Resilient performance from one of the UKs leading housebuilders.
- May 2011
Crest Nicholson accounts for financial year ended 31 October 2010.
Key financial and performance highlights at a glance:
- Turnover of £284.4m, down 10% on 2009 (£315.6m*)
- Operating profit up 95% at £47.3 million (2009: £24.3 million*)
- Significant rise in operating margins 16.6% (2009: 7.7%*)
- Average selling prices (ASP’s) up 13.3%, reflecting improved pricing and housing mix
- Over 1,200 strategic land bank plots converted to short-term portfolio
- £28m net cash inflow resulting in cash and cash equivalents of £130m (31 October 2009: £102m)
- Proposed financial restructuring to convert £359m of debt to equity resulting in proforma net assets of £173m (2009: £99m net liabilities)
* Filed accounts contain prior year numbers for the seven months to 31 October 2009. Figures shown above are full year equivalent numbers for the 12 months to 31 October 2009.
Stephen Stone, Chief Executive of Crest Nicholson, commented:
“Crest Nicholson is pleased to have delivered robust financial results, against the backdrop of continued uncertainty in the housing industry and the wider UK economy. Despite these challenges we have significantly increased operating profits and margins, underpinning our commitment to delivering high quality developments that balance economic, environmental and social considerations.
“In line with the market, housing completions were lower, at 1,609, driven primarily by fewer affordable units which, combined with improved pricing resulted in a 13.3% increase in ASPs. While the business will continue to face challenges in the short-term as the housing market recovers from the difficulties it has faced over the last few years, in the longer-term UK housing market fundamentals look strong. With a strong land bank in high demand areas and an established track record for building high quality sustainable developments, the Group is well placed to take advantage of these longer-term fundamentals.”
During the year, the Directors commenced discussions with its lenders about a further financial restructuring of the group, to increase the equity on the group balance sheet and extend bank facilities for a further three to four years. After the balance sheet date, Varde Partners, together with certain market associates and partners, progressively acquired the debt of other group lenders in order to facilitate a financial restructuring of the group.
At 23rd March 2011, Varde Partners, together with certain market associates and partners, had control over more than 80% of the senior debt of the group, which enables the Company with their support to pursue the financial restructuring of the group, either by consent or through a scheme of arrangement. The precise terms of this restructuring have still to be agreed, but draft and indicative terms include the conversion of £359m of debt to equity, restoring the group balance sheet to a net asset position. The indicative £359m of debt conversion comprises £200m of senior debt, £150m of subordinated PIK debt and capitalized interest on the PIK debt of £9m. The restructuring of the group balance sheet will put the group on a more sustainable financial footing and enable it to pursue commercially attractive opportunities as they arise.
Full FY10 Report & Accounts can be downloaded here