Interim Results

Crest Nicholson PLC
28 June 2001



28 June 2001

Interim Results Announcement

Crest Nicholson PLC, the residential development company with interests in
property and construction, today announces results for the six months ended 30
April 2001.

Financial Highlights

 -  Residential Division operating margins increased to 15.1% (2000: 14.7%)
 -  Profit before tax up 14% to £25.1m (2000: £22.1m)
 -  Residential Division operating profits increased by 16% to £26.8m
    (2000: £23.2m)
 -  Earnings per share increased by 14% to 15.5p (2000: 13.6p)
 -  Interim dividend 2.5p (2000: 2.2p), an increase of 14%

Post Balance Sheet Highlights

 -  Agreement signed for £135m urban regeneration project at Attwood Green,
    Birmingham (1,200 dwellings together with commercial and other uses)
 -  US Private Placement has secured £90m borrowings for 8-10 year period

Commenting today John Matthews, Chairman, said:

'The Group's major concept scheme portfolio, reinforced by the recent
acquisition of Attwood Green, provides the backbone for our earnings over the
next five to ten years.  With our second US Private Placement of £90m, secured
for an 8-10 year term, we have the resources in place to finance these long
term projects.

We have made an encouraging start to the second half of 2001. The major
concept schemes are selling extremely well and we are continuing to achieve
premium prices.'

A copy of the interim statement, consolidated profit & loss account, balance
sheet and cash flow statement are attached.

Enquiries to:
John Callcutt, Chief Executive          Patrick Handley/ Kate Miller/
Crest Nicholson PLC                     Jonathan Ayrton
Tel: [phone] (on day of           Brunswick Group Limited
announcement)
Tel: [phone] (thereafter)          Tel: [phone]

Web site:   www.crestnicholson.com

CHAIRMAN'S STATEMENT

RESULTS AND DIVIDEND

Profit before tax was £25.1m (2000: £22.1m) for the six months to 30 April
2001, an increase of 14%.

Group turnover for the six months was £265.1m (2000: £229.0m).  Operating
Margins on Group turnover were slightly down at 11.3% compared to 11.7% last
year due to significantly higher turnover from the Construction Division which
has lower margins.

Basic earnings per share rose to 15.5p (2000: 13.6p), an increase of 14%.  The
Directors are pleased to declare an interim dividend of 2.5p (2000: 2.2p) to
be paid on 1 October 2001 to shareholders on the register at the close of
business on 31 August 2001.


REVIEW OF OPERATIONS

Residential

Results
Operating profits increased to £26.8m (2000: £23.2m) an increase of 15.5%.
Margins at 15.1% (2000: 14.7%) showed further improvement which is expected to
continue as the proportion of sales from the larger more profitable concept
schemes increases.

Average sales prices continued to increase to an average of £194,700 (2000:
£166,000).  Open market sales values averaged £205,100 (2000: £173,100) due to
a combination of the switch of production from the North, better locations,
premium generated by the new concept schemes, as well as inflation.

Volumes were slightly lower at 814 units.  However, due to the higher average
price, turnover increased significantly to £177.5m (2000: £157.3m).  The
overall residential turnover included £19m from the sale of land.  As the
number of large, mixed use projects increases, revenue generated from such
disposals will make a growing contribution to profits as well as funding the
costs of initial infrastructure.

Major Concept Schemes
In addition to the current large concept schemes in production, a number of
further large projects will begin to contribute in the second half or early
2002.  Bolnore Village, Haywards Heath and the Haydon Sector at Swindon are
progressing satisfactorily with the first reservations being secured at
Bolnore Village.

As with many such developments, sales are initially made from the periphery of
the site with the premium for location and aspect increasing as the
development progresses inwards.

Demand has remained steady during the half year, with purchaser interest
especially buoyant in these new concept developments. We are therefore
optimistic that further potential exists for price improvements.

The Market
The uncertainty surrounding the slow down in the US and its likely impact on
Europe and the UK, together with the belief that interest rates are at, or
about, their lowest, has caused concern in the markets.  However, central
government restrictions on land supply coupled with delays in the planning
system have created a major shortage of development land reducing new home
production to a post-war low which should underpin demand, especially in the
South of England.

We therefore expect demand to remain steady in the next 6-12 months, with
house price inflation settling at 1% - 2% above RPIX.

Land
A further 519 plots on 9 sites were secured during the half year.  Since then,
an agreement has been signed between Crest, the City of Birmingham and Optima
Housing Association for the redevelopment of the Lee Bank area of the city
which will be known as Attwood Green.  This project,  located in the centre of
Birmingham, is one of the largest urban renaissance schemes in Europe
consisting of c.1,200 new homes in the private and social sectors, together
with substantial commercial and other uses.

The short term portfolio consists of 7,037 plots with a projected development
value of £1.4 billion.  This represents 4.6 years' production at current
annualised rates of sale.  Whilst the number of plots in the short-term land
bank has decreased slightly since the year end (October 2000: 7,280 plots),
the large sites agreed since April will serve to increase this significantly
at October 2001.

The Group's strategic land holdings are located almost exclusively in the
South of England and comprise around 12,800 plots.  The strategic sites are in
areas of proven demand and are all likely to receive planning in due course.

The Group's total land holdings amount to 19,800 plots.  The policy is to
concentrate strategic and other land procurement activities in prime locations
and areas where future shortages are likely to be most acute.  This will
enable the Group to achieve volume and profits growth, notwithstanding the
increasingly restrictive policy on supply.

Property

The Property Division made an operating profit of £2.6m (2000: £3.8m) for the
six months to 30 April 2001.  Turnover at £16.8m (2000 : £24.8m) was down as
the development and sale of the large projects on historic land were completed
and sold in the previous year.  Nevertheless, operating margins at 15.5%
(2000: 15.3%) were maintained.

The Division has secured further opportunities at Reigate and Scarborough and
has agreed several other urban renewal projects.  Notwithstanding some
weakening of the retail sector, lettings have been agreed on its developments
at Oxford and Newport.

The 'out of town' retail and business park holdings are 3.1 million square
feet which will help underpin future profitability.

The Division continues to promote a number of major urban regeneration
schemes.  Most notable of the large projects is Gloucester Docks where
planning permission for major leisure, retail and residential uses was granted
on appeal.  After taking a more consultative approach, a new application for
planning at Bristol Harbourside has been made which we believe has gained
broad public support.

Co-operation with the Residential Division on commercial elements of mixed use
developments has extended to almost every large project as the Group increases
its urban mixed use business.

Construction

The Pearce Group made an operating profit of £0.5m compared with an operating
loss of £0.1m in the same period last year.

Turnover, after deduction of £19.5m intra group work, was £70.8m (2000:
£46.9m), substantially up on last year following significant increases in
orders in the Retail and Leisure Divisions.

Orders received in the first half amounted to £116m, with total orders in hand
standing at a record £152m (2000: £131m).

The niche markets of renovating and re-imaging retail premises and providing
specialist services to the leisure and fitness industries is proving highly
successful with a growing list of quality customers.

Whilst the market for clean rooms is difficult due to the downturn in the
electronics and related sectors, there is growing demand in the pharmaceutical
and food processing industries.

The Pearce Group have provided considerable amounts of know-how and expertise
to the Residential Division in terms of management systems and personnel are
now being integrated into project teams on all major residential developments.


FINANCE

Capital and reserves at 30 April 2001 were £219m compared with £191m at 30
April last year.  Net assets per ordinary share have continued to grow and, at
168p, show an increase of 18% on last year.

Net borrowings at £119.9m compare with £120.9m a year ago and £79.7m at the
last year end.  Gearing is 55% (2000: 63%).  Net interest payable for the half
year was £4.8m (2000: £4.8m) and is covered 6.2 times by operating profits.

Following a further US Private Placement, which has secured £90m of borrowings
for an 8-10 year term, the Group has borrowing facilities of £288.2m.  A total
of  £120.1m is now secured for a term in excess of five years.


PROSPECTS

Crest  Nicholson's  focus on major high quality sites in Southern  England  is
designed  to  take commercial advantage of the economic and regulatory  forces
shaping  the industry.  The combination of demographic pressure for new  homes
and  stringent  planning requirements is creating a long-term  land  shortage.
This  has  not  been  a  feature of previous economic cycles.   The  Company's
strengths  in  planning,  its excellent land bank and its  design  sensitivity
specifically  address  the  challenges and opportunities  arising  from  these
factors.

Crest Nicholson has made an encouraging start to the second half of 2001. The
major concept schemes are selling extremely well and we are continuing to
achieve premium prices.  Despite macroeconomic uncertainty, the Board of Crest
Nicholson anticipates steady progress for the full year.

STATEMENT OF RESULTS

Unaudited Group results for the Half Year to 30 April 2001

                                                                            
                                             Half Year  Half Year  Full Year
                                       Note       2001       2000       2000
                                                    £m         £m         £m
                                                                            
Turnover - including joint ventures       2      265.1      229.0     555.2
Less: attributable to joint ventures             (7.7)      (0.7)     (10.6)    
                      
                                                 
                                             _________   ________   ________
Turnover - Group companies                       257.4      228.3     544.6
                                             =========   ========  =========
Operating profit - Group companies                30.0       27.0      57.9
Operating (loss)/profit of joint                                           
ventures                                         (0.1)      (0.1)       0.6
                                              ________   ________   ________
Operating profit - including joint                                         
ventures                                  2       29.9       26.9      58.5
Net interest payable                             (4.8)      (4.8)     (10.4)
                                              ________   ________   ________
Profit before taxation                    2       25.1       22.1      48.1
Estimated taxation                        3      (7.5)      (6.6)     (14.3)
                                              ________   ________  ________
Profit after taxation                             17.6       15.5      33.8
Preference dividends                             (1.1)      (1.1)      (2.1)
                                              ________   ________  ________
Profit attributable to ordinary                                            
shareholders                                      16.5       14.4      31.7
Ordinary dividends                               (2.7)      (2.3)      (7.4)
                                              ________   _______+  ________
Retained profit                                   13.8       12.1      24.3
                                              ========   ========   ========
                                                                            
                                                                            
Earnings per 10p ordinary share           4                                 
Basic                                            15.5p      13.6p     30.0p
Diluted                                          14.4p      12.8p     28.0p
                                                                           
Dividends per 10p ordinary share                  2.5p     2.2p        7.0p
                                                                            


There are no recognised gains or losses other than those shown above.

SUMMARY BALANCE SHEET

Unaudited Consolidated Balance Sheet as at 30 April 2001

                                                                        
                                        Note    April    April   October
                                                 2001     2000      2000
                                                   £m       £m        £m
Fixed assets                                                            
Tangible assets                                   4.3      3.6       3.8
Investments                                       6.1      8.9       6.1
                                              _______  _______   _______
                                                 10.4     12.5       9.9
                                              _______  _______   _______
Current assets/liabilities                                              
Stocks                                          396.1    409.0     390.6
Debtors                                         182.7    143.4     169.4
Creditors                                     (185.6)  (188.8)   (216.9)
Net (borrowings)/cash in hand                   (1.2)     17.6      15.5
                                              _______  _______  ________
Net current assets                              392.0    381.2     358.6
                                              _______  _______   _______
Total assets less current liabilities           402.4    393.7     368.5
                                                                        
Creditors falling due after more                                        
than one year
Bank and other loans                          (118.7)  (138.5)    (95.2)
Other creditors and provisions                 (65.0)   (64.1)    (69.9)
                                              _______  _______   _______
                                              (183.7)    191.1     203.4
                                              =======  =======   =======
                                                                        
Shareholders' funds                        5    218.7    191.1     203.4
                                                =====   ======    ======
                                                                        
Net borrowings                                  119.9    120.9      79.7
                                                                        
Gearing                                           55%      63%       39%
                                                                        
Net assets per ordinary share              6     168p     142p      156p
                                                                        
                                                                        

SUMMARY CASH FLOW STATEMENT

Unaudited Consolidated Cash Flow Statement for the Half Year to 30 April 2001
                                                                            
                                             Half Year  Half Year  Full Year
                                                  2001       2000       2000
                                                    £m         £m         £m
                                                                            
Net cash (outflow)/inflow from operating                                    
activities                                      (23.1)     (23.1)       33.5
                                                                            
Returns on investments and servicing of                                     
finance
Interest received                                  0.1        0.4        0.5
Interest paid                                    (5.6)      (4.5)     (10.2)
Preference dividends paid                        (1.1)      (1.1)      (2.1)
                                              ________   ________   ________
                                                 (6.6)      (5.2)     (11.8)
                                              ________   ________   ________
                                                                            
Taxation paid                                    (5.3)      (4.4)     (14.0)
                                                                            
Capital expenditure and financial                                           
investment                                       (1.5)      (9.2)      (6.3)
                                                                            
Equity dividends paid                            (5.1)      (4.3)      (6.5)
                                              ________   ________   ________
Net cash flow before financing                  (41.6)     (46.2)      (5.1)
                                                                            
Financing                                                                   
Share issues                                       1.5        0.5        0.6
Increase/(decrease) in bank and other loans       23.5       22.0     (21.3)    
                     
                                                  
                                              ________   ________   ________
                                                  25.0       22.5     (20.7)
                                             _________   ________   ________
Decrease in cash                                (16.6)     (23.7)     (25.8)
                                             =========   ========   ========
                                                                            
                                                                            
NOTES

1 Basis of presentation
The summarised half year financial information is unaudited and does not
constitute full accounts. The accounting policies are as stated in the last
Annual Report.
The figures for 31 October 2000 are not the Company's statutory accounts but
the information has been extracted from statutory accounts which have been
reported on by the auditors and filed with the Registrar of Companies. The
report of the auditors was unqualified and did not contain a statement under
Section 237(2) or (4) of the Companies Act 1985.

2 Segmental analysis
                                          Half Year  Half Year  Full Year
                                               2001       2000       2000
                                                 £m         £m         £m
  Turnover                                                               
  Residential                                 177.5      157.3      357.1
  Property                                     16.8       24.8       65.0
  Construction                                 70.8       46.9      133.1
                                           ________  _________   ________
                                              265.1      229.0      555.2
                                           ========  =========   ========
  Operating profit                                                       
  Residential                                  26.8       23.2       46.4
  Property                                      2.6        3.8       11.2
  Construction                                  0.5      (0.1)        0.9
                                           ________    _______   ________
                                               29.9       26.9       58.5
                                           ========    =======   ========
  Pre-tax profit                                                         
  Residential                                  22.6       18.6       36.6
  Property                                      2.1        3.6       10.7
  Construction                                  0.4      (0.1)        0.8
                                           ________    _______    _______
                                               25.1       22.1       48.1
                                           ========    =======    =======

3 Taxation
                                      Half Year  Half Year  Full Year
                                           2001       2000       2000
                                             £m         £m         £m
                                                                     
  Corporation tax charge at 30%           (7.5)      (6.6)     (14.4)
  Deferred tax at 30%                         -          -      (0.1)
  Adjustment in respect of prior                                     
  years                                       -          -        0.4
  Joint venture undertakings                  -          -      (0.2)
                                      _________  _________   ________
                                          (7.5)      (6.6)     (14.3)
                                      =========   ========   ========

4 Earnings per share
Earnings per share are calculated on the profit attributable to ordinary
shareholders of £16.5m (2000: £14.4m) on a weighted average of 106.5m (2000:
105.8m) ordinary shares in issue during the six months.

Diluted earnings per share are calculated on the profit after taxation of
£17.6m (2000: £15.5m) on a weighted average of 122.3m (2000: 120.9m) ordinary
shares on the basis that the preference shares had been converted and the
share options exercised.


5   Reconciliation of shareholders' funds
                                          Half Year  Half Year  Full Year
                                               2001       2000       2000
                                                 £m         £m         £m
                                                                         
  Retained profit                              13.8       12.1       24.3
  Net proceeds from share issues                1.5        0.5        0.6
                                          _________  _________   ________
  Net increase in shareholders' funds          15.3       12.6       24.9
  Opening shareholders' funds                 203.4      178.5      178.5
                                           ________  _________   ________
  Closing shareholders' funds                 218.7      191.1      203.4
                                           ========   ========   ========


6 Net assets per share
Net assets per ordinary share is calculated on net assets of £180.0m (2000:
£152.4m) after deducting the preference capital of £38.7m (2000: £38.7m)  from
the capital and reserves, on 107.1m (2000: 105.6m) ordinary shares in issue at
30 April 2001.


7 Interim Statement
The Interim Statement for the half year will be sent to all shareholders and
copies will also be available from Crest House, 39 Thames Street, Weybridge,
Surrey KT13 8JL, the Company's Registered Office.