Crest Nicholson (LON:CRST) share price is largely flat after the company posted an okay set of first-half figures. Revenue jumped by 7% to £501.9 million, but profit before tax declined by 11% to £64.4 million. Operating margin slipped by 270 basis points to 14.1%, and this is something than investors will focus on as it hit the bottom line. On the bright side, the forward sales risk has diminished thanks to increases in pre-funded homes, and that helped forward sales increase by 15%. The interim dividend was held steady at 11.2p, and the group said that trading has been ‘encouraging’ against a ‘politically turbulent backdrop’. Bellway (LON:BWY) issued a trading update this morning too, and the company said it expects to deliver earnings growth in line with the board’s expectations. The update was light in terms of figures, but it pointed out that reservations increased by 4.7% in the period from 1 February to 2 June.
Last October, Crest Nicholson issued a profit warning due to slowing sales in south east England and London. Like many of its rivals, the group complained that the uncertainty surrounding Brexit has prompted some potential buyers to hold off on such a big financial outlay.
In late January, the company posted a 15% fall in annual pre-tax profit, even though revenue increased by 9%, but the operating margin dropped from 20.3% to 16.7%, as higher material costs and skill shortages are problem across the sector. Given that the stock is well-off the low’s that were achieved post the profit warning in October, it seems that investors have now accepted the new pace at which the company is operating.
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