Crest Nicholson shares (LON: CRST) surged over 16% on Tuesday morning as the group released a full-year trading statement.
The results were ahead of expectations and the company has upgraded profit expectations.
Pre-tax profit for the full year was ahead of previous guidance and totalled £37.9m and the group boasted a strong sales performance over summer.
“Due to a positive trading environment since the Spring lockdown, and strong progress implementing our updated strategy, the Group is pleased to report that it expects Adjusted Profit Before Tax for FY20 to be significantly ahead of consensus of £37.9m and at the upper end of the previously guided range of £35m – £45m,” said Crest Nicholson in a statement.
“During the summer we have seen good trading across all of our divisions. Reservation rates are now slightly ahead of the pre-Spring lockdown level. The release of pent-up demand, whether due to customers putting off moving because of Brexit uncertainty or subsequent COVID-19 disruption, and the benefits of the Stamp Duty holiday, have supported near-term confidence levels in the housing market.”
Peter Truscott, Chief Executive, commented: ‘This has been a challenging year for everyone involved with housebuilding. For Crest Nicholson, in the early stages of implementing an updated strategy, the arrival of COVID-19 could not have come at a worse time.
“Despite the disruption caused by COVID-19 the Group has maintained a rigorous focus on delivering the plan we laid out in January 2020. We are pleased to report that we are now seeing this take effect. We are also appreciative of the Government moving quickly to reopen the sector and taking the decision to temporarily suspend Stamp Duty. Confidence in moving home and stability of house prices will be a critical part of a successful economic recovery from this pandemic.
“Since the Spring lockdown we have traded well and as a result are pleased to announce an upgrade to earnings for the year. We also enter next year with a strong forward order book. Our disciplined focus on cash generation and capital allocation has ensured we close the year with an excellent cash position and a robust balance sheet. Accordingly, we are pleased to be reinstating our dividend in the next financial year.”