Covid-19 pushes Crest Nicholson into the red
Crest Nicholson has swung to a full-year loss, after the housebuilder was hit by both Covid-19 and the uncertainty surrounding Brexit.
Revenues for the year to 31 October 2020 tumbled 38% to £677.9m, while the operating loss came in at £1.8m compared to a profit of £114.6m a year previously. The pre-tax loss was £13.5m against a pre-tax profit in 2019 of £102.7m.
However, the FTSE 250 also announced plans to reinstate the dividend on the back of strong current trading, fuelled in large part by the Stamp Duty holiday.
Crest Nicholson said: "We experienced a challenging start to the [2020 full] year, as we began to make significant and necessary changes to our business model and ways of working in an environment of political uncertainty surrounding Brexit.
"This uncertainty led consumers to delay major decisions about their participation in the housing market in the first quarter."
Covid-19 also "significantly" impacted its operational and financial performance, it added.
But looking to the current year, the firm said it had a "strong forward order book and enhanced balance sheet", while market conditions following the first lockdown had been "strong and consistent" and sales had returned to pre-pandemic levels.
"Despite the current lockdown restrictions, we are continuing to trade in line with our expectations," it said.
"Gross profit margin in 2021 will continue to be impacted by some of our more complex legacy sites, and we will also need to invest the necessary capital to complete these. However, the group still expects to deliver strong profit growth and cash flow generation. This backdrop supports the reinstatement of the dividend and provides flexibility to invest for growth."
Crest Nicholson said it had also repaid £2.5m of funding received through the Coronavirus Job Retention Scheme in December.
The reinstatement of the dividend will be effective from the first half of the current year.
As at 0845 GMT, shares in Crest Nicholson were trading 3% higher at 316.6p.