Crest Nicholson, the housing regeneration specialist, has warned that the market remained “challenging” in the short term at least, and that it had not recovered from the pre-election slump in activity
Crest made the gloomy statement as it announced its results for the six months to 30 April 2005. It also revealed it had been forced to pay £2.1m in professional fees while it was staving off the unwelcome advances of developer Heron International, which was interested in a takeover attempt.
John Calcutt, Crest’s chief executive, said: “We won’t see a lot of growth this side of Christmas, but 2006 might be half decent, especially if interest rates fall.”
He said that Heron’s interest in the company had caused little disruption to the business and that there was no lasting damage. “We would rather not have paid £2.1m in fees but we had to have the best advice and that does not come cheap. It is a complete pain but we had to maximise shareholder value.”
In the first half of the year, Crest made a pre-tax profit of £38m, up 6%, but this was before exceptional costs associated with Heron were taken into account. When this was included, pre-tax profit fell to £35.9m.
The number of affordable housing units completed by Crest was down 18% to 256, but Calcutt said that this was a result of the “lumpy” nature of that sector and that there would be big increases next year.
Crest’s landbanks and agreed urban regeneration projects have a combined development value of £4.54bn. It is expecting to deliver about half of these schemes by 2008, which would be a “significant income stream”, according to the company.
Turnover rose 11% to £315.m and Crest recommended an interim dividend of 4.2p, up 5%. Shares in the company fell just 2p to 390p when the results were announced last Thursday, but they continued to fall this week.
Crest results (six months to 30 April 2005)
Pre-tax profit before exceptionals £38m (+6%)
Pre-tax profit after exceptionals £35.9m (-0.3%)
Turnover £315.3m (+11%)
Dividend 4.2p (+5%)