This announcement contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) No. 596/2014 as it forms part of domestic law by
virtue of the European Union (Withdrawal) Act
2018
CREST NICHOLSON HOLDINGS
PLC
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 APRIL 2024
Martyn Clark joined the business on 3
June, and takes over as CEO from 14 June
Improvement in operational discipline,
completed sites review concluded
Net debt better than
expectations
Crest Nicholson Holdings plc ('Crest Nicholson',
the 'Company' or the 'Group') today announces its unaudited interim
results for the six months ended 30 April 2024:
HY24 Financial Summary
· Revenue at
£257.5m (HY23: £282.7m), reflecting the low level of
reservations at the beginning of the financial year, with H1
reservations in line with expectations. Land and
commercial sales during the half of £30.8m (HY23: £4.9m)
· Home
completions of 788 (HY23: 894), comprising open market private of
435 (HY23: 532), bulk deals of 177 (HY23: 115) and affordable
completions of 176 (HY23: 247)
· Sales per outlet
per week (SPOW) of 0.47 (HY23: 0.54) with average outlets at 45
(HY23: 48). Average selling prices have remained stable year on
year
· Good progress
has been made at Farnham with the scheme tracking in line with the
revised plan
· Review of
completed site costs, supported by an external consultant, is now
concluded resulting in a one-off charge of £31.4m (previous
estimate £15.0m), of which £25.5m is treated as an exceptional item
as it relates to developments no longer part of the core strategy,
which were started prior to 2019, and the balance of £5.9m is
recorded as pre-exceptional. The increased charge is due to a wider
scope of the review to cover all completed sites
· Adjusted
operating profit1 after accounting for £5.9m of
completed sites charges at £6.2m (HY23: £22.1m) also reflecting
lower volume and a higher proportion of revenue from low margin
sites as the Group makes good progress in reducing low margin
inventory
· Statutory loss
after tax of £23.4m (HY23: profit of £21.1m)
· A continued
focus on cash management has enabled the Group to maintain balance
sheet strength with net debt1,2 at £9.4m (HY23: net
cash1,2 £66.2m). £250m revolving credit facility undrawn
(HY23: undrawn)
· Interim dividend
at 1.0 pence per share (HY23: 5.5 pence per share)
Key Financial
Metrics
|
£m (unless otherwise stated)
|
|
HY24
|
HY23
|
% Change
|
|
|
|
|
|
|
|
Adjusted basis1
|
|
|
|
|
|
Operating profit
|
|
6.2
|
22.1
|
(71.9)
|
|
Operating profit margin
|
|
2.4%
|
7.8%
|
(540bps)
|
|
Profit before tax
|
|
2.6
|
20.9
|
(87.6)
|
|
Basic earnings per share
(p)
|
|
0.7
|
6.1
|
(88.5)
|
|
|
|
|
|
|
|
Statutory basis
|
|
|
|
|
|
Revenue
|
|
257.5
|
282.7
|
(8.9)
|
|
Operating (loss)/profit
|
|
(24.1)
|
30.7
|
(178.5)
|
|
Operating (loss)/profit
margin
|
|
(9.4)%
|
10.9%
|
(2030bps)
|
|
(Loss)/profit before
tax
|
|
(30.9)
|
28.4
|
(208.8)
|
|
Basic (loss)/earnings per share
(p)
|
|
(9.1)
|
8.2
|
(211.0)
|
|
|
|
|
|
|
|
Other metrics
|
|
|
|
|
|
Home completions
(number)
|
|
788
|
894
|
(11.9)
|
|
Net
(debt)/cash1,2
|
|
(9.4)
|
66.2
|
(114.2)
|
|
Dividend per share (p)
|
|
1.0
|
5.5
|
(81.8)
|
|
1. Adjusted basis represent the HY24 and HY23 statutory
figures adjusted for exceptional items as disclosed in note 5.
Adjusted performance metrics and net (debt)/cash are non-statutory
alternative performance measures (APM) used by the Director's to
manage the business which they believe should be shared for a
greater understanding of the performance of the Group. The
definitions of these APM and the reconciliation to the statutory
numbers are included below
|
|
2. Net (debt)/cash is defined as cash and cash equivalents
less interest-bearing loans and borrowings. See note 14 to the
condensed consolidated half year financial
statements.
|
HY24
Operational Summary
· Sharpened focus
on operational discipline and efficiency
· In FY23 we
acquired several high-quality sites with planning applications
underway, thereby satisfying all of the Group's land requirements
for FY24 and allowing the Group to remain highly selective on land
acquisitions
- 241
plots (HY23: 1,539) added to the short-term land portfolio,
reflecting a planned step-back from the land market
- Quality
of land portfolio underpins anticipated margin improvement in
FY25
· Build cost
inflation has moderated further from mid-single digit percentages
to flat year on year and we expect these conditions to continue in
the remainder of FY24
· Reflecting our
enhanced commitment to customer service as a key focus for the
business, we have consistently achieved greater than 90% customer
satisfaction rating since February 2023, and are on track to return
to a five-star rating for the year to September 2024
· On track with
our sustainability targets as we actively collaborate with our
supply chain and wider industry to reduce greenhouse gas emissions
and prepare for upcoming regulations.
Current trading and outlook
The spring selling season started
well with positive housing indicators in an improving macro
backdrop. Momentum has softened slightly since Easter,
reflecting the volatility in mortgage rates and the expectation of
a base rate reduction coming later in the year than previously
expected. The imminent General Election is creating some short-term
uncertainty, but this is anticipated to be alleviated in July once
the outcome is known.
As a result, and including the
one-off pre-exceptional charge for completed sites, the Group
expects FY24 adjusted profit before tax (APBT) to be between £22m
to £29m.
Updated Guidance for FY24
|
Completions
|
1,800 - 1,900 units
c. 25% affordable c. 75% open market and
bulk
|
|
Outlets
(year-end position)
|
c. 45
|
|
Build Cost
Inflation
|
c. flat
|
|
Net finance
costs
|
£8 - 9m
|
|
Adjusted
profit before
tax3
|
£22 - 29m
|
|
Net
debt
|
c. £40 - 60m
|
3 Including one-off completed site charge of £5.9m
Peter
Truscott, Chief Executive commented:
"We have made some important operational
progress in the first half of the year against our strategic
priorities. We are on track to achieve a five-star customer service
rating, have a clear and comprehensive plan to resolve the legacy
and operational issues, and continue to focus on maintaining a
strong balance sheet.
"The Group is continuing to focus on
completing its low margin sites, with FY23 and FY24 being the peak
years of impact and the majority of the remainder expected to be
traded through during FY25. Going forward the Group will benefit
from its high-quality, higher margin land portfolio, and with an
increased commitment to operational efficiency and control, is
well-positioned to capture growth opportunities as market
conditions improve."
Analyst and investor meeting, conference call and
webcast
There will be a meeting for analysts at 9.00
am today at Norton Rose Fulbright, 3 More London Riverside, London
SE1 2AQ hosted by Peter Truscott, Chief Executive and Bill Floydd,
Group Finance Director. Martyn Clark, CEO designate will also be at
the meeting.
To join the presentation, please use the
following link:
Crest Nicholson HY24 results webcast
There is also a facility to join the
presentation and Q&A session via a conference call.
Participants should dial +44
(0)203 936 2999 and use
confirmation code 981297. A
playback facility will be available shortly after the presentation
has finished.
For further information, please
contact:
Crest Nicholson
Jenny Matthews, Head of Investor
Relations
+44 (0) 7557 842720
Teneo
James Macey White / Giles Kernick
+44 (0) 20 7353 4200
The person responsible for arranging
the release of this announcement on behalf of the Company is Penny
Thomas, Group Company Secretary.
13 June 2024
Cautionary statement regarding forward-looking
statements
This release may include statements
that are, or may be deemed to be, 'forward-looking statements'.
These forward-looking statements can be identified by the use of
forward-looking terminology, including the terms 'believes',
'estimates', 'plans', 'projects', 'anticipates', 'expects',
'intends', 'may', 'will' or 'should' or, in each case, their
negative or other variations or comparable terminology, or by
discussions of strategy, plans, objectives, goals, future events or
intentions. These forward-looking statements include all matters
that are not historical facts. They appear in a number of places
throughout this release and include, but are not limited to,
statements regarding the Group's intentions, beliefs or current
expectations concerning, among other things, the Group's results of
operations, financial position, liquidity, prospects, growth,
strategies and expectations of the industry.
By their nature, forward-looking
statements involve risk and uncertainty because they relate to
future events and circumstances. Forward-looking statements are not
guarantees of future performance and the development of the markets
and the industry in which the Group operates may differ materially
from those described in, or suggested by, any forward-looking
statements contained in this release. In addition, even if the
development of the markets and the industry in which the Group
operates are consistent with the forward-looking statements
contained in this release, those developments may not be indicative
of developments in subsequent periods. A number of factors could
cause developments to differ materially from those expressed or
implied by the forward-looking statements including, without
limitation, general economic and business conditions, industry
trends, competition, commodity prices, changes in law or
regulation, changes in its business strategy, political and
economic uncertainty. Save as required by the Listing and
Disclosure Guidance and Transparency Rules, the Company is under no
obligation to update the information contained in this release.
Past performance cannot be relied on as a guide to future
performance.
Chief
Executive Statement
I would like to begin my last Chief Executive
statement at Crest Nicholson by thanking all our colleagues for
their dedication and hard work throughout the past four
transformative, yet sometimes very challenging years. During my
tenure, the management team and I delivered a new strategy in a
very difficult macro backdrop. We established a flexible and
efficient operating platform delivering standard house types,
nurtured a talented workforce, and have a portfolio of high-quality
land - all essential for sustained success in the housing sector. I
believe the Group will overcome recent challenges and continue to
build on what we have accomplished so far. I wish everyone at Crest
the very best and the success they deserve.
Economy and
housing market
Over the last six months, the UK economy has
experienced a mix of challenges and positive developments.
Inflation, while starting to decline, has remained a persistent
issue, impacting consumer purchasing power and business costs. The
timing of an interest rate cut by the Bank of England has been a
subject of speculation, adding to economic uncertainty. Mortgage
rates have been volatile, initially decreasing but rising again due
to SWAP3 rates increasing, which has impacted the
housing market. On the positive side, wage growth has been strong,
outpacing house price inflation and helping to alleviate some
affordability concerns. House prices also remained stable. The
labour market has remained resilient, contributing to improved
consumer confidence. Additionally, recent economic indicators have
shown signs of improvement, with GDP growth exceeding expectations.
This, combined with the prospect of falling inflation and a
potential interest rate cut, suggests a more favourable economic
outlook for the future. The General Election in July will pose some
uncertainty in the short-term. Overall, while challenges remain,
the UK economy shows signs of gradual recovery and
stabilisation.
HY24
performance
Operationally, we have made good progress in
HY24. The Group delivered 788 units in the first half. At the start
of this financial year, trading reflected seasonal trends with
reduced activity before Christmas and subsequently a stronger
performance from mid-January.
During the half the Group has delivered a sales
per outlet per week of 0.47. Cancellation rates have continued to
normalise and pricing has remained flat year on year.
Adjusted operating profit was £6.2m, reflecting
lower volume and a higher proportion of revenue from low margin
sites and the impact of £5.9m of the completed sites charge. The
Group continues to address low margin sites, the majority of which
are expected to be traded through during FY25.
Farnham
Progress at Farnham has been largely
in line with our revised plan. One of the two remaining apartment
buildings was completed on time in April and the second is due to
be completed on time in July. Renovation of the Grade 1 listed
building has progressed well and is expected to be signed off in
June. Road and pavement work has been temporarily delayed but is
now underway. This will continue into August and the remaining
landscaping work is also progressing to plan. We expect all works
to be completed in August with the exception of the pedestrian
bridge. Commencement of work on the bridge is pending
planning approval and work will start once this is achieved. Sales
in the development have been better than expected, and the
remaining 55 units are expected to be sold by the end of
FY25.
Completed site costs
As announced in the AGM statement
in March, the Group has undertaken a comprehensive review,
supported by external consultants, on the Group's completed sites.
Initially work focused on four sites that were completed prior to
2019 when the Group closed its Regeneration division. Subsequently,
in order to achieve a higher level of confidence in the adequacy of
the cost estimates, the review was extended to cover all c.140
sites that the Group has completed but maintains an obligation to
carry out remediation or maintenance prior to adoption by the
relevant local authority or management company. The review of
completed site costs has now concluded resulting in a one-off
charge of £31.4m, of which £25.5m is accounted for as an
exceptional charge because the remediation work relates to changes
in estimates on developments no longer part of the core strategy
and were started prior to the change in strategy in
2019.
The Group is now prioritising
establishing a comprehensive roadmap to resolve these issues in a
timely manner to allow the Group to capitalise on its high-quality
land portfolio and drive margin improvement in the
future.
Building Safety
In March 2023, the Group signed the
DLUHC Self Remediation Terms in England, in which it is committed
to resolve any historical fire remedial work on buildings completed
since 5 April 1992. This provides clarity for future remediation,
particularly with regards to the standards required for internal
and external remedial works on legacy buildings. We have a
dedicated team in place to manage the remediation programme and to
progress work on these buildings to ensure high-quality
delivery.
During the half the Group has
recorded a further charge of £8.9m related to build costs inflation
and scope of work required and recovered £4.4m from third parties.
The total provision of £145.2m at 30 April 2024 (31 October 2023:
£144.8m) is the Group's best estimate of future costs. The Group
will continue to assess the magnitude and utilisation of this
provision in future reporting periods.
Land and
planning
Land supply continues to tighten due to the
Government's decision to eliminate top-down housing targets,
causing delays in new site allocations. Broader issues within the
planning system, including challenges related to nutrients and
water neutrality, are compounded by an under-resourced and
inefficient development control function at the local authority
level.
While the constraining impacts of planning is
unlikely to ease in the near-term for the housing sector, we have a
strong short-term land portfolio of 14,146 plots and is underpinned
by our strategic land pipeline of 17,813 plots.
During the half, we added 241 (HY23: 1,539)
plots to the short-term land portfolio. Our decision to acquire
land in FY23 has added high-quality sites in desirable locations,
some of these are at advance stage of planning, and will support
the Group's future outlet growth. Our short-term land portfolio's
planning permission profile allows us to be highly selective in
land acquisition for the next couple of years.
Customer
experience
Achieving a five-star customer service rating is
a key priority for the Group. Following significant investment in
FY23 in people, processes, and systems, quality and customer
service standards are improving. For legal completions from
February 2023, over 90% of customers have said they would recommend
Crest Nicholson to a friend. The Group has sustained this level and
remains on track to regain our House Builders Federation five-star
status in 2025.
3.
the fixed interest rate agreed in an interest swap contract, where
one party exchanges fixed interest rate payments for the short-term
floating interest rate (Sterling Overnight Index Average) over a
specified period
Commitment to
sustainability
Our sustainability strategy is split
into three priority areas - protect the environment, make a
positive impact on our communities and operate the business
responsibly. These three priority areas guide our commitment to
drive positive action across our activities and value
chain.
We continue to make good progress in achieving
our net zero targets and during the half the Group has achieved the
following ESG benchmark results:
|
FTSE4GOOD
|
Constituent member
|
|
MSCI ESG
|
AA
|
|
CDP (climate change)
|
A-
|
|
Sustainalytics
|
Low risk
|
Outlook
Looking ahead, the long-term fundamentals of the
housing market remain strong due to structural undersupply, growing
demand driven by population growth, changing demographics, and
persistent housing shortages. The sector faces several macro
headwinds, including stretched affordability, volatile mortgage
rates, and low consumer confidence. The imminent General Election
in July has created some short-term uncertainty, but overall the
economy is stabilising with moderate economic growth and good
employment levels, this should improve consumer confidence and
support demand for housing.
The Group's key priorities are to address legacy
site issues, continue improving operational efficiency, achieve a
five-star customer rating, make significant progress in building
safety remediation, and convert land to implementable planning
consent. This will position Crest strongly to capture growth when
the market returns. I am confident that under Martyn Clark's
leadership and our highly experienced management, Crest will
restore growth and deliver sustainable value for all
stakeholders.
Financial
Review
Completions and
revenue
During the half open market completions were 612
(HY23: 647) which included 177 (HY23: 115) bulk completions, and
affordable completions were 176 (HY23: 247). Total home completions
were therefore 788 (HY23: 894), down 11.9%, reflecting a weak order
book at the start of the year and continued low levels of
confidence in the housing market in the period.
The total weighted average selling price (ASP)
of £349k (HY23: £341k) was an increase of 2.3% compared to prior
year as a result of a change in mix with a higher proportion of
sales being attributed to open market completions. Selling
prices on comparable units were broadly stable with modest declines
in some areas.
Sales
Sales rates as measured by sales per outlet week
(SPOW), were 0.47 for the first half compared to 0.54 in the prior
half. The economic uncertainty that followed the mini-budget in
September 2022 has continued to impact the housing market with
mortgage rates remaining at elevated levels compared to recent
historic norms. Whilst mortgage rates have been stable in the
period, there has been little impetus for consumers to enter the
market with many consumers waiting for a reduction in
rates.
Average sales outlets were 45 (HY23: 48).
Planning matters continue to take longer to progress sites to
operational development as well as other issues such as
environmental impacts associated with water nutrient
neutrality.
The Group completed £30.8m (HY23: £4.9m) land
and commercial sales on sites that it would not have been able to
access itself for several years.
Forward sales for the remainder of FY24 as at 30
April 2024 were 716 (at 30 April 2023: 897) units with a GDV of
£202.6m (30 April 2023: £271.3m).
Operating
profit and margin
Adjusted operating profit of £6.2m (HY23:
£22.1m) was a decline of 71.9%.
The Group recorded a lower number of legal
completions in the half reflecting the challenging trading
environment. As a result of the weak level of demand in the second
half of FY23, the Group entered the year with 252 open market
reservations. Demand remained weak in November and December 2023
due to seasonality. Demand has improved since January 2024 but
remains fragile and pricing has remained stable.
Adjusted operating profit was also
impacted by a one-off £5.9m charge in relation to the Group's
remaining cost obligations on completed sites, discussed below
within Exceptional items.
Finally, the Group recorded net administrative
expenses of £26.1m (HY23: £28.3m) in the half, a reduction of 7.8%
on prior half reflecting the rationalisation exercise undertaken by
the Group in the second half of FY23 including the merger of the
East Anglia division into the Eastern division.
The operating loss for the half was £24.1m after
exceptional items charge of £30.3m (HY23: £30.7m operating profit
after an exceptional credit of £8.6m).
Exceptional
items
In the prior year as a consequence
of signing the Developer Remediation Contract on 13 March 2023, the
Group entered into contractual commitments with the UK Government
to identify and remediate those buildings it has developed with
possible life-critical fire safety defects. During the half the Group recorded a further
charge of £8.9m (HY23: £1.4m) to adjust its provision to reflect
the latest estimate of costs to complete these remedial works.
During the half, £4.4m (HY23: £10.0m) was recovered from third
parties in respect of defective design and workmanship. A further
£3.2m (HY23: £2.2m) was charged in relation to imputed interest on
the combustible materials charge.
As announced in the AGM statement
in March, the Group has undertaken a comprehensive review,
supported by external consultants, of the Group's remaining cost
obligations on completed sites. Initially work focused on four
sites that were completed prior to 2019 when the Group closed its
Regeneration division. Subsequently a review has been carried out
on all sites that the Group has completed but maintains an
obligation to carry out remediation or maintenance prior to
adoption by the relevant local authority or management company. The
review of completed site costs is now concluded resulting in a
one-off charge of £31.4m, of which £25.5m is treated as an
exceptional item as it relates to non-standard developments started
prior to the change in strategy in 2019 and the balance of £5.9m is
recorded within pre-exceptional items.
The tax credit on exceptional items is £8.4m
(HY23: tax charge £2.0m).
Further detail on exceptional items can be found
in note 5 and note 12 of the condensed consolidated financial
statements.
Financing and
liquidity
At 30 April 2024 the Group had net debt of £9.4m
(HY23: net cash of £66.2m). Net debt including land creditors was
£185.3m (HY23: £82.0m). Return on capital employed (ROCE) for the
half was 3.5% (HY23: 14.6%) reflecting the lower adjusted operating
profit compared to prior year and the net debt position on the
balance sheet.
Cash and cash equivalents at 30 April 2024 are
£88.7m from £162.6 at 31 October 2023. The reduction is mainly
driven by the FY23 final dividend payment of £29.5m and cash
outflow from operations of £62.6m, which includes deferred land
creditor payments. A greater focus on controllable operating cash
management has enabled the business to remain undrawn under its RCF
facilities for the period.
Pension
The Group operates a defined benefit pension
scheme. At 30 April 2024 the retirement benefit surplus under IAS
19 was £9.3m (HY23: £14.1m).
Taxation
The actual tax rate applied to profit before tax
for the period was 24.3% (HY23: weighted average annual effective
tax rate which is expected to apply to the Group for the year
ending 31 October 2023 25.7%).
Earnings per
share
Adjusted basic earnings per share was 0.7 pence
(HY23: 6.1 pence), reflecting the decrease in the Group's earnings
on prior year. Basic loss per share was 9.1 pence (HY23: earnings
per share 8.2 pence).
Dividend
The Board has declared an interim dividend of
1.0 pence per share, payable on 11 October 2024 to shareholders on
the register on 20 September 2024.
Land and
planning
At 30 April 2024 the short-term land portfolio
includes 14,146 (FY23: 14,922) plots. The Group's strategic land
portfolio ended the half with 17,813 (FY23: 18,830) plots meaning
the total land portfolio at 30 April 2024 was 31,959 plots (FY23:
33,752). The total GDV of the portfolio is £11.6bn (FY23:
£12.2bn).
During the half, we added 241 plots to the
short-term land portfolio (HY23: 1,539). Our decision to continue
to acquire land in FY23 when others pulled back from acquisitions
supports the Group's future growth. As a result the Group was able
to add high-quality sites in desirable locations, with some of
these now at advance stage of planning. Our short-term land
portfolio's planning permission profile allows us to be highly
selective in land acquisition in the balance until FY26.
Principal Risks
and Uncertainties
The Group's financial and operational
performance and reputation is subject to a number of potential
risks and uncertainties. These risks could, either separately or in
combination, have a material impact on the Group's performance and
shareholder returns.
Our divisional boards consider their divisional
risk registers on a half-yearly basis. The divisional risk reviews,
alongside the Group's principal and emerging risks are carefully
considered by the Executive Leadership Team. Both the Audit and
Risk Committee and the Board have oversight of the Group's emerging
and principal risks.
We have continued to face economic headwinds
which has led to sustained higher mortgage rates and a sluggish
housing market. This continues to impact housing buying
affordability and reduces buyer activity.
Our principal risks are unchanged from those set
out on pages 35 to 42 of the Group's Annual Report and financial
statements for the year ended 31 October 2023.
Statement of Directors' Responsibilities
The Director's confirm that these
condensed consolidated half year financial statements have been
prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the United Kingdom and
that the interim management report includes a fair review of the
information required by DTR 4.2.7 and DTR 4.2.8, namely:
• an indication of important
events that have occurred during the first six months and their
impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the
remaining six months of the financial year; and
• material related party
transactions in the first six months and any material changes in
the related party transactions described in the last Annual Report
and financial statements.
The current Directors of Crest
Nicholson Holdings plc are listed in the Annual Report and
financial statements for the year ended 31 October 2023 with the
exception that Martyn Clark joined the Board on 3 June 2024. A list
of Directors is maintained on the Crest Nicholson
website: www.crestnicholson.com.
By order of the Board
Peter Truscott
Chief Executive
13 June 2024
CONDENSED
CONSOLIDATED INCOME STATEMENT
|
|
Note
|
Half year
ended
|
Half year
ended
|
Half year
ended
|
Half year
ended
|
Half year
ended
|
Half year
ended
|
Full year
ended
|
Full year
ended
|
Full year
ended
|
|
|
|
30 April
|
30 April
|
30 April
|
30 April
|
30 April
|
30 April
|
31 October
|
31 October
|
31 October
|
|
|
|
2024
|
2024
|
2024
|
2023
|
2023
|
2023
|
2023
|
2023
|
2023
|
|
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Audited
|
Audited
|
Audited
|
|
|
|
Pre-exceptional
items
|
Exceptional
items (note
5)
|
Total
|
Pre-exceptional
items
|
Exceptional
items (note
5)
|
Total
|
Pre-exceptional
item
|
Exceptional
item (note
5)
|
Total
|
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
4
|
257.5
|
-
|
257.5
|
282.7
|
-
|
282.7
|
657.5
|
-
|
657.5
|
|
Cost of sales
|
|
(225.0)
|
(30.3)
|
(255.3)
|
(232.1)
|
8.6
|
(223.5)
|
(556.9)
|
(14.3)
|
(571.2)
|
|
Gross profit/(loss)
|
|
32.5
|
(30.3)
|
2.2
|
50.6
|
8.6
|
59.2
|
100.6
|
(14.3)
|
86.3
|
|
Net administrative
expenses
|
6
|
(26.1)
|
-
|
(26.1)
|
(28.3)
|
-
|
(28.3)
|
(55.8)
|
-
|
(55.8)
|
|
Net impairment losses on financial
assets
|
|
(0.2)
|
-
|
(0.2)
|
(0.2)
|
-
|
(0.2)
|
(0.6)
|
-
|
(0.6)
|
|
Operating profit/(loss)
|
6
|
6.2
|
(30.3)
|
(24.1)
|
22.1
|
8.6
|
30.7
|
44.2
|
(14.3)
|
29.9
|
|
Finance income
|
|
2.0
|
-
|
2.0
|
2.0
|
-
|
2.0
|
4.1
|
-
|
4.1
|
|
Finance expense
|
|
(5.6)
|
(3.2)
|
(8.8)
|
(4.5)
|
(2.2)
|
(6.7)
|
(9.6)
|
(4.6)
|
(14.2)
|
|
Net finance expense
|
|
(3.6)
|
(3.2)
|
(6.8)
|
(2.5)
|
(2.2)
|
(4.7)
|
(5.5)
|
(4.6)
|
(10.1)
|
|
Share of post-tax result of joint
ventures using the equity method
|
|
-
|
-
|
-
|
1.3
|
1.1
|
2.4
|
2.7
|
0.6
|
3.3
|
|
Profit/(loss) before
tax
|
|
2.6
|
(33.5)
|
(30.9)
|
20.9
|
7.5
|
28.4
|
41.4
|
(18.3)
|
23.1
|
|
Income tax
(expense)/credit
|
7
|
(0.9)
|
8.4
|
7.5
|
(5.3)
|
(2.0)
|
(7.3)
|
(10.0)
|
4.8
|
(5.2)
|
|
Profit/(loss) for the period
attributable to equity shareholders
|
|
1.7
|
(25.1)
|
(23.4)
|
15.6
|
5.5
|
21.1
|
31.4
|
(13.5)
|
17.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss) per ordinary
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
8
|
0.7p
|
|
(9.1)p
|
6.1p
|
|
8.2p
|
12.3p
|
|
7.0p
|
|
Diluted
|
8
|
0.7p
|
|
(9.1)p
|
6.1p
|
|
8.2p
|
12.2p
|
|
7.0p
|
CONDENSED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|
|
|
Half year
ended
|
Half year
ended
|
Full year
ended
|
|
|
|
30 April
|
30 April
|
31 October
|
|
|
|
2024
Unaudited
|
2023
Unaudited
|
2023
Audited
|
|
|
|
£m
|
£m
|
£m
|
|
(Loss)/profit for the period
attributable to equity shareholders
|
|
(23.4)
|
21.1
|
17.9
|
|
Other comprehensive
income/(expense):
|
|
|
|
|
|
Items that will not be
reclassified to the consolidated income statement:
|
|
|
|
|
|
Actuarial (losses)/gains of
defined benefit schemes
|
|
(1.5)
|
2.5
|
(2.5)
|
|
Change in deferred tax on
actuarial (losses)/gains of defined benefit schemes
|
|
0.4
|
(0.7)
|
1.1
|
|
Other comprehensive
(expense)/income for the period net of income tax
|
|
(1.1)
|
1.8
|
(1.4)
|
|
Total comprehensive
(expense)/income for the period attributable to equity
shareholders
|
|
(24.5)
|
22.9
|
16.5
|
CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
Half year ended 30 April 2024 (Unaudited)
|
Note
|
Share
capital
|
Share premium
account
|
Retained
earnings
|
Total
|
|
|
|
£m
|
£m
|
£m
|
£m
|
|
Balance at 1 November 2023
|
|
12.8
|
74.2
|
769.3
|
856.3
|
|
Loss for the period attributable
to equity shareholders
|
|
-
|
-
|
(23.4)
|
(23.4)
|
|
Actuarial losses of defined
benefit schemes
|
|
-
|
-
|
(1.5)
|
(1.5)
|
|
Change in deferred tax on
actuarial losses of defined benefit schemes
|
|
-
|
-
|
0.4
|
0.4
|
|
Total comprehensive expense for
the period
|
|
-
|
-
|
(24.5)
|
(24.5)
|
|
Transactions with shareholders:
|
|
|
|
|
|
|
Equity-settled share-based
payments
|
|
-
|
-
|
0.7
|
0.7
|
|
Purchase of own shares
|
|
-
|
-
|
(0.3)
|
(0.3)
|
|
Transfers in respect of share
options
|
|
-
|
-
|
0.4
|
0.4
|
|
Dividends paid
|
9
|
-
|
-
|
(29.5)
|
(29.5)
|
|
Balance at 30 April 2024
|
|
12.8
|
74.2
|
716.1
|
803.1
|
|
Half year ended 30 April 2023 (Unaudited)
|
|
Share
capital
|
Share premium
account
|
Retained
earnings
|
Total
|
|
|
|
£m
|
£m
|
£m
|
£m
|
|
Balance at 1 November 2022
|
|
12.8
|
74.2
|
796.1
|
883.1
|
|
Profit for the period attributable
to equity shareholders
|
|
-
|
-
|
21.1
|
21.1
|
|
Actuarial gains of defined benefit
schemes
|
|
-
|
-
|
2.5
|
2.5
|
|
Change in deferred tax on
actuarial gains of defined benefit schemes
|
|
-
|
-
|
(0.7)
|
(0.7)
|
|
Total comprehensive income for the
period
|
|
-
|
-
|
22.9
|
22.9
|
|
Transactions with shareholders:
|
|
|
|
|
|
|
Equity-settled share-based
payments
|
|
-
|
-
|
1.0
|
1.0
|
|
Deferred tax on equity-settled
share-based payments
|
|
-
|
-
|
0.1
|
0.1
|
|
Purchase of own shares
|
|
-
|
-
|
(1.0)
|
(1.0)
|
|
Dividends paid
|
9
|
-
|
-
|
(29.5)
|
(29.5)
|
|
Balance at 30 April 2023
|
|
12.8
|
74.2
|
789.6
|
876.6
|
|
Year ended 31 October 2023 (Audited)
|
|
|
Share
capital
|
Share premium
account
|
Retained
earnings
|
Total
|
|
|
|
|
£m
|
£m
|
£m
|
£m
|
|
|
|
12.8
|
74.2
|
796.1
|
883.1
|
|
Balance at 31 October 2022
|
|
|
|
|
|
|
Profit for the period attributable
to equity shareholders
|
|
-
|
-
|
17.9
|
17.9
|
|
Actuarial losses of defined
benefit schemes
|
|
-
|
-
|
(2.5)
|
(2.5)
|
|
Change in deferred tax on
actuarial losses of defined benefit schemes
|
|
-
|
-
|
1.1
|
1.1
|
|
Total comprehensive income for the
year
|
|
-
|
-
|
16.5
|
16.5
|
|
Transactions with shareholders:
|
|
|
|
|
|
|
Equity-settled share-based
payments
|
|
-
|
-
|
1.5
|
1.5
|
|
Deferred tax on equity-settled
share-based payments
|
|
-
|
-
|
(0.2)
|
(0.2)
|
|
Purchase of own shares
|
|
-
|
-
|
(1.9)
|
(1.9)
|
|
Transfers in respect of share
options
|
|
-
|
-
|
0.9
|
0.9
|
|
Dividends paid
|
9
|
-
|
-
|
(43.6)
|
(43.6)
|
|
Balance at 31 October 2023
|
|
12.8
|
74.2
|
769.3
|
856.3
|
CONDENSED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
|
|
Note
|
As at
|
As at
|
As at
|
|
|
|
|
30 April
|
30 April
|
31 October
|
|
|
|
|
2024
|
2023
|
2023
|
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
ASSETS
|
|
£m
|
£m
|
£m
|
|
Non-current assets
|
|
|
|
|
|
|
Intangible assets
|
|
29.0
|
29.0
|
29.0
|
|
|
Property, plant and
equipment
|
|
2.6
|
2.2
|
2.2
|
|
|
Right-of-use assets
|
|
7.1
|
4.7
|
6.1
|
|
|
Investments in joint
ventures
|
|
8.3
|
10.4
|
10.7
|
|
|
Financial assets at fair value
through profit and loss
|
|
0.6
|
1.4
|
2.6
|
|
|
Deferred tax assets
|
|
3.1
|
4.4
|
3.3
|
|
|
Retirement benefit
surplus
|
|
9.3
|
14.1
|
10.0
|
|
|
Trade and other
receivables
|
|
10.7
|
14.1
|
6.0
|
|
|
|
|
70.7
|
80.3
|
69.9
|
|
Current assets
|
|
|
|
|
|
|
Inventories
|
10
|
1,181.9
|
1,108.1
|
1,164.8
|
|
|
Financial assets at fair value
through profit and loss
|
|
2.9
|
2.7
|
1.1
|
|
|
Trade and other
receivables
|
|
102.3
|
104.4
|
120.0
|
|
|
Current income tax
receivable
|
|
12.6
|
3.2
|
11.9
|
|
|
Cash and cash
equivalents
|
11
|
88.7
|
163.6
|
162.6
|
|
|
|
|
1,388.4
|
1,382.0
|
1,460.4
|
|
Total assets
|
|
1,459.1
|
1,462.3
|
1,530.3
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
Interest-bearing loans and
borrowings
|
11
|
(83.9)
|
(97.4)
|
(83.5)
|
|
|
Trade and other
payables
|
|
(64.8)
|
(42.4)
|
(71.1)
|
|
|
Lease liabilities
|
|
(5.5)
|
(3.1)
|
(4.4)
|
|
|
Deferred tax
liabilities
|
|
(2.3)
|
(4.1)
|
(2.5)
|
|
|
Provisions
|
12
|
(55.4)
|
(67.9)
|
(73.8)
|
|
|
|
|
(211.9)
|
(214.9)
|
(235.3)
|
|
Current liabilities
|
|
|
|
|
|
|
Interest-bearing loans and
borrowings
|
11
|
(14.2)
|
-
|
(14.2)
|
|
|
Trade and other
payables
|
|
(323.8)
|
(296.8)
|
(337.0)
|
|
|
Lease liabilities
|
|
(1.8)
|
(1.7)
|
(2.0)
|
|
|
Provisions
|
12
|
(104.3)
|
(72.3)
|
(85.5)
|
|
|
|
|
(444.1)
|
(370.8)
|
(438.7)
|
|
Total liabilities
|
|
(656.0)
|
(585.7)
|
(674.0)
|
|
|
|
|
|
|
|
|
Net assets
|
|
803.1
|
876.6
|
856.3
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Share capital
|
15
|
12.8
|
12.8
|
12.8
|
|
|
Share premium account
|
15
|
74.2
|
74.2
|
74.2
|
|
|
Retained earnings
|
|
716.1
|
789.6
|
769.3
|
|
Total equity
|
|
803.1
|
876.6
|
856.3
|
Crest Nicholson Holdings plc
Registered number 6800600. These condensed consolidated half year
financial statements were approved by the Board of Directors on 13
June 2024.
CONDENSED
CONSOLIDATED CASH FLOW STATEMENT
|
|
|
Note
|
Half year
ended
|
Half year
ended
|
Full year
ended
|
|
|
|
|
30 April
|
30 April
|
31 October
|
|
|
|
|
2024
|
2023
|
2023
|
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
|
|
£m
|
£m
|
£m
|
|
Cash flows from operating activities
|
|
|
|
|
|
(Loss)/profit for the period
attributable to equity shareholders
|
|
(23.4)
|
21.1
|
17.9
|
|
|
Adjustments for:
|
|
|
|
|
|
|
Depreciation on property, plant
and equipment
|
|
0.2
|
0.2
|
0.5
|
|
|
Depreciation on right-of-use
assets
|
|
0.8
|
1.1
|
2.3
|
|
|
Retirement benefit obligation
administrative expenses
|
|
0.3
|
0.5
|
0.6
|
|
|
Net finance expense
|
|
6.8
|
4.7
|
10.1
|
|
|
Share-based payment
expense
|
|
0.7
|
1.0
|
1.5
|
|
|
Share of post-tax result of joint
ventures using the equity method
|
|
-
|
(2.4)
|
(3.3)
|
|
|
Impairment of inventories
movement
|
10
|
0.7
|
2.0
|
7.6
|
|
|
Net impairment of financial
assets
|
|
0.2
|
0.2
|
0.6
|
|
|
Income tax
(credit)/expense
|
|
(7.5)
|
7.3
|
5.2
|
|
Operating (loss)/profit before
changes in working capital, provisions and contribution to
retirement benefit obligations
|
|
(21.2)
|
35.7
|
43.0
|
|
|
(Increase)/decrease in trade and
other receivables
|
|
(2.8)
|
34.2
|
27.0
|
|
|
Increase in inventories
|
|
(17.8)
|
(120.0)
|
(182.3)
|
|
|
Decrease in trade and other
payables, and provisions
|
|
(24.4)
|
(114.6)
|
(31.9)
|
|
|
Contribution to retirement benefit
obligations
|
|
(0.8)
|
(0.7)
|
(1.5)
|
|
Cash used by operations
|
|
(67.0)
|
(165.4)
|
(145.7)
|
|
|
|
|
|
|
|
|
Finance expense paid
|
|
(2.8)
|
(2.9)
|
(5.6)
|
|
Income tax
received/(paid)
|
|
7.2
|
(8.8)
|
(14.3)
|
|
|
|
|
|
|
|
|
Net cash outflow from operating activities
|
|
(62.6)
|
(177.1)
|
(165.6)
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
Purchases of property, plant and
equipment
|
|
(0.6)
|
(1.5)
|
(1.8)
|
|
|
Disposal of financial assets at
fair value through profit and loss
|
|
0.2
|
0.3
|
0.9
|
|
|
Dividends received from joint
ventures
|
|
2.5
|
-
|
1.5
|
|
|
Funding to joint
ventures
|
|
(9.5)
|
(4.4)
|
(13.0)
|
|
|
Repayment of funding from joint
ventures
|
|
25.2
|
3.4
|
11.7
|
|
|
Finance income received
|
|
1.3
|
1.1
|
2.3
|
|
Net cash inflow/(outflow) from investing
activities
|
|
19.1
|
(1.1)
|
1.6
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
Principal elements of lease
payments
|
|
(1.0)
|
(1.3)
|
(2.4)
|
|
|
Dividends paid
|
9
|
(29.5)
|
(29.5)
|
(43.6)
|
|
|
Net share movement
|
|
0.1
|
(1.0)
|
(1.0)
|
|
Net cash outflow from financing activities
|
|
(30.4)
|
(31.8)
|
(47.0)
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
(73.9)
|
(210.0)
|
(211.0)
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the
beginning of the period
|
|
162.6
|
373.6
|
373.6
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of the
period
|
|
88.7
|
163.6
|
162.6
|
NOTES TO THE
CONDENSED CONSOLIDATED HALF YEAR FINANCIAL STATEMENTS
(unaudited)
1 BASIS OF
PREPARATION
Crest Nicholson Holdings plc (the
Company) is a public limited company incorporated, listed and
domiciled in the UK. The address of the registered office is 500
Dashwood Lang Road, Bourne Business Park, Addlestone, Surrey KT15
2HJ. The condensed consolidated half year financial statements
consolidate the results of the Company and its subsidiaries
(together referred to as the Group) and include the Group's
interest in jointly controlled entities.
These condensed consolidated half
year financial statements for the six months ended 30 April 2024
have been prepared in accordance with the Disclosure Guidance and
Transparency Rules of the UK Financial Conduct Authority and with
UK-adopted International Accounting Standard 34 'Interim financial
reporting'. These condensed consolidated
half year financial statements do not include all of the
information required for full annual consolidated financial
statements and should be read in conjunction with the Group's
Annual Report and financial statements for the year ended 31
October 2023, which has been prepared in accordance with UK-adopted
international accounting standards in conformity with the
requirements of the Companies Act 2006.
These condensed consolidated half
year financial statements do not constitute statutory financial
statements within the meaning of Section 434 of the Companies Act
2006. Statutory financial statements for the year ended 31 October
2023 were approved by the Board of Directors on 23 January 2024 and
delivered to the Registrar of Companies. The report of the auditor
on those accounts was (i) unqualified, (ii) did not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying their report, and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
These condensed consolidated half
year financial statements are unaudited but have been reviewed by
PricewaterhouseCoopers LLP, the Company's auditors in accordance
with International Standard on Review Engagements (UK) 2410 'Review
of Interim Financial Information performed by the Independent
Auditor of the Entity', issued by the Auditing Practices Board. The
auditor's review report for the period to 30 April 2024 is set out
below.
Going Concern
The Directors have considered the
impact of the Group's current principal risks and uncertainties to
confirm the appropriateness of the going concern assumption in
these condensed consolidated half year financial
statements.
The Group benefits from a £250.0m
revolving credit facility (RCF), which expires in September 2026
and remained undrawn during the period, and £100.0m of senior loan
notes, of which £15.0m matures in August 2024, £20.0m matures in
August 2025 with the remaining maturing between 2026 and 2029. Both
of these arrangements are subject to three financial covenant tests
which are detailed in note 24 of the Group's Annual Report and
financial statements for the year ended 31 October 2023. The Group
was compliant with all three tests throughout the six month period
ended 30 April 2024.
At 30 April 2024 the Group had net
debt (see note 11) of £9.4m (FY23: net cash of £64.9m). Given the
availability of liquidity for the Group, the Directors consider the
impact of breaching one of its covenants as being the first
indication that the Group could be in distress and should be the
basis of its going concern assessment.
The Directors have then considered
two scenarios that stress test how the Group would perform against
its principal risks as outlined in the Group's Annual Report and
financial statements for the year ended 31 October 2023:
Base case
This is the Group's latest forecast
for FY24 and FY25 which reflects the Directors current assessment
of market experience and is reviewed by the Directors periodically.
The assessment is performed over the period to 31 October
2025.
Severe but plausible downside
case
The following assumptions were
applied in combination to the base case without double
counting:
·
An immediate reduction in new reservations to a
sales per outlet week of 0.37 for the remainder of FY24 and sales
per outlet week of 0.53 for FY25 with a future reduction on outlets
for sites that are yet to obtain planning approval
·
A 7.0% fall in average selling prices over an 18
month period
Under the severe but plausible
downside there were no forecast covenant breaches. The date and
covenant most at risk of breach was the interest cover covenant for
the October 24 reporting period.
Mitigation options and considerations
The Group has previously used
appropriate mitigations available to enable it to offset the
deterioration in financial performance and would do so again in the
future were it necessary. The majority of these mitigations are
within the control of the Group and can be enacted at any
time.
Based on the assessment methodology
outlined above, the Directors have considered some of the
mitigations that could be applied in a deteriorating trading
environment to either increase profit and/or conserve cash and
reduce the interest cost. Some of these measures are implicit
outcomes of a downturn (such as reduction in build spend) rather
than mitigating actions which the Group would have to apply. The
Group has experience of applying such mitigations in the past, and
is actively managing expected covenant levels to ensure that it has
sufficient time to apply these if required. These actions include
but are not limited to:
A reduction in overheads to reflect
the lower build and selling activity in a weaker trading
environment
· A
reduction in sales and marketing costs as a result of a fall in
sales volumes
· Postponing less productive and / or capital intensive
schemes
· Reduction in dividend to conserve cash
· Sales
of land above levels assumed in the forecast plans
· Renegotiation of supplier arrangements as the amount of build
activity contracts, and materials suppliers and subcontractors are
required to be more competitive, reducing build spend
Conclusion on going concern
Having considered the assessments
outlined above, and taking into account of potential mitigations
available, the Directors are confident that the Group has the
necessary resources and mitigations available to continue trading
for at least 12 months from the date of approval of the condensed
consolidated half year financial statements. Accordingly, the
condensed consolidated half year financial statements continue to
be prepared on a going concern basis.
Critical accounting estimates and
judgements
The preparation of the condensed
consolidated half year financial statements under UK-adopted
international accounting standards requires the Directors to make
estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and expenses
and related disclosures. In applying the
Group's accounting policies, the key judgements that have a
significant impact on the financial statements, including those
involving estimates, are as follows; the judgement to present
certain items as exceptional (see note 5),
certain revenue policies relating to part exchange
sales, the identification of performance obligations where a
revenue transaction involves the sale of both land and residential
units and revenue on the units is then subsequently recognised over
time where the land sale element takes place at the start of the
contract (see note 4 for the split of revenue recognised at a point
in time and recognised over time), the recognition of the defined
benefit pension scheme net surplus and the current and non-current
presentation of the combustible materials
provision.
Estimates and associated
assumptions affecting the financial statements are based on
historical experience and various other factors that are believed
to be reasonable under the circumstances. The estimates and
underlying assumptions are reviewed on an ongoing basis. Changes in
accounting estimates may be necessary if there are changes in the
circumstances on which the estimate was based or as a result of new
information.
Revisions to accounting estimates
are recognised in the year in which the estimate is revised if the
revision affects only that year, or in the year of revision and
future years if the revision affects both current and future
years.
The Directors have made estimates
and assumptions in reviewing the going concern assumption as
detailed above. The Directors consider the
key sources of estimation uncertainty that have a risk of causing a
material adjustment to the carrying value of assets and liabilities
are the carrying value of inventories, estimation of development
profitability, estimation of future costs
associated with completed sites, valuation of the pension scheme
assets and liabilities and the valuation of the combustible
materials provision. These are detailed within the Group's
consolidated financial statements for the year ended 31 October
2023.
Accounting policies
The principal accounting policies
adopted in the condensed consolidated half year financial
statements are consistent with those applied by the Group in its
consolidated financial statements for the year ended 31 October
2023 except in respect of taxation. In determining the tax charge
for the interim period under IAS 34, historically the Group has
applied the forecast annual effective tax rate to the pre-tax
income for the six month period. As a result of volatility in the
Group's result due to a significant exceptional charge in the
period, management determined that the actual tax charge for the
six months ended 30 April 2024, excluding the impact of exceptional
items, represented its best estimate of the annual effective tax
rate to be used in calculating the tax charge for this period. No
adjustments have been made to prior period comparatives.
Adoption of new and revised standards
There are no new standards,
amendments to standards and interpretations that are applicable to
the Group and are mandatory for the first time for the financial
year beginning 1 November 2023 which have a material impact on the
Group.
Alternative performance measures
The Group has adopted various
Alternative Performance Measures (APM), as presented below. These
measures are not defined by IFRS and therefore may not be directly
comparable with other companies' APM, and should be considered in
addition to, and are not intended to be a substitute for, or
superior to, IFRS measurements.
2 SEGMENTAL REPORTING
The Executive Leadership Team
(ELT), as disclosed in the Group's consolidated financial
statements for the year ended 31 October 2023 on page 58 is
accountable to the Board and has been identified as the chief
operating decision-maker for the purposes of determining the
Group's operating segments. Martyn Clark joined the Group on 3 June
2024 and is a member of the ELT. The ELT approves investment
decisions, allocates group resources and performs divisional
performance reviews. The Group operating segments are considered to
be its divisions, each of which has its own management board. All
divisions are engaged in residential-led, mixed use developments in
the United Kingdom and therefore, with consideration of relevant
economic indicators such as the nature of the products sold and
customer base, and, having regard to the aggregation criteria in
IFRS 8, the Group identifies that it has one reportable operating
segment.
3 SEASONALITY
In common with the rest of the UK
housebuilding industry, activity occurs throughout the year, with
peaks in sale completions in spring and autumn. This creates
seasonality in the Group's trading results and working
capital.
4 REVENUE
|
|
Half year
ended
|
Half year
ended
|
Full year
ended
|
|
|
30 April
|
30 April
|
31 October
|
|
|
2024
|
2023
|
2023
|
|
Revenue type
|
£m
|
£m
|
£m
|
|
Open market housing including
specification upgrades
|
197.7
|
235.7
|
550.0
|
|
Affordable housing
|
29.0
|
42.1
|
88.0
|
|
Total housing
|
226.7
|
277.8
|
638.0
|
|
Land and commercial
sales
|
30.8
|
4.9
|
19.5
|
|
Total revenue
|
257.5
|
282.7
|
657.5
|
|
|
|
|
|
|
|
Half year
ended
|
Half year
ended
|
Full year
ended
|
|
|
30 April
|
30 April
|
31 October
|
|
|
2024
|
2023
|
2023
|
|
Timing of revenue recognition
|
£m
|
£m
|
£m
|
|
Revenue recognised at a point in
time
|
223.4
|
242.8
|
552.4
|
|
Revenue recognised over
time
|
34.1
|
39.9
|
105.1
|
|
Total revenue
|
257.5
|
282.7
|
657.5
|
|
|
|
|
|
|
|
|
|
|
5 EXCEPTIONAL
ITEMS
Exceptional items are those which,
in the opinion of the Directors, are material by size and/or
non-recurring in nature such as significant costs and settlements
associated with combustible materials, significant costs associated
with acquiring another business, significant legal matters, changes
in estimate of costs associated with completed sites which are no
longer part of our core strategy and significant inventory
impairments. Where appropriate, the Directors consider that items
should be considered as categories or classes of items, such as any
credits/costs impacting the consolidated income statement which
relate to combustible materials or completed site costs
notwithstanding where an item may be individually immaterial. The
Directors believe that these items require separate disclosure
within the condensed consolidated income statement in order to
assist the users of the financial statements to better understand
the performance of the Group, which is also how the Directors and
Chief Operating Decision Maker internally manage the business.
Where appropriate, the material reversal of any of these amounts
will also be reflected through exceptional items. Additional
charges/credits to items classified as exceptional items in prior
years will be classified as exceptional in the current year, unless
immaterial to the financial statements. As these exceptional items
can vary significantly year on year, they may introduce volatility
into the reported earnings. The income tax impacts of exceptional
items are reflected at the actual tax rate related to these
items.
|
|
Half year
ended
|
Half year
ended
|
Full year
ended
|
|
|
30 April
|
30 April
|
31 October
|
|
|
2024
|
2023
|
2023
|
|
Cost of sales
|
£m
|
£m
|
£m
|
|
Combustible materials
charge
|
(8.9)
|
(1.4)
|
(11.3)
|
|
Combustible materials
credit
|
4.4
|
10.0
|
10.0
|
|
Net combustible materials
(charge)/credit
|
(4.5)
|
8.6
|
(1.3)
|
|
Legal provision
|
(0.3)
|
-
|
(13.0)
|
|
Completed sites costs in respect of
non-standard developments, started prior to change in strategy in
2019
|
(25.5)
|
-
|
-
|
|
Total cost of sales (charge)/credit
|
(30.3)
|
8.6
|
(14.3)
|
|
|
|
|
|
|
Net finance expense
|
|
|
|
|
Combustible materials imputed
interest
|
(3.2)
|
(2.2)
|
(4.6)
|
|
|
|
|
|
|
Share of post-tax loss of joint ventures
|
|
|
|
|
Combustible materials credit of
joint ventures
|
-
|
1.1
|
0.6
|
|
|
|
|
|
|
Total exceptional
(charge)/credit
|
(33.5)
|
7.5
|
(18.3)
|
|
Tax credit/(charge) on exceptional
(charge)/credit
|
8.4
|
(2.0)
|
4.8
|
|
Total exceptional (charge)/credit
after tax credit/(charge)
|
(25.1)
|
5.5
|
(13.5)
|
Net combustible materials (charge)/credit
In the prior year as a consequence
of signing the Developer Remediation Contract on 13 March 2023, the
Group entered into contractual commitments with the UK
Government to identify and remediate those buildings it has
developed with possible life-critical fire safety defects. The
combustible materials charge represents forecast changes in build
costs and in the provision discount. The Group has recovered £4.4m
cash from third parties in the half year in respect of defective
design and workmanship. See note 12 for additional
information.
Completed site costs in respect of
non-standard developments, started prior to the change in strategy
in 2019 Since the publication of the FY23
results, the Group has become aware of certain build defects
initially identified on four sites that were completed prior to
2019 when the Group closed its Regeneration and London divisions.
During the period the Group completed a thorough review of all
completed sites in association with third party consultants. The
review of completed sites is now concluded resulting in a
one-off charge of £31.4m, of which £25.5m is treated as an
exceptional item as it relates to developments no longer part of
our core strategy which we started prior to 2019. The balance of
£5.9m is recorded as pre-exceptional. Due to the size and
nature of the remediation required, and in line with the Group's
accounting policy, this has been presented as an exceptional
item.
Net finance expense
The combustible materials imputed
interest reflects the unwind of the imputed interest on the
provision to reflect the time value of the liability.
Share of post-tax loss of joint ventures
In the prior year the combustible
materials credit of joint ventures represents the Group's share of
exceptional combustibles materials credit in its joint venture
Crest Nicholson Bioregional Quintain LLP. The credit represents a
recovery from third parties.
Taxation
An exceptional income tax credit
of £8.4m (30 April 2023: charge of £2.0m, 31 October 2023: credit
of £4.8m) has been recognised in relation to the above exceptional
items using the actual tax rate applicable to these
items.
6 NET ADMINISTRATIVE EXPENSES AND
OPERATING (LOSS)/PROFIT
Operating loss of £24.1m (30 April
2023: operating profit of £30.7m, 31 October 2023: operating profit
of £29.9m) from continuing activities is stated after
(charging)/crediting:
|
|
Half year
ended
|
Half year
ended
|
Full year
ended
|
|
|
30 April
|
30 April
|
31 October
|
|
|
2024
|
2023
|
2023
|
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
Administrative expenses
|
(25.5)
|
(28.2)
|
(55.0)
|
|
Other operating income
|
28.3
|
13.7
|
40.1
|
|
Other operating
expenses
|
(28.9)
|
(13.8)
|
(40.9)
|
|
Net administrative
expenses
|
(26.1)
|
(28.3)
|
(55.8)
|
Other operating income and other
operating expenses shown above relate to the income and associated
costs arising on the sale of part exchange properties.
7 TAXATION
The actual rate of taxation on
profit for the half year ended 30 April 2024 is 24.3% (30 April
2023: weighted average annual effective rate for the year ending 31
October 2023 25.7%, 31 October 2023: actual rate of taxation
22.5%). This calculation uses rates substantively enacted by 30
April 2024 as required by IAS 34 'Interim Financial
Reporting'.
8 (LOSS)/EARNINGS PER ORDINARY
SHARE
Basic (loss)/earnings per share is
calculated by dividing (loss)/earnings attributable to equity
shareholders by the weighted average number of ordinary shares in
issue during the period. For diluted earnings per share, the
weighted average number of shares is increased by the average
number of potential ordinary shares held under option during the
period. This reflects the number of ordinary shares which would be
purchased using the difference in value between the market value of
shares and the share option exercise price. The market value of
shares has been calculated using the average ordinary share price
during the period. Only share options which have met their
cumulative performance criteria have been included in the dilution
calculation. The (loss)/earnings and weighted average number of
shares used in the calculations are set out below.
|
|
(Loss)/
|
Weighted
|
Per
|
|
|
earnings
|
average
|
share
|
|
|
|
number of
|
amount
|
|
|
|
shares
|
|
|
|
£m
|
millions
|
pence
|
|
Half year ended 30 April 2024 - Total
|
|
|
|
|
Basic loss per share
|
(23.4)
|
256.4
|
(9.1)
|
|
Effect of share
options1
|
-
|
-
|
|
|
Diluted loss per share
|
(23.4)
|
256.4
|
(9.1)
|
|
|
|
|
|
|
Half year ended 30 April 2024 - Pre-exceptional
items
|
|
|
|
|
Basic earnings per share
|
1.7
|
256.4
|
0.7
|
|
Effect of share options
|
-
|
1.1
|
|
|
Adjusted diluted earnings per
share
|
1.7
|
257.5
|
0.7
|
|
|
|
|
|
|
Half year ended 30 April 2023 - Total
|
|
|
|
|
Basic earnings per share
|
21.1
|
256.1
|
8.2
|
|
Effect of share options
|
-
|
1.6
|
|
|
Diluted earnings per
share
|
21.1
|
257.7
|
8.2
|
|
|
|
|
|
|
Half year ended 30 April 2023 - Pre-exceptional
items
|
|
|
|
|
Basic earnings per share
|
15.6
|
256.1
|
6.1
|
|
Effect of share options
|
-
|
1.6
|
|
|
Adjusted diluted earnings per
share
|
15.6
|
257.7
|
6.1
|
|
|
|
|
|
|
Full year ended 31 October 2023 - Total
|
|
|
|
|
Basic earnings per share
|
17.9
|
256.1
|
7.0
|
|
Dilutive effect of share
options
|
-
|
0.6
|
|
|
Diluted earning per
share
|
17.9
|
256.7
|
7.0
|
|
|
|
|
|
|
Full year ended 31 October 2023 - Pre-exceptional
items
|
|
|
|
|
Basic earnings per share
|
31.4
|
256.1
|
12.3
|
|
Dilutive effect of share
options
|
-
|
0.6
|
|
|
Adjusted diluted earnings per
share
|
31.4
|
256.7
|
12.2
|
1 Share options are not shown to be dilutive as they cannot
further increase a loss per share.
9
DIVIDENDS
|
|
Half year
ended
|
Half year
ended
|
Full year
ended
|
|
|
30 April
|
30 April
|
31 October
|
|
|
2024
|
2023
|
2023
|
|
|
£m
|
£m
|
£m
|
|
Dividends recognised as distributions to equity shareholders
in the period:
|
|
|
|
|
Final dividend for the year ended
31 October 2023 of 11.5 pence per share (2022: 11.5 pence per
share)
|
29.5
|
29.5
|
29.5
|
|
Interim dividend for the year ended
31 October 2023: 5.5
pence per share (2022: 5.5 pence
per share)
|
-
|
-
|
14.1
|
|
|
29.5
|
29.5
|
43.6
|
|
|
|
|
|
The Board approved an interim
dividend of 1.0 pence per share on 13 June 2024.
The interim dividend will be paid on 11 October
2024 to ordinary shareholders on the Register of Members on 20
September 2024. In accordance with IAS 10
'Events After the Reporting Period' the proposed dividend has not
been included as a liability in this condensed consolidated half
year financial information.
10 INVENTORIES
|
|
As at
|
As at
|
As at
|
|
|
30 April
|
30 April
|
31 October
|
|
|
2024
|
2023
|
2023
|
|
|
£m
|
£m
|
£m
|
|
Work-in-progress
|
1,031.2
|
1,021.9
|
1,040.7
|
|
Completed buildings including show
homes
|
113.3
|
68.4
|
89.6
|
|
Part exchange
inventories
|
37.4
|
17.8
|
34.5
|
|
|
1,181.9
|
1,108.1
|
1,164.8
|
Total inventories are stated after
a net realisable value provision of £20.9m (30 April 2023: £14.6m,
31 October 2023: £20.2m), with £4.3m being charged in the period
and £3.6m being used in the period.
Of the £20.9m remaining NRV
provision at 30 April 2024 it is currently forecast that around a
quarter will be used in the second half of FY24, around half in
FY25 and the balance in FY26.
|
Movements in the NRV provision
|
As at
|
As at
|
As at
|
|
|
30 April
|
30 April
|
31 October
|
|
|
2024
|
2023
|
2023
|
|
|
£m
|
£m
|
£m
|
|
At beginning of the
period
|
20.2
|
12.6
|
12.6
|
|
NRV charged in the
period
|
4.3
|
3.2
|
13.4
|
|
NRV used in the period
|
(3.6)
|
(1.2)
|
(5.8)
|
|
Total movement in NRV in the
period
|
0.7
|
2.0
|
7.6
|
|
At end of the period
|
20.9
|
14.6
|
20.2
|
|
|
|
|
|
11
CASH AND CASH
EQUIVALENTS, INTEREST-BEARING LOANS AND
BORROWINGS
|
|
As at
|
As at
|
As at
|
|
|
30 April
|
30 April
|
31 October
|
|
|
2024
|
2023
|
2023
|
|
|
£m
|
£m
|
£m
|
|
Cash and cash equivalents
|
88.7
|
163.6
|
162.6
|
|
|
|
|
|
|
Non-current interest-bearing loans and
borrowings
|
|
|
|
|
Senior loan notes - maturing 2025
to 2029
|
(85.0)
|
(100.0)
|
(85.0)
|
|
Revolving credit facility and
senior loan notes issue costs
|
1.1
|
2.6
|
1.5
|
|
|
(83.9)
|
(97.4)
|
(83.5)
|
|
|
|
|
|
|
Current interest-bearing loans and
borrowings
|
|
|
|
|
Senior loan notes
|
(15.0)
|
-
|
(15.0)
|
|
Revolving credit facility and
senior loan notes issue costs
|
0.8
|
-
|
0.8
|
|
|
(14.2)
|
-
|
(14.2)
|
|
|
|
|
|
The first repayment of £15.0m of
senior loan notes is due in August 2024.
At 30 April 2024, the Group had
undrawn revolving credit facilities of £250.0m (30 April 2023:
£250.0m, 31 October 2023: £250.0m). The Groups revolving credit
facility ends in October 2026.
12
PROVISIONS
|
|
|
|
|
|
|
|
|
Combustible
materials
|
Legal
provision
|
Joint
ventures
|
Other
provisions
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
As
at 30 April 2024
|
|
|
|
|
|
|
At 1 November 2023
|
144.8
|
13.0
|
0.9
|
0.6
|
159.3
|
|
Provided in the year
|
8.9
|
-
|
-
|
-
|
8.9
|
|
Imputed interest
|
3.2
|
-
|
-
|
-
|
3.2
|
|
Utilised in the year
|
(11.7)
|
-
|
-
|
-
|
(11.7)
|
|
At 30 April 2024
|
145.2
|
13.0
|
0.9
|
0.6
|
159.7
|
|
|
|
|
|
|
|
|
As
at 30 April 2023
|
|
|
|
|
|
|
At 1 November 2022
|
140.8
|
-
|
1.2
|
1.0
|
143.0
|
|
Provided in the year
|
1.4
|
-
|
-
|
-
|
1.4
|
|
Imputed interest
|
2.2
|
-
|
-
|
-
|
2.2
|
|
Utilised in the year
|
(5.2)
|
-
|
-
|
-
|
(5.2)
|
|
Funding commitment
change
|
-
|
-
|
(1.2)
|
-
|
(1.2)
|
|
At 30 April 2023
|
139.2
|
-
|
-
|
1.0
|
140.2
|
|
|
|
|
|
|
|
|
As
at 31 October 2023
|
|
|
|
|
|
|
At 1 November 2022
|
140.8
|
-
|
1.2
|
1.0
|
143.0
|
|
Provided in the year
|
12.0
|
13.0
|
-
|
0.4
|
25.4
|
|
Imputed interest
|
4.6
|
-
|
-
|
-
|
4.6
|
|
Utilised in the year
|
(12.6)
|
-
|
-
|
(0.6)
|
(13.2)
|
|
Released in the year
|
-
|
-
|
-
|
(0.2)
|
(0.2)
|
|
Funding commitment
change
|
-
|
-
|
(0.3)
|
-
|
(0.3)
|
|
At 31 October 2023
|
144.8
|
13.0
|
0.9
|
0.6
|
159.3
|
|
|
|
|
|
|
|
|
At 30 April 2024
|
|
|
|
|
|
|
Non-current
|
55.2
|
-
|
-
|
0.2
|
55.4
|
|
Current
|
90.0
|
13.0
|
0.9
|
0.4
|
104.3
|
|
|
145.2
|
13.0
|
0.9
|
0.6
|
159.7
|
|
At 30 April 2023
|
|
|
|
|
|
|
Non-current
|
67.6
|
-
|
-
|
0.3
|
67.9
|
|
Current
|
71.6
|
-
|
-
|
0.7
|
72.3
|
|
|
139.2
|
-
|
-
|
1.0
|
140.2
|
|
At 31 October 2023
|
|
|
|
|
|
|
Non-current
|
73.6
|
-
|
-
|
0.2
|
73.8
|
|
Current
|
71.2
|
13.0
|
0.9
|
0.4
|
85.5
|
|
|
144.8
|
13.0
|
0.9
|
0.6
|
159.3
|
Combustible materials
In March 2023 the Group signed the
DLUHC Self Remediation Terms (SRT) in England, which converted the
principles of the building safety pledge signed in 2022, in which
we committed to resolve any historical fire remedial work on
buildings completed since 5 April 1992, into a binding agreement
between the Government and the Group. This provides clarity
for future remediation, particularly with regards to the
standards required for internal and external remedial works on
legacy buildings.
We are making progress with our
assessment programme for both external walls and internal fire
safety and are working through the portfolio in a risk-based
sequence. To date, formal assessments are in progress or complete
for 57% of the buildings that fall within the scope of the SRT. We
have made a physical start to remedial works on 63% (102 buildings)
of those buildings assessed. Due to the quantity and nature of the
projects, the multiple stakeholders involved and the availability
of appropriately qualified and experienced consultants and
contractors, we expect to complete the remedial works within three
to five years.
The combustible materials provision
reflects the estimated costs to complete the remediation of
life-critical fire safety issues on identified buildings. The
Directors have used a combination of BSF costed information, other
external information, and internal assessments as a basis for the
provision, which is a best estimate at this time.
The Group recorded a further net
combustible materials charge of £8.9m in the period predominantly
related to changes in forecast build cost scope and price over the
duration of remediation, net of the change in discounting.
The provision is stated after a related discount
of £6.1m, which unwinds to the condensed consolidated income
statement as finance expense over the expected duration of the
provision using the effective interest rate method.
The provision of £145.2m represents
the Group's best estimate of future costs on 30 April 2024. The
Group will continue to assess the magnitude and utilisation of this
provision in future reporting periods. The Group recognises that
required remediation works could be subject to further inflationary
pressures and cash outflows. If forecast remediation costs on
buildings currently provided for are 10.0% higher than provided,
the pre-tax exceptional items charge in the consolidated income
statement would be £14.5m higher. If further buildings are
identified this could also increase the required provision, but the
potential quantity of this change cannot be readily determined
without further claims or investigative work.
The Group spent £11.7m in the
period across several buildings requiring further investigative
costs, including balcony and cladding-related works. The Group
expects to have completed any required remediation within a three
to five-year period, using £90.0m of the remaining provision within
one year, and the balance within one to five years. The timing of
the expenditure is based on the Directors best estimates of the
timing of remediating buildings and repaying the BSF incurred
costs. Actual timing may differ due to delays in agreeing scope of
works, obtaining licences, tendering works contracts and the BSF
payment schedule differing to our forecast.
The Group is continuing to review
the recoverability of costs incurred from third parties where it
has a contractual right of recourse. In the period £4.4m was
recovered from third parties by the Group. Recoveries are not
recognised until they are virtually certain to be received. See
note 5 for condensed consolidated income statement
disclosure.
Legal provision
The Group is subject to a legal
claim relating to a low-rise bespoke apartment block built by the
Group which was damaged by fire in 2021. The fire caused extensive
damage to the property which was subsequently demolished and is
currently being rebuilt by the freeholder. In the prior year the
Group received a letter of claim alleging fire safety defects and
claiming compensation for the rebuild and other associated costs.
The provision recorded represents managements best estimate of the
Group's potential exposure taking into account legal and
professional advice. The claim and ultimate route to settlement is
ongoing but the Group currently does not have a set timeline for
when the matter will be concluded.
Joint ventures
Joint ventures represents the
Group's legal or constructive obligation to fund losses on joint
ventures.
Other provisions
Other provisions comprise
dilapidation provisions on Group offices and dilapidation
provisions on commercial properties where the Group previously held
the head lease.
13 FINANCIAL ASSETS AND
LIABILITIES
|
|
As at
|
As at
|
As at
|
|
|
30 April
|
30 April
|
31 October
|
|
|
2024
|
2023
|
2023
|
|
Financial assets
|
£m
|
£m
|
£m
|
|
Sterling cash deposits
|
88.7
|
163.6
|
162.6
|
|
Trade receivables
|
69.8
|
46.2
|
60.9
|
|
Amounts due from joint
ventures
|
23.4
|
29.4
|
29.5
|
|
Other receivables
|
9.1
|
16.3
|
22.7
|
|
Total financial assets at amortised cost
|
191.0
|
255.5
|
275.7
|
|
Financial assets at fair value
through profit and loss
|
3.5
|
4.1
|
3.7
|
|
Total financial assets
|
194.5
|
259.6
|
279.4
|
|
|
|
|
|
Financial assets at fair value
through profit and loss are held at fair value and categorised as
level three within the hierarchical classification of IFRS 13 'Fair
Value Measurement'. The carrying value of
cash and cash equivalents, trade and other receivables and amounts
due from joint ventures is a reasonable approximation of fair value
which would be measured under a level 3 hierarchy.
|
|
As at
|
As at
|
As at
|
|
|
30 April
|
30 April
|
31 October
|
|
|
2024
|
2023
|
2023
|
|
Financial liabilities
|
£m
|
£m
|
£m
|
|
Senior loan notes
|
100.0
|
100.0
|
100.0
|
|
Land payables on contractual terms
carrying interest
|
-
|
16.7
|
-
|
|
Land payables on contractual terms
carrying no interest
|
175.9
|
131.5
|
205.5
|
|
Amounts due to joint
ventures
|
0.4
|
1.3
|
0.7
|
|
Lease liabilities
|
7.3
|
4.8
|
6.4
|
|
Other trade payables
|
62.5
|
46.8
|
61.8
|
|
Other payables
|
2.9
|
3.5
|
3.1
|
|
Accruals
|
132.0
|
119.4
|
123.9
|
|
Total financial liabilities at amortised
cost
|
481.0
|
424.0
|
501.4
|
|
|
|
|
|
The carrying amounts of the Group's
financial liabilities is deemed a reasonable approximation to their
fair value.
14 (NET DEBT)/NET CASH INCLUDING
LAND CREDITORS
|
|
As at
|
As at
|
As at
|
|
|
30 April
|
30 April
|
31 October
|
|
|
2024
|
2023
|
2023
|
|
|
£m
|
£m
|
£m
|
|
Cash and cash
equivalents
|
88.7
|
163.6
|
162.6
|
|
Non-current interest-bearing loans
and borrowings
|
(83.9)
|
(97.4)
|
(83.5)
|
|
Current Interest-bearing loans and
borrowings
|
(14.2)
|
-
|
(14.2)
|
|
(Net debt)/ net cash
|
(9.4)
|
66.2
|
64.9
|
|
Land payables on contractual terms
carrying interest
|
-
|
(16.7)
|
-
|
|
Land payables on contractual terms
carrying no interest
|
(175.9)
|
(131.5)
|
(205.5)
|
|
Net debt including land creditors
|
(185.3)
|
(82.0)
|
(140.6)
|
|
|
|
|
|
15 SHARE
CAPITAL
|
|
Shares
|
Nominal
|
Share
|
Share
|
|
|
issued
|
value
|
capital
|
premium
|
|
|
|
|
|
account
|
|
|
number
|
pence
|
£m
|
£m
|
|
As at 30 April 2024, 30 April 2023
and 31 October 2023
|
256,920,539
|
5
|
12.8
|
74.2
|
16
RELATED PARTY
TRANSACTIONS
Transactions between fellow
subsidiaries, which are related parties, are eliminated on
consolidation, as well as transactions between the Group and its
subsidiaries during the current and prior period.
There were no transactions between
the Group and key management personnel other than remuneration
during the current and prior period.
The Group pays contributions
to the Crest Nicholson Group Pension and
Life Assurance Scheme to improve the
Scheme's funding position as determined by regular actuarial
valuations.
The Company's Directors and
Non-Executive Directors have associations other than with the
Company. From time to time the Group may trade with organisations
with which a Director or Non-Executive Director has an association.
Where this occurs, it is on normal commercial terms and without the
direct involvement of the Director or Non-Executive
Director.
The Group had the following
transactions with its joint ventures in the period:
|
|
Half year
ended
|
Half year
ended
|
Full year
ended
|
|
|
30 April
|
30 April
|
31 October
|
|
|
2024
|
2023
|
2023
|
|
|
£m
|
£m
|
£m
|
|
Interest income on joint venture
funding
|
0.3
|
0.6
|
1.2
|
|
Project management fees
received
|
1.2
|
0.8
|
1.9
|
|
Amounts due from joint ventures,
net of expected credit losses
|
23.4
|
29.4
|
29.5
|
|
Amounts due to joint
ventures
|
0.4
|
1.3
|
0.7
|
|
Funding to joint
ventures
|
(4.5)
|
(4.4)
|
(13.0)
|
|
Repayment of funding from joint
ventures
|
25.2
|
3.4
|
11.7
|
|
Dividends received from joint
ventures
|
2.5
|
-
|
1.5
|
17 CONTINGENCIES AND
COMMITMENTS
There are performance bonds and
other engagements, including those in respect of joint venture
partners, undertaken in the ordinary course of business. It is
impractical to quantify the financial effect of performance bonds
and other arrangements. The Directors consider the possibility of a
cash outflow in settlement of performance bonds and other
arrangements to be remote and therefore this does not represent a
contingent liability for the Group.
In the ordinary course of
business, the Group enters into certain land purchase contracts
with vendors on a conditional exchange basis. The conditions must
be satisfied for the Group to recognise the land asset and
corresponding liabilities within the condensed consolidated
statement of financial position. No land payable in respect of
conditional land acquisitions has been recognised.
The Group provides for all known
material legal actions, where having taken appropriate legal advice
as to the likelihood of success of the actions, it is considered
probable that an outflow of economic resource will be required, and
the amount can be reliably measured. No material contingent
liability in respect of such claims has been recognised since there
are no known claims of this nature.
As a consequence of signing the
Developer Remediation Contract on 13 March 2023, the Group entered
into contractual commitments with the UK Government to identify and
remediate those buildings it has developed with possible
life-critical fire safety defects. Accordingly,
while the Group believes that most significant liabilities will
have been identified through the process of building owners
assessing buildings and applying for BSF funding and through Crest
commissioning assessments to date, contingent liabilities exist
where additional buildings have not yet been identified which
require remediation. Due to the enduring challenges of developing a
reliable estimate of these possible costs, it is not practicable to
disclose an expected range.
The Group is reviewing the
recoverability of costs incurred from third parties where it has a
contractual right of recourse. As reflected in these financial
results, the Group has a track record of successfully obtaining
such recoveries, however no contingent assets have been recognised
in these consolidated financial statements for such
items.
ALTERNATIVE PERFORMANCE MEASURES
(UNAUDITED)
The Group uses a number of
alternative performance measures (APM) which are not defined within
IFRS. The Directors use the APM, along with IFRS measures, to
assess the operational performance of the Group. Definitions and
reconciliations of the financial APMs used compared to IFRS
measures, are included below:
Adjusted performance metrics
Adjusted performance metrics as
shown below comprise statutory metrics adjusted for the exceptional
items as presented in note 5 of the condensed consolidated
financial statements. Exceptional items are those which, in the
opinion of the Directors, are material by size and/or non-recurring
in nature. The Directors believe that these items require separate
disclosure within the consolidated income statement in order to
assist the users of the financial statements to better understand
the performance of the Group, which is also how the Directors
internally manage the business. As such, the Directors consider
these adjusted performance metrics reflect a more accurate view of
its core operations and business performance.
|
Half year ended 30 April 2024
|
|
Statutory
|
Exceptional
items
|
Adjusted
|
|
Gross profit
|
£m
|
2.2
|
30.3
|
32.5
|
|
Gross profit margin
|
%
|
0.9
|
11.8
|
12.6
|
|
Operating (loss)/profit
|
£m
|
(24.1)
|
30.3
|
6.2
|
|
Operating (loss)/profit
margin
|
%
|
(9.4)%
|
11.8
|
2.4
|
|
Net finance expense
|
£m
|
(6.8)
|
3.2
|
(3.6)
|
|
(Loss)/profit before tax
|
£m
|
(30.9)
|
33.5
|
2.6
|
|
Income tax
credit/(expense)
|
£m
|
7.5
|
(8.4)
|
(0.9)
|
|
(Loss)/profit after tax
|
£m
|
(23.4)
|
25.1
|
1.7
|
|
Basic (loss)/earnings per
share
|
Pence
|
(9.1)
|
9.8
|
0.7
|
|
Diluted (loss)/earnings per
share
|
Pence
|
(9.1)
|
9.8
|
0.7
|
|
Half year ended 30 April 2023
|
|
Statutory
|
Exceptional
items
|
Adjusted
|
|
Gross profit
|
£m
|
59.2
|
(8.6)
|
50.6
|
|
Gross profit margin
|
%
|
20.9
|
(3.0)
|
17.9
|
|
Operating profit
|
£m
|
30.7
|
(8.6)
|
22.1
|
|
Operating profit margin
|
%
|
10.9
|
(3.1)
|
7.8
|
|
Net finance expense
|
£m
|
(4.7)
|
2.2
|
(2.5)
|
|
Share of post-tax profit/(loss) of
joint ventures using the equity method
|
£m
|
2.4
|
(1.1)
|
1.3
|
|
Profit before tax
|
£m
|
28.4
|
(7.5)
|
20.9
|
|
Income tax
(expense)/credit
|
£m
|
(7.3)
|
2.0
|
(5.3)
|
|
Profit after tax
|
£m
|
21.1
|
(5.5)
|
15.6
|
|
Basic earnings per share
|
Pence
|
8.2
|
(2.1)
|
6.1
|
|
Diluted earnings per
share
|
Pence
|
8.2
|
(2.1)
|
6.1
|
|
Full year ended 31 October 2023
|
|
Statutory
|
Exceptional
items
|
Adjusted
|
|
Gross profit
|
£m
|
86.3
|
14.3
|
100.6
|
|
Gross profit margin
|
%
|
13.1
|
2.2
|
15.3
|
|
Operating profit
|
£m
|
29.9
|
14.3
|
44.2
|
|
Operating profit margin
|
%
|
4.5
|
2.2
|
6.7
|
|
Net finance expense
|
£m
|
(10.1)
|
4.6
|
(5.5)
|
|
Share of post-tax profit/(loss) of
joint ventures using the equity method
|
£m
|
3.3
|
(0.6)
|
2.7
|
|
Profit before tax
|
£m
|
23.1
|
18.3
|
41.4
|
|
Income tax expense
|
£m
|
(5.2)
|
(4.8)
|
(10.0)
|
|
Profit after tax
|
£m
|
17.9
|
13.5
|
31.4
|
|
Basic earnings per share
|
Pence
|
7.0
|
5.3
|
12.3
|
|
Diluted earnings per
share
|
Pence
|
7.0
|
5.2
|
12.2
|
Net (debt)/cash
Net (debt)/cash is cash and
cash-equivalents plus non-current and current interest-bearing
loans and borrowings. Net cash Illustrates the Group's overall
liquidity position and general financial resilience. Net cash has
reduced to net debt of £9.4m from £66.2m net cash at 30 April
2023.
|
|
|
As at
|
As at
|
As at
|
|
|
|
30 April
|
30 April
|
31 October
|
|
|
|
2024
|
2023
|
2023
|
|
Cash and cash
equivalents
|
£m
|
88.7
|
163.6
|
162.6
|
|
Non-current and current
interest-bearing loans and borrowings
|
£m
|
(98.1)
|
(97.4)
|
(97.7)
|
|
Net (debt)/cash
|
£m
|
(9.4)
|
66.2
|
64.9
|
|
|
|
|
|
|
Return on capital employed (ROCE)
Return on capital employed equals
rolling 12 month adjusted operating profit before joint ventures
divided by the average of opening and closing capital employed over
the same 12 months (capital employed = equity shareholders' funds
plus net borrowing or less net cash).
|
|
|
Half year ended 30 April
2024
|
Half year ended 30 April
2023
|
Full year ended 31 October
2023
|
|
Adjusted operating profit
- rolling 12 month
|
£m
|
28.3
|
108.5
|
44.2
|
|
Average of opening and closing
capital employed over same 12 months
|
£m
|
811.5
|
741.7
|
699.0
|
|
ROCE
|
%
|
3.5
|
14.6
|
6.3
|
|
|
|
Half year ended 30 April
2024
|
Half year ended 30 April
2023
|
Half year ended 30 April
2022
|
Full year ended 31 October
2023
|
Full year ended 31 October
2022
|
|
Adjusted operating profit
|
|
|
|
|
|
|
|
For reporting
period/year
|
£m
|
6.2
|
22.1
|
54.5
|
44.2
|
140.9
|
|
Second half of the prior year
where applicable
|
£m
|
22.1
|
86.4
|
|
|
|
|
Rolling 12 month
|
£m
|
28.3
|
108.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at
|
As at
|
As at
|
As at
|
As at
|
|
|
|
30 April
|
30 April
|
30 April
|
31 October
|
31 October
|
|
|
|
2024
|
2023
|
2022
|
2023
|
2022
|
|
Capital employed
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Equity shareholders'
funds
|
£m
|
803.1
|
876.6
|
846.3
|
856.3
|
883.1
|
|
Net debt/net (cash) (note
14)
|
£m
|
9.4
|
(66.2)
|
(173.3)
|
(64.9)
|
(276.5)
|
|
Closing capital employed
|
£m
|
812.5
|
810.4
|
673.0
|
791.4
|
606.6
|
|
Average closing capital
employed
|
£m
|
811.5
|
741.7
|
|
699.0
|
|
INDEPENDENT REVIEW REPORT TO CREST NICHOLSON HOLDINGS
PLC
Report on the condensed consolidated interim financial
statements
Our
conclusion
We have reviewed Crest Nicholson
Holdings plc's condensed consolidated interim financial statements
(the "interim financial statements") in the unaudited interim
results of Crest Nicholson Holdings plc for the 6 month period
ended 30 April 2024 (the "period").
Based on our review, nothing has
come to our attention that causes us to believe that the interim
financial statements are not prepared, in all material respects, in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
The interim financial statements
comprise:
· the
Condensed Consolidated Statement of Financial Position as at 30
April 2024;
· the
Condensed Consolidated Income Statement and the Condensed
Consolidated Statement of Comprehensive Income for the period then
ended;
· the
Condensed Consolidated Cash Flow Statement for the period then
ended;
· the
Condensed Consolidated Statement of Changes in Equity for the
period then ended; and
· the
explanatory notes to the interim financial statements.
The interim financial statements
included in the unaudited interim results of Crest Nicholson
Holdings plc have been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410, 'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Financial
Reporting Council for use in the United Kingdom ("ISRE (UK) 2410").
A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures.
A review is substantially less in
scope than an audit conducted in accordance with International
Standards on Auditing (UK) and, consequently, does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
We have read the other information
contained in the unaudited interim results and considered whether
it contains any apparent misstatements or material inconsistencies
with the information in the interim financial
statements.
Conclusions relating to going concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors
have inappropriately adopted the going concern basis of accounting
or that the directors have identified material uncertainties
relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the group to cease to continue as a going
concern.
Responsibilities for the interim financial statements and the
review
Our
responsibilities and those of the directors
The unaudited interim results,
including the interim financial statements, is the responsibility
of, and has been approved by the directors. The directors are
responsible for preparing the unaudited interim results in
accordance with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority. In
preparing the unaudited interim results, including the interim
financial statements, the directors are responsible for assessing
the group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the group or to cease operations, or have no realistic
alternative but to do so.
Our responsibility is to express a
conclusion on the interim financial statements in the unaudited
interim results based on our review. Our conclusion, including our
Conclusions relating to going concern, is based on procedures that
are less extensive than audit procedures, as described in the Basis
for conclusion paragraph of this report. This report, including the
conclusion, has been prepared for and only for the company for the
purpose of complying with the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct
Authority and for no other purpose. We do not, in giving this
conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent
in writing.
PricewaterhouseCoopers
LLP
Chartered Accountants
London
13 June 2024