High-end housebuilder Crest Nicholson (CRST) gains 7.2% to 378.4p as it snares the chief executive of rival Galliford Try (GFRD) Peter Truscott. Galliford sinks 3.1% to 664.7p.
Crest, which also provides a relatively resilient update on trading, clearly felt it needed to respond after reporting its first fall in profit for several years in January in the face of rising costs and a softening housing market in the south east. The company has a higher average selling price than its peers at a little under £400,000.
Its homes may sell for a premium, but its shares do not. In the last two years they have declined 30%, a significantly worse performance than its peer group.
| Company | 2-year share price performance (%) |
| Countryside Properties | 37.7 |
| Bovis Homes | 26.9 |
| Redrow | 23.5 |
| Berkeley | 18.1 |
| Barratt Developments | 10.4 |
| Bellway | 8 |
| Persimmon | 5.5 |
| Taylor Wimpey | -7.7 |
| Crest Nicholson | -30.5 |
Source: SharePad, 26 March 2019
The share price of Galliford Try, more of a diversified construction firm, though with a housebuilding arm, has not fared well under Truscott’s leadership, falling more than 50%.
However, he does have a wealth of experience in the housebuilding sector having spent nearly two decades at Taylor Wimpey (TW.), and Crest shareholders will be hoping Galliford’s woes are more about the challenges facing the wider construction space than mis-steps on Truscott’s part.
Truscott is set to replace Patrick Bergin from September 2019, with Crest’s chairman of major projects and strategic partnerships Chris Tinker serving as interim CEO, while the remainder of the managerial merry-go-round will see Galliford’s current finance director Graham Prothero take the top job there.
READ MORE ON CREST NICHOLSON HERE
Turning around Crest Nicholson will be a big job. Investment bank Berenberg noted back in February that the company is 'selling the wrong product in the wrong place at the wrong time' with 30% of its homes priced at £600,000 or more in 2018.
A large proportion of Crest's new builds are ineligible for Help to Buy support and it has an overexposure to the south east of England. The company is trying to move towards more affordable pricing points, but this is likely to take time.
