Crest Nicholson (CRST) has taken a £43m impairment charge against the value of its inventory, anticipating a fall in UK house prices. The housebuilder’s weaker gross margin comparable to the broader sector have made it more susceptible to a fall in sales prices, said chief financial officer Duncan Cooper. “We probably have historically a higher proportion of our portfolio more likely to fall into the jaws of needing that adjustment,” said Mr Cooper.
Completions declined by more than a third during the first-half and unlike many other housebuilders, the group’s forward sales position was also around a tenth lower in value. Attention has turned to cutting costs, with plans to launch a southern counties division now shelved and the partnerships and regeneration and the strategic projects businesses due to merge. Build cost savings of £30m are being targeted this year as the group seeks to improve margins and a further £5m will be saved by reducing staff numbers.
The consensus NAV forecast is 335p a share at the end of October, rising to 344p the same time the following year.
CREST NICHOLSON (CRST) | ||||
ORD PRICE: | 224p | MARKET VALUE: | £ 576m | |
TOUCH: | 223.4-224.4p | 12-MONTH HIGH: | 524p | LOW: 160p |
DIVIDEND YIELD: | 9.7% | PE RATIO: | NA | |
NET ASSET VALUE: | 314p | NET DEBT: | 13%* |
Half-year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2019 | 502 | 64.4 | 20.2 | 11.2 |
2020 | 240 | -51.2 | -15.8 | 0.0 |
% change | -52 | - | - | - |
Ex-div: | na | |||
Payment: | na | |||
*Includes lease liabilities of £8.2m |