TIDMCRST

RNS Number : 7485S

Crest Nicholson Holdings PLC

18 November 2021

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018

Crest Nicholson Holdings plc

(the "Group" or "Crest Nicholson")

FY21 PROFIT TO BE MARGINALLY AHEAD OF CONSENSUS (1)

STRONG SALES PERFORMANCE IN H2

TRANSFORMED BALANCE SHEET TO SUPPORT FUTURE GROWTH

Crest Nicholson today provides an update on trading for the 12-month period ending 31 October 2021.

Financial highlights

 
      --         FY21 Adjusted Profit Before Tax expected to be marginally 
                  ahead of consensus of GBP101.2m(1) with the Longcross 
                  Film Studio contribution being more than anticipated 
      --         Strong sales performance throughout the second half 
                  of the year with current sales rates remaining robust 
                  across all regions 
      --         Forward sales as at 12 November 2021 were 2,502 
                  units and GBP623.9m Gross Development Value (GDV) 
                  (13 November 2020: 2,330 units and GBP496.6m GDV), 
                  with good visibility of sales pipeline for FY22 
      --         Continued expansion of operating margins in line 
                  with guidance as the Group makes strong progress 
                  depleting poorer legacy sites and maintains discipline 
                  on overheads 
      --         Excellent cash generation throughout FY21, ensuring 
                  the Group ran on a net-cash basis throughout the 
                  year 
      --         The Group remained active in the land market in 
                  FY21: 4,332 plots have been approved for purchase 
                  at a gross margin of 26.7% (after S&M) 
 
   1 Consensus as published on 17 November 2021 at https://www.crestnicholson.com/investors/consensus-estimates

First stage of turnaround now complete and plans to grow underway

 
      --   Successful roll out of new house types with over 
            6,000 units now planned, which represents 74% of 
            open market housing held in the short-term land 
            portfolio 
      --   Operational efficiency programme, coupled with 
            house price inflation, continues to insulate the 
            Group against supply chain disruption and build 
            cost inflation 
      --   At our Capital Markets Day on 20 October 2021, 
            the Group presented a growth strategy which will 
            see it expand into three new UK geographies by 
            2026 
      --   The Group is initiating its plan to establish divisions 
            in Yorkshire and East Anglia from 2022 
      --   Medium term targets set to illustrate progress 
            on growth strategy. A two-phase plan: 
            -    Phase one: gross margin rate accretion and 
                  volume growth from existing divisions (FY22-FY24) 
            -    Phase two: volume growth from the three new 
                  divisions (FY24-FY26) 
 
 
 Medium term targets        FY24           FY26 
                       ------------- 
 Home completions       In excess of   In excess of 
  (units)                   3,000          4,200 
---------------------  -------------  ------------- 
 Divisions                   5+             8 
---------------------  -------------  ------------- 
 Operating profit 
  margins                         18-20% 
---------------------  ---------------------------- 
 Return on capital 
  employed                        22-25% 
---------------------  ---------------------------- 
 Land Creditors                Less than 30% 
  (% of Net Assets) 
---------------------  ---------------------------- 
 Dividend Policy 
  (cover)                          2.5x 
---------------------  ----------------------------

Good progress against our existing sustainability targets and further ambition to come

 
      --   Existing medium targets to 2025 progressing well 
            in FY21 
           -   Carbon emission reduction target: 25% 
           -   Renewable electricity target:100% 
           -   Waste reduction target: 15% 
      --   New targets announced at recent Capital Markets 
            Day 
           -   Signatory to the United Nation's Race to Zero 
                campaign 
           -   Developing ambitious interim science-based 
                targets, validated by the Science Based Targets 
                initiative (SBTi) 
           -   Achieving net zero emissions across our value 
                chain by 2050 at the latest

Progress against existing sustainability targets will be provided in our FY21 preliminary results and further detail will be given on our new sustainability targets in the first half of FY22.

Commenting on today's announcement, Peter Truscott, Chief Executive said:

'The Group has performed strongly in the second half of the year with our full year underlying profit before tax marginally ahead of our expectations.

While the trading environment remains robust, it has been a challenging operational environment for our sector as we have emerged from the pandemic, with disruption to supply chains and the availability of materials. I am delighted that our teams have remained focused on implementing our strategy and have managed to successfully navigate our way through these issues.

At our recent Capital Markets Day, the leadership team outlined how the first part of our turnaround strategy is complete and presented an exciting vision for the future. The Group now has the necessary resources and capabilities to grow its footprint in the UK and we see this as the best way to maximise shareholder value over the medium term. We look forward to communicating more detail on this as we progress with the implementation of our plans.'

For further information, please contact:

Crest Nicholson

   Jenny Matthews, Head of Investor Relations                               +44 (0) 7557 842720 
   Tulchan Communications                                                        +44 (0) 20 7353 4200

James Macey White

Giles Kernick

The person responsible for arranging the release of this announcement on behalf of the Company is Kevin Maguire, General Counsel and Company Secretary.

18 November 2021

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END

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