Housebuilder Crest Nicholson (CRST) gained 1.2% to 310p on a mixed set of full year results covering the 12 months to 31 October 2020.

On the one hand the company reinstated its dividend on expectations for an improvement in operating margins but on the other it swung to annual loss as the Covid-19 crisis disrupted the business.

Under CEO Peter Truscott, who took over in September 2019, the company outlined a turnaround strategy through to 2022.

This included a plan to increase completions to 3,500 units, boost return on capital employed to 20% and to improve the then operating margin of 12.2% by 250 basis points.

The margin has actually gone backwards to 8.4% and the targeted increase in volumes has been put on hold indefinitely but this reflects the significant disruption caused when the housing market went into deep freeze last spring.

For the year ended 31 October 2020, the pre-tax loss was £13.5 million, compared with a profit of £121.1 million year-on-year as revenue fell 37.6% to £677.9 million.


Adjusted pre-tax profit fell to £45.9 million, down from £121.1 million, but ahead of the £35 million-to-£45 million guidance range.

The dividend will be reinstated at two and a half times cover, and will come into effect from the first half of 2021.

Forward sales as at 15 January 2021 of 2,435 units and £564.5 million gross development value (GDV) was 55% of expected 2021 levels.

The company said it continued to trade in line with its expectations and would provide further financial guidance when these restrictions ease and the economic outlook was clearer.

‘Looking forward, through 2021 and 2022, the next phase of Crest Nicholson’s recovery will be improving operating margins to be in line with industry peers,’ it added.

‘Gross profit margins in 2021 will continue to be impacted by some of our more complex legacy sites ... [but] the group still expects to deliver strong profit growth and cash flow generation.’


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Issue Date: 26 Jan 2021