Crest Nicholson looks off site in quality drive
House-builder Crest Nicholson is riding high financially but has taken a dip in the customer satisfaction stakes.
Having seen is 5-star Home Builders Federation rating slip to just 4-star, it is now looking at how off-site manufacturing and better supplier relationships can improve its quality control.
Chief executive Stephen Stone said: “As a company traditionally rated 5-star in the HBF survey, we were extremely disappointed with our 4-star rating in 2015 – a result that was influenced by delays and quality challenges on some projects, linked to supply chain issues. While recognising that the 2-3% decline in our overall score is a slight one, we are determined to regain our 5-star status. To underpin this target, customer service performance continues to be a metric within bonus schemes across the group, including those of the executive directors. Our supply chain is crucial to quality and delivery. Some of the innovations we're exploring include off-site manufacturing and partnering agreements to provide greater assurance of high quality and timely completion.”
Despite the fall in customer satisfaction, the financial performance remains strong.
Crest Nicholson Holdings’ results for the year ended 31st October 2015 show sales revenues up 26% to £804.8m (2014: £636.3m) and pre-tax profit up 32% to £154.0m (2014: £116.7m).
The number of new homes built during the financial year reached 2,725, which is 8% up on 2014’s figure of 2,530 and 80% up on the 2011 low watermark of 1,520.
Operating profit margin for 2015 was up to 20.3% (2014: 20.1%) and return on capital employed improved to 26.8% (2014: 26.0%).
Mr Stone said: "Since the recent low point of 1,520 units in 2011, Crest Nicholson has increased its volumes by almost 80% and is establishing a strong business for the benefit of all our stakeholders. We remain on track to deliver on our targets of 4,000 homes and £1.4bn of revenue by 2019, which would represent a record level of delivery for the business and a more than 150% increase over our 2011 housing numbers.
“The housing market is now more sustainable, underpinned by strong demand dynamics, a benign land market and government policies to improve access to home ownership. We remain confident that this environment provides Crest Nicholson with the opportunity to grow housing volumes and deliver strong cash returns to shareholders over the medium to long term."
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This article was published on 26 Jan 2016 (last updated on 26 Jan 2016).