Crest Nicholson swings to profit, but sees cladding bill rise

Housebuilder Crest Nicholson has revealed another £29 million bill for high-rise cladding and fire safety measures as it swung to a full-year profit.

The group said the charge follows its latest assessment of potential building safety work needed across its properties in light of the Grenfell Tower tragedy.

It comes after the Government’s announcement last week that all leaseholders in high-rise blocks should not have to pay for remediation works on dangerous cladding, including those in properties between 11 metres and 18 metres tall.

Crest’s full-year results showed it jumped to a pre-tax profit of £86.9 million for the year to October 31, 2021, against losses of £13.5 million the previous year.

On an underlying basis, pre-tax profits more than doubled to a better-than-expected £107.2 million from £45.9 million.

It had upped its profit outlook last year thanks to strong first-half trading and robust forward sales in spite of the stamp duty holiday ending at the end of June, tapered to September 30.

Crest said in its latest report that forward sales stood at £719 million, or 2,702 properties, as at January 14, up from 2,435 a year earlier.

It sold 2,407 homes in 2020-21, up 7% on the year before.

Crest said it was seeing some signs that shortages of both workers and materials are starting to ease after supply chain troubles emerged last summer.

It said: “In the UK the full impact of Brexit, especially on labour availability, was also clearly a feature.

“The group was able to navigate its way through these challenges successfully and is confident it is already seeing signs that these pressures have stabilised, and in some areas have started to reduce.”

Analyst Charlie Campbell at Liberum said: “The main message from the results is that the turnaround is complete… and that the group now has a good platform for future growth.”