Crest Nicholson sees strong start to the year, shares jump
Shares in rallied on Thursday, after the housebuilder said it had seen an "encouraging" start to the year.
Crest Nicholson unnerved investors last month when it flagged a "severe but plausible" scenario in which it could breach its loan terms as soon as April. At the time, it blamed a slower pace of interest rate cuts and economic uncertainty.
But updating on trading on Thursday, the FTSE 250 firm said it had seen an "encouraging" start to the year.
In the 10 weeks to 14 March, the open market sales rate, excluding bulk, was 0.61, compared to 0.50 a year previously.
Crest Nicholson attributed the stronger start to various initiatives, including improved training for the sales team, revised incentive schemes and an enhanced product offering. It also pointed to "stable" market conditions and "marginally" improving mortgage rates.
As a result, the firm said it remained on track to deliver results in line with guidance for the current financial year, with the cash performance also tracking better than expected in the first four months.
At 0920 GMT, shares in Crest Nicholson were up 12% at 170.94p.
Martyn Clark, chief executive, said: "I am pleased to see early signs of progress from our operational and sales improvement initiatives, reflecting our continued commitment to strengthening the group's performance and delivering value.
"While it is still early days, these efforts are beginning to make a positive impact."
However, the firm also sounded a note of caution, warning: "With interest rate reductions now expected to be slower, stubborn inflation and broader global macroeconomic uncertainty, the housing sector remains susceptible to weak consumer confidence."
The update was published ahead of a capital markets day, during which Clark - who joined from rival Persimmon in June 2024 - is due to outline his strategic plans for the business.
Medium-term guidance is currently for mid-single digit percentage growth per annum in home completions, over five years to 2,300+ unist. It is also targeting average improvement of gross margins of around 100 to 150 basis points per annum.
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