Crest Nicholson’s (CRST) shift away from higher priced areas of the housing market – which have suffered a heightened slowdown in growth – eroded operating profit margins during the first half. The housebuilder has switched focus from sales growth to pre-sales and partnerships with local authorities and registered providers, which accounted for 45 per cent of homes. That boosted total forward sales for the year by 15 per cent to £870m.
The reduced capital intensity of its partnership activities meant net debt and land creditors fell by £41.3m, and management expects the group to be in a net cash position by the year-end. While average open-market sales prices rose 8 per cent, that is expected to reduce going forward as the proportion of higher-value homes in London and the south-east declines. However, the rate of average sales per outlet week was maintained at 0.78.
Analysts at Peel Hunt expect adjusted pre-tax profits of £160m for the year to October 2019, giving EPS of 50.1p, compared with £176m and 55.4p, respectively, the prior year.
| CREST NICHOLSON (CRST) | ||||
| ORD PRICE: | 357.8p | MARKET VALUE: | £919m | |
| TOUCH: | 357.4-357.8p | 12-MONTH HIGH: | 451p | LOW: 275p |
| DIVIDEND YIELD: | 9.2% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 335p | NET CASH: | 8% | |
| Half-year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 468 | 72.0 | 22.9 | 11.2 |
| 2019 | 502 | 64.4 | 20.2 | 11.2 |
| % change | +7 | -11 | -12 | |
| Ex-div: | 19 Sep | |||
| Payment: | 4 Oct |
