4 February 2025
If you are covering Crest Nicholson’s full year financial results, please find below a comment from Oli Creasey, property research analyst at Quilter Cheviot:
“Following a two-week delay to the announcement of Crest Nicholson’s full year results, one may have thought trouble was brewing, but the statement contains little in the way of surprise, positive or negative.
“Sales volumes in the year to Oct-24 were 1,873 homes, down 7% compared to last year, and at an average price of 1% less compared to the year before. Both of these metrics are someway below other housebuilders, who have mostly turned a corner in 2024 and reported increased volumes and prices, albeit still low compared to history. The company reported a net loss for the year, largely relating to fire safety remediation exceptional costs, and the expectation is that the firm will return to profit in 2025.
“Of some concern to investors will be the statement from the Directors suggesting that in a “severe but plausible” downside scenario, the group may breach the interest cover covenant on its debt. While not a good sign, it is a low probability scenario, and one where we would expect the company and lenders to work together to find a solution.
“The company has guided 2025 volumes similar to 2024, although the forward order book is down 40% compared to last year. While management expects sales rates to increase, the company will also be operating from fewer outlets this year, limiting growth prospects. Overall guidance is cautious, with the expectation that most of the recovery will come in the second half of the year.”
