Housebuilding and construction group Crest Nicholson has announced a pre-tax profit of £28.1m in the year to 31 October 1998, 37% up on the same period in 1997.

The surge in profit was mirrored by a jump in the group's turnover, which rose 32% to £465m, up from £353m in the previous year.

Turnover from house sales rose to £260.3m from £193.4m in 1997, with almost 60% of sales achieved in the South-east. Sales growth in the Midlands and the North lagged behind.

House sales hit a record high of 2210, up from 1965. Average house price reached £117 800, a rise of £19 400.

Crest revealed it had set aside a £1.3m provision for a "doubtful debt" arising from a joint venture operated by its Pearce Group construction arm.

Pearce reported a pre-tax profit of £700 000 in 1998, down £800 000 on the previous year. Turnover at Pearce hit £158.8m, up 24% on the previous year's figure of £128.2m. Crest's operating margins on residential sales eased to 12% from 11.4%.

Chairman John Matthews said the Bank of England's interest rate cuts had increased confidence in the housebuilding market.