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Crest Nicholson eyes higher-than-expected profit amid stamp duty holiday

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August Graham, PA City Reporter
·2-min read
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Housebuilder Crest Nicholson has enjoyed a major bounce due to the stamp duty holiday.

The company said it will make more profit than analysts had predicted as a result of the Government’s move to cut the rate to 0% for all properties costing £500,000 or less during the pandemic.

The holiday was originally set to end in March but has now been extended until the end of September.

Crest Nicholson’s sales rate, which measures the number of homes sold at one of its outlets every week, reached 0.81 over the last eight weeks.

It is a big increase on 2020’s sales rate of 0.59, and is higher than pre-pandemic levels.

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As a result, Crest Nicholson now expects to make £85 million in the financial year ending October 2021, considerably more than the £74 million predicted by experts.

However, it is still far off the housebuilder’s past profits, which peaked in 2017 at £207 million.

Liberum analyst Charlie Campbell said: “Crest Nicholson’s management is driving a self-help recovery story, and they are helped at the moment as one of the sector’s main beneficiaries of the stamp duty holiday.”

Crest Nicholson said its order book was 70% covered for 2021 as of Monday, up from 55% when it reported preliminary results in January.

“This includes sales that will legally complete after the end of Help to Buy phase one and the stamp duty holiday extension, further highlighting customers’ confidence in the market,” it said in a statement.

The company added: “The UK housing market has remained resilient to the impacts of Covid-19 and is set to benefit from the measures recently outlined in the Budget, including the extension of the stamp duty holiday and the introduction of Government-backed 95% mortgages.”