Crest Nicholson shares soar after housebuilder hikes profit expectations
Shares in Crest Nicholson soared this morning after the housebuilder hiked its profit forecast following strong sales after coronavirus lockdown restrictions were lifted.
The FTSE 250 firm said adjusted profit before tax is expected to be significantly ahead of the previous forecast of £37.9m, at around £45m.
The London-listed developer’s share price surged more than 17 per cent to 255.6p this morning as it announced it will resume dividend payments when it posts its interim results next year.
It scrapped shareholder payouts earlier this year due to the uncertainty caused by the pandemic.
In a update to the market this morning Crest Nicholson said sales rates were robust and ahead of pre-spring lockdown levels due to the release of pent-up demand.
Meanwhile, forward sales at 31 October were 2,289 units, up from 2,013 last year after more time spent at home during lockdown prompted more people to consider moving house.
Crest Nicholson chief executive Peter Truscott said the new national lockdown will bring “fresh challenges” for the business, but that it expects the housing market to remain “resilient”.
“If anyone thinks the UK’s stock market is unloved and undeservedly undervalued then house builders may be one way to get exposure in anticipation of any improvement in the FTSE indices’ fortunes – or at least that’s one message that can be taken from Crest Nicholson’s trading update today,” said Russ Mould, AJ Bell investment director.
“Forward sales are still building nicely, the balance sheet is net cash, profits are exceeding expectations and the FTSE 250 firm even intends to restore dividend payments in 2021.
“The shares are responding with a big gain and this shows what can happen if sentiment changes quickly and an unloved stock provides even the slightest scrap of good news.”