Crest Nicholson Holdings PLC Trading Update (8881J)
21 Agosto 2023 - 8:00AM
UK Regulatory
TIDMCRST
RNS Number : 8881J
Crest Nicholson Holdings PLC
21 August 2023
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014 as it
forms part of domestic law by virtue of the European Union
(Withdrawal) Act 2018
Crest Nicholson Holdings plc
(the "Group" or "Crest Nicholson")
TRADING UPDATE
FY23 ADJUSTED PROFIT BEFORE TAX NOW EXPECTED TO BE AROUND
GBP50.0m
Trading Environment
Against a backdrop of persistently high inflation and rising
interest rates, trading conditions for the housing market have
worsened during the summer of this year. While pricing has remained
resilient in a market with limited supply and few distressed
sellers, the economic uncertainty is deterring prospective home
movers. Additional mortgage borrowing for those looking to upgrade
or for those with low levels of equity, notably first-time buyers,
has become significantly more expensive with no Government support
(following the end of Help to Buy) now in place to cushion this
impact.
Transaction levels across the industry have therefore weakened
further, particularly in recent weeks. Although overall inflation
is encouragingly starting to fall, core inflation and wage
inflation both remain high with further interest rate rises
forecast over the coming months. The Group does not therefore
expect to see a material improvement in trading conditions before
its year end at 31 October 2023.
At the interim results in June 2023 the Group outlined that it
was forecasting a SPOW rate of 0.50 for the second half and for the
7 weeks to 18 August 2023 this has been 0.25, representing a
progressively deteriorating trend.
Given this market backdrop the Group is also currently
negotiating several bulk deals on appropriate commercial terms with
partners where it has developed strong relationships over recent
years. These transactions will provide support to volume delivery
in future years.
Legacy Schemes
In addition to a poorer trading environment, the Group has also
recorded a further GBP4.0m cost movement in the second half at
Brightwells Yard, Farnham. This site is a highly complex urban
regeneration and mixed-use development scheme with a build
programme expected to conclude by the end of the calendar year.
Management Actions
Management are responding proactively to these conditions. The
Group was able to add several high-quality sites to the land
portfolio in the first half and, as has been previously
communicated, expects future land activity to reduce
significantly.
Management will also be reducing the Group's overhead position
in the next financial year and will be incorporating the newly
created East Anglia division into its existing Eastern division
with revised boundaries. Yorkshire will remain unaffected given it
is now a fully operational division, but the pace of growth and
onboarding of further resources expected in this region will be
revised to reflect the market conditions. Further detail on these
initiatives will be shared in the Group's November trading
update.
Dividend
The Board remains committed to the FY23 dividend pence per share
in line with prior year at 17.0 pence per share as announced in
June 2023.
Outlook
The Board remains positive and confident about the outlook for
Crest Nicholson. While the current trading conditions are
challenging, over the medium term it expects inflation to abate and
mortgage rates start to reduce. In addition, the Group has a strong
financial position and an experienced leadership team who are used
to trading through downturns in the cycle. The long-term structural
shortfall of housing supply versus demand continues to increase and
the Group has developed an attractive land portfolio.
Reflecting the factors outlined above, the Group now expects
FY23 Adjusted Profit Before Tax to be around GBP50.0m.
Analyst and investor conference call
There will be a brief conference call for analysts at 9.00 am
today hosted by Peter Truscott, Chief Executive and Duncan Cooper,
Group Finance Director.
Dial in details:
UK: 0207 660 8380
Toll-free: 0800 029 3426
Phone Conference ID: 924 858 743#
For further information, please contact :
Crest Nicholson
Jenny Matthews, Head of Investor Relations +44 (0) 7557 842720
Teneo Communications
James Macey White / Giles Kernick +44 (0) 20 7353 4200
The person responsible for arranging the release of this
announcement on behalf of the Company is Harriet Huband, Interim
Company Secretary.
21 August 2023
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END
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