House-builder Crest Nicholson Holdings plc (LON:CRST) posted its final year results on Tuesday. Profits dropped 15% as current market uncertainty caused by Britain’s departure from the European Union prevails.
Chief Executive Patrick Bergin commented on the results:
“The business has had a good year operationally, with an increase in the number of new homes delivered. However, we have faced some challenges in London and with sales at higher price points where political and economic uncertainty has adversely impacted customer demand and this is likely to continue pending Brexit resolution.”
“Our forward sales are strong, boosted by our strategic partnerships and our new channels to market. Pricing is stable, build cost inflation has moderated and we have implemented plans to mitigate margin pressure, which will take effect progressively over the next few years.”
“Our revised business strategy and focus on cash generation underpins our confidence in generating sustainable shareholder returns.”
Sales, including those from joint ventures, were up 7% to £1,136.6 million.
Pre-tax profit was recorded as £176.4 million, a 15% drop compared to £207 million in 2017.
Total dividend was maintained at 33.0p.
Net cash by the end of the financial year was £14.1 million. This is significantly less than the £33.2 million recorded in 2017.
Drawing upon the impacts of Brexit, Patrick Bergin outlined the future of Crest Nicholson:
“In the context of an unresolved Brexit, I expect the first half of 2019 to be difficult. However, I believe our new strategy will ensure the business is fighting fit and equipped to deal with any challenges it faces.”
“Current market uncertainty is making it hard to look too far ahead, so while we are optimistic about the longer term prospects of the sector, we continue to remain vigilant and responsive. Our focus on the south of England housing markets remains a long-term strength, land remains in good supply and we have strong plans in place to meet the demand for affordable housing.”
“Overall, Crest Nicholson presents a resilient financial proposition and I am excited about our future. We have made good progress this year and I look forward to working with the dedicated and talented people we have across the organisation as we strengthen the business further in 2019.”
London house prices fell 1.2% month-on-month in November, according to the ONS. Given the difficult climate caused by Brexit, the recovery of house prices in 2019 remains uncertain. In fact, a report from the Royal Institution of Chartered Surveyors has outlined that house prices are expected to continue stagnating in 2019.
At 09:19 GMT today, shares in Crest Nicholson Holdings plc (LON:CRST) were trading at +5.26%.