Crest Nicholson’s Share Price Plunged 8.44% on Its Latest Update

Crest Nicholson Holdings PLC (LON: CRST) ‘s share price plunged 8.44% after the company released a trading update covering its performance from the beginning of November 2023 to mid-March 2024, with the fiscal year concluding on October 31, 2024. The company also notified investors that it was holding its annual general meeting (AGM) today. 

Regarding current trading, the company has reported reservation numbers that meet expectations and a sales pace of open market homes (SPOW rate) of 0.44 across 46 outlets. This reflects a period of subdued activity leading up to Christmas, followed by a resurgence in sales from mid-January. 

In the recent eight weeks up to March 15, 2024, the SPOW rate has increased to 0.52. Sale prices have aligned with forecasts, and cancellation rates have stayed within normal ranges. In some regions, reduced construction activity has led to lower labour costs. At the same time, overall build cost inflation has begun stabilising at a rate lower than the previous year's.

A significant focus remains on enhancing customer service, with the company achieving a customer satisfaction rating of over 90% since February 2023.

The company also discussed the challenges within the planning system. However, thanks to a robust land portfolio, including several high-quality sites acquired last year, Crest Nicholson can navigate planning delays and support growth in future outlets.

As anticipated, progress is being made regarding ongoing developments in Farnham and other legacy sites.

For sites completed before 2019, the company has identified certain construction defects, mainly in four locations developed before the closure of its Regeneration and London divisions. Remediation work will cost up to £15 million over the next three years.

Consequently, the board has opted to engage third-party consultants to reassess the sufficiency of current provisions for these and similar projects completed before 2019. A detailed update on this matter will be shared during the June interim results presentation.

Looking ahead, Crest Nicholson is concentrating on maximising value and anticipates completing between 1,800 and 2,000 homes in FY24. These completions are expected to be distributed with a 35/65 split between the first and second halves of the year.

The forecast reflects the initial order book and the slow start to reservations in the first two months of the fiscal year. Sale prices are projected to stay consistent throughout FY24.

Crest Nicholson share price.

The Crest Nicholson share price plunged 8.44% to trade at 205.00p from Monday’s closing price of 223.90p.