REG - Crest Nicholson Hdgs - AGM Statement

Crest Nicholson HoldingsAnnouncement

23/03/2023 07:15

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RNS Number : 9272T  Crest Nicholson Holdings PLC  23 March 2023

Crest Nicholson Holdings plc

 (the 'Group' or 'Crest Nicholson')

 

IMPROVING SALES RATE

AVERAGE SELLING PRICES HOLDING FIRM

STRONG BALANCE SHEET MAINTAINED

 

Crest Nicholson Holdings plc is holding its Annual General Meeting ('AGM') at
11.30 a.m. today. This trading update is for the period from 1 November 2022
to 20 March 2023. The Company's FY23 year end is on 31 October 2023.

Trading update

The Group has delivered a SPOW(1) rate at 0.52 for the last eleven weeks from
the start of the calendar year. This improvement versus the eleven-week SPOW
rate from 1 November 2022 at 0.35, as reported at our Preliminary Results in
January 2023, reflects the ongoing and steady recovery in overall consumer
confidence and housing market activity since the start of the year. The most
likely economic scenario we articulated back in January continues to be
realised as average selling prices have remained robust with an enduring lack
of housing supply. The market is clearly softer than the previous two years of
trading, however it remains resilient.

Mortgage rates have progressively reduced as the outlook for future interest
rate rises and general economic stability have both become more favourable
since the start of our trading year. In addition, lower transaction volumes
have intensified competition for new mortgage business and led to increasingly
competitive rates for those buyers with higher levels of equity, which in turn
is giving them confidence to move home. This is being reflected in our lead
indicators. However, those with lower levels of equity are unsurprisingly
finding it harder to purchase their first home and making it onto the housing
ladder. Support for these potential buyers, in a higher interest rate
environment, is going to be necessary if we are to see a full recovery in the
housing market.

Build cost inflation remains a challenge for housebuilders. Since the start of
the year, we have seen subcontractors starting to anticipate a lower level of
build activity which is now being reflected in a greater competitive intensity
for work and pricing. Raw materials pricing is a more mixed picture with some
categories continuing to experience price increases while others are starting
to fall. We continue to expect that the overall basket of high single-digit
percentage build cost inflation will recede during 2023.

On 13 March 2023 the Group announced it had signed the Developer Remediation
Contract which formalises its responsibilities to identify and remediate those
buildings with potential safety risks. At 31 October 2022 the Group held a
provision of £140.8m in respect of its remediation obligations and remains
confident that this is the best estimate of its expected future costs at this
time. We will provide a further update on the progress we are making in this
area at our half year results.

While the economic outlook remains uncertain the housing market has continued
to demonstrate its relative resilience. The Board remains confident in Crest
Nicholson's ability to create value through the development of its attractive
land portfolio and its plans to expand into new regions, which is on track and
progressing well. The housing market fundamentals remain strong and the Group
continues to benefit from a strong balance sheet which gives it flexibility to
trade in tougher market conditions.

The Group expects to announce its half year results for the six months ending
30 April 2023 on 8 June 2023 and will provide an update on its progress at
this time.

 

 

AGM

The Group will be holding its AGM today at 11.30 a.m. at the Group's Head
Office: Crest House, Pyrcroft Road, Chertsey, Surrey KT16 9GN.

1.Sales per outlet per week

 

For further information, please contact:

 Crest Nicholson

 Jenny Matthews, Head of Investor Relations   +44 (0) 7557 842720

 Teneo

 James Macey White / Giles Kernick            +44 (0) 20 7353 4200

 

23 March 2023

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