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Mon December 17 2018

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Crest Nicholson feels the squeeze

12 Jun House-builder Crest Nicholson has blamed an inability to pass build cost inflation onto home-buyers for a drop in its profit margins.

Chief executive Patrick Bergin
Chief executive Patrick Bergin

For the six months ended 30th April 2018, Crest Nicholson Holdings’ interim pre-tax profit dipped 2% to £74.8m (2017 H1: £76.2m) on revenue up 13% to £473.8m (2017 H1: £419.7m).

The operating profit margin dipped from 19.1% last time to 17.2%.

“Our experience of generally flat pricing against a back-drop of continuing build cost inflation has had an adverse impact on our margins,” said chief executive Patrick Bergin.

Full year margins expected to be around 18% (2017: 20.3%), he said.

Build cost inflation had been running at around 3-4% but was now "showing some signs of moderation”, he said.

Mr Bergin added: “We have taken a number of actions to seek to offset build cost pressures and invest in areas of greater housing affordability.”

Pre-tax profit was also impacted by higher financing costs due to investment in new sites and the timing of joint venture performance.

MPU

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