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 challenging market conditions.

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

• Net debt was £9.4m, with FY24 year-end forecast between £40m–£60m, supported by improved cash management and an undrawn £250m RCF.

• Leadership transition completed, with Martyn Clark appointed CEO and a focus on resolving legacy issues and operational discipline.

Financial highlights

• Adjusted gross margin declined to 12.6%–13.6% (HY23: 17.9%) due to a higher proportion of low-margin sites.

• Adjusted operating profit was £6.2m (HY23: £22.1m); adjusted operating margin: 2.4% (HY23: 7.8%).

• Adjusted basic EPS was 0.7p (HY23: 6.1p); interim dividend reduced to 1.0p per share (HY23: 5.5p).

• Exceptional items before tax totaled £33.5m, mainly from legacy site and combustible materials provisions.

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

Outlook and guidance

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

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

• Net debt forecasted between £40m–£60m for FY24, with improved cash management and reduced land commitments.

• Sales volumes are expected to remain subdued until after the election and the first interest rate cut.

• Build cost inflation expected to remain flat for the rest of FY24; profitability weighted to the second half.