Last updated 17th November 2022
Crest Nicholson
Crest Nicholson is a major publicly-listed FTSE 250 housebuilder which has been developing property for some 55 years and completed around 2,400 homes on sites of varying sizes in its last financial year.
The company works through regional divisions; Midlands, Chiltern, South West and South and two new divisions launched in late 2021, Yorkshire, based in Leeds and a new East Anglia business.
Plans to open a third new division were deferred in autumn 2022 in the light of weaker trading. The group”s forward sales as at mid-November stood at 2,038 units, down from 2,502 units a year previously.
Founded in 1963 and based in Chertsey in Surrey, Crest Nicholson also works to develop land jointly with partners which include Homes England, the Defence Infrastructure Organisation and various housing associations and financial groups. After being taken private in 2007, the company went public on the stock exchange again in 2013. In recent years, the company has focused on housebuilding in the regions, having retreated from London and put less emphasis on areas such as commercial property and off-site manufacturing.
Under chief executive Peter Truscott, the group has also focused on moves to boost efficiencies and margins; the number of employees at the group fell to 661 as at October 2021 from 796 a year previously.
Although its underlying profits improved, the group reported a heavy pre-tax loss in April 2022 after an exceptional charge of £105 million on its obligations under the Government”s Building Safety Pledge drawn up following the Grenfell fire.
In a trading statement in November 2022, Peter Truscott said: “The UK is clearly facing a challenging macro-economic outlook, however we remain confident in the long-term fundamentals of the UK housing market.”
Financials
To view the financial for Crest Nicholson go to Companies House and use company ID 104161
In common with most housebuilders, Crest Nicholson produced sparkling results for its latest financial year. Helped by a healthy housing market, revenues in the year to end-October 2021, rose to £786.6 million, up from £677.9 million previously, whilst adjusted pre-tax profit rose to £107.2 million (helped by the sale of Longcross Film Studio) from £45.9 million. The group had net cash of £252.8 million as at October 2021, up from £142.2 million, previously. Meanwhile the group’s latest interim results, for the half up to end-April 2022, show sales rose by 12.3% to £364.3 million and adjusted pre-tax profit rose to £52.5 million from £36.1 million previously, whilst net cash stood at £173.3 million. The group recorded a loss before tax of £52.5m after the £105 million exceptional charge related to the government”s Building Safety Pledge.
Operations
In 2021, Crest Nicholson completed 2,407 homes (up from 2,247 previously) and split between 1,924 open market completions and 483 affordable sales. Meanwhile the firm has a total land bank of some 36,985 units made up of 14,677 plots for short term units and 22, 308 of longer term ‘strategic land’.
To maintain its land bank, the firm approved 4,332 plots for purchase over the year, at a forecast gross margin of 26.7%.
Crest Nicholson uses various marketing initiatives to generate sales including a Smoothmove option which helps buyers sell their existing home and a deposit unlock scheme which enables buyers to proceed with a 5% deposit.
In mid-June 2022, the company unveiled interim results showing continued strong trading and homes completions in the half to end-April up 8% to 1,096. Its guidance for 2022 adjusted profit before tax was upgraded to £135-140 million.
Recently the firm has been rolling a range of new house types and its 75% of its private open market houses to use the new range in 2022.
Glenigan data
Glenigan data suggests Crest Nicholson is maintaining a solid pipeline of new developments around the country. Detailed plans have been submitted for a £4.74 million Crest Nicholson Yorkshire scheme of 62 house and 8 flats at Sprotborough Doncaster where work is due to start in summer 2023 and run for 12 months (Project ID: 22357979). Meanwhile, in Daventry in Northants, plans have been submitted for a £33.3 million Crest Nicholson Eastern development of 222 homes at Staverton Road where work could start in 2024 and run for 20 months (Project ID: 22400177).
Conclusion: well placed to withstand the downturn in new housing
Having shifted its focus towards regional housebuilding (both private and affordable) Crest Nicholson has improved efficiency and margins and endeared itself to the City analysts who follow the company. In common with all quoted housebuilders, the group has been impacted by the dramatic slowdown in the UK housing market in autumn 2022. But with a wide regional spread, a good reputation and strong balance sheet, the group is better-placed to withstand the downturn than many smaller rivals.
How to win work with Crest Nicholson
The company aims foster an open and honest culture and to create a positive, effective and collaborative environment. Details on Crest Nicholson’s supply chain policies can be found at its website here https://www.crestnicholson.com/supply-chain. An email address of info@crestnicholson.com is available for questions.
The firm’s priorities include maintaining a well-located, flexible land portfolio and a focus on operational efficiency with an emphasis on key themes such as consistency, discipline, benchmarking and measurement. In summer 2021, Crest Nicholson has become a partner of the Supply Chain Sustainability School.
Key contacts
David Marchant, Group Operations Director
Telephone: 01932 580555
Email: David.Marchant@crestnicholson.com
Ryan McIver, Head of Build
Telephone: 01932 580555
Email: Ryan.McIver@crestnicholson.com
Mark Kershaw, Group Head of Sustainability
Telephone : 01932 580555
Email: Mark.Kershaw@crestnicholson.com
Tobias Jones Sustainable Procurement Manager
Telephone: 01932 580555