Chief executive of Crest Nicholson to step down as profits plummet
Peter Truscott is due to step down from his position of chief executive of Crest Nicholson after it was revealed that profits have dropped by 70%.
After five years in the role, Peter Truscott will be handing over his role to Martyn Clark, who is currently the chief commercial officer at Persimmon Homes, later in the year.
Following three profit warnings that have been issued within the last six months – the most recent one being from a week ago – Crest Nicholson, a leading property developer, reported the 70% decline in adjusted profits before tax to £41.4m in the 12 months to 31st October 2023.
Research found that although Crest completed 2,020 new homes last year, it was down by a quarter from 2,734 the year before, leading to a 28% drop in revenue to £657.5m. The organisation have blamed the weakness of the housing market and Truscott claimed the company was aiming to build 1,800 to 2,000 homes this year.
Against this backdrop, Truscott explained he found the results ‘disappointing’, but added: ‘Recently there has been some positive macro trends with inflation and mortgage rates falling, which bode well for the housing sector.
‘Although it is too early to gauge customer behaviour, we have been encouraged by an increase in customer interest levels and inquiries this calendar year. However, we remain mindful of ongoing uncertainties within the broader economy.’
In addition to the property market being so weak it caused profits to fall, company funds were also affected by further costs of over £5m at the Brightwells yard site in Farnham – the project has been delayed because of a series of planning, legal and construction issues.
Furthermore, Crest has took a further charge of £11.3m for internal and external works on older buildings to rectify fire safety defects after the tragic fire that broke out in Grenfell Towers in 2017. As a result, the company’s total provision has increased to £144.8m from £140.8m.
Truscott has claimed that hurdles which are currently littering the planning system would lead to slower housebuilding volumes across the sector.
Andy Murphy, an analyst at Edison Group, said: ‘The announcement of CEO Peter Truscott’s retirement and the appointment of Martyn Clark signals a crucial leadership transition.
‘Clark brings extensive industry experience, and his role becomes crucial in steering the company’s strategic recovery, controlling costs, and sustaining growth. Investors will closely watch how the leadership change contributes to Crest Nicholson’s efforts to overcome the recent operational and financial challenges.’
Images: Hunters Race and Ted Balmer
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