Crest Nicholson profits continue to build as housing demand remains strong

Interim results from Crest Nicholson saw profits grow by a quarter as the housebuilder and said demand for new homes was remaining strong despite the clamour around a potential Brexit.

Revenue in the six months to 30 April of £408.1m were up 22% on the same period last year, as house sales rates and average selling prices both improved.

Operating margins were maintained at 19.1% with falling gross margins from the diminishing benefit of old written down land being offset by better cost efficiency.

Profit before tax jumped 25% to £72.6m, with basic earnings per share up by the same rate to 23.3p.

An interim dividend of 9.1p per share was proposed, up 42% as part of the board's target to reduce dividend cover to 2.0 times by 2017.

Net debt at the half year was £26m.

House sales rates averaged 1.06 per outlet per week, an increase of 4%, while legal completions increased 7% to 1,206. Sales per outlet week excluding PRS slipped 6% to 0.87 from 0.93 a year ago, largely due to the increase in average selling prices of new reservations taken 24% higher at £387,000.

Most of those figures had been pre-released in a pre-close trading update, while fresh information included forward sales at mid-June of £520.8m, which were 19% ahead of last year.

"Whilst the debate about the forthcoming referendum on UK membership of the European Union continues to dominate the headlines and the board notes the risk of business disruption in the event of a vote to leave, purchaser demand for new homes remains strong," said chief executive Stephen Stone.

The nascent move into PRS saw the company deliver 173 units in the first half, on schemes in Bath, Bristol and Southampton.

During the period, planning was granted for Crest Nicholson's first purpose-designed, suburban PRS scheme, being delivered for M&G at Faygate, near Gatwick Airport.