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Chief executive Peter Truscott placed the blame with the Liz Truss and Kwasi Kwarteng, who for a few weeks last years were prime minister and chancellor of the exchequer respectively.
During their brief time in office they crashed the pound, leading to spiralling interest rates, making mortgage loans more expensive.
“We started our first half amidst the worst of the economic uncertainty arising from the September 2022 mini-budget,” Peter Truscott said. “Rapidly falling consumer confidence and rising interest rates immediately translated into softer demand in the housing market. At the time we outlined that, with a package of sensible measures to restore economic stability and trust, the market would remain resilient and this has proven to be the case.”
For the six months to 30th April 2023, Crest Nicholson Holdings saw its revenue fall 22% to £282.7m (2022 H1: £364.3m). During the half-year it completed 894 homes, compared to 1,096 over the same months a year before.
Adjusted profit before tax of £20.9m was less than half the previous year’s figure (2022 H1: £52.5m), although factoring in £105m provisions last year and a £7.5m exceptional credit this year relating to combustible materials, statutory profit before tax was £28.4m, compared to a £52.5m half-year loss last year.
While the first half of the current financial year started badly for Crest Nicholson, things picked up.
“As we traded through the period, confidence started to return and this has been reflected in our trading metrics, which have sequentially improved throughout the period,” Truscott said. “Our disciplined approach in continuing to acquire land during the period, supported by our strong balance sheet, has enabled us to add several high quality sites in desirable locations that support our expansion plans and position us for future growth.”
However, he would like to see the government offering more help to house-builders.
“Unemployment remains low and mortgage availability remains good albeit at more expensive rates. The ongoing lack of housing supply is continuing to support house prices and these factors are also driving strong levels of rental inflation. The economic case for buying a home therefore remains compelling, but for many first time buyers the higher cost of borrowing and the cessation of Help to Buy are prohibitive to realising this ambition. If interest rates continue to rise, and remain elevated for a sustained period of time, this will undoubtedly exacerbate this issue even further and start to impact demand and confidence again. We continue to call on government to recognise this challenge and provide further support to these potential homeowners.”
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