Crest sells record number of homes

THE CHAIRMAN of Crest Nicholson, John Matthews, yesterday reported a good performance for 1998 when the upmarket housebuilder sold a record 2,210 units, nearly 60 per cent of them in the prosperous South-east and a similar proportion on the brownfield sites favoured by government policy.

Turnover rose by 32 per cent, profit before tax was up by 37 per cent to pounds 28.1m and earnings per share rose 41 per cent to 16.6p, marginally ahead of market forecasts.

Average prices rose nearly 20 per cent, with half the improvement coming from the expensive central London flats offered by Nicholson Estates, the specialist division set up two years. It made its first contribution to profits last year, and has already replenished its portfolio of sites.

Operating margins on housebuilding rose from 11.4 per cent to a satisfactory 12 per cent, the property division returned to profit and the reduced contribution from the construction division was more than accounted for by a pounds 1.3m provision on a doubtful debt.

Half the 110 flats in the converted spice warehouse opposite the Tower of London have been sold, including 30 sales in Hong Kong. The land bank for immediate development has been increased by almost 10 per cent to 6,329 units, or three years' supply at current sales.

Crest is banking heavily on sustained expansion. Net borrowings almost doubled to pounds 77.3m and the group has been gearing up to fund the development of the Claybury Hospital site at Chigwell, where 770 homes will be built between 2000 and 2004. Analysts are forecasting a more modest growth in profits to pounds 30.8m and earnings of 18.2p a share. The shares, which bottomed at 81p in October, rose 3p to 124.5p.