South East housebuilder Crest Nicholson has announced that they expect to achieve a pre-tax profit of over a whopping £40m this year!
Crest has said that it has benefitted from a strong bounce back in housing demand and planned operational savings in site efficiency programmes and overheads. During the summer they have seen good trading across all their divisions, with reservation rates now slightly ahead of the pre-Spring lockdown level. Crest have also said in a recent statement that they will be reintroducing dividend payments at the next half–year point.
Chief Executive, Peter Truscott, said: “The introduction of another national lockdown will undoubtedly bring fresh challenges, but we welcome the Government’s support to maintain construction activity and for the housing market to remain open for business.”
“Although the macro-economic outlook is uncertain our strategy will remain unchanged.”
“We will maintain our strong focus on delivering operational efficiencies and if our trading becomes significantly disrupted, we will act decisively again to protect our enhanced balance sheet.”
“However, we expect the housing market to remain resilient to the impacts of COVID-19 and as such we are well-positioned to capitalise on that demand, particularly considering our product range and focus on Southern England.”
Crests internal reorganisation across the Crest operating divisions and head office after the first lockdown will deliver £15m in annual overhead savings. They have stated that its operational efficiency programme has identified £30m of specification savings through better discipline in procurement.
This focus has also enabled Crest to improve the quality of their service levels, materials and develop closer, more strategic relationships with their trusted suppliers.
It has also identified £40m gross margin improvement from existing and future schemes through re-plotting the layout and types of units on the schemes.
The introduction of a new standard type of house is predicted to drive further benefits with significantly lower build costs, shorter building timeframes and a reduction in intricacy.
At present, Crest has over 5,500 future units planned with this new range, with over 80% of open market houses switched to the new type by 2022. Very exciting for those planning to buy in the next few years!
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1.) The Construction Enquirer – South East house builder to exceed profit forecast – 3 November 2020