Crest Nicholson FY2025: transition on track, cash discipline biting, and early market green shoots
Crest Nicholson’s full-year numbers are bang in line with the November update, but the texture matters. 2025 was all about repositioning the business to the mid-premium segment, tightening cash control, and clearing legacy undergrowth. Profitability has stabilised, balance sheet levers are working, and early 2026 demand indicators look a touch better. It is not a victory lap, but the direction of travel is clearer.
Headline results and what moved the dial
| Metric (Adjusted unless stated) | 2025 | 2024 | Change |
|---|---|---|---|
| Revenue | £610.8m | £618.2m | (1.2)% |
| Operating profit | £34.7m | £29.2m | +18.8% |
| Operating margin | 5.7% | 4.7% | +100bps |
| Profit before tax | £26.5m | £20.3m | +30.5% |
| Basic EPS | 7.8p | 5.0p | +56.0% |
| Statutory PBT | £2.9m | £(145.8)m | n/m |
| Completions | 1,691 | 1,873 | (9.7)% |
| Net debt | £38.2m | £8.5m | n/m |
| Total dividend per share | 3.1p | 2.2p | +40.9% |
Mix did a lot of the heavy lifting. Open market sales were broadly flat on units (1,095 vs 1,047), but bulk/PRS and affordable were lower as the Group pivoted away from bulk deals. The Group leaned into land disposals – £78.8m revenue, £17.1m gross margin – to refocus the land bank and release cash. Average selling price fell to £323k (2024: £344k) mainly due to product mix rather than like-for-like pricing pressure.
Project Elevate and the mid-premium tilt
Management is anchoring Crest in the mid-premium segment – fewer incentives, more discerning buyers, steadier pricing. That calls for better design, better service, and better build quality. On that front:
- HBF five star rating on track to be maintained.
- NHBC reportable items improved to 0.26 per inspection from 0.35.
- New mid-premium house types finalised – planning adoption from January 2026 and production rollout from 2027.
- Sales function overhaul and a new website, with strong interest in Arteva – the new upgrade range.
The planning backdrop is improving too: 66% of the strategic land bank is allocated or in draft allocation (2024: 47%), which should help outlet growth and margins in time.
Balance sheet discipline: inventory down, land creditors down, liquidity secured
Management has been deliberately cash minded and it shows:
- Inventory down £73.0m to £1,056.1m, driven by land, part exchange and completed units.
- Land creditors reduced sharply to £73.2m (2024: £131.6m).
- Net debt finished at £38.2m – better than guidance – and the £250m revolving credit facility was renewed to October 2029 after year end.
There is a caveat. The going concern assessment flags that in a severe but plausible downside, the interest cover covenant could be breached from April 2026 without lender agreement. The Board is confident an amendment would be secured if needed, but it is rightly disclosed as a material uncertainty.
Legacy clean‑up: fire remediation, legal claim, and restatement
The fire remediation programme has progressed with all scoped buildings assessed by July 2025, and works underway on around a third. During the year:
- £62.8m spent on investigations and remediation.
- Further provisions and updates resulted in a net combustible materials exceptional charge within the period, with £12.4m recovered from third parties.
- £95.9m of the remaining provision is expected to be utilised within one year, including £19.1m repayable to the Building Safety Fund.
A separate legal claim related to a 2021 fire has now been settled post year end in line with the provision. On financial controls, the Group restated 2024 and opening reserves due to a cost forecasting issue on one Eastern division site, reducing 2024 adjusted and reported PBT by £2.1m and opening reserves by £6.4m. The CFO states the problem was isolated and CVR controls have been strengthened.
Current trading: subdued start, but better signs since Boxing Day
Early 2026 has echoed the slower H2 2025 conditions, but web traffic, enquiries and appointment conversion have picked up since Boxing Day. January sales rates have strengthened as mortgage costs ease and the customer proposition improves. The forward order book at 25 January 2026 was 848 units – lower due to the strategic shift away from bulk deals and softer autumn trading – but new, margin‑accretive outlets should lift the run‑rate from H2 2026.
Guidance for 2026: steady volume, improving quality of earnings
- Open market units: 1,100 – 1,200
- Bulk and affordable units: 450 – 500
- Average outlets: c.42
- Sales rate: 0.5 – 0.6
- Land sales revenue: £75m – £100m
- Adjusted gross margin: 15% – 16%
- Interest: £10m – £12m
- Adjusted PBT: £32m – £40m
- Net debt: £15m – £65m
The margin guide implies further improvement as the transformation beds in and new sites come on stream. Note the continued role of land sales in earnings – useful for cash and reshaping the land bank, but investors will want to see housing margins doing more of the work over time.
Dividend and capital returns
The Board proposes a final dividend of 1.8p per share, taking the full‑year to 3.1p (2024: 2.2p). Pay date is 24 April 2026, subject to approval. In the context of a transitional year, that uplift is a sensible signal of confidence without over‑stretching the balance sheet.
My take: why this matters for investors
What looks positive
- Margin momentum despite a tough market – adjusted operating margin up 100bps to 5.7%.
- Cash discipline is real – inventory and land creditors both down; RCF extended to 2029.
- Clear strategic positioning – mid‑premium focus with tangible quality and service improvements.
- Planning progress – 66% of strategic land pipeline allocated or in draft allocation supports medium‑term outlet growth.
- Dividend stepping up – a measured but welcome sign.
What to watch
- Covenant headroom – the disclosed material uncertainty in a downside scenario needs monitoring until market conditions firm up.
- Land sales contribution – helpful in transition, but underlying housing gross margins should take the lead as new sites mature.
- Remediation cash drag – heavy near‑term utilisation (£95.9m within one year) before the programme tails off.
- Volumes – completions fell 9.7% and outlets averaged 40; H2 2026 openings need to land on time.
- Restatement hangover – controls reinforced, but trust is rebuilt quarter by quarter.
Bottom line
Crest Nicholson has moved from firefighting to rebuilding. The mid‑premium strategy is coherent, operational metrics are improving, and the balance sheet looks better organised. Near‑term, the market is still subdued and legacy cash outflows remain a reality, but early demand signals are encouraging and guidance points to further margin progress in 2026.
If you are looking for a UK housebuilder with a more premium skew and self‑help levers, this is becoming interesting. Just go in with eyes open to the covenant disclosure, the reliance on land sales during transition, and the timing risk around new outlet launches.
