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Crest Nicholson posts profit and revenue growth in half-year results

Crest Nicholson has said there will be “significant” staff growth over the next three years after establishing a new office in St Albans, Hertfordshire.

Group chief executive Stephen Stone told Construction News the team will begin recruiting in the next three to four months after establishing a new division in the Home Counties.

He said there will be 60 new employees in the St Albans office when it is fully operational, which will take up to three years.

Mr Stone said: “Coupled with that are all the sites, so there’s generally 100 to 150 additional people employed – so [there will be] significant growth in staffing.

“But it’ll take two to three years before it’s growing to a reasonable size and 2018/19 before it has matured.”

The chief executive was speaking after Crest Nicholson posted its half-year results for the six months ended 30 April 2014.

Group revenues for the period stood at £241.1m compared with £192m for the same period in 2013.

Profit before tax stood at £38.4m compared with £28.1m for the same period the previous year.

Mr Stone said the team was on track to meet its 2,500 legal completions target in October 2014, having forward sales of £347.3m.

Housing completions were up 35 per cent for the period at 1,091, compared with 810 for the same period in 2013.

The team added 784 plots to its short-term pipeline with an average selling price of £338,000, and added 2,000 plots to its strategic landbank across six sites.

Mr Stone said apprenticeship growth would increase under the team’s expansion, with 10 per cent of Crest Nicholson’s overall business made up of apprentices.

He said he was encouraging the company’s new division in St Albans to make the same commitment and take on 10 new apprentices over the next two to three years.

On affordable housing, the chief executive said affordable revenues were up 89 per cent for the six months ended 30 April 2014.

Crest Nicholson group finance director Patrick Bergin said the team delivers 25 per cent of affordable housing from its portfolio on average, which they expect to continue.

Mr Stone added: “Every site we have planning permission for has generally got a percentage of affordable housing.

“Planning regulations are changing now towards the Community Infrastructure Levy [CILs] so there are more local authorities pushing for that and sadly affordable housing tends to come outside of this.”

He said: “Whilst every local authority is supposed to introduce a CIL charging level to take account of affordable housing, often the maths doesn’t work. So both Crest and other housebuilders are working with local councils to make sure CIL charging levels can still be delivered at exceptional values to generate affordable housing at the same time.”

Private rented sector

Crest Nicholson chief executive Stephen Stone said the group’s activity in the private rented sector was “work in progress”.

He added: “We think it’s got some legs to it, particularly given the profile of the land that we’re successful in bringing through planning – that’s the longer sites – where we think creating a balanced community of spec housing, affordable housing and PRS is great for community engagement.”

Crest Nicholson was the first company to sign a deal under the government’s Build to Rent fund for its £500m Centenary Quay project in Southampton.

The Build to Rent fund was launched by the government to help developers build large-scale quality homes specifically for PRS.

Mr Stone said it was important to look at the “exit arrangements”, when getting involved with PRS schemes.

“Some of the European and American funds that are used to dealing with PRS and investing in it take a long-term, 60-year view and so you can design a product that’s only got rental in mind and make it highly efficient.”

However, a large portion of the UK market has been designed for spec housing, which then gets sold into PRS, he said.

“So it’s a question of balancing and having the right product for the institution that you are working with.”

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