Housebuilder Crest Nicholson (CRST) gained 3.7% to 446.2p as it upgraded its outlook on annual adjusted earnings.

This followed a return to profit in the first half of its financial year driven by a jump in revenue amid a rise in home completions.

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.

For fiscal 2021, adjusted pre-tax profit was ‘now expected to be at least £100 million including the Longcross Film Studio profit contribution’, the company said.

For the six months ended 30 April 2021, pre-tax profit was £36.3 million from a loss of £51.2 million year-on-year as revenue increased to £324.5 million from £240 million. The company reported a net cash position of £130.4 million.

PLAN TO EXPAND INTO NEW GEOGRAPHIES

Home completions increased to 1,071 from 775. As at 18 June 2021, forward sales stood at 2,771 units and gross development value was £691.8 million, up from 2,715 units and £575.1 million respectively. An interim dividend of 4.1 pence per share was declared.

‘We are evaluating options to enter new geographical markets and look forward to outlining these future growth plans and our long-term financial targets later this year,’ the company said.

Canaccord Genuity analyst Aynsley Lammin commented: ‘The group is clearly making good progress on its turnaround with the balance sheet much improved and the focus on further margin improvement and, on a longer-term view, volume growth.’

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Issue Date: 24 Jun 2021