TIDMCRST
RNS Number : 6186T
Crest Nicholson Holdings PLC
16 November 2023
The information contained in this announcement is deemed by the
Company to constitute inside information for the purposes of
Article 7 of the Market Abuse Regulation (EU) No. 596/2014 which
forms part of domestic law in the United Kingdom pursuant to the
European Union (Withdrawal) Act 2018
Crest Nicholson Holdings plc
(the "Group" or "Crest Nicholson")
STREAMLINING OPERATIONS IN RESPONSE TO MARKET CONDITIONS
STRONG LAND PORTFOLIO TO SUPPORT MEDIUM-TERM GROWTH
AMBITIONS
Crest Nicholson today provides an update on trading for the year
ending 31 October 2023 and a streamlining of Group operations for
FY24.
Financial Summary
-- Previous 10-week private Sales Per Outlet Week (SPOW)
excluding bulk of 0.39, reflecting the continued weakness in the
housing market but on an upward trend
o Previous 10-week private SPOW including bulk of 0.80
-- FY23 Adjusted Profit Before Tax (APBT) expected to be in the range of GBP45.0m to GBP50.0m
o Including a GBP0.5m charge for restructuring activities
o Brightwells Yard, Farnham - a zero margin scheme - has
incurred circa GBP11.0m of incremental build costs in FY23 (a
further GBP7.0m in addition to the GBP4.0m previously
communicated). Construction activities are now in the final stages
as the site approaches its completion
-- Group's year-end net cash position at GBP64.9m
-- Strong strategic relationships with institutional investors
delivering 273 unit completions in FY23
-- Forward sales as at 10 November 2023 of 1,710 units and
GBP408.5m Gross Development Value (GDV) (11 November 2022: 2,038
units and GBP526.2m GDV)
-- Disciplined approach to capital allocation for FY24
o Land activity to reduce significantly given high quality
additions made earlier this year
o Rigorous approach to work-in-progress to align to expected
sales rates
Operational Summary
-- Several high quality sites added to the portfolio in the
first half with planning approvals underway. These sites all
provide excellent prospects to support future growth
-- Build cost inflation is starting to reduce from mid-single
digit percentages and we expect this to continue into FY24
-- On track with our sustainability targets as we actively
collaborate with our supply chain and wider industry to reduce
greenhouse gas emissions and prepare for upcoming regulations
-- Good progress with our fire safety remediation programme
Streamlining of Group Operations
Given the deterioration in trading conditions experienced in the
second half of the year, the Group communicated in its 21 August
2023 Trading Update that it would be reducing overheads for
FY24.
Accordingly, the management team has conducted a thorough and
diligent review of all activities within the Group.
These changes will:
-- Reduce annualised administrative expenses by circa GBP3.0m in FY24
-- Moderate the pace of growth in Yorkshire - now expecting 300-350 units in 2026
-- Incorporate the newly created East Anglia division into the
existing Eastern division with revised boundaries
-- Align headcount and resources in existing divisions to the expected level of output in FY24
-- Require a one-off GBP0.5m cash charge in FY23 APBT to implement
These decisions balance the need to respond to the tougher
operating environment whilst preserving the capability to deliver
future growth as more favourable economic and trading conditions
return.
We will provide further detail and an update on the progress of
these initiatives at our Preliminary results in January 2024.
Peter Truscott, Chief Executive, commented:
'Given the challenging trading backdrop we have experienced this
year, the Group has acted decisively in streamlining its operations
to align our cost base with the operating environment. These are
difficult decisions to take but will ensure the Group is well
positioned to recover strongly as more supportive market conditions
return. I would like to thank all Crest Nicholson colleagues for
their efforts this year and their professionalism in dealing with
the changes we have made.
We expect the housing market will remain challenging as we head
into 2024 with elevated interest rates remaining in place until
inflation comes back down to its target level. In addition, the
absence of any Government support for first time buyers, coupled
with higher borrowing costs continues to impact affordability.
However, there are reasons to be optimistic with year-on-year
inflation now halved and real wage growth starting to be felt in
households across the UK. We have acquired some excellent sites
that are at advanced stages in the planning process, leaving us
well positioned to trade in whatever market conditions emerge.'
For further information, please contact:
Crest Nicholson
Jenny Matthews, Head of Investor Relations +44 (0) 7557 842720
Teneo
James Macey White / Giles Kernick +44 (0) 20 7353 4200
The person responsible for arranging the release of this
announcement on behalf of the Company is Penny Thomas, Group
Company Secretary.
16 November 2023
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END
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(END) Dow Jones Newswires
November 16, 2023 02:00 ET (07:00 GMT)
Crest Nicholson (LSE:CRST)
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Crest Nicholson (LSE:CRST)
Gráfica de Acción Histórica
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