Crest's production fell 12% from 1731 to 1531 units last year. This is because it is switching from traditional greenfield housing estates to larger, individually designed schemes on brownfield land, which are more complicated to construct.
Chief executive John Callcutt said he expected production to increase this year by about 150 units as the group got to grips with the new demands. He claimed next year would see production increase even more.
The group has now switched to project management and is using contractors to do the construction. Callcutt said this would increase production, but it was essential that the contractors built to Crest's standards.
He said: "We have a top-quality brand and a reputation for good homes. We have to maintain that in the new way we are doing things."
The company's move into brownfield development caused it to suffer cost overruns on three sites last year, highlighting the need to keep costs under control.
We have to maintain our reputation for good homes in the new way we are doing things
John Callcutt, chief executive, Crest Nicholson
Callcutt made his comments as the group posted its results for the year to 31 October 2001. Although production had slipped, the group's pre-tax profit was 10% higher at £53.1m because the firm's average selling price had jumped from £167,400 in 2000 to £203,300. Crest's housing operating margin had also increased from 13% to 15.6% last year.
Callcutt said the housing market remained strong for the group, with reservations in December rising 15% by number and 30% by value. He said: "[After 11 September] things dropped off for six weeks because of all the uncertainty, but then sales were good in October, November and December."
The group also significantly increased its landbank, from 7280 plots with planning consent to 9948 plots – enough for six years, based on last year's production.
Crest's construction division raised pre-tax profit from £800,000 in 2000 to £1.4m, and turnover increased £15m to £225m. Turnover for Pearce Construction, the group's leisure- and retail-focused contracting business, climbed above £100m for the first time.