house prices fell last year
The company sold 2,870 homes, up five per cent year-on-year, and average prices jumped 18 per cent as the group targeted more expensive locations. The group hit its target of selling £1bn of homes in the year.
Crest Nicholson's share price was down 0.41 per cent at time of writing.
Why it's interesting
Despite the positive numbers, the market's reaction was tempered after Crest Nicholson said price growth was weaker in central London developments due to higher rates of stamp duty. The group also said "an element of cost inflation is expected" due to currency movements on imported materials following the Brexit vote.
What Crest Nicholson said
Stephen Stone, Crest Nicholson's chief executive, said:
This has been a landmark year for the business. In spite of a temporary impact on sales around the time of the vote to leave the European Union, we have achieved sales of £1bn including through joint ventures, in line with our stated target.
The housing market continues to show robust characteristics, underpinned by strong demand for new homes, a benign land market and government policies to improve access to housing.
What analysts said
Anthony Codling, equity analyst at Jefferies International, said that Crest Nicholson "is taking Brexit in its stride".
"The group is supplying more homes and importantly supplying homes across a range of tenures," he said. "In our view Crest is well placed to deliver what may be asked of it in the eagerly awaited housing white paper."