Crest builds on recovery

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The Independent Online
Crest Nicholson, the Weybridge-based building group, continued its long road to recovery yesterday, shrugging off interest rate rises and a fragile housing market to turn in improved profits and record house sales.

Crest lost £61m in 1991 but has been gradually clawing its way back to respectability. Yesterday it anounced pre-tax profits of £11m for the year to 31 October, compared with last year's £2m, and the dividend was doubled to 2p.

However, John Callcutt, chief executive, warned that the market was still weak and homebuyers nervous about the future on interest rates. He said: "People are frightened that interest rates will rise and rise and that they will be paying a lot more for their mortgage against pay increases of just 2 or 3 per cent. The perception of the house as a store of value may be diminishing."

He also ruled out a fizz in the market as the economy improved, saying he expected a period of lower inflation to provide more consistent growth.

Crest's residential property division performed particularly well, with profits of £14m (£5.7m), due to improved margins and modest house price increases. Both unit and turnover volumes broke new records though the performance cooled off in the second half as the housing market weakened again.

Crest says it sold 1,832 new homes last year at an average of £77,200, compared with last year's £75,500. The company has also reaped the benefit of better geographic coverage after its acquisition of CE Cowen, a Harrogate builder, in November.

Crest has also acquired more than 2,000 new plots on 83 sites at an average cost of £28,500. The additions bring the group's land bank to 2,700 plots. The residential division has 700 units in Tooting Bec, south London, for which it is seeking planning permission.

The property division saw profits increase by half to £1.7m, though sales were lower due to a dip in the commercial property market. The blot on the figures continues to be Pearce Construction, where losses deepened to £4m from £3.5m last year. However, Crest says an improved order book augured well for a better performance. The shares finished 0.5p lower at 79.5p.