Crest Nicholson Shares Bounce From Recent Lows, Notes Encouraging Start to Year

Crest Nicholson (LON: CRST) shares are rising Thursday, aiming to continue the bounce from their recent lows after reporting an encouraging start to the year and outlining a refreshed strategy for growth at its Capital Markets Day.

In a release Thursday, the housebuilder said its open market sales rate improved to 0.61 in the 10 weeks to 14 March, up from 0.50 in the previous financial year. 

They said the rate has been supported by internal initiatives such as enhanced training, revised incentives, and product improvements. Customer satisfaction also rose to 95.0% from 87.3% in 2023.

Crest Nicholson shares have surged more than 8% so far in Thursday’s session, trading around the 650p per share mark. Last week Thursday, the stock opened at a low of 143.5p. However, over the last few sessions, it has made gains.

CEO Martyn Clark acknowledged early signs of progress but noted ongoing challenges. “While it is still early days, these efforts are beginning to make a positive impact,” he said, adding that the company is focused on improving operations and capitalising on the mid-premium housing market.

Crest Nicholson outlined its medium-term guidance for 2024 to 2029, targeting mid-single-digit annual growth in home completions, an improvement in gross margins to over 20%, and a reduction in overheads to around 7% of revenue by 2027. 

The company also aims to lift the return on capital employed (ROCE) by 200 basis points annually to 13%+.

Despite stable market conditions, Crest Nicholson warned that with interest rate reductions now expected to be slower, stubborn inflation, and broader global macroeconomic uncertainty, the housing sector remains susceptible to weak consumer confidence.

However, management remains optimistic about delivering long-term growth and shareholder value.