On Crest of a wave as builder bucks trend

HOUSEBUILDER Crest Nicholson bucked the economic gloom by reporting half-year profits of £16m and a 33 per cent jump in sale completions.

Surrey-based Crest, which operates in the South East, South West and the Midlands, said its focus on prime locations and a rush by first-time buyers to take advantage of a stamp duty holiday helped to boost revenues.

The Queen’s Diamond Jubilee had some impact on sales but demand has picked up in recent weeks and Crest expects the Government’s NewBuy scheme and other initiatives to encourage bank lending to help it this year.

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The company was previously owned through a joint venture between HBOS and Sir Tom Hunter, the Scottish entrepreneur, following a £1.2bn takeover at the peak of the housing market in 2007.

Crest was then the subject of a £630m debt-for-equity swap in March 2009, a move which left it owned by a consortium of 24 banks, before a financial restructuring in September reduced its debt costs.

This was a factor in it swinging back to profit for the six months to April 30, after losses of £21.5m a year earlier.

Average selling prices were up 12 per cent at £233,000, reflecting an increasing proportion of higher value properties, while margins improved 3.1 per cent to 28.3 per cent.

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Chief executive Stephen Stone described the results as “excellent”, with strong revenues and margin growth at a time of economic uncertainty.

He added: “We have continued to benefit from good customer demand for high quality homes, within well-conceived master plans, in prime locations in London and the South.

“In an uncertain macroeconomic environment, our ability to deliver strong revenue and margin growth is a testimony to the business and those who work for it.”

Housing revenues rose 38 per cent, reflecting the higher number of sales and average selling pri-ces.

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But commercial revenues fell after they came up against strong comparatives from the previous year when it was boosted by a town centre redevelopment in Camberley, Surrey.

It recently exchanged contracts to build a Waitrose superstore in the Oakgrove development based in Milton Keynes, which will benefit its second-half performance.

Overall revenues rose six per cent to £138.6m in the first-half, while operating profits rose 21 per cent to £21.7m.

At the end of April, the short-term land bank comprised 15,413 plots, with around two thirds of these based in London and the South East.

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Much of the residual balance of the land-bank is in prime areas of the South West, such as Bristol and Bath.

In a statement, the company said: “The strong southern focus of our land-bank correlates well with the areas of the country expected to have the best pricing experience, where demand for housing exceeds supply and levels of employment are comparatively high.

“Crest has demonstrated a commitment to delivering sustainable development for a number of years.

“As regulation pushes us quickly to a lower carbon economy, Crest continues to work with Government and partners to both establish new sustainability targets and to drive down the associated cost of future regulatory compli-ance.”