Crest Nicholson (CRST) H1 2024 earnings summary

Executive summary

• Revenue declined 8.9% year-over-year to £257.5m, reflecting weak forward orders, planning constraints, and subdued sales due to delayed interest rate cuts and the upcoming general election.

• Adjusted operating profit dropped to £6.2m from £22.1m, impacted by lower volumes, low-margin sites, and a £5.9m one-off completed sites charge.

• Statutory loss after tax was £23.4m, compared to a profit of £21.1m in the prior year, driven by exceptional charges and lower volumes.

• Leadership transition: Peter Truscott retired as CEO, succeeded by Martyn Clark in June.

• Focus on resolving legacy low-margin sites, strengthening operational discipline, and maintaining a strong land portfolio.

Financial highlights

• Adjusted gross margin declined to 12.6% from 17.9% year-over-year, reflecting a higher proportion of low-margin sites.

• Adjusted profit before tax was £2.6m, down from £20.9m year-over-year.

• Adjusted basic EPS fell to 0.7p (HY23: 6.1p); interim dividend reduced to 1.0p per share.

• Net assets decreased to £803.1m (HY23: £876.6m), mainly due to exceptional charges and dividend payments.

• Operating cash outflow improved to £67.0m from £165.4m, with working capital outflow of £45.8m.

Outlook and guidance

• FY24 completions expected at 1,800–1,900 units, with 25% affordable and 75% open market/bulk.

• Adjusted profit before tax guidance for FY24 is £22m–£29m, including the one-off site review impact.

• Net debt forecasted at £40m–£60m by year-end.

• Sales prices and build costs anticipated to stay broadly stable; build cost inflation expected to remain flat.

• Focus remains on resolving legacy site issues, operational efficiency, and regaining five-star customer rating.