Housebuilder Crest Nicholson is ending a six-year exile and returning to the London stock market with a partial flotation scheduled to take place in February. Exact details have not yet been released but a mixture of new and existing shares representing around 35 per cent of the company's value will be on offer, and the proceeds will be used to trim debt by around £50m and also to realise part of the investment made by the current owners, Deutsche Bank and US investment group Varde Investment Partners.
Crest Nicholson was originally taken private by HBOS and entrepreneur Tom Hunter in March 2007, but with the housing sector in freefall and banks in financial turmoil just a year later, neither was able to provide the fresh capital required to support the business, and the banks who funded the buyout agreed to keep the company afloat through a debt-for-equity swap. Subsequently, Varde bought into the company and, through a second restructuring in 2011, acquired a 60 per cent stake.
Housebuilders have recovered strongly in the past year, and now is as good a time as any to cash in on the improved market conditions. Figures released by Crest Nicholson showed that turnover last year rose 27.9 per cent to £408m and a pre-tax loss of £27m was turned into a profit of £62.1m. Housing completions rose by 24 per cent to 1,882 and open market average selling prices rose 3 per cent to £230,000. Operating margins grew to an impressive 18 per cent, and at the end of October the short-term land bank comprised 16,959 plots on 72 sites, 95 per cent of which are located in the south of England. Forward sales at the end of 2012 were up from £80.7m a year earlier at £105.4m.
