Crest Nicholson (CRST) delivered a very strong first-half performance, with housing completions up 35 per cent to 1,091 units and operating margins rising from 18.1 to 18.5 per cent. Moreover, since administrative expenses as a share of sales are higher in the first half, full-year margins are expected to be close to 20 per cent. Accordingly, analysts at Numis have increased their estimates by between 5 and 10 per cent for the next three years. They now expect full-year pre-tax profits of £116m and EPS of 35.6p.
A change in the sales mix towards family homes helped to lift average selling prices by 12 per cent to £269,000, excluding affordable housing. Furthermore, Crest Nicholson plans to boost revenue by opening a new division in the north-west Home Counties. These two drivers are expected to deliver revenue growth of up to 80 per cent in the next three years. With purchaser demand remaining strong, the company admitted that production capacity is the critical factor limiting volume growth. Even so, full-year output is expected to reach 2,500.
The strategic and short-term land banks were replenished. In total the two include over 31,000 units, with a gross development value of £8.2bn.
| CREST NICHOLSON (CRST) | ||||
|---|---|---|---|---|
| ORD PRICE: | 336p | MARKET VALUE: | £845m | |
| TOUCH: | 336-336.4p | 12-MONTH HIGH: | 420p | LOW: 306p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 192p | NET DEBT: | 13% | |
| Half-year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 192 | 22.2 | 6.80 | nil |
| 2014 | 241 | 38.4 | 12.3 | 4.1 |
| % change | +26 | +73 | +81 | - |
Ex-div: 24 Sep Payment: 9 Oct | ||||
