Half-year results from Crest Nicholson (CRST) provided further evidence of the buoyant house building sector. The residential developer registered a 42 per cent gain in operating profits to £63.6m, and lifted operating margins from 18.5 per cent to 19.1 per cent.
Completions rose a respectable 3 per cent to 1,124, but the rate of expansion is expected to accelerate as the group focuses on building in more affordable areas in its London division. Given a continuation in the current favourable conditions, guidance for annual completions has been lifted from 3,500 homes to 4,000.
To meet this output level, the strategic land pipeline has been built up from 16,219 plots a year earlier to 18,153, which together with the consented land bank gives a gross development value of £10.1bn, up 22 per cent from a year earlier. Forward sales at the half-year were up from £347m a year earlier to £436m, which equates to 79 per cent of forecast full-year revenue.
Average selling prices on open market completions rose 15 per cent to £309,000, more than offsetting cost increases in the supply chain, notably labour costs. The group is actively engaged in an apprenticeship programme to address a shortage of skilled labour.
Analysts at Barclays are forecasting full-year adjusted pre-tax profits of £149m and EPS of 47.1p (from £117m and 38.7p in 2014).
| CREST NICHOLSON (CRST) | ||||
|---|---|---|---|---|
| ORD PRICE: | 530p | MARKET VALUE: | £1.33bn | |
| TOUCH: | 529-530p | 12-MONTH HIGH: | 569p | LOW: 292p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 222p | NET DEBT: | 11% | |
| Half-year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 241 | 38.4 | 12.3 | 4.1 |
| 2015 | 333 | 58.3 | 18.6 | 6.4 |
| % change | +38 | +52 | +51 | +56 |
Ex-div: 24 Sep Payment: 8 Oct | ||||
