Crest Nicholson, the UK housebuilder, has reported a 27 per cent boost to full-year profits as it pushed up the prices of its homes in a climate of strong demand.
Pre-tax profit reached £195m in the year to the end of October, while the FTSE 250 company hit a target of selling at least £1bn of homes during the year, according to full-year results released on Tuesday.
Part of the profit increase was driven by an 18 per cent jump in average selling prices, as the group shifted to more expensive locations and dwellings in what it called a “robust” market.
Like other developers, Crest — which is among the UK’s 10 largest listed housebuilders — has benefited from a housing shortage and government support for home purchases through the Help to Buy equity loan scheme for first-time buyers.
“This has been a landmark year for the business,” said Stephen Stone, chief executive.
“In spite of a temporary impact on sales around the time of the vote to leave the European Union, we have achieved sales of £1bn including through joint ventures, in line with our stated target. We remain committed to, and on track to deliver, our targets of 4,000 homes and £1.4bn of sales by 2019.”
The Surrey-based group built 5 per cent more homes during the year, at 2,870. It plans a dividend increase of 40 per cent to 27.5p a share.
A planned “garden village” at Longcross in Surrey, is one of 14 to receive formal support from the government as it seeks ways to boost housebuilding numbers.
However, the company warned that the UK’s departure from the EU may cut into its labour force.
“European workers in the UK’s construction force have been essential in delivering much needed homes. It is important to the objective of increasing housing output that a supply of European labour is maintained,” it said.
Housebuilders are also awaiting the contents of a government white paper on housing due this month, which aims to further boost construction nationwide and is expected to include changes to the planning system to enable higher building rates.
While this would be favourable for developers, the paper may also contain measures to push housebuilders to develop more quickly on sites they already own.