Crest Nicholson Holdings plc has reported an encouraging start to the year, with early signs of operational improvements as the company prepares to implement its refreshed strategic direction.
Investors cheered the combination of a strong start to the year and an upbeat medium term outlook as shares rose over 10%.
In the 10-week period to 14 March, the housebuilder achieved an open market sales rate of 0.61, up from 0.50 in the previous financial year. This improvement has been driven by several self-help initiatives, including enhanced training for the sales team, revised incentive schemes, and improvements to the product offering.
The company remains on track to deliver results in line with guidance for the current financial year, with cash performance exceeding expectations in the first four months.
Despite these positive developments, Crest Nicholson acknowledges that market conditions remain challenging. While mortgage rates have improved marginally, slower-than-expected interest rate reductions, persistent inflation, and broader global macroeconomic uncertainty continue to affect consumer confidence in the housing sector.
At today’s Capital Markets Day in Windsor, CEO Martyn Clark and CFO Bill Floydd will outline the company’s strategic plans to position Crest Nicholson for sustainable growth and returns.
Crest Nicholson has also announced medium-term guidance for FY24 to FY29, which includes mid-single digit percentage growth in home completions annually over five years to exceed 2,300 units, average annual improvement in gross margins of approximately 100-150 basis points per annum to over 20%, overhead reduction to approximately 7% of revenue by FY27, and average Return on Capital Employed improvement of approximately 200 basis points per annum to over 13%.
“We are focused on unlocking the significant opportunity in the mid premium segment of the market, through becoming truly customer-centric, driving operational excellence and optimising our land portfolio to maximise value creation,” said Martyn Clark, CEO of Crest Nicholson.
“We have established and have confidence in delivering a set of ambitious yet achievable medium-term financial targets which will underpin sustainable profitability and returns. We are excited about the road ahead and are clear on what we need to do to ensure success.”