Crest Nicholson reports robust H1 results, maintains H2 outlook

Crest Nicholson Holdings reported H1 2025 results showing a 6% decrease in home completions to 739 units, with private sales down 40% to 107 units; however, open market sales rates improved to 0.53, increasing to 0.61 since mid-January. Despite a slight dip in average selling price to £342,000 due to housing mix, adjusted profit before tax rose significantly by 204% to £7.9 million, and the company reaffirmed its full-year volume and profit guidance, expecting adjusted profit before tax between £28 million and £38 million.

Analysis

Crest Nicholson Holdings plc reported a mixed but ultimately reassuring first-half 2025 performance, indicating early positive effects from its new strategy amidst challenging housing market conditions. While total home completions, including joint ventures, declined by 6% year-over-year to 739 units and private sales rates including bulk deals fell significantly by 40% to 107 units, the company demonstrated resilience with an improved open market sales rate, which rose to 0.53 from 0.47 in H1 2024, and further accelerated to 0.61 since mid-January. This improvement occurred despite operating with fewer average outlets, down to 40 from 45. A key positive was the expansion of the gross margin to 14.2% from 12.0% in the prior year. Although the overall average selling price on open market sales dipped by 2% to £342,000 due to a higher social housing mix, underlying open market selling prices remained stable at £422,000. This operational performance translated into a substantial 204% increase in adjusted profit before tax to £7.9 million. However, net debt rose to £71.5 million from £9.4 million at the end of FY2024, and the fire safety remediation provision increased by £2.4 million. Looking ahead, current trading aligns with expectations, the forward order book stands at 763 homes, and the company anticipates no significant build cost inflation for the remainder of FY2025. Crucially, Crest Nicholson reaffirmed its full-year 2025 guidance, projecting 1,050-1,150 open market homes, 650-750 bulk and affordable homes, an adjusted profit before tax between £28 million and £38 million, and net debt in the range of £40 million to £90 million.

Key Decisions for Investors

• Investors should note the encouraging improvement in open market sales rates and gross margin, which suggest the new strategy is gaining traction despite lower overall completion volumes.
• The reaffirmed full-year guidance offers some stability, however, ongoing monitoring of sales momentum, particularly given the sharp drop in private sales including bulk deals, and evolving housing market conditions remains essential.
• Consider the increased net debt and the ongoing financial impact of fire safety provisions as key risk factors that could influence future financial flexibility and returns.