Crest Nicholson profit hike fails to boost shares

In the year to 31 October 2016, Crest Nicholson reached its sales target of £1bn and increased volumes by 5%. Its pre-tax profits rose 27% to £195m. However, uncertainty over Brexit remains a concern.

The housebuilder said its forward sales at mid-January are £533.5m, 4% ahead of last year, with 37% of the year’s forecast secured. It added that it is on target to deliver £1.4bn sales and 4,000 homes by 2019.

However, its share price has yet to recover its pre-Brexit vote levels, and the strong financial results did not lead to a boost on that front.

Chief executive Stephen Stone said: “This has been a landmark year for the business. In spite of a temporary impact on sales around the time of the vote to leave the European Union, we have achieved sales of £1bn including through joint ventures, in line with our stated target.

“We remain committed to, and on track to deliver, our targets of 4,000 homes and £1.4billion of sales by 2019.”

He added: “The housing market continues to show robust characteristics, underpinned by strong demand for new homes, a benign land market and government policies to improve access to housing.”

However, Stone also said the long-term implications of the EU vote are still unknown.

“We could experience a slower rate of growth in 2017 and 2018, if political or economic factors reduce consumer confidence. There is also a potential risk to our labour market, as European workers in the UK’s construction force have been essential in delivering much needed homes. It is important to the objective of increasing housing output that a supply of European labour is maintained,” he said.