Crest Nicholson’s profit before tax leaped 52 per cent in the six months to the end of April, thanks to an improving market characterised by a sustained demand.
Residential developer Crest reported profit before tax of £58.3m, a 52 per cent increase from 2014's figure of £38.4m. Revenue was up 38 per cent from £241.1m in 2014, to £332.2m.
It completed three per cent more houses; 1,124 compared to 1,091 in the same period last year. Forward sales showed the strength of the market and were up 26 per cent to £436.4m (£347.3m in the first half of 2014).
Earnings per share were up 51 per cent to 18.6p, while operating profit margins widened to 19.1 per cent, driven by efficiency on its overheads.
Why it’s interesting
Crest operates mainly in the South East of England, so it’s perhaps not surprising to see it reaping the rewards of a bullish housing market. Prices in London and the South East have been soaring as demand far outpaces supply. Data yesterday from Rightmove, an online estate agent, suggested house prices across the country were at record highs.
Interestingly, Crest also said the General Election result will create a better market, and adjusted its volume target accordingly. It said it was “on track with [its] three year plan to drive revenue growth towards £1bn by October 2016,” and that it had established “further targets… to grow towards 4,000 homes and £1.4bn revenue by 2019”.
What Crest Nicholson said
Stephen Stone, the company's chief executive, said:
The business is well positioned to continue on its growth trajectory, delivering high quality homes for our customers while generating strong returns for shareholders.
With ongoing concerns about housing demand, the climate is ripe for developers such as Crest to take advantage of demand and alleviate the pressure on the market.