Demand improves at Nicholson

CREST NICHOLSON yesterday became the latest housebuilder to report a recovery in sales in the past two months, although it also warned that profits in the first half of the year were likely to be disappointing, partly because of that recovery.

The group returned to profit in the year to October, making pounds 2m before tax compared with a pounds 59.4m loss, after pounds 39.8m of provisions, last time.

There was a further pounds 3.3m write-off against commercial property in the period, but pounds 2m of the provision against housing land was released, which helped the housing division to a pounds 4.9m profit, compared with a pounds 47.2m loss last time.

John Calcutt, chief executive, said that reservations in the past six weeks had reached their highest level since the recession began, and were now averaging about 31 houses a week, compared with 20 in the very depressed period before Christmas.

The group hopes to sell between 1,500 and 1,700 houses this year, up from 1,465. Because it hopes the market will recover in second half, it will defer sales of land from its trading division - pounds 6.8m last time - until then. That, together with a slowdown in contracting, means the first-half result could be worse than the pounds 1.7m loss suffered last time.

Debt has risen from pounds 54.7m to pounds 62.7m, 60 per cent of net assets, and is expected to be at a similar level at the end of the current year. The loss per share was 0.13p (55.67p loss) and there is again only a nominal 0.01p dividend. The shares closed 1p lower at 51p.