Crest Nicholson Share Price: Government Schemes Boost Sales

on Sep 18, 2013
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iNVEZZ.com, Wednesday, September 18th: UK homebuilder Crest Nicholson Holdings Plc (LON:CRST), which returned to the stock market earlier in February, said on Tuesday that its forward sales of homes jumped between May and September as a result of the UK government’s “Funding for Lending” and “Help to Buy” schemes. Crest Nicholson shares were trading more than two percent lower in London on Wednesday morning.

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**Crest Nicholson Sees Rise in Demand from Buyers**
Surrey-based Crest Nicholson said in an interim management statement that forward sales for 2014 and beyond had totalled £145 million for the period from May 1 2013, to September 6 2013, a 92 percent increase year-on-year. The company reported that its reservation rate for the reported period had increased by 46 percent on the same period last year from 0.65 per outlet week to 0.95. The number of cancellations declined to 10.5 percent compared with 15.8 percent in the prior-year period.

The company attributed the improvement in the sales environment to the “Funding for Lending” scheme helping cut the cost of mortgages and the “Help to Buy” initiative which provided a further stimulus to activity.
“The increased volume of reservations confirms the strong desire for home ownership that exists in this country and it is good to see that aspiration becoming a reality for many,” Crest Nicholson’s chief executive Stephen Stone said in the company statement.

The homebuilder however reported that higher reservation levels had resulted in some delivery delays and cost increases in certain building materials.
“Delivery cool-off periods for roof tiles have doubled from six to 12 weeks because of demand,” Stone pointed out, as quoted by The Times. “Sub-contractors are refusing to give fixed prices beyond a year, which shows they are starting to get concerned about the supply of labour and we are starting to see the return of Eastern European labour on jobs such as carpentry and plastering.”

The Scotsman quoted Shore Capital analyst Gavin Jago as saying that Crest Nicholson’s “geographic skew makes the company a leading beneficiary of rising house prices in London and the south-east and cost pressures are likely to be more than offset by improving house prices”.
!m[Varde Management and Deutsche Bank to Reduce Stakes ](/uploads/story/5540/thumbs/pic1_inline.jpg)

**Varde Management and Deutsche Bank Reducing Stakes**
Reuters reported yesterday that Varde Management and Deutsche Bank, two of Crest Nicholson’s biggest shareholders, were going to sell a 13.5 percent stake in the UK company via an accelerated bookbuilding. The newswire quoted the two groups as saying that the sale would start immediately and would be handled by Barclays and J.P. Morgan Cazenove.
Following the placing, Varde Management would continue to hold approximately 20 percent in Crest Nicholson, whereas Deutsche Bank would retain around nine percent.
Crest Nicholson returned to the stock market in February this year, with the listing valuing the company at
£553 million. The group said it continued to benefit from the equity base established through the initial public offering and was operating with moderate levels of borrowings.
**As of 09:52 BST buy Crest Nicholson shares at 327.00p.**
**As of 09:52 BST sell Crest Nicholson shares at 326.10p.**

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