Builder Crest Nicholson to increase shareholder payouts

(Adds CEO comments, shares)

LONDON, Jan 27 (Reuters) - British housebuilder Crest (BSE: CREST.BO - news) Nicholson said it would increase the rewards flowing to shareholders after steady demand for its new homes helped it to post a 34 percent rise in pretax profit for the year to end-October.

The builder, which completed 2,530 homes in the year, posted pretax profit before exceptionals of 116.7 million pounds, slightly ahead of analysts' consensus.

Chief Executive Stephen Stone said the availability of cheap mortgages and positive news on jobs was underpinning demand.

"We have got all the ingredients of a longer term sustainable housing market," he said on Tuesday.

The company, which is focused on the south of the country, was encouraged by the start to its new year, he said, with weekly sales per site in January running at a higher level than a year ago, after a slight dip in November and December.

The group said it would increase its final dividend to 10.2 pence, from 6.5 pence, representing cover of 2.75 times. It said it would reduce its cover to two times over the next three years.

"In a more stable housing market, we are more than comfortable to continue with our current growth strategy, but recognize that shareholders want something on the way," he said.

Shares (Berlin: DI6.BE - news) in the group rose 3.9 percent to 387 pence by 1236 GMT.

($1 = 0.6629 pounds)

(Reporting by Paul Sandle; editing by James Davey)