House builder Crest Nicholson reports mixed fortunes with completions up but post-tax profits dented by uncertainty
British housebuilding firm Crest Nicholson reported an uptick in revenue and completed homes last year despite continued disruption and pressure to supply chains.
The firm’s revenue up until October 2022 was up 16 per cent to £913.6m, up from £786m in the pandemic-affected 2021 report.
Home completions also increased by 13.6 per cent to 2,734, with just over 500 affordable completions, which was still up on the previous year’s 483.
This comes after Liz Truss’ calamitous mini-budget and the ongoing cost of living crisis compounded misery for millions of borrowers and homeowners, with interest rates soaring, making buying a house more difficult.
The ongoing war in Ukraine has also put pressure on supply chain costs for materials needed for housebuilding, making it more expensive.
Crest Nicholson reported a boost in its profit before tax at £137.8m up from £107m, which is in line with its guidance.
The main drag on its performance was the cost of materials which was at £105m, up from £28.8m, in part due to the Building Safety Pledge.
A result of this was the firm reporting profit after tax of £26.4m, way down on 2021’s £70.9m.
Looking ahead to this current year, the company acknowledged the UK is “clearly facing a challenging macroeconomic outlook in the near term.”
“The Board is cognisant of the uncertainty and headwinds the sector is currently facing, including rising interest rates and the declining mortgage availability. Accordingly, our immediate focus will be to deliver our strong forward order book and maintain a strong financial position.”
“When market conditions improve we will accelerate our growth ambitions as they represent the most effective way to create shareholder value in the longer term.
Peter Truscott, chief executive, commented:
‘We are delighted to report a strong financial performance for the year, in line with our guidance upgraded at the half year.
“Demand for housing remained resilient for much of the trading period, while we had to navigate operational disruption throughout the year and faced increased economic uncertainty in our final quarter.
“Despite these headwinds we have delivered revenue growth, adjusted operating margin expansion, an increase in return on capital employed and excellent cash generation throughout the year. I would like to thank all Crest Nicholson colleagues for their efforts in helping to deliver these results.’