Annual Financial Report

RNS Number : 0781P
Crest Nicholson Holdings PLC
15 February 2016
 

 

 

 

Crest Nicholson Holdings plc ("the Company")

 

2015 ANNUAL INTEGRATED REPORT & NOTICE OF ANNUAL GENERAL MEETING

 

The Company released its preliminary results announcement for the year ended 31 October 2015 on 26 January 2016 and has today published its 2015 Annual Integrated Report for the same period, and Notice of the 2016 Annual General Meeting which is to be held on 17 March 2016.

These documents will shortly be available for inspection at the National Storage Mechanism which is located at http://www.morningstar.co.uk/uk/NSM. Hard copy versions have been posted to shareholders who have elected to receive them in paper form.

The Notice of Annual General Meeting and Annual Integrated Report are also available to view or download in pdf format from the Company's website at www.crestnicholson.com/investor-relations.

The Company's financial statements and extracts of the Strategic Report were included in the Company's preliminary results announcement. That information together with the Appendix to this announcement, which contains additional information that has been extracted from the Annual Integrated Report for the year ended 31 October 2015, constitute the material required to be communicated in unedited full text for the purposes of compliance with DTR 6.3.5. Page numbers and cross references in the extracted information refer to page numbers and cross references in the Annual Integrated Report.

 

For further information, please contact:

 

Kevin Maguire

Company Secretary

Crest Nicholson Holdings plc

+44 (0) 1932 580 555

 

15 February 2016

 

Appendix

Risk area

Risk

Controls and mitigation

Adverse macro-economic

climate, caused by:

Global economic slowdown

and market volatility;

geopolitical instability;

political uncertainty around

UK EU referendum

Higher unemployment

or fear of unemployment

undermines consumer

confidence and reduces

propensity to purchase a

new home or ability to secure

a mortgage

Maintain review of economic

and political environment and

consider potential responses to changes in trading conditions

Loss of income at housing

associations due to budget

changes to rents

Returns on our strategic

land holdings could be

undermined

Cascade s106 mechanisms to restore viability and continue to develop a balanced portfolio

Pressure on cash headroom

and generation due to:

Ongoing strong market

demand; commitments to

development obligations;

high London land values;

high work-in-progress costs

for new sites; investment in

Chiltern division

Cash resources may be

over-committed, leading

to business disruption,

reputational issues, covenant

breaches and dividend loss

Robust cash management and borrowing/spending controls

 

Access to funding and use

of alternative payment

mechanisms

Build cost inflation

Increased build costs absorb

or exceed higher sales prices

 

Margin squeeze leads to

investor dissatisfaction

Suppliers seek to 'price in'

sales price inflation

Use alternative suppliers and

production methods

 

Robust contract arrangements to control costs

 

Leverage volume through

long-term partnerships with

strategic suppliers

Rapid and extensive

changes to planning system

introduce uncertainty,

delays and potential

challenges to viable

development

Delays in obtaining

planning consents and

operational starts

 

Land becomes unviable

due to increased planning

cost burden

Work closely with key

regulators and national/local

decision makers

 

Regularly review the Strategic Land Portfolio and forecast operational starts

 

Seek prior planning approval on significant projects

 

Influence new CIL viability

testing and appraise costs

Costs not adequately

controlled and managed

Inadequate forecasting and

sudden cost changes can

erode margins

 

Pressure to maintain margins

and control costs can impact

on product quality

Regular cost and forecast

reviews

 

Greater adherence to

Agresso procedures

Quality standards set, met

and reviewed

Litigation relating to

legacy risks, future

environmental risks and

counter-party risks in

existing contracts

Dealing with the

consequences where risks

are uninsured

 

Legal defence costs

Maintain appropriate

insurance cover

 

Introduce Environmental

Management Plans (EMPs)

 

Periodic review of key

contractual obligations

Help to Buy incentive scheme

While Help to Buy scheme

has been extended, a change in its eligibility criteria could reduce mortgage access

 

Reduced overall mortgage

access impacts demand,

sales values and rates of sale, and undermines confidence in the market

Alternative incentives are

less compelling

 

Maintain policy-maker

awareness of construction

sector economic contribution

High quality sales training to

prepare for a tougher market in due course

Rising complexity of

projects

Cost over-runs on complex

projects can affect margins

 

Latent defects can generate

extra costs and reputational

damage, where new

materials and systems have

been deployed

 

Heightened expectations can

result in rushed projects and

subsequent problems

Project committee oversight

and risk-based review by Group Technical & Quality Director

 

Consultative and partnership

approach at planning/

designing stage

 

Robust Crest Nicholson

project management

 

New hurdle rate matrix

addressing complexity and

other risks

Bribery, corruption

and fraud

Claims can lead to

reputational damage

 

Costly and inefficient land

procurement

 

Compliance costs

Training for all employees

Policy and guidelines on

Bribery Act 2010

 

Guidance on acceptable land

purchase behaviour

Cyber security breach

Loss of operational systems

and data

 

Subject to external

financial crime

 

Disruption to services

Robust virus protection and

internet security

 

Web checking of internet traffic

 

'Demilitarised zone' linking

servers correctly and directly

 

Annual cyber-security

breach tests

Reputational damage from

a major product failure or

significant environmental,

health or safety issue

Injury or potential loss of life

 

Remediation costs

 

Loss of projects and

associated revenues

 

Damage to Crest Nicholson

brand

 

Potential civil or criminal

prosecution

Board leadership and scrutiny of health, safety and environment

 

Assess risks and integrate them into management processes from pre-acquisition stage

 

Training for all employees

Guidance on land purchase

Employee retention and

succession management

Shortages of key staff in

critical business areas

introduces cost and delay

in bringing developments

forward

 

Skills and experience lost

are difficult to replace in a

buoyant market

Loss of knowledge within the

business

Improved apprentice and

graduate programmes

 

Ensure competitive pay,

benefits and incentives

 

Improve management

development programmes

Succession planning

Experience gaps lead to

poor outcomes

Customer satisfaction erodes

due to delays or quality issues

 

Increased employee turnover

can create instability and

uncertainty

 

Business and finance targets

threatened

New and refreshed divisional

structure with new Regional

Chairman

 

Good land pipeline and strong market

 

Executive management and

coaching creating more internal candidates

Supply of materials and/or

labour fails to match desired

production levels

Supply chain issues

constrain output and

efficiency in currently

strong market

 

Adverse customer

experience as build

completion forecasting

is difficult and subject to

variation

Dialogue with major suppliers

 

Advance planning and

call-off by divisions

 

Spread risk across suppliers,

e.g., kitchen supply-and-fit

contracts

 

Examine alternative production approaches, e.g., timber frame as opposed to blocks

 

Maintain strong apprenticeship

and graduate programmes

 

The Directors are responsible for preparing the Annual Report, the Directors' remuneration report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, and the parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

·      select suitable accounting policies and then apply them consistently;

·      make judgements and accounting estimates that are reasonable and prudent;

·      state whether IFRS as adopted by the European Union and applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Group and parent Company financial statements respectively; and

·      prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors' remuneration report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy.

 

Each of the Directors, whose names and functions are listed on page 68, confirm that, to the best of their knowledge:

·      the Group financial statements, which have been prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

·      the Strategic report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

 

Having assessed the principal risks and the other matters discussed in connection with the Viability statement, the Directors considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
ACSSFIFFIFMSEDE
UK 100

Latest directors dealings