Crest Nicholson (CRST) CMD 2025 summary

Strategic priorities and market positioning

• Refocusing on the mid-premium housing segment, targeting above-average income buyers and reducing exposure to PRS and affordable channels to improve margins and returns.

• Leveraging a strong brand, well-located land bank, and experienced leadership to drive value growth and disciplined volume growth.

• Aiming for 10% market share in the mid-premium segment by optimizing product design, build quality, and customer experience.

• Enhancing customer service and journey, with initiatives to align all touchpoints to the mid-premium brand and improve conversion rates.

• Committing to sustainability, including net zero by 2045, biodiversity, and zero-carbon ready developments.

Operational and financial transformation

• Implementing a comprehensive transformation program focused on quality homes, customer service, operational excellence, and land optimization, spanning 2–3 years.

• Standardizing build processes, improving staff training, and strengthening quality control to achieve five-star HBF status and reduce defects.

• Centralizing procurement, improving ERP systems, and enhancing governance to increase efficiency and reduce overheads from 9% to 7% of revenue by FY27.

• Actively managing the land bank by disposing of or partially selling non-core or large sites, freeing up capital for smaller, higher-margin developments.

• Targeting inventory reduction of £200m and lowering inventory value to £900–950m by FY29, while growing volumes by 20–25%.

Financial guidance and targets

• Guidance for FY2025 unchanged; targeting mid-single-digit CAGR in volumes, with completions rising from c.1,900 in FY24 to over 2,300 by FY29.

• Gross margin targeted to rise from 14% in FY2024 to over 20% by FY2029, with EBIT margin reaching 13%+ and ROCE at or above 13% by FY2029.

• Overhead reduction to around 7% of revenue by FY27 through process streamlining and cost controls.

• Inventory reduction to be achieved through better site planning, land disposals, and improved WIP management, reducing short-term land bank from 7 to 4–5 years.

• Maintaining existing dividend policy (2.5x cover), with disciplined capital allocation and future optionality post-fire remediation.