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Crest Nicholson has moved back into profit following a strong sales performance and an overhaul of its balance sheet.

The housebuilder, in its results for the year to 31 October, reported pre-tax profit of 拢86.9m compared with a 拢13.5m loss the previous year. The firm said its adjusted pre-tax profit, taken before accounting for 拢20.8m of exceptional items, rose from 拢45.9m in 2020 to 拢107.2m, ahead of expectations at the start of the year.

Crest鈥檚 total revenue jumped 16% from 拢677.9m to 拢786.6m. This is still significantly down, however, on the 拢1.1bn recorded in 2019, pre-pandemic.

The firm鈥檚 results were boosted by a 17.4% increase in sales, from 拢693.1m in the covid-hit 2020 year to 拢813.6m to October 2021. The housebuilder also said its sales per outlet week increased from 0.59 to 0.8.

It added that forward sales as of this week stood at 2,702 units with a gross development value of 拢719m, compared with 2,435 with a GDV of 拢564.5m this time last year.

The return to profitability follows a restructuring after a difficult few years for the housebuilder, which pre-pandemic and as it slumped into the red.

In its latest results, Crest said it has now transformed its balance sheet, nearly doubling its net cash over the year to 拢252.8m from 拢142.2m. It said this was due to 鈥渕ore disciplined capital allocation鈥�, better aligning build stages to sales rates and the divesting of 鈥減oorer legacy schemes.鈥�

The housebuilder said the improved balance sheet would allow it to grow and it plans to start to set up new divisions in Yorkshire and East Anglia this year.

Crest said material shortages and labour availability have created 鈥渋nflationary pressures in some areas鈥� but it has monitored these risks and 鈥渕aintained effective relationships with supply chain partners through comprehensive trade agreements.鈥�

鈥淒uring this financial year the pandemic continued to affect operations, however the market remained open throughout, and the sales environment was largely favourable,鈥� said Peter Truscott, chief executive of Crest Nicholson.

Crest increased its provision for fire safety remediation work after assessing potential building work of all its properties, adding a further 拢28.8m to the 拢14.8m already set aside.

Crest also said it was looking at the impact of Michael Gove鈥檚 announcement last week of plans to force housebuilders to pay 拢4bn into a fund for fire safety work on blocks between 11m and 18m in height. It said: 鈥淭he board is carefully considering the impact of this update and is representing its views in response through the Home Builders Federation (HBF), who have sought to establish a dialogue with the government in this area.

鈥淭he group recognises the distress caused to homeowners from living in a property that they rightfully expect is safe and has been built to a standard that is compliant with all the necessary building regulations.鈥�

The 拢28.8m charge for cladding work contributed to an overall 拢20.8m of exceptional items, which also included an 拢8m boost from the revaluation of land. This compares to a 拢43.8m write-down in the 2020 figures.

Crest also announced this week it has agreed a 拢120m deal with funds managed by global investment firm, Oaktree Capital Management and CompassRock International to sell 403 build-to-rent homes across three developments in southern England.