Crest Nicholson chief executive Peter Truscott to step down as profit slumps

Crest Nicholson has announced the appointment of Persimmon’s Martyn Clark as its new chief executive as it confirmed a drop in its annual pre-tax profit of two-thirds.

The housebuilding giant today announced Clark will join the firm later in the year, replacing Peter Truscott who is retiring after five years in the role.

Clark will leave his current role as chief operating officer at Persimmon, after working for nine years at the firm.

Today’s announcement comes alongside Crest Nicholson’s results for the year ending 31 October, which Truscott admitted were “disappointing”.

As it warned last week, its pre-tax profit for the year plummeted to £41.4m from £137.8m the year before, while its turnover has dropped 28% to £658m.

The firm said the poorer than hoped for performance was due to a combination of “challenging trading conditions” and unexpected extra costs.

As previously announced Crest Nicholson has incurred an extra £11m in ‘incremental build costs’ relating to its 239-home Brightwells Yard scheme in Farnham after it was hit by delays.

It has also recorded a charge of £13m to cover a legal claim the firm received relating to a fire in a low-rise block built by the group in 2021. This is separate from the £144.8m set aside for building safety remediation.

Crest Nicholson completed 2,020 homes in the year, down 26% on the 2,734 reported for the previous year.

Truscott said that due to supply chain issues in late 2022, Crest Nicholson “commenced the new financial year with a lower build position than originally planned.”

Truscott added that build activity was however “normalised” by October 2023.

In response to the tough trading conditions, Crest Nicholson in the year took the decision to merge its East Anglia and Eastern divisions and is expected to streamline its operations to reduce administrative costs by £3m this year.

The firm’s sales revenue, including joint ventures dropped 28% year-on-year.

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Crest Nicholson’s total land pipeline as of 31 October was 33,752, down on the 36,700 recorded the previous year.

Truscott said: “The combination of challenging trading conditions and incremental cost movements associated with Farnham and other legacy low-margin sites have led to a disappointing set of results in FY23.

“We have proactively streamlined the business to align with the challenging trading environment and have taken decisive measures to address operational challenges associated with Farnham and other legacy sites, implementing strategies to control costs and ensure a more precise and feasible path towards projects completion.”

Truscott said however that the medium-term prospects for housing demand are positive, with inflation and mortgage rates falling, while customer inquiries have increased.