Housebuilder Crest Nicholson has seen home sales decline as it focuses on releasing cash through land sales, commercial activity and joint ventures.
The company reported a 4% decline in residential sales, but an uptick in partnerships and commercial activity driving growth, in a trading update for the six months ended 30 April 2019.
Residential sales to date and forward sold for the 2019 financial year stood at £715m, compared to £745m for the same period in 2018.
Commercial deals and joint ventures delivered £77m in revenue for the full year, five times the £15m generated the previous year.
Revenue to date and forward sales increased by 4.2% to £792m, bolstered by the uptick in forward sales, commercial activity and partnerships. The housebuilder said the increase demonstrated “the benefits of our revised strategy”, which it proposed in October.
Crest Nicholson is seeking to reduce its debt and release cash to shareholders, in a strategy that will see it “pausing growth and expanding our partnerships and joint ventures”.
It said increased funding from Homes England to registered providers had contributed to its sales, alongside buyers being assisted by the government’s Help to Buy scheme, strong employment figures and favourable interest rates.
During the period, the housebuilder completed a £229m joint venture with Sovereign Housing Group to deliver around 910 homes at Harry Stoke in Bristol.
Interim chief executive Chris Tinker said: “We welcome the government’s increased grant funding and focus on delivering a broader tenure mix. As a consequence, we will continue to grow our partnerships with registered providers, who are playing an increasingly important role in the diversification of tenures.
“This strategy trades an element of margin for reduced risk and improved cash flows.”
Last week, EG revealed Crest Nicholson’s £73m partnership with Southern Housing across three sites in Walthamstow and Surrey.
The housebuilder is still yet to enter into a development agreement with Brighton & Hove City Council on the £400m King Alfred regeneration project, having previously said that the commitment would require “greater clarity on the form and timing of Brexit… as certain scenarios could yet undermine the project’s feasibility”.
The trading update acknowledged “ongoing political turbulence” driving uncertainty around demand in the short term.
Crest Nicholson’s full half-year results will be announced on 11 June.
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