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Crest Nicholson share price: what to expect from its half-year results

The British homebuilder has done a good job at implementing its growth strategy this year, but the company still saw its sales slow this year as it prioritises cash flow and dividends.

When is Crest Nicholson’s results date?

Crest Nicholson is scheduled to release its half-year results on June 11.

Crest Nicholson results preview: what does the City expect?

Last month, Crest Nicholson reported that residential sales to date and forward-looking sales for the year fell by 4% to £715 million, down from £745 million recorded last year.

However, despite the slide in sales, the British homebuilder maintains that it has made good progress in implementing its strategy over its first six months of trading this year, with performance forecast to pick up in the second half of 2019.

The decline in sales was mitigated by the company’s new strategy, with its shift in focus toward lower price points and completing more joint ventures with housing associations helping to reduce its net debt by 13% to £68.2 million.

'We will continue to grow our partnerships with registered providers who are playing an increasingly important role in the diversification of tenures,’ Crest Nicholson Interim CEO Chris Tinker said. ‘This strategy trades an element of margin for reduced risk and improved cash flows.’

‘We maintain a strong balance sheet and operate a disciplined business model, generating good returns on our chosen investments. We have reduced debt in the half year and expect to be cash positive by the end of the year after paying ordinary dividends of 33 pence per share,’ he added.

The company’s stable set of results this year have been reflected by analysts, with eight investment banks rating the stock with a ‘hold’ rating, while another five opted to give the homebuilder’s ‘buy’ grade.

The average 12-month price target among analysts covering the stock is 406.90p a share. Crest Nicholson’s share price sits at 369p a share as of 15:30 on Wednesday.

Crest Nicholson maintains full-year guidance despite challenging start

Crest Nicholson was forced to change tact this year, putting the brakes on aggressive growth plans in favour of returning values to shareholders by increasing its dividend and reducing the amount of debt on its balance sheet at the expense of lower margins.

Brexit has provided the mpetus for the strategy rework, with the sector at large struggling in the face of major political uncertainty that has had a freezing effect on the British housing market.

The strategic shift by the homebuilder this year is delivering results so far, with investors hoping for a clearer picture of the future when the company unveils its half-year results later this month.

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