Investors are getting jittery about housebuilders after Persimmon (PSN) delivered a rather cautious trading update earlier this month. So a broadly upbeat statement from Crest Nicholson (CRST) for the year to 31 October (results are due for release on 24 January 2018) was pounced on for highlighting a smaller than expected increase in sales outlets, and the shares fell 8 per cent.
However, trading has been strong. Average selling prices rose by 5.4 per cent to £391,000, while the number of completions was up 2.3 per cent at 2,935. Operating margins are expected to be at the top end of the 18-20 per cent management range, with a return on capital employed approaching 30 per cent. Underlying sales rates per outlet per week fell from 0.81 to 0.77, reflecting higher prices and a softer market in central London. However, sales rates for properties under £1m remained strong. Forward sales were up 13.6 per cent.