Annual Report

and Accounts

2024

Contents

Strategic Report

Chairman’s review 02

Chief Executive Officer’s statement 04

Our investment case 08

Business model 09

Strategic priorities 11

Market environment 13

Stakeholder engagement 15

Sustainability 19

Key performance indicators 28

Financial review 30

Principal risks and uncertainties 32

Task Force on Climate-related

Financial Disclosures 40

Non-financial and sustainability

information statement 49

Viability statement 50

Governance

Chairman’s introduction 52

Role of the Board 53

Board of Directors 54

The Board’s year 56

Board performance review 62

Nomination Committee report 63

Audit and Risk Committee report 66

Directors’ remuneration report 74

Directors’ report 92

Financial Statements

Statement of Directors’

responsibilities 95

Independent auditors’ report 96

Consolidated income statement 105

Consolidated statement of

comprehensive income 106

Consolidated statement of changes

in equity 107

Consolidated statement of

financial position 108

Consolidated cash flow statement 109

Notes to the consolidated financial statements 110

Company statement of

financial position 153

Company statement of changes

in equity 154

Notes to the Company financial statements 155

Alternative performance measures (unaudited) 158

Historical summary (unaudited) 160

Shareholder services 161

Glossary 162

Cautionary statement

The Annual Report and Accounts for the year ended

31 October 2024 as contained in this document

(Annual Report), contains information which readers

might consider to be forward looking statements

relating to or in respect of the financial condition,

results, operations or businesses of Crest Nicholson

Holdings plc (Company or Group). Any such

statements involve risk and uncertainty because

they relate to future events and circumstances.

There are many factors that could cause actual

results or developments to differ materially from

those expressed or implied by any such forward

looking statements. Nothing in this Annual Report

should be construed as a profit forecast.

Approval

The Strategic Report for the financial year ended

31 October 2024 as presented on pages 2-50 was

approved by the Board of Directors on 3 February

2025 and signed on its behalf by:

Penny Thomas

Group Company Secretary

Chief Executive

Officer’s statement

The Board’s year

Key performance indicators

Defined terms are set out in the Glossary on page 162

Crest Nicholson

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Financial StatementsStrategic Report Governance

(Loss)/profit before tax

£(143.7)m

2023: £23.1m

Adjusted operating profit margin

5.1%

2023: 7.7%²

Return on capital employed

4.1%

2023: 7.3%²

Net (debt)/cash

£(8.5)m

2023: £64.9m

Operating (loss)/profit margin

(20.8)%

2023: 4.5%

Sales

£658.1m

2023: £692.1m

Revenue

£618.2m

2023: £657.5m

Adjusted profit before tax

£22.4m

2023: £48.0m²

We have responded to difficult trading

conditions with decisive actions.

1 Sales, adjusted profit before tax, adjusted operating profit margin, return on capital employed and

net (debt)/cash are non-statutory alternative performance measures (APM) used by the Directors

to manage the business, which they believe should be shared for a greater understanding of the

performance of the Group. The definitions of these APM and the reconciliation to the statutory

numbers are included on pages 158-159.

2 Represented as per note 29 of the financial statements.

At Crest Nicholson, we build high quality

homes and create vibrant communities

in sought-after locations where

homeowners can settle and thrive.

We build great places for our customers,

communities and the environment. Our focus on

placemaking means that we create sustainable

communities where people and nature can

thrive. We are committed to incorporating

sustainable and energy-efficient features into

each property, ensuring our homes not only

provide comfort but also support environmental

responsibility. We strive to make a lasting and

positive impact on people’s lives, creating

spaces where they can live, grow and thrive.

We aspire to have an open and honest culture,

creating a positive, effective and collaborative

environment, where all colleagues are

empowered to deliver our success. We are

focused on the wellbeing of our people and

developing talent. Our values underpin how we

implement our business strategy and enable us

to deliver against our goals.

OUR PURPOSE OUR CULTURE OUR VALUES

OUR YEAR IN REVIEW

Working together

Being the best we can be

Doing the right thing

Leaving a positive legacy

Championing our people

Crest Nicholson

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Financial StatementsStrategic Report Governance

Our 2024 performance was negatively affected

by both external and internal factors. Persistently

high mortgage rates and a sluggish housing

market recovery have placed additional pressure

on the business environment and particularly on

the housing sector.

Internally, we executed a carefully planned Chief

Executive Officer succession in early summer.

We then faced considerable operational disruption,

as distractions from the unsolicited Bellway bid had

a noticeable impact on our performance for the

second half of the financial year.

2024 PERFORMANCE

We completed 1,873 homes, with adjusted

profit before tax at £22.4m. During the year, we

made positive progress in addressing three

difficult areas which have impacted our financial

performance: completed sites, fire remediation

and complex legacy sites. Management has

undertaken a comprehensive review, supported

by external consultants, to evaluate the

remediation requirements across our portfolio of

sites. Subsequently, the Group made appropriate

provisions to cover the necessary rectifications

which largely consist of several legacy sites with

identified building defects. Within these provisions

there are also costs related to obligations that

the Group may retain after legal completion, such

as road and public space adoption, third-party

contracts, and remedial work for defects. It is

reassuring to have these issues identified and

addressed, allowing us to resolve them properly

and focus on moving forward. Significant efforts

and progress were made in assessing and

provisioning fire remediation costs for all buildings

under the Developer Remediation Contract,

which I believe will provide greater clarity, reduce

uncertainty and distraction, and allow us to

Chairman’s review

focus on driving the business forward. I would

like to thank everyone who contributed to this

tremendous progress.

Management is focused on completing the few

remaining projects which we class as complex

legacy sites. I am pleased to report that Farnham,

our largest remaining complex legacy site,

achieved practical completion, with the majority

of homes occupied in the development. This

marks an important step forward as we finally

conclude this chapter over the next year or so

and focus exclusively on building good quality

homes and achieving normalised margins.

“ 2024 was an eventful

and challenging year

for Crest Nicholson,

marked by significant

macroeconomic and

geopolitical headwinds.”

Iain Ferguson CBE

Chairman

A focused and experienced team

Crest Nicholson

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Financial StatementsStrategic Report Governance

Chairman’s review continued

PEOPLE

Our colleagues are at the heart of everything we

do, and their dedication and resilience continue

to be our greatest asset. I am pleased that our

people remain committed to navigating this

difficult landscape with determination and focus.

I want to personally thank every colleague for

their unwavering commitment during the period

of the recent attempted takeover which created

uncertainty about their futures. Despite this, our

teams have embraced new technologies and

processes to deliver better customer services,

enhance operational processes and bring

greater accountability throughout the business.

We remain committed to investing in the growth

of our colleagues’ capabilities, providing training

and development opportunities to nurture talent,

and enhance our company culture to make Crest

Nicholson a great place to work. It is through their

efforts that we will strengthen our business and

position ourselves for future success.

BOARD CHANGES AND LEADERSHIP

In June 2024, Peter Truscott, Chief Executive

Officer, retired and stepped down from the Board

after five years at Crest Nicholson. The Board

and I would like to thank Peter for the

contribution he made over the past five years.

The Board appointed Martyn Clark as the

new Chief Executive Officer and a member of

the Board in June 2024. Martyn brings vast

operational and commercial experience in

housebuilding, with a detailed understanding

of every aspect of the business. His first weeks

in the business were compromised and made

particularly challenging by the unsolicited

and unsuccessful Bellway takeover approach.

Since then, Martyn has moved quickly to lead

his senior team to focus on improvements in

operational efficiency, product quality, enhanced

management information, and a positive shift in

both culture and employee attitude. The Board

and I are confident that Martyn will continue to

drive meaningful change to further improve Crest

Nicholson’s performance in the coming years.

DIVIDEND

The Group is maintaining its dividend policy

of two and a half times cover, and the Board

is recommending a final dividend of 1.2 pence

per share (2023: 11.5 pence), and subject to

shareholder approval, this will be paid on

25 April 2025, which will make the total dividend

2.2 pence for 2024 (2023: 17.0 pence).

OUTLOOK AND FUTURE FOCUS

The government budget in October 2024

confirmed an increased focus on reforming the

planning system which could help to address

housing supply challenges. However, increases in

overall taxation levels, particularly in employers’

National Insurance, are likely to depress

economic growth and will feed through into

higher costs. There were no measures aimed at

stimulating demand for new housing, especially

with reducing support for first-time buyers. While

the recent interest rate reduction is encouraging,

we anticipate a slower trajectory towards

more affordable mortgage rates, especially

given the outlook for limited economic growth

in the coming year. We will closely monitor

developments and look forward to further insights

in the government’s spring briefing.

2025 is a reset year for Crest Nicholson. We have

sufficient land with full planning permission for our

budgeted completions and the key focus will be

to build high quality homes with excellent

customer service and to continue to optimise

our land bank to maximise value. We are already

seeing the benefits of increased operational

efficiency and rigorous focus on quality being

instilled under Martyn’s leadership.

The Board is confident in the Group’s ability to

navigate current market challenges and believes

that the strength of the brand, the inherent value

of the land bank and the rigorous operational

focus of the leadership team positions us well

for the future.

Looking ahead, in spring 2025, Martyn will

provide more details to the market on our reset

strategy and future vision for Crest Nicholson.

Iain Ferguson CBE

Chairman

Crest Nicholson

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Financial StatementsStrategic Report Governance

It is my pleasure to present my first set of results

as Chief Executive Officer of Crest Nicholson.

The unique circumstances of my introduction

to the business coincided with the unhelpful

distraction of an unsuccessful, unsolicited

takeover approach for the Group. This allowed

me to gain real insight into, and a comprehensive

understanding of, our operations, our people,

our strengths, the areas we need to address

and the many opportunities for us to grow the

business profitably and create value for our

shareholders within a more condensed period.

Iam encouraged by the potential I see within the

Group and am increasingly confident of being

able to shape Crest Nicholson into a best-in-class

UK housebuilder.

My initial focus has been on implementing early

operational changes at pace, and ensuring we

have a solid foundation for the years ahead.

As part of that, I have reviewed the existing

Executive Committee to ensure we have the right

breadth of expertise and capability, in order to

enhance decision making, strengthen internal

controls, address operational challenges and

drive future strategic priorities.

I have also made considerable progress in reviewing

our strategy and defining my long-term vision for

Crest Nicholson to re-invigorate the business for

growth, focusing on three key strategic priorities:

building homes of exceptional quality efficiently;

delivering outstanding service to customers,

and optimising value from the Group’s high

quality land portfolio;

growing private sales and emphasising value-

led growth to enhance returns and margins.

Chief Executive Officer’s statement

I look forward to sharing with the market in March

more information on those strategic priorities and the

initiatives I will implement to maximise sustainable

value for all Crest Nicholson shareholders.

2024 has undoubtedly been a challenging year

for Crest Nicholson. Previous failures to identify

and implement appropriate internal controls

within the Group, particularly in relation to legacy

operational issues on complex developments

and legacy sites have significantly impacted our

financial performance. We have taken steps to

address these shortcomings. Furthermore the

market was affected by the impact of persistently

high interest rates and subdued consumer

confidence. Despite these challenges, we have

delivered 2024 results in line with guidance

updated at the start of my tenure, and through a

rigorous focus on cash management have exited

the year with better than expected net debt. This

is a testament to my colleagues’ dedication and

commitment during highly uncertain times, and I

thank them for their hard work.

“ We delivered 2024 results

in line with guidance

updated at the start of my

tenure, a testament to my

colleagues’ dedication

and commitment during

challenging times.”

Focusing on the future

Martyn Clark

Chief Executive Officer

Crest Nicholson

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Financial StatementsStrategic Report Governance

Chief Executive Officer’s statement continued

FIRST IMPRESSIONS

Since joining, I have been encouraged by the

strengths I see within our business. We have a

valuable portfolio of land assets, which positions us

well to optimise value creation as market conditions

evolve. The team is talented and dedicated.

However, my initial assessment has identified

certain operational areas that need attention

to improve efficiency and performance. There

is also an opportunity to streamline processes,

tighten controls and enhance our approach to

project execution to meet our goals effectively.

ACTIONS TAKEN DURING THE YEAR

My initial focus has been on implementing early

operational changes and ensuring we have a

solid foundation for the years ahead. As part

of that, I have expanded the existing Executive

Committee to ensure we have the right breadth of

expertise and capability in order to enhance decision

making, strengthen internal controls, address

operational challenges and drive future strategic

priorities. We have also taken several key actions

during the year to set us on the right path, and

support our strategic goals focusing on actions that

can deliver immediate improvements. For example,

we are upgrading our management information

systems, which will enable better and more timely

data-driven decision making across the business.

I have also noticed a marked positive cultural

change over the past few months, as cross-functional

teams are now working together more effectively,

creating a unified focus on our strategic priorities

and promoting a results-driven environment.

Adjusted profit before tax

£22.4m

2023: £48.0m

Homes completed

1,873

2023: 2,020

BUILDING HOMES OF EXCEPTIONAL

QUALITY, EFFICIENTLY

Building right first time is essential to deliver

an exceptional customer experience and drive

profitable growth. It reduces warranty claims and

costs and hence safeguards our brand value while

maintaining the trust of our customers. In order

to optimise resources to maximise returns, we

have taken significant steps in recent months to

enhance our build quality, to ensure operational

efficiency and to manage our work in progress

effectively. This means that our build rate

needs to be aligned with our expected sales

rate and costs need to be closely monitored

for each development. We appointed a new

Group Commercial Director, whose leadership

has driven the implementation of an enhanced

system for establishing site budgets and managing

cost effectively in the second half of the year.

Additionally, to further improve build precision, we

introduced new software to track build progress

and sign off quality assessments at each build stage,

including the capture of photographic evidence.

We have continued to focus on improving our

build quality and are pleased that independent

measures of quality assessed by NHBC and

Premier Guarantee show an improvement on

2023. Furthermore, NHBC has been appointed

to carry out Construction Quality Reviews on all

sites. These will serve as an independent key

performance indicator, providing a quantitative

assessment of build quality across construction

sites, which we will use to assist us to align with

best practices and maintaining high standards in

construction quality.

Health and safety remain a top priority for the

Group. We continue to maintain the highest

standard to ensure the wellbeing of our teams

and subcontractors, reinforcing our commitment

to a safe working environment.

DELIVERING OUTSTANDING SERVICE TO

CUSTOMERS

It is essential to recognise that we are, at our

core, a business offering customers one of

the most significant emotional and financial

purchases of their lives. We have taken

meaningful steps to enhance our customer

service, ensuring a seamless and exceptional

experience throughout the entire sales journey

and beyond. Since January 2024, we have

consistently achieved a customer satisfaction rating

above the 90% required to achieve 5 star status

from the Home Builders Federation. Our sales team

has undergone comprehensive recurrent training

to enhance the skills to better meet our customers’

needs. Initial feedback from both the sales team and

customers has been positive and we will continue

to invest in training going forward. Additionally, we

have repositioned our incentive structure to align with

our goal of maximising value while maintaining high

service standards.

We are developing a new customer portal,

which will not only support customers during the

reservation stage, but also provide them with

ongoing access and visibility of the progression

of the sales and build process for their home.

This is due to be rolled out during 2025. Post-

sales customer service has also been significantly

improved, with dedicated site teams now in

place to address warranty items promptly and

efficiently. The introduction of new systems to

track performance in resolving warranty matters

will help us significantly improve customer

response times. These enhancements reflect our

unwavering commitment to delivering quality and

ensuring customer satisfaction.

The development of our product offering will be

central to our activity in 2025. Several factors

will drive these initiatives including changing

regulations (such as the Future Homes Standard),

raising quality and, more importantly, meeting the

needs and aspirations of our customers. We have

already enhanced some of the specifications of

our homes.

1 Represented as per note 29 of the financial statements.

Crest Nicholson

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Financial StatementsStrategic Report Governance

Chief Executive Officer’s statement continued

OPTIMISING VALUE FROM OUR HIGH

QUALITY PORTFOLIO

Our land portfolio is strategically located in highly

sought-after areas. We are focused on leveraging

our high quality land assets to maximise their

value, ensuring that every site is optimised for

profitability. The portfolio includes a mix of site

sizes. We are conducting a comprehensive

review of our land bank with a focus on managing

our cash outlay while increasing the number of

outlets over the medium term.

FIRE REMEDIATION

In December 2024, the Group signed up to

the Joint Plan to accelerate developer-led

remediation and improve resident experience

(Joint Plan to Accelerate), requiring developers

to complete all assessments of buildings under

the scope of the Developer Remediation Contract

by July 2025 and commence work on 100% of

affected buildings by July 2027. The timing aligns

closely with our revised business plan, with the

associated costs integrated into our budgets and

cash flow forecasts.

The Group has made significant progress,

supported by our newly centralised Special

Projects division, and is nearing completion

of its assessment of all buildings within the

scope of the Developer Remediation Contract.

As a consequence of additional and better

information, we are now in a position to account

for the expected costs for known buildings within

scope. As a result, the total fire remediation

provision at the 2024 year end is £249.3m and

compares with £145.2m at the 2024 half year.

In determining the quantum of the provision, whilst

acknowledging that no approach can eliminate all

uncertainty, the Group has applied its experience

to date and the most plausible current risk scenario

to ensure it accounts for its probable liabilities

and maintains an appropriate and responsible

approach to fire safety remediation provisions.

The provision does not include any third-party

recoveries or contributions that could offset these

costs. The remediation programme is expected

to be completed during 2029, exceeding the

obligations of the Joint Plan to Accelerate, and

is intended to be funded from the Group’s cash

flow and balance sheet. This approach highlights

our commitment to transparency and financial

responsibility, and we believe it should address

lingering concerns regarding Crest Nicholson’s

future legacy fire-related liabilities, providing greater

confidence in our valuation and business case.

Further details can be found in the Financial

Review on pages 30-31.

SUSTAINABILITY

We remain committed to our sustainability

strategy which focuses on three priority areas:

protecting the environment, making a positive

impact on our communities, and operating the

business responsibly. In 2024, we made good

progress against our own targets and continue

to work collaboratively with our suppliers and

the wider industry on a range of sustainability

initiatives. More details on our sustainability

progress and focus can be found on pages 19-27.

STRATEGIC FOCUS FOR 2025

In the coming year, our primary goal is to

reinvigorate the business for growth. During

the year, I have undertaken a comprehensive

review to understand the business, which has

included obtaining both internal and external

perspectives. This has allowed me to identify

the market opportunity and craft a strategy

that will allow us to maximise that opportunity

and optimise the Group for sustainable growth,

enhanced profitability and consistent shareholder

value creation, based upon the three key

strategic priorities set out above. The changes

to the business and the strategic direction we

are heading will not happen overnight but I am

confident we will deliver success.

I look forward to updating you in March 2025 with

the findings when I will also set out our medium-

term strategic focuses and goals for ensuring

Crest Nicholson realises its full potential.

SUMMARY AND OUTLOOK

2025 will be a year of transition for Crest

Nicholson as we implement and start to deliver

on our new strategy for profitable growth. We

are well-positioned with sufficient land with full

planning permission to support our planned

outlets and volumes.

The broader economic landscape is showing

tentative signs of stabilisation, even if at a more

tempered pace than expected, providing a slightly

more supportive environment for growth in 2025.

A more stable and benign interest rate climate will

help to restore confidence among both developers

and homebuyers, reducing financial pressures and

enabling greater investment in housing projects.

Additionally, the government has intensified its

efforts to address the critical shortage of homes

in the UK, introducing targeted measures to

streamline and improve the planning process.

Such initiatives are not only vital for addressing

the housing crisis but also provide a strong

foundation for the sector to meet the country’s

pressing demand for homes.

Reflecting on my first months, I am encouraged by

the progress we have made and the potential we

have to drive meaningful changes. I am confident

that we can navigate the challenges ahead. I look

forward to leading Crest Nicholson through this

transformative period, creating a stronger, more

resilient business and optimising the Group for

sustainable growth, enhanced profitability and

consistent shareholder value creation.

Martyn Clark

Chief Executive Officer

Crest Nicholson

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Financial StatementsStrategic Report Governance

Chief Executive Officer’s statement continued

What is your overarching vision for the Group, and

how do you see it evolving within the housebuilding

industry over the next five years?

My vision is for Crest Nicholson to be a best-in-

class housebuilder – and to my mind this means

being renowned for building high quality homes,

having excellent customer service, being a good

business partner for our suppliers, being a place

where people can build long-term, rewarding

careers, and maximising value by creating

sustainable returns for our investors. We are

selling one of the most significant assets anyone

will ever purchase in their lifetime. Over the

next five years, I want us to set a benchmark for

industry standards in both quality and customer

satisfaction. We will be hosting a Capital Markets

Day in March, and I look forward to updating

the market on my vision and future plans for the

business in more detail.

What are the main challenges and opportunities

you foresee for the business in the medium term,

and how do you plan to address them?

Over the medium term, it is clear that the UK

needs more homes built. We want to make our

contribution to that effort, in a sustainable way

which helps all our stakeholders. The current

market backdrop is beginning to show signs of

improvement. Interest rates are gradually coming

down, and there are encouraging signals from the

government on planning reform. While external

factors continue to influence buyer confidence

and affordability, these positive developments

provide a more optimistic outlook. Internally,

we are focused on implementing reasonably

significant changes that will take time to embed.

This period of transition is an opportunity to

strengthen our operations, refine our processes,

and position ourselves to fully capitalise on a more

favourable market environment as it emerges.

Reflecting on your first six months, what have been

your key takeaways, and how have they shaped

your understanding of the business and its culture?

It has obviously been an eventful few months!

Reflecting back, I think my overriding sense

is one of optimism. There is clearly a great

deal to be done but I can see how we take

Crest Nicholson forward and it has the strong

foundations to be a best-in-class housebuilder.

These foundations include a quality land

portfolio, a dedicated team and a trusted brand.

As I say though, there is more to be done.

Culturally, the organisation required some

reshaping to encourage collaboration and better

communication, while operationally there is room

for improvement. I look forward to sharing my

thoughts on that further in March.

Q&A

with Martyn Clark,

Chief Executive Officer

What milestones or achievements should

stakeholders expect to see as you implement your

vision and strategy in the coming years?

My key focus is on returning the Group to

industry-level operating margins and increasing

our return on capital through appropriate

land acquisitions and operational efficiency.

Stakeholders will see a more disciplined approach

to land buying, rigorous cost control, and enhanced

customer engagement. Our goal is to build

homes that meet high quality standards, deliver

a seamless sales process, and solidify our

reputation as a company customers trust for one

of the most significant investments of their lives.

What have been the most valuable lessons you’ve

learned in your leadership journey so far?

The most important lesson is the power of teams

and teamwork. I hope to foster an open culture in

the business and encourage our people to talk to

me, the leadership team and their colleagues. No

individual has the answer to every question but

by working together and collaborating, we will

determine the most appropriate outcome.

I’ve also realised that resilience and flexibility

are important. Challenges will come, but staying

focused on the bigger picture while being ready

to adapt is key to moving forward. Lastly, it’s all

about empowering people. When you trust and

invest in your team, you create a culture where

everyone feels motivated to step up and deliver

their best.

Crest Nicholson

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Financial StatementsStrategic Report Governance

Our investment case

RESILIENT HOUSING

MARKET FUNDAMENTALS

STRATEGIC LAND AND

PARTNERSHIPS

ADAPTIVE LAND PORTFOLIO

SUSTAINABILITY COMMITMENT

A strong proposition

with growth potential

The housing market benefits from a growing

population and limited housing supply

The lending market remains functional

and stable

The land division ensures a strong pipeline of

strategic land for medium-term growth

We benefit from a diversified approach,

including working with the private rented

sector and partnerships, providing resilience

against market fluctuations

We hold a high quality strategic land portfolio,

ensuring flexibility in land development with a

strong five-year land bank

We hold land in desirable locations to capture

growth as the market recovers

We remain committed to protecting the

environment including achieving net-zero

emissions by 2045 and 100% renewable

electricity by the end of 2025

We make a positive impact on our communities

and deliver high quality energy efficient homes

for our customers

BRAND, QUALITY AND

PLACEMAKING

MAINTAINING OUR FINANCIAL

POSITION

Our established brand, known for quality and

placemaking, helps differentiate us as a niche

housebuilder in the market

We have a strong reputation for creating

attractive, sustainable communities

We conduct rigorous cash management and

utilise internal working capital opportunities

such as enhanced WIP management

We maintain our balance sheet to provide

optionality and sufficient funding headroom

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Business model

VALUE CREATION  LAND ACQUISITION TO CUSTOMER SERVICE

Land acquisition

Acquiring land in desirable

locations is essential for creating

value. Our focus is primarily in

the southern regions of England,

where land supply is scarce and

demand for homes is high.

We have a rigorous, formal land

acquisition process. We set

minimum gross margin and return

on capital employed requirements

for each site, and consider

location, planning constraints,

site suitability, viability,

profitability and alignment

with our strategic goals.

Design, planning and

placemaking

Our approach creates vibrant,

sustainable and community-

focused developments. Our

designs balance functionality

and aesthetics with attention to

street scenes and diverse house

types. We prioritise accessible

green spaces, pedestrian-

friendly pathways and community

amenities, ensuring developments

meet housing needs while

creating connected, resilient

communities where people thrive.

Selling our homes

Our process ensures a

seamless journey from initial

enquiry to completion of

purchase. Our dedicated sales

team engages and identifies buyers’

needs, provides detailed home and

community information, and supports

mortgage applications and pre-

approvals. Throughout construction,

updates are shared, and a thorough

final inspection is conducted to meet

quality standards.

Construction

We instil a right first time

attitude in building good quality

houses to a consistent standard.

Our construction process is

meticulously planned and

monitored to ensure quality,

efficiency and compliance.

The build team follows strict

programmes and standards, with

each phase meeting the New

Homes Quality Code with rigorous

inspections and safety checks.

Advanced project management

tools track progress in real time,

enabling swift issue resolution

and ensuring smooth, on-time

completion that meets our high

standards and client expectations.

Customer experience

Central to our customer

commitment is delivering a high

quality home and minimising the

number of issues that customers

require our support with after

they move in. Our personal and

responsive post-sales service, led

by customer relations managers,

addresses any questions or

concerns, ensuring a smooth

transition into homeownership.

The introduction of new systems

to track performance in resolving

customer issues has significantly

improved response times.

How we build value

1 2 3 4 5

Our land acquisition appraisals embed

sustainability principles. We consider

factors such as biodiversity, water

conservation measures and habitat

protection. We prioritise locations

with access to sustainable transport,

including public transport links and

major road networks, and ensure space

for social infrastructure to promote

thriving, inclusive communities.

Sustainability is integrated across

every stage of design and planning. We

incorporate biodiversity net gain, design

attractive green spaces to encourage

outdoor activity and wellbeing, and plan

for sustainable connectivity through

walking, cycling and public transport links.

Social infrastructure, such as schools,

healthcare facilities, play areas and

community hubs, is carefully considered

to deliver a lasting positive legacy.

We deliver high quality energy

efficient homes and provide buyers

with information on the sustainability

features of their homes. Alongside

high performance insulation, many of

our homes include solar PV panels,

electric vehicle charging points and

an increasing number of sites are

installing air source heat pumps. All

new houses achieve a minimum EPC B

rating to support energy efficient living.

We integrate sustainable practices

throughout our construction activities,

focusing on resource efficiency and

waste reduction. On-site recycling

stations and waste segregation

processes maximise landfill diversion,

while we work to conserve and

enhance natural habitats around the

site. Additionally, protective measures

for wildlife, such as temporary fencing

and ecological monitoring, ensure

construction activities align with our

environmental stewardship commitment.

We deliver homes that prioritise

energy efficiency, helping to keep

running costs down. Sustainable

features support customers to live

more sustainably. Many developments

also incorporate measures to support

nature, alongside accessible green

space and social infrastructure,

creating more enjoyable spaces

for residents.

INTEGRATING

SUSTAINABILITY

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Business model continued

PEOPLE

Skilled employees are essential in building

and delivering homes that meet regulatory

standards and customer expectations. A strong

focus on workforce development, through

training, health and safety measures and

employee wellbeing, helps ensure efficiency,

innovation and sustainability in operations.

Engaging a motivated, well-trained workforce

enhances productivity and contributes to

maintaining the Group’s reputation and long-

term growth.

DESIGN AND INNOVATION

High quality design enhances our customer

proposition, ensuring long-term value and

customer satisfaction. Maintaining the flexibility

of house types allows for customisation while

improving construction efficiency. Innovation to

enhance the sales process and streamline the

build process can reduce costs and supports

safety, quality and service.

NATURAL AND MANUFACTURED

RESOURCES

Natural resources like timber and aggregates,

alongside manufactured materials such

as bricks and steel, are the foundation

of our building operations. Sourcing

materials responsibly supports sustainability

andminimises environmental impact.

Weare committed to reducing waste and

optimising resource use which controls costs

while enabling us to meet regulatory and

environmental standards.

PARTNERSHIPS

We have good relationships with the private

rented sector, landowners and government

bodies. These collaborations provide us

with access to key development sites, shared

resources and funding opportunities, while

also facilitating compliance with regulations.

By working together, we can expand project

pipelines, improve delivery efficiency and

meet housing demand, driving growth and

long-term profitability.

FINANCIAL RESOURCES

Financial resources are a critical component

enabling investment in land, development

and construction. We have a diverse capital

structure ensuring flexibility and resilience.

We adopt a prudent approach to risk and have

a disciplined cash management approach which

helps us maintain financial stability, supports

sustainable growth and ensures the Group

can weather market fluctuations.

The financial structure of the Group prioritises

maintenance of the balance sheet, supported

by diverse financing. Rigorous cash

management ensures liquidity and operational

efficiency. Our capital allocation strategy

focuses on sustainable growth by investing

in the business and acquiring land, while

maximising dividends for shareholders. This

balanced approach underpins our long-term

financial stability and commitment to delivering

shareholder value.

DIVISIONAL STRUCTURE

The Group operates through regional divisions,

each handling local developments and

construction. There are two central divisions,

one specialising in strategic land acquisitions

and supporting projects through the planning

process, and the new Special Projects division

which focuses exclusively on fire remediation

and legacy sites.

RESOURCES AND RELATIONSHIPS

Our business needs key

resources and is dependent

on critical relationships

to operate efficiently.

What we use to create value

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Strategic priorities

Our strategy

Our strategy builds on our strengths

and addresses current challenges. It is

structured around five strategic priorities,

supported by four foundations.

OUR FOUNDATIONS

People

Read more on pages 19-24

LAND PORTFOLIO

OUR STRATEGIC PRIORITIES

Land Portfolio

Strategic Land and Partnerships

Placemaking and Quality

Operational Efficiency

5 Star Customer Service

We own or control a prime land portfolio

which offers the long-term stability of a

land pipeline for development and revenue

generation. It enables us to react swiftly to

growth opportunities when the market recovers.

2024 highlights

We successfully progressed planning applications with

13,935 plots now in our short-term land portfolio

Land acquisition appraisals considered sustainability-

related factors such as biodiversity net gain which support

long term value creation

Focus for 2025

Manage land portfolio suitable for the size of business

Drive planning consents forward to enhance the

operational deliverables andoptimise the value of

the landbank

Progress measured by land creditors as a % of net

assets and land portfolio gross margin

See KPIs on page 28

We manage acquisitions of strategic land in

a central function, to incorporate land at the

advanced planning stage into the short-term

land portfolio for development. We build

strategic relationships within the private

rented sector and with registered providers of

affordable housing.

STRATEGIC LAND

AND PARTNERSHIPS

2024 highlights

Good progress made in progressing planning permissions

for key strategic sites

Continued focus on progress through partnerships and

planning for strategic land

Focus for 2025

Affordable housing will remain a key composite of

our revenue

The private rented sector will provide a good source of

revenue for largersites

Progress measured by affordable unit completions

See KPIs on page 29

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Financial StatementsStrategic Report Governance

Strategic priorities continued

The quality of the homes we build is a key

component of our strategy. It directly impacts

customer satisfaction, brand reputation and our

long-term value. Right first time, high quality

homes reduce defects, enhance durability and

have fewer maintenance issues, which lead

to stronger confidence from our customers.

Placemaking is important to create developments

that have a positive impact on our customers,

communities and the environment.

2024 highlights

Incorporated biodiversity net gain on all newplanning

submissions

Maintained our focus on creating desirable developments

in sought-after locations, such as the Windsor Gate

development which opened in theyear

Focus for 2025

Focus on precision and quality in the build process

Thorough internal inspection to ensure consistency

and reliability

PLACEMAKING

AND QUALITY

Progress measured by

EBIT and customer satisfaction scores

See KPIs on pages 28-29

OPERATIONAL

EFFICIENCY

We are driving increased operational rigour

and efficiency, managing costs effectively

and increasing value and productivity of the

business. This will ensure we are able to

optimise resources to support long-term

sustainable growth.

2024 highlights

Fully implemented our automated system across the

business managing payments, sales and financial

forecasting

Focused on governance oversight via improved

management information systems and embedding our

Operational Framework

Focus for 2025

Embed a right first time ethos throughout the Group

Align overheads to output and drive efficiencies through

process and policy reviews

Progress measured by net cash, greenhouse gas

emissions intensity and waste intensity

See KPIs on pages 28-29

Exceptional customer care and service is

fundamental in the housebuilding sector.

Providing customer care, with consideration

of what customers’ expectations are, is

always at the forefront of our minds. Strong

commitment to deliver high quality homes

and exceptional customer experience is at

the heart of everything.

5 STAR

CUSTOMER SERVICE

2024 highlights

7% improvement in customer satisfaction scores

New processes and software to enhance quality and

service after customers move into their new homes

Focus for 2025

Improve longer-term customer support

Continue to enhance the quality regime

Re-design elements of our housing range to meet new

regulatory requirements

Progress measured by customer satisfaction scores

See KPIs on page 29

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Market environment

Operating in a cyclical environment

The housing market has faced a long-

standing imbalance between supply and

demand, and the sector is influenced by

multiple economic indicators.

What’s happening?

Population growth and relatively static household

sizes have driven up demand, while housing supply

has failed to keep pace. This shortage has been

exacerbated by decades of underinvestment

in new housing, leading to increasing pressure on

the market and higher housing costs. The persistent

gap between demand and supply continues to

challenge affordability and access to housing across

the country.

GDP growth, while slowing in the second half of

2024 after a strong start, is still expected to start to

rise moderately in 2025. The economic rebound,

primarily driven by increased investment and stronger

government spending, will provide resilience and

lay the foundation for long-term growth. This will

create opportunities for renewed housing investment,

benefiting developers and buyers.

Vacancies in the labour market are nearing pre-

pandemic levels which could ease wage pressures

and reduce inflation, fostering economic stability.

Ongoing growth and employment prospects should

support buyer confidence, encouraging more

households to consider homeownership.

Risks and opportunities for Crest Nicholson

With moderated wage pressures helping to

stabilise inflation, consumer spending power may

improve. This more stable economic environment

should increase affordability for potential buyers,

supporting sustained demand for new homes

The ongoing shortage creates a sustained

demand for new homes, offering a stable market

to capitalise on. There are potential price growth

opportunities which will enhance margins.

The need to address the housing crisis could

result in government support in the form of

demand stimulus as well as more efficient planning

regulations and process. The introduction of

the new housing target of 300,000 homes per

annum is a positive sign which will require further

support such as a faster planning process and

more funding for affordable housing.

There are risks of shortage in materials supply

and skilled labour if the whole sector increases

build production, in turn leading to build cost

inflation.

The land market could tighten as competition for

land intensifies and the planning system is not

efficient enough to cope with increased demand.

GDP expected to grow at modest level

2Q24 3Q24 1Q254Q24 2Q25 3Q25

0.7

0.9

1.1

1.3

1.5

1.7

1.9

% change over the previous period

Source: Barclays Global Economic research

UK ECONOMY AND HOUSING SECTOR

Interest rates have a significant

bearing on the cost of borrowing

and the affordability of homes for

ourcustomers.

What’s happening?

In the first half of 2024, there were significant fluctuations

in mortgage rates, but there was a notable shift in the

second half of the year to more stable conditions.

With inflation anticipated to rise in early 2025, driven

by higher energy and services costs, affordability for

home buyers may be impacted. However, the Bank of

England’s gradual approach to interest rate cuts, with the

base rate expected to fall during 2025, offers a positive

outlook for mortgage affordability.

Decreases in mortgage rates will make it easier for

prospective buyers to enter the market. Stabilisation

of mortgage rates will lead to renewed buyer

confidence, which could help alleviate some of

the pressures caused by previous rate volatility.

Persistently high rental costs make it more difficult

for first-time buyers to save up for a deposit and

there are fewer mortgage products at reasonable

rates for higher loan to value mortgages.

Risks and opportunities for Crest Nicholson

Our focus on cost-efficiency can help to mitigate

the risks of a volatile lending market and

potentially a stretched affordability environment,

particularly for first-time buyers.

As inflation trends downwards, there is a

likelihood of more favourable borrowing

conditions, increasing demand for houses.

Diversifying portfolios, leveraging government

initiatives, and focusing on cost-efficiency

can help mitigate the risks while capitalising

on emerging opportunities in a challenging

economic environment.

5-year fixed mortgage rate – 75% LTV

2000 2005 20152010 2020 2025

Source: statista.com

LENDING MARKET AND AFFORDABILITY

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Annual Report and Accounts 2024

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Market environment continued

The land market and

planning system are critical

for housing growth and

new home delivery.

What’s happening?

The operation of the planning system is a major

factor contributing to the under-delivery of housing

in the UK.

In December 2023, the government shifted local

housing targets from mandatory to advisory, and

removed the obligation for local authorities to

maintain a five-year rolling land supply. The target

has since been reinstated but as a result, many local

authorities paused their housing delivery plans for

the first half of 2024. This has been exacerbated by

under resourcing in planning departments to meet the

growing demand. The reintroduction of mandatory

housing targets by the government is seen as a

positive step to clear some of the historical backlogs.

Risks and opportunities for Crest Nicholson

We have a good quality land portfolio with

a land bank life of over five years based

on our current capacity. We are well positioned

to quickly capitalise on any improvements in the

planning system.

The sector will continue to face risks related

to planning delays as it will take time for new

regulations and processes to work through the

current backlog of planning permissions, but the

sector has significant opportunities, particularly

with the government’s efforts to streamline the

system and its drive to meet housing targets.

These factors, combined with a quality strategic

land bank, position us to capture future growth

when the housing market recovers.

The government’s recent policies

and regulatory reforms aim to boost

housing supply while reinforcing

standards of safety, quality

and sustainability.

What’s happening?

The Building Safety Act 2022 introduced

comprehensive reforms to improve building safety,

especially in multi-occupancy building developments,

mandating safety certificates, fire safety protocols,

and increased developer accountability. The Joint

Plan to Accelerate was introduced in December 2024

and requires that remediation work begins on 100%

of affected buildings by July 2027.

Regulations, including the Future Homes Standard

(set to be legislated in 2025) and the biodiversity

net gain requirement under the Environment Act

2021, are driving sustainable building practices.

The biodiversity mandate requires developers to

enhance biodiversity by at least 10% above the pre-

development baseline. Together, these measures are

shaping a sustainable future for UK housing.

Risks and opportunities for Crest Nicholson

We are committed to prioritising safety for all

residents living in a home built by the Group

that falls within the scope of the Developer

Remediation Contract, and are expediting the

process of fire remediation. During the year,

the fire remediation team was moved into a

newly created Special Projects division. This

highly skilled team is dedicated to assessing

and remediating the 291 affected buildings within

scope. At the beginning of January 2025 the

group has external wall assessments and internal

assessments on 211 and 169 buildings respectively,

each out of the 291 buildings identified. The Group

has committed to performing 100% of assessments

by July 2025. This will provide clarity and

reassurance to all stakeholders affected.

The Future Homes Standard will future-proof

our homes by delivering zero carbon ready

homes, supporting the UK’s greenhouse gas

emissions reduction goals. The transition to

low-carbon heating systems, such as air source

heat pumps, poses a risk if customers are not

properly supported in their use, while uncertainty

around government guidance on implementation

timelines and technical requirements could

impact our design and planning processes.

The biodiversity net gain requirement necessitates

integrating ecological enhancements into land

acquisition plans, potentially increasing initial

costs and aligning with long-term sustainability

objectives. This initiative will make our

developments more attractive to buyers and

improve public perception.

LAND MARKET AND PLANNING GOVERNMENT AND REGULATORY ENVIRONMENT

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Stakeholder engagement

Section 172 statement

We work hard to understand

and meet the needs of our

different stakeholder groups,

engaging and creating value

for them.

Under Section 172 of the Companies Act 2006,

our Board has a duty to promote the success of

the Company, and in doing so it must consider a

number of matters when making decisions.

The Board acknowledges that it may have to make

decisions that affect one or more stakeholder

groups negatively. In challenging markets it is

even more important to reflect upon the need to

act fairly and with integrity. The factors influencing

Board decision-making, including stakeholder and

sustainability considerations, are shown below.

The following pages set out how the Group and

the Board have engaged with key stakeholder

groups during the year, and how their views

have been taken into account and influenced

the outcomes of decisions made.

Board decision-making

Risk reviews

Consideration of

impact of decisions

on stakeholders and

wider environment

Regular updates from

Sustainability and

SHE committees

Oversight of

purpose and value,

and monitoring of

culture

Regular updates from

senior management

Regular

engagement with key

stakeholders

External feedback on

market perception

Annual strategy

and budget

review

WHAT DO THEY EXPECT FROM US?

Our employees require a safe and healthy

working environment which is complemented

by a supportive, diverse and inclusive

culture. Our employees value challenging and

rewarding work that is enhanced by professional

development and career opportunities.

HOW WE HAVE ENGAGED

Board engagement

Received updates on employee matters

at each of its meetings and regularly

discussed employee turnover, engagement,

succession planning, appraisals, training

and development

Directors attended employee forums and

divisional roadshows to provide strategic

and trading updates

The CEO and CFO introduced monthly

business briefing calls including

Q&A sessions

Three Employee Voice Forum meetings

were held during the year

Group engagement

Employee forums were held as part

of the Culture Action Plan development

Employees were offered health and

wellbeing training and the ability to

enhance their mental health fitness through

online resources

Updates were provided to employees

from the CEO and CFO throughout the

unsolicited takeover bid

WHAT DID THEY TELL US?

Employees expressed a need for better

communication from management to

understand the direction of the business

Employees have a clear appetite for training

and development, including enhanced

onboarding for new colleagues

A need was identified for improved

recruitment standards and additional

support in standardising related processes

KEY OUTCOMES

A Culture Action Plan was developed and

initial actions implemented

Enhanced onboarding process

implemented

Fortnightly business briefings introduced

to support the dissemination of key

information across the Group

Launched online recruitment support

modules

Participation of 24% in the 2024

Sharesave scheme

Delivered 6,130 hours of in-person and

online training

FURTHER INFORMATION

See Our people on pages 26-27, Safety, health

and environment on page 25, Embedding and

monitoring culture on page 58 and Listening

and responding to employees on page 59.

OUR PEOPLE

Individuals who are directly employed by us.

Factors considered during the Board decision-making process

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Financial StatementsStrategic Report Governance

WHAT DO THEY EXPECT FROM US?

Our customers expect quality homes in

attractive, safe communities, delivered on

time and offering good value for money.

They seek an excellent customer experience

throughout the homebuying journey and once

in occupation.

HOW WE HAVE ENGAGED

Board engagement

Received regular updates on actions taken

to enhance the customer experience from

the CEO, Group Operations Director and

the Group Sales and Marketing Director

Reviewed metrics on quality and customer

satisfaction scores at each meeting, providing

insights into strategic issues

Group engagement

Product development working groups

reviewed feedback on home designs

and specifications with a focus on

continuous improvement

Customer Service forums met to

review customer feedback and develop

improvements to processes

Meetings were held with partner

organisations to ensure good

working relationships

WHAT DID THEY TELL US?

Customers want a choice of home sizes

and layouts suitable for local needs,

with modern specifications and a range

of optional extras

Responsive and efficient after-sales service

is important

There is a growing desire for more energy-

efficient homes to drive down running

costs, built to a high quality for long

lasting value

Early engagement with partners is crucial

to delivering to requirements

KEY OUTCOMES

Consistently achieved a customer

satisfaction rating above the 90% required

to achieve 5 star status from the Home

Builders Federation when it is announced

in March 2025

7% increase in customer satisfaction score

compared with prior year

Trustpilot score of 4.3 (2023: 4.1)

Delivered 44% affordable homes, including

open market bulk sales

FURTHER INFORMATION

See the Chief Executive Officer’s statement

on pages 4-7.

CUSTOMERS

The people who purchase our homes. These can be individuals

or larger institutions that we work in partnership with.

WHAT DO THEY EXPECT FROM US?

It is important to investors that we navigate

the current market challenges, while

maintaining sustainable returns. They value

clear communication about our strategy and

performance, and expect strong leadership,

effective risk management and robust

governance.

HOW WE HAVE ENGAGED

Board engagement

The CEO and CFO met regularly with

investors, lenders and analysts including

hosting visits to sites under development

The Chairman and Senior Independent

Director consulted with the Group’s

major investors on strategic and

governance matters

Investor Relations updates including

feedback from investor roadshows were

presented at each Board meeting

The Chairman and Executive Directors

discussed the approach and response to

the unsolicited bid with the Group’s largest

investors

All Directors attended the AGM and were

available to answer shareholder questions

Group engagement

The CEO, CFO and Head of Investor

Relations attended a programme of

meetings and investor conferences, and

carried out investor roadshows at half and

full year, including providing insight on

progress against sustainability targets

WHAT DID THEY TELL US?

Investors spoke with us about the main

areas of interest including:

Macro factors affecting the

housebuilding sector

The planning process

Land portfolio and land market

Balance sheet and capital allocation

Fire remediation provision and progress

Other completed sites provision

Operational issues

KEY OUTCOMES

Regular Board engagement increased

confidence among investors by

demonstrating that the Board is committed

to open communication and addressing

shareholder concerns

Continued shareholder support as shown

by all resolutions being passed at the 2024

AGM with in excess of 80% votes in favour

We remained a constituent of the

FTSE4Good Index series and received

an A- rating in the CDP climate change

disclosure

FURTHER INFORMATION

See Approach to stakeholder

engagement on page 60.

INVESTORS

Stakeholder engagement continued

Institutional and individual investors, lenders and analysts.

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Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

WHAT DO THEY EXPECT FROM US?

Our suppliers and subcontractors want

mutually beneficial working relationships that

share risk and reward alongside operational

efficiency. Suppliers expect us to deliver

projects safely and on time and to pay them

within agreed timescales.

HOW WE HAVE ENGAGED

Board engagement

Received regular updates on the Group’s

supply chain, including payment practices,

material costs and availability

Reviewed and approved the Modern

Slavery Act Statement

Group engagement

Maintained relationships with key suppliers

with particular focus on safety, costs and

sustainability

Periodic meetings held with subcontractors

at a divisional level to disseminate updates

and gather valuable feedback

Encouraged key suppliers to engage with

the Supply Chain Sustainability School

Continual dialogue with suppliers on

innovative new products aimed at

enhancing our offering

Engaged with suppliers on their

greenhouse gas emissions data to support

our whole life carbon analysis

WHAT DID THEY TELL US?

They want clear information about

timelines and project statuses so that

they can plan manufacturing schedules

and build programmes

Identifying future and upcoming

projects empowers them to forecast their

workload effectively and provide more

competitive pricing

Prompt payment is important for them

to maintain cash flow

KEY OUTCOMES

The adoption of innovative products

has significantly contributed to the

enhancement of our home energy

efficiency ratings and overall energy

performance across our diverse range

of house types

66% of Group suppliers actively engage

with the Supply Chain Sustainability School

Average time taken to pay suppliers was

38 days

Maintained our status as a Living Wage

employer and continued to engage with

subcontractors on their compliance

FURTHER INFORMATION

See Responsible practice on page 24.

Our Supply Chain Code of Conduct is on our

website at crestnicholson.com/supply-chain

SUPPLIERS

Stakeholder engagement continued

The suppliers who provide the materials for our homes and

the skilled subcontractors for our construction activities.

WHAT DO THEY EXPECT FROM US?

Our neighbours in the communities around

our developments expect engaged two-way

communication. They want us to uphold our

commitments to invest in essential infrastructure,

including transport, schools and health facilities.

It is also important that we protect the local

environment, reduce emissions and waste, and

support sustainable lifestyles.

HOW WE HAVE ENGAGED

Board engagement

Reviewed product development changes

to enhance home design and specifications

Received updates and monitored progress

against agreed SHE targets

Received updates on sustainability and

monitored progress against published

targets

Group engagement

Engaged with local communities, planning

authorities and environmental regulators,

allowing us to respond and incorporate

feedback into the development process

Partnered with Young Lives vs Cancer and

supported local charities and organisations

Joined the Homes for Nature commitment

and implemented actions to meet new

biodiversity net gain requirements

WHAT DID THEY TELL US?

Local communities want to engage with us

to enable them to input into development

infrastructure plans

It is important that our neighbours are

given clear information about the impact

of planned works

The charities we support want us to

understand their needs, and to know what

kind of support we can provide

It is important to create attractive outdoor

spaces that support both biodiversity and

community wellbeing, while mitigating our

environmental impact

KEY OUTCOMES

63% reduction in scope 1 and 2 greenhouse

gas emissions compared with the baseline

year of 2019

95% homes built during the year with an

Environmental Impact Rating of A or B

More than 160 employees participated in

our annual company fundraising day for

Young Lives v Cancer

FURTHER INFORMATION

See Protect the environment on pages 20-23

and Thriving communities on page 23.

COMMUNITIES AND ENVIRONMENT

The communities and environment local to our developments.

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Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

WHAT DO THEY EXPECT FROM US?

The government expects proactive

engagement from us and solutions to meet key

housing targets, the Future Homes Standard

and industry initiatives that support biodiversity

and climate change matters.

HOW WE HAVE ENGAGED

Board engagement

Representation on the leadership council of

the Future Homes Hub (FHH)

Meetings with various industry bodies

including the Home Builders Federation (HBF)

Meetings with government ministers

Group engagement

Management met with the following bodies:

FHH, on the Future Homes Standard and

industry initiatives on biodiversity and

climate change

Ministry of Housing, Communities and Local

Government, on regulations for housing

Department for Energy Security and Net

Zero (DESNZ), regarding securing long-term

energy supply

HBF, involving high level policy and

regulatory changes

National House Builders Council and

Premier Guarantee, on building controls

Building Safety Regulator, including

workshops on compliance with updates to

the Building Safety Act

WHAT DID THEY TELL US?

The government is setting new mandatory

housing targets including 50% delivery of

affordable homes

Support and advice was received from

FHH in aligning business operations with

sustainability goals

Support from DESNZ on implementation

of home energy modelling including

understanding new software and trial

parameters

HBF outlined high level expectation of

government regulations including water

authorities, OFWAT, local authority highway

departments and electricity distribution

network operators

KEY OUTCOMES

Contributed to FHH research, influencing

the creation of realistic standards that the

industry can work towards, including whole

life carbon conventions, water efficiency

targets and biodiversity net gains

Preparedness for home energy modelling

and gave direct feedback on how

to improve the software for industry

implementation

Influenced input on practical advice to

ministers who are responsible for housing

and other government regulation

FURTHER INFORMATION

See Government and regulatory environment

on page 14.

GOVERNMENT AND OTHER BODIES

Stakeholder engagement continued

The government, regulatory and industry bodies that shape

the legislative environment in which we operate.

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Sustainability

Our sustainability strategy

Sustainability is one of our strategic foundations. It remains at

the core of our purpose to build great places for our customers,

communities and the environment. Our sustainability strategy is

built around three overarching priorities (see opposite).

MONITORING OUR MATERIAL ISSUES

Recognising the dynamic nature of environmental and

social challenges, we remain committed to regularly

engaging with our stakeholders to ensure we focus

on the most important sustainability-related issues.

These discussions help us identify and address areas

where we have an impact, or where we are impacted,

allowing us to stay responsive to emerging risks and

opportunities. Our stakeholder engagement process

supports our alignment with their priorities.

Read more on our stakeholder engagement

on pages 15-18

EVOLVING REPORTING REQUIREMENTS

We continue to monitor evolving reporting requirements

to stay ahead of future compliance. We are preparing for

the Taskforce on Nature-related Financial Disclosures

(TNFD) recommendations, aiming to voluntarily disclose

ahead of any mandatory requirements.

We are also closely tracking the UK’s Sustainability

Disclosure Requirements, including the adoption of

ISSB S1 and S2 standards, the UK Green Taxonomy

and transition plan disclosures. Our approach ensures

we remain well-prepared to meet forthcoming

sustainability-related obligations.

OUR GOVERNANCE APPROACH TO

SUSTAINABILITY

Strong governance is essential to driving sustainability

performance. Our commitment to responsible operations

is reinforced by Board oversight of our sustainability

strategy and objectives. The Sustainability Committee,

chaired by our Chief Executive Officer, guides the

evolution and integration of this strategy across the

Group, with delegated authority from the Board and

Executive Committee. In 2024, the Committee met four

times. Further details on our governance structure is

found on page 41.

We also link sustainability targets to remuneration (see

pages 78 and 81) and have tied our Revolving Credit

Facility to four sustainability targets. Performance

against these targets is on page 142.

We are committed to reducing our climate impact, conserving

resources, minimising waste and enhancing biodiversity.

We create high quality homes and invest in infrastructure

and placemaking to bring lasting benefits to our communities.

We uphold high ethical standards and prioritise the health,

safety and welfare of everyone connected to our value chain.

PROTECT THE ENVIRONMENT

MAKE A POSITIVE IMPACT ON OUR COMMUNITIES

OPERATE RESPONSIBLY

Climate action

Read more on pages 26-27

Our ESG Data Handbook provides further information on our

sustainability performance, including our response to the

Sustainability Accounting Standards Board Home Builder’s industry

standard. See crestnicholson.com/sustainability-reports.

“ At the heart of everything we do is a

commitment to sustainability. It’s not just part of

our strategy, it’s embedded into our values and

culture. By embracing responsible practices

across the Group, we’re able to make a

meaningful difference in the communities in

which we operate, while delivering long-term

value for our stakeholders.”

Mark Kershaw

Group Head of Sustainability

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Our journey to net zero at a glance

1. Revolving Credit Facility-linked target 2. Science-based target

You can find information regarding our climate-related risks and opportunities in our Task Force on Climate-related Financial Disclosures (TCFD) section on pages 40-48. Information on the RCF and the sustainability-linked targets is on page 142.

Protect the environment

Procure 100% renewable electricity by2025

Reduce waste intensity by 15% by 2025 from a 2019

base year

Reduce scope 3 GHG emissions intensity by 55% by

2030 from a 2019 base year

Reduce absolute scope 1 and 2 GHG emissions by

60% by 2030 from a 2019 base year

1,2

Increase proportion of homes with an Environmental

Impact Rating A and B (90% A rated by 2027)

Achieve net zero across our value chain

Reduce absolute scope 1 and 2 GHG emissions 90%

by 2045 from a 2019 base year

1,2

Reduce scope 3 GHG emissions intensity 97% by

2045 from a 2019 base year

Reach net-zero GHG emissions across the value chain

by 2045

SHORTTERM TARGETS MEDIUMTERM TARGETS LONGTERM TARGETS

As the urgency to address climate change intensifies, we are committed to reducing our

greenhouse gas (GHG) emissions in line with our science-based targets. Achieving net

zero across our value chain by 2045 is a key priority and significant challenge. We are

focused on mitigating and adapting to climate change, building resilience for the future.

2030 2045

Key actions from 2024

Reduced site diesel consumption through

reporting and early grid connections, reducing

generator reliance

Maintained use of hydrotreated vegetable oil

(HVO) accounting for 46% of site fuel

Expanded low emission vehicle fleet. Electric

and hybrid cars account for 82% of our Group

car fleet (2023: 64%)

Focus for 2025

Enhance energy and fuel efficiency awareness

through strengthened colleague engagement

Explore opportunities to adopt more lower

emission technologies, such as lower carbon

plant and machinery on site

Expand the use of renewable tariffs to meet

100% target by 2025 (2024: 85%)

Key actions from 2024

Collaborated with the Future Homes Hub,

suppliers and industry peers on GHG emission

disclosure and emissions reduction opportunities

Advanced preparation for the Future Homes

Standard, increasing the use of air source

heat pumps across developments

Prioritised waste reduction and material

use efficiency

Focus for 2025

Leverage insights from sites using air source

heat pumps to scale best practices and feed

learning into future developments

Expand supplier collaboration to drive

reductions in embodied carbon emissions

across the value chain

Scope 1 emissions encompass direct emissions from the use of fuel in the operation of plant and equipment at our sites, gas

consumption for heating and hot water and the fuel used by our vehicle fleet. Scope 2 emissions represent indirect emissions

arising from the procurement of electricity and heat.

Scope 3 emissions encompass emissions for which we are indirectly responsible throughout our value chain. These emissions are

primarily associated with our supply chain (upstream) and the use of our homes (downstream).

Scope 1 and 2 Scope 3

2025 20302025

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Performance against our science-based targets

REDUCING OUR SCOPE 1 AND 2 EMISSIONS REDUCING OUR SCOPE 3 EMISSIONS

In 2024, our total scope 1 and 2 GHG emissions

were 3,105 tonnes of CO

equivalent (tCO

e),

marking an 18% reduction from 2023 and 63%

decrease against our 2019 baseline. On an

intensity basis, emissions were 1.83 tCO

e per

100 sq. m, a 12% reduction compared with 2023

(2.09 tCO

e).

Reducing site diesel emissions has been a

key priority. During the year, we achieved a

42% reduction compared with 2023, driven

by regular communication and reporting on

fuel, plant and equipment use. This helped

minimise generator hire, prioritise early grid

connections and ensure generators in use

were appropriately sized. Along with using

efficient Tier 5 telehandlers, we have continued

to use hydrotreated vegetable oil as a direct

replacement for white diesel, accounting for

46% of our site diesel consumption.

We maintained 85% of our electricity use on

renewable tariffs, with a target of 100% by

the end of 2025. Until this year, renewable

tariffs were not available for unmetered

supplies on our sites. Through collaboration

with our utility management partner and

industry engagement, we secured access

to renewable unmetered supplies and

have already transitioned the majority to

renewable tariffs.

Additionally, we continue to promote low

emission vehicles, with 82% of our Group car

fleet now either electric or hybrid, up from

64% in 2023.

Scope 3 emissions account for 99% of our

total GHG emissions and predominantly

comprise emissions relating to our supply

chain (upstream) and the use of our homes

(downstream).

In 2024, our absolute scope 3 emissions

reduced by 15% compared with 2023. Scope3

intensity was 2.39 tCO

e/sq. m, representing

a 9% decrease from 2023 and a 7% reduction

against our 2019 baseline.

The use of our homes accounts for 62% of our

total emissions. The Future Homes Standard

(FHS) will deliver zero carbon ready homes

using electric heating systems like air source

heat pumps. Despite delays to the FHS

timeline, we remain focused on preparing for

its introduction.

In 2024, we introduced air source heat pumps

on several developments and will expand their

use in 2025, leveraging insights to scale best

practices and align with future regulations.

Our fabric-first approach enhances thermal

efficiency, reducing heat loss and improving

energy performance. Additionally, 95%

of our homes achieved an Environmental

Impact rating of A or B in 2024, meeting our

sustainability-linked RCF target for the year.

Materials and services used in construction

contribute around 36% of our total emissions. As

emissions from home use decrease, supply chain

emissions will become our largest carbon source.

Collaboration is critical to achieving net zero.

We engage with suppliers on emissions data,

including Environmental Product Declarations,

and strategies to cut emissions. We also

participate in the Future Homes Hub’s working

groups on embodied and whole-life carbon,

helping to drive industry-wide reductions and

supporting the net zero transition.

Scope 1 and 2 emissions performance (tCO

Scope 3 emissions breakdown

Supply chain 36%

Use of sold product 63%

Other scope 3 1%

Protect the environment continued

Scope 3 emissions intensity performance

(tCO

e/sq. m)

2030 target (1.16 tCO

e/sq. m)

2030 target (3,383 tCO

--- 2019 base year (8,458 tCO

2024

2023

3,803

2022

4,449

3,105

2024

2023 2.64

2022

2.42

2.39

--- 2019 base year (2.57 tCO

e/sq. m)

Scope 1 and 2 GHG emissions breakdown

Scope 1 2,030 tCO

e 65%

Scope 2 1,075 tCO

e 35%

Scope 2 emissions use location-based emission factors.

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Natural resources and waste

Unsustainable resource

consumption and waste are

significant contributors to

climate change, biodiversity loss

and pollution. Reducing waste

aligns with our Operational

Efficiency strategic priority.

In 2024, we reduced total construction waste

by 39% compared with 2023, generating 12,132

tonnes (2023: 19,975 tonnes). Waste intensity

also decreased to 7.15 tonnes per 100 sq. m of

completed floor area, reflecting a 26% reduction

from our 2019 baseline and a 35% reduction

compared with last year.

Driving compliance with our Waste Management

Policy has been key to this progress. We produced

a waste management video to demonstrate best

practice on site and provided regular guidance to

divisions to support further waste reduction.

We recognise that we still generate too much

waste and we will continue to focus on efficiency

improvements. We maintained strong waste

segregation practices, diverting 98% of waste

from landfill (2023: 98%), exceeding our 95%

target. Additionally, our ongoing collaboration

with Community Wood Recycling resulted in 11

jobs, 16 training places and facilitated timber re-

use. Our pallet return scheme saw 23,763 pallets

collected for repair, re-use or recycling.

EVOLVING OUR WASTE METRICS AND

TARGETS

This year, we continued to report waste intensity

based on floor area. However, for 2025, we

will transition to using equivalent build units

for reporting as this approach offers a more

representative view of the production taking

place on our sites. This change will help us

refine our targets and further enhance our waste

management practices.

WATER RESILIENCE

The UK faces increasing pressure on its water

supply due to climate change, population growth

and ageing water infrastructure. To help address

these challenges, we focus on both reducing

water demand and improving water management

across our developments.

Our homes are designed to use less than 105

litres per person per day (lpppd), 16% lower

than the regulatory requirement of 125 lpppd.

Our homes incorporate water-saving features

such as dual-flush toilets, low-flow taps and

showers and water meters, helping to reduce

household water consumption.

At a development scale, we integrate

sustainable drainage systems (SuDS) to build

resilience against water scarcity and mitigate

flood risk. SuDS, which reduce surface water

runoff by using natural features like swales

and attenuation ponds, not only improve water

quality but also enhance biodiversity and create

recreational spaces.

NUTRIENT NEUTRALITY

In response to elevated phosphate and

nitrate levels in watercourses, several local

authorities mandate nutrient neutrality for

new developments, following guidance from

Natural England. While this approach seeks to

improve water quality, it has caused planning

delays without fully addressing the root cause

of river pollution. We continue to work closely

with government bodies, industry partners

and stakeholders to find effective solutions for

nutrient neutrality.

Our waste management best practice video

is a mandatory training requirement for

commercial and site-based colleagues.

SuDS at Sevington

Lakes, Ashford creates

an attractive vista while

mitigating flood risk

across the development.

Total construction waste (tonnes)

Waste intensity (tonnes/100 sq. m)

Protect the environment continued

2024

2023 19,975

2022 21,356

12,132

2024

2023 10.98

2022 8.72

7.15

---- 2019 base year (9.64 tonnes/100 sq. m)

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Enhancing biodiversity

Biodiversity loss is a significant

global challenge, and we

can play a role in supporting

ecosystems at both a local

and national level.

In February 2024, biodiversity net gain (BNG)

became a mandatory requirement for all new

planning applications, requiring at least a 10%

increase in biodiversity compared with a pre-

development baseline. This regulation forms part

of the Environment Act 2021, reinforcing efforts to

preserve local ecosystems and support broader

biodiversity targets.

Our approach to biodiversity net gain varies

across our developments, and to ensure

effective delivery, we incorporate it early

in the land acquisition and planning stages.

By engaging ecologists and landscape architects

from the outset, we aim to create habitat

solutions that are both environmentally beneficial

and cost effective.

As biodiversity net gain is still a relatively new

requirement, we recognise that our approach

will continue to evolve as we learn from each

project. We are committed to refining our

strategy over time, ensuring we implement best

practices in biodiversity and consistently meet

both regulatory requirements and the ecological

needs of each site.

HOMES FOR NATURE COMMITMENT

Nature is highly intricate and cannot be captured

through metrics alone. We go beyond the

requirements measured for biodiversity net gain

set out in the Environment Act 2021. This includes

protecting and, when necessary, relocating

species on our developments, installing bird and

bat bricks and creating hedgehog highways to

support local wildlife.

In 2024, we signed up to the Homes for Nature

commitment, developed in collaboration with the

Future Homes Hub and industry peers. As part

of this initiative, we will install a bird-nesting brick

or box for every new house we build, as well

as creating hedgehog highways as standard in

every new development taken through planning

from September 2024.

Protect the environment continued

We are committed to delivering

attractive, high quality homes

and leaving a lasting positive

legacy for our communities and

the local environment.

CREATING THRIVING COMMUNITIES AND

SOCIAL VALUE

Through thoughtful placemaking, collaborative

planning and stakeholder engagement, we

are committed to providing high quality homes

with convenient access to local amenities. We

prioritise enhancing connections between

our customers and nature by incorporating

accessible green spaces wherever possible.

We aim to create thriving communities that

bring lasting benefits. Our approach integrates

social value through local infrastructure

enhancements, such as improved public transport

links, community centres, educational facilities

and recreational and play areas. We also drive

socio-economic growth by creating jobs for local

subcontractors, apprentices, trainees and supply

chain partners.

CHARITABLE GIVING AND SUPPORTING

THE LOCAL COMMUNITY

In 2023, we launched a charity partnership with

Young Lives vs Cancer, supporting their mission

to ensure children and young people with cancer

get the right support at the right time. We also

actively support local charities and organisations

through donations, sponsorships and our payroll

giving scheme.

DELIVERING HIGH QUALITY HOMES AND

EXCELLENT CUSTOMER EXPERIENCE

Building high quality homes and delivering an

outstanding customer experience are central

to our strategy. We aim to provide our customers

with the best possible experience throughout

their home buying journey and beyond.

In 2024, we renewed our focus on quality

and customer service, consistently achieving

a customer satisfaction rating above the 90%

threshold required for 5 star status from the

Home Builders Federation. We enhance the

energy efficiency of our homes by incorporating

sustainable technologies and efficient building

fabric, helping reduce emissions and lower

energy costs for homeowners. More details

can be found on page 5.

Make a positive impact on our communities

Thriving communities

More than 160 colleagues

participated in the annual

charity challenge raising funds

for Young Lives vs Cancer.

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Responsible practice

We are dedicated to running

our business responsibly,

fostering a safe, inclusive

workplace and working

closely with our supply chain

to drive positive outcomes

for our stakeholders.

SUSTAINABLE SUPPLY CHAIN AND

RESPONSIBLE PROCUREMENT

Collaboration with our supply chain partners

is crucial to the successful delivery of our

strategy and sustainability objectives. Our

Sustainable Procurement Policy and Supply Chain

Code of Conduct (Supplier Code) outline clear

environmental, ethical and social obligations for our

partners, ensuring safe and fair working conditions.

We remain a Gold status partner of the Supply

Chain Sustainability School (the School),

an industry initiative that provides valuable

sustainability-related learning resources to our

supply chain and colleagues. This partnership

enhances the skills and knowledge of our

suppliers through targeted learning modules on

key sustainability topics such as climate change,

waste management and modern slavery.

One of our sustainability-linked Revolving Credit

Facility targets focuses on supplier engagement

with the School. We aim for 90% of suppliers with

Group Trading Agreements to achieve bronze,

silver or gold membership of the School by 2026.

In 2024, 66% (2023: 56%) of these suppliers had

reached at least bronze membership, of which

48% achieved gold status.

SUSTAINABLE TIMBER

Our Sustainable Timber Policy commits us

to sourcing certified timber from responsibly

managed forests, including Forest Stewardship

Council (FSC) and Programme for the

Endorsement of Forest Certification (PEFC)

certified timber. This promotes sustainable forest

management and helps mitigate the risk of illegal

deforestation. In our most recent audit, 99%

of our timber procured from suppliers was FSC

or PEFC certified.

HUMAN RIGHTS AND ANTISLAVERY

We are committed to conducting our business

with integrity, helping to ensure that human

rights are respected and protected throughout

our operations. This extends to our colleagues,

supply chain, customers and the communities

we serve. Our Human Rights Policy supports the

principles set out in internationally recognised

standards, including the UN Guiding Principles on

Business and Human Rights and the UN Universal

Declaration of Human Rights.

We expect our supply chain partners to act

responsibly, with respect for human rights.

Our Supplier Code clearly sets out expectations

on environmental and social issues, and all

partners are contractually required to comply with

these standards.

To raise awareness of modern slavery, we

require all new employees to complete anti-

slavery training during induction, with existing

employees undertaking an annual update. We

provide updates through our intranet and display

posters across our sites in multiple languages,

to help those working on our sites identify signs

of modern slavery. We maintain a zero-tolerance

approach to all forms of modern slavery, including

forced labour and child labour.

Our Speaking Up (whistleblowing) helpline and

website allow our colleagues, subcontractors,

suppliers and the local community to report

concerns. In 2024, no substantiated grievances

related to human rights were reported, and no

instances of modern slavery were identified.

REAL LIVING WAGE

We maintained our accreditation as a Living Wage

Employer in 2024. The real Living Wage exceeds

both the government’s minimum wage and the

National Living Wage, being the only wage rate

in the UK calculated based on the actual cost

of living.

We ensure that all direct employees are paid

at least the real Living Wage, with annual

reviews to ensure compliance. Our Supplier

Code requires that subcontractors working

on our sites are also paid the real Living Wage,

and we actively communicate this across our

sites. We also provide information on how to

report any concerns of non-compliance through

our Speaking Up channels.

Group suppliers at bronze, silver

or gold status with the Supply Chain

Sustainability School

66%

of which

48%

received gold

Operate our business responsibly

Read more in our Speaking Up policy and our Supply Chain

Code of Conduct at: crestnicholson.com/supply-chain

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Operate our business responsibly continued

Safety, health and environment

The safety and welfare of

everyone who comes into

contact with our operations

is our number one priority.

There is nothing more important than the health,

safety and wellbeing of our people, subcontractor

workforce, customers and the public. As a Home

Builders Federation Health and Safety Charter

Signatory organisation, we are committed to

continuous improvement and to the charter’s

core aims of driving improved performance and

growing a positive health and safety culture. We

have continued to make improvements in the way

that we manage workplace health and safety risks

throughout 2024.

There is a Group Safety, Health and Environment

(SHE) Committee whose role is to ensure oversight

and stewardship of the Group’s SHE management

system, and performance and compliance with

applicable laws and standards. Responsibilities

of the Committee include setting policy, developing

strategic objectives, ensuring resources

are available to manage risk and ensuring

operational processes are being controlled

effectively. SHE Committee actions and progress

are reported to the Board at every meeting.

Everything we do is built on a foundation of

integrity, quality and care. Our SHE mission

is to promote a culture and environment that

empowers everyone to work collaboratively and

responsibly, promoting operational excellence

and wellbeing, centred around keeping people

and places healthy and safe.

This includes the occupiers of legacy buildings

which we are now revisiting to ensure they

comply with the latest fire related standards.

Additional measures and processes have been

put in place to ensure this work is carried out

to the highest health and safety standards and

monitored by both senior management and our

SHE team.

2024 HIGHLIGHTS

The Group has had no health and safety

prosecutions, prohibition or improvement notices,

work related fatalities or environmental breaches

resulting in prosecution during the year.

A total of 519 site inspections were completed,

by a combination of divisional and Group senior

management, build and site managers, the in-

house SHE team and our independent external

consultants. SHE compliance inspections on

all active sites were carried out measuring our

compliance with industry best practice guidance

and legal requirements. Compliance has steadily

improved over the past four years and we have

raised our Group target for compliance from 90%

to 95% for 2025.

A key focus area was accidental buried cable

strikes, which are both dangerous and costly.

We implemented new working practices and

engaged our supply chain, and as a result we

were able to reduce cable strikes by nearly 50%

over the second half of the year.

Our Annual Injury Incident Rate (AIIR) increased

compared with 2023. AIIR is the ratio of accidents

to the number of people exposed to the risk.

In 2024, the number of people working on our

sites and other premises fell while the number of

reportable incidents remained the same as the

previous year, leading to a rise in the AIIR.

2025 FOCUS AREAS

We have set targets for reducing accidents

in 2025. Our priorities include focusing on

the causes of accidents, and increasing

our expectations of tidiness and material

management on our sites.

We want to make sure that customers moving

into their new homes have the best possible

experience while construction of additional

homes continues on the development. We are

introducing new public safety processes and

monitoring to ensure occupied areas of new

and established developments are as safe as

possible and being managed to provide an

excellent experience for our customers.

We will continue to work with stakeholders

on our remedial schemes to improve how they

are managed.

AIIR

396

2023: 305

SHE inspection compliance

92.3%

2023: 89.9%

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Our people

We want our people to feel

valued, heard and included.

Our people are at the heart

of everything we do, and

their commitment and hard

work are critical to our

long-term success.

There has been a level of uncertainty for our

people throughout this financial year, with some

major changes within the business as well as

external factors having an impact. Our people

have shown true resilience, and we have sought

to champion them with a continued aim of being

an employer of choice.

TRAINING AND DEVELOPMENT

We have invested time and resources into how

we train and develop our employees and have

focused on compliance and mandatory training.

To enhance the skillset of our people on a more

personal level, we have facilitated a number of

learning avenues.

Personal skills programme

We partner with an external provider to deliver

a series of short management training modules.

We have different modules which come under

three key themes, which are Myself, My Team

and My Relationships.

Recognising and preventing harassment

and bullying training

We have developed and provided a new

training programme to reinforce our stance on

harassment, especially sexual harassment,

in line with new legislation which came into force

in October 2024.

We have invested time and resources in its

development to ensure it is as impactful as

possible. Working with an external trainer and two

actors, we launched the training in person for all

employees with line management responsibilities,

with live online training for all other employees.

The training encompasses what does it mean to

be respectful at work, what is harassment, what

our standards are in terms of our code of conduct,

what is banter, what constitutes being ‘at work’,

implicit bias and speaking up.

Positive feedback has been received on this and

we have heard our employees saying how they

will change their mindset, especially given the

industry we are in and that a different approach

is required.

Hours of in-person and

online training delivered

6,130

“ If only courses like this

were available many

years ago, perhaps

all industries, or even

everyday life, would be in

a better place.”

Cliff Thomas

Senior Site Manager – Recognising and

preventing harassment and bullying training

Operate our business responsibly continued

“I joined Crest Nicholson

in January 2022 as a

Sales and Marketing

Director.

After a year I expanded my role to include

overseeing customer service and later

supported the commercial department,

which broadened my knowledge of the

business. In my second year, I attended a

Senior Leadership course which included

1:1 coaching with an external, professional

coach. This was to help us, as leaders,

drive business performance and face into

challenges with authenticity, agility and

bravery. This gave me the confidence to

apply for the Managing Director role for the

South West division, which I was delighted

to be offered.”

Charlie Joseph

Managing Director, South West

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Sales management team – coaching skills

Sales is a key focus for our business and we have

invested in broadening the skillset of our sales

management team by giving them an in-depth

dive into what coaching is, so that they can better

support our sales executives in their roles.

We have received positive feedback on

the coaching training delivered to our sales

management team, which also includes a follow

up with divisional teams to truly embed the

coaching mindset.

Trainees

We continue to invest in our trainees, noting the

importance of having a future talent pipeline

within the business. We achieved the Gold

Award with the government-recognised 5% Club

scheme for our 2024 financial year.

SIte employee development

We continue to enhance the technical knowledge

and expertise of our site management population,

by partnering with the Chartered Institute

of Building and ensuring our site managers,

assistant site managers and trainee assistant

site managers have the option to complete an

enhanced qualification to broaden their horizons

in site management.

Operate our business responsibly continued

EMPLOYEE TURNOVER

Our voluntary employee turnover has slightly

increased to 22% in 2024. Our focus on

recruitment process improvements, onboarding

and management communication has been

in the service of improving the turnover of our

people and to ensure we have the right people

in place to implement our strategy and achieve

our goals. We will continue this focus in 2025

specifically around upskilling leaders and

managers in our business.

ONBOARDING

We have invested time in how we can improve

our onboarding experience for new starters.

We focused on the responsibility of hiring

managers to be accountable for a new starter

as part of their preboarding and onboarding

experience, looking to show that we are a

business that cares about and values our people.

We have created a series of new documents

to aid our hiring managers and others involved

in the process and introduced a buddy system

where each new starter is assigned someone

from another division to widen their support

network and build relationships further afield for

their future career.

We are also utilising our HR system to bolster how

we receive feedback from new starters and look to

continually improve our onboarding experience.

HEALTH AND WELLBEING

It is important for our people to feel valued,

happy and healthy in their workplace. We

promote an agile working environment, valuing

the importance of work-life balance.

We continue to invest in having Mental Health

First Aiders in the business, and understand

the impact of the training these people have

received, should a situation arise where these

skills are required.

EQUALITY, DIVERSITY AND INCLUSION

It is essential to have a diverse workforce who

bring different experiences and perspectives to

our workplace, who feel valued, included and

empowered to succeed.

Our policies are clear that we do not

discriminate, either in hiring, development or

career progression, based on any protected

characteristic including gender, race, age, sexual

orientation or disability.

We held a Diversity and Inclusion Forum during

the year, to further discuss how we could embed

an equality, diversity and inclusion strategy across

the business. Given the uncertainty the business

and industry faced this year, the implementation

of the strategy will be a focus for 2025.

We continue to be a Silver Award holder with

the Employer Recognition Scheme, showing our

ongoing support of the armed forces, especially

being an employer that has a reservist policy

in place.

We are currently developing new guidance for

both line managers and employees on managing

neurodivergence in the workplace. We aim to

ensure all employees are supported in working to

the best of their ability, and gaining the advantages

that a neurodiverse workforce can bring.

Voluntary employee

turnover

22%

2023: 19%

Employees promoted

through the year

2023: 61

Male

63%

Female

37%

Ethnicity split

White British or other white 88%

Mixed/multiple ethnic groups 1.5%

Asian/Asian British 4%

Black/African/Caribbean/Black British 3%

Other including Arab 0.5%

Not specified/prefer not to say 3%

Ethnicity categories as specified in Listing Rule 9, to align with

data on diversity on the Board and in executive management

shown on page 92.

Gender balance

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Financial StatementsStrategic Report Governance

Key performance indicators

Measuring our performance

FINANCIAL KPIS

We use key performance

indicators to monitor our

progress against our strategy.

These are how we measure

the performance and health

of our business.

Return on capital

employed (ROCE)

4.1%

2024

7.3%

2023

22.4%2022

Definition

Adjusted operating profit before joint ventures

divided by average capital employed.

Why we measure

Illustrates how effective the Group’s capital

allocation is in delivering returns.

Land creditors as a %

of net assets

18.1%2024

24.0%2023

22.5%2022

Definition

Land creditors divided by net assets.

Why we measure

Ensures that the Group is maintaining its

financial position when entering into future

landcommitments.

Earnings before interest

and tax (EBIT) margin

5.1%2024

7.7%

2023

15.4%2022

Definition

EBIT margin (operating profit margin) reflects the

adjusted profit before interest, joint ventures and

tax achieved by the Group, divided by revenue.

Why we measure

Assesses the financial efficiency of our Group

operations before any one-off costs.

Net (debt)/cash

£(8.5)m2024

£64.9m2023

£276.5m2022

Definition

Cash and cash-equivalents plus non-current and

current interest-bearing loans and borrowings.

Why we measure

Illustrates the Group’s overall liquidity position

and general financial resilience.

Unit completions

1,8732024

2,0202023

2,7342 022

Definition

Sales of homes recognised in the year including

100% of those held in joint ventures and on an

equivalent unit basis.

Why we measure

Reflects overall business activity and output

and enables us to forecast future capacity

requirements.

Land portfolio forecast

gross margin

23.1%2024

23.2%2023

25.0%2022

Definition

The forecast gross margin after sales and

marketing costs of land we hold in our short-term

land portfolio.

Why we measure

Indicates the earnings potential of current

and future land development and the sale

of associated homes.

Link to remuneration

To align the focus of the Board and Executive

Committee with the interests of stakeholders,

some KPIs are reflected in our senior

management incentive schemes.

Land Portfolio

Strategic Land and Partnerships

Placemaking and Quality

Operational Efficiency

5 Star Customer Service

Links to Strategic Priorities

KPI used in the annual bonus scheme

KPI used in the Long-Term Incentive Plan

Further information on remuneration can be

found on pages 74-91

2 2

1 ROCE, EBIT margin, net debt/cash and land creditors as a percentage of net assets are alternative performance measures. See pages 158-159 for further details.

2 Represented as per note 29 of the financial statements.

4.1%

18.1%

5.1%

£(8.5)m

1,873

23.1%

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Key performance indicators continued

NONFINANCIAL KPIS

Greenhouse gas

emissions intensity

1.832024

2.092023

1.822022

Definition

The greenhouse gas emissions intensity reflects

our scope 1 and 2 emissions (tCO

e) per 100 sq. m

of completed floor area. It includes business

travel via company cars, fuel and energy used

on sites and in offices.

Why we measure

Tracks our progress on reducing our impact on

the environment. There is also a financial benefit

from increased operational efficiency

and reduced cost of fuel used.

Waste intensity

7.152024

10.982023

8.722022

Definition

Waste intensity reflects tonnes of construction

waste per 100 sq. m of completed floor area.

Why we measure

Tracks our progress on reducing our impact on

the environment. There is also a financial benefit

from the reduced cost of materials purchased

and waste generated in the construction process.

Annual Injury

Incidence Rate (AIIR)

3962024

3042023

4682022

Definition

AIIR represents the number of accidents in the

year normalised per 100,000 people working

on-site.

Why we measure

The safety, health and welfare of everyone who is

part of our operations is our number one priority.

Voluntary employee

turnover

22%2024

19%2023

27%2022

Definition

The percentage of leavers during the year

by reason of resignation or retirement as a

proportion of total employees at the end of

theyear.

Why we measure

Low employee turnover supports greater depth

of experience, continuity and development of

skills within ourteams.

Affordable and bulk housing

completions

44%2024

40%2023

35%2022

Definition

Proportion of unit sales of homes recognised in

the year to affordable housing, including open

market bulk sales.

Why we measure

Partnerships form part of our strategic priorities.

The number published for 2023 in last year’s report has been

updated to include open market bulk sales.

Customer satisfaction

4*2024

4*202 3

5*2022

Definition

The annual HBF’s customer satisfaction rating

based on the NHBC survey which new home

buyers receive. Survey results are published

in March each year.

Why we measure

Providing 5 star customer service is one of

our strategic priorities. In 2024, we have

consistently achieved a customer satisfaction

rating above the 90% required to achieve 5 star

status in March 2025.

1.83

396

7.15

44%

22%

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Financial review

Completions and revenue

Open market private completions were 1,047

(2023: 1,222), open market bulk completions

were 331 (2023: 273) and affordable completions

were 495 (2023: 525). As a result, total home

completions were 1,873 (2023: 2,020), down

7.3%, reflecting a weak order book at the start

of the year as a consequence of low levels of

confidence in the housing market. There was

some modest improvement in market sentiment

as the year progressed, largely as a result of the

0.25% interest rate reduction in August 2024.

The total weighted average selling price for

the Group was substantially unchanged at

£344k (2023: £347k). On like-for-like units, we

experienced modest sales price deflation in the

first half of the financial year, which reversed in

the second half of the year to leave the average

selling prices largely unchanged, but with some

positive momentum being taken into 2025.

The open market private sales rate as measured

by sales per outlet week, was 0.48 for the year

compared with 0.52 in 2023. The housing

market remained sluggish throughout 2024

compared with much of the previous decade,

with comparatively high mortgage rates, low

consumer confidence and an absence of

meaningful government support all contributing

to the suppressed levels of demand. As the year

progressed, a commencement of loosening

monetary policy and a new government with more

expansive housing aspirations provided some level

of improvement in the overall sales environment.

Average sales outlets were 44 (2023: 47).

“ 2024 has been a challenging year for the

Group. We exit the year better placed to

address the opportunities ahead.”

Bill Floydd Chief Financial Officer

1 Represented as per note 29 of the financial statements.

Planning matters continue to take much longer

to progress sites to operational development

and associated environmental impacts such

as water and nutrient neutrality further delay

planning decisions. We therefore expect a minor

reduction in our sales outlets in 2025. As a result

of these factors, revenue from housing totalled

£572.5m (2023: £638.0m), a reduction of 10.3%.

We completed £45.7m (2023: £19.5m) of land

sales on sites that we would not have been able

to access ourselves for several years.

Total revenue for the year was £618.2m, compared

with £657.5m in 2023, a decline of 6.0%.

Representation of 2023

The current year consolidated income statement

presents other operating income, other

operating expenses and administrative expenses

separately, with comparators being represented.

Following the in-year review, completed

site accruals are now split into accruals and

provisions, also with comparators being

represented. These changes provide greater

clarity for users of the accounts and are marked

by footnotes throughout the Annual Report and

explained fully in note 29 of the consolidated

financial statements. The Group’s accounting

policy for exceptional items has also been

revised to include completed site costs relating

to changes in the estimate of costs associated

with completed sites which are no longer part of

the core strategy. The previous year’s completed

sites charge has been represented to align with

the revised policy.

Gross profit

Adjusted gross profit was £86.8m (2023:

£105.6m¹), a reduction of 17.8%. The reduction in

gross profit substantially reflected the continued

weak sales environment. Additionally, we

recognised pre-exceptional costs of £7.3m in

respect of completed sites as a result of a one-off

review. During the year £14.2m (2023: £13.4m)

additional NRV was charged consisting of £8.5m,

mainly on legacy developments and £5.7m

on freehold reversionary interests as disclosed

in note 4.

Gross profit on lands sales was £10.1m (2023:

£7.1m). Adjusted gross profit margin was 14.0%

(2023: 16.1%¹). Gross loss was £71.6m (2023: gross

profit £84.7m¹).

Operating profit and margin

Adjusted operating profit of £31.3m (2023: £50.8m¹)

was a decline of £19.5m (38.4%) as a result of the

gross profit reduction of £18.8m and an increase

in administrative costs. The operating loss for the

year was £128.7m after an exceptional items charge

of £160.0m (2023: £29.9m¹ operating profit after an

exceptional items charge of £20.9m).

Control environment

As noted in my report last year, during 2023

we identified that controls were not operating

effectively in two divisions. The control

weaknesses related to the divisions’ management

and forecasting of build costs and margin.

At the end of 2023, we completed the rollout of a

new ERP system that strengthened the key financial

and commercial controls across the business.

During 2024, further control improvements were

implemented. There has been significant cultural

change within the business, led by the new Chief

Executive Officer, Executive Committee and senior

management, on the importance of both governance

and transparency in the business. A Chief Operating

Officer was appointed on 1 January 2024 and a

Group Commercial Director joined the business in a

newly established role on 3 June 2024. I changed

the reporting line for divisional finance directors

from divisional managing directors to myself, to

increase the level of independence and oversight

within divisional management teams. Numerous

other governance and reporting improvements have

been implemented during the course of the year to

improve the control environment.

As a result the control environment is operating

effectively and we are continuing to monitor the

processes to identify any further improvements

that can be made.

Exceptional items

An exceptional net cost of sales charge of

£158.4m was recognised in the year, comprising

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Financial review continued

combustible materials charge of £131.7m,

combustible materials recovery from third parties

of £4.4m, completed site costs of £25.0m, freehold

inventories written off of £5.7m and professional

legal fees of £0.4m.

In the prior year, as a consequence of signing the

Developer Remediation Contract on 13 March 2023,

the Group entered into contractual commitments

with the government to identify and remediate

those buildings it has developed with possible life-

critical fire safety defects.

The £131.7m combustible materials charge

comprises £98.5m relating to the Group’s

estimated remedial costs for non-surveyed

buildings and £15.2m remedial costs of buildings

surveyed in the year requiring remediation, both

of which were previously disclosed as contingent

liabilities, and £18.0m relating to changes in

forecast build cost scope and price over the

duration of remediation for buildings upon which

a provision was already recognised.

With additional information, the Group is now able

to estimate a charge for non-surveyed buildings

based on its experience of the cost analysis of

surveyed and tendered buildings. The number

of surveyed buildings has increased significantly

over the year enabling the Group to compute a

reliable estimate for these buildings.

The Group has also undertaken a comprehensive

review, supported by external consultants, of the

Group’s remaining cost obligations on completed

sites. Initially, work focused on four sites that were

completed prior to 2019 when the Group closed its

Regeneration and London divisions. Subsequently,

a review has been carried out on all sites that the

Group has completed but maintains an obligation

to carry out remediation or maintenance on, prior

to adoption by the relevant local authority or

management company. The review of completed

site costs is now concluded, resulting in a one-off

charge of £32.3m, of which £25.0m is treated as

an exceptional item as it relates to non-standard

developments started prior to the change in

strategy in 2019, and the balance of £7.3m is

recorded within adjusted operating profit.

The Group provided £5.7m to write off the value

of its remaining freehold reversionary interests in

buildings previously constructed by the Group.

The market for freehold reversionary interests is

increasingly uncertain given proposed legislative

changes in this area and the impact of some

freehold buildings requiring fire remediation works.

An exceptional administrative cost of £1.6m is

recognised reflecting aborted transaction costs

from the unsolicited approach from Bellway plc.

A further £6.1m (2023: £4.6m) was charged in

relation to imputed interest on the combustible

materials charge.

The tax credit on exceptional items is £48.2m

(2023: £6.5m¹) based on actual tax rates.

Further detail on exceptional items can be

found in note 4 and note 22 to the consolidated

financial statements.

Financing and liquidity

At 31 October 2024, the Group had net debt

of £8.5m (2023: net cash of £64.9m). Net debt

including land creditors was £140.1m (2023:

£140.6m). Average net debt in the year was

£49.6m (2023 average net cash: £47.1m). Return

on capital employed (ROCE) for the year was

4.1% (2023: 7.3%¹) reflecting the lower adjusted

operating profit compared with the prior year.

The Group made good progress on improving its

cash management during the year, with increased

discipline on part exchange and WIP controls,

which continue to deliver benefits to cash flow.

The Group’s debt facilities include a £250m

Revolving Credit Facility, the expiry date of which was

extended in the year to October 2027. The Group

is also financed by an £85m private placement. In

August 2024, in accordance with the note purchase

agreement, the Group made its first amortisation

payment of £15m. A further amortisation payment of

£20m is due to be made in August 2025.

Going concern

The Directors have assessed the Group’s going

concern position, analysing a base case and a

range of adverse scenarios that are deemed to be

Severe But Plausible (SBP), including aggregates

of multiple factors.

The base case scenario utilised rolling forecasts

up to 30 April 2026 (the going concern period) that

reflect the Group’s current financial position and the

prevailing economic landscape, taking into account

that the Group has already secured a proportion

of sales for 2025 by way of its forward order

book. The SBP downside conditions incorporate

potential macroeconomic scenarios which could be

experienced by the UK, industry-wide dynamics, and

Group-specific risks. The assessment also evaluated

the anticipated effectiveness of proposed mitigating

actions that are within the Group’s control. Whilst

the Group forecasts to meet all its covenants in the

base case scenario, the cumulative impact of the

assumptions and mitigations in the SBP downside

case indicates that the Group would not meet its

interest cover covenant during the going concern

period, with the first measurement date in April

2025. The Group maintains good relationships and a

regular dialogue with all its lenders and is confident

that an amendment to its covenants would be

secured if necessary, however, this is not guaranteed

and therefore this represents a material uncertainty

related to going concern. In all scenarios, except

where the interest cover covenant is breached and

a covenant amendment is not agreed, the Group

forecasts adequate liquidity.

In reviewing the assessment outlined above, and

notwithstanding the material uncertainty related

to going concern outlined above, the Directors

are confident that the Group has the necessary

resources and mitigations available to continue

operations and discharge its obligations as they

fall due for at least 12 months from the date of

approval of the financial statements. Accordingly,

the consolidated financial statements continue to

be prepared on a going concern basis.

Further detail can be found in note 1 to the

consolidated financial statements.

Pension

The Group operates a defined benefit pension

scheme. At 31 October 2024, the retirement benefit

surplus under IAS 19 was £19.5m (2023: £10.0m).

Taxation

Effective tax rate applied to the loss before tax

(2023: profit before tax) for the year was 28.0%

(2023: 22.5%). The increase in effective tax rate is

due to the impact of changes in the UK corporation

tax rate. Full details are set out in note 8 to the

consolidated financial statements.

Earnings per share

Adjusted basic earnings per share was 5.6 pence

(2023: 14.2¹ pence), reflecting the decrease in

the Group’s earnings on prior year. Basic loss per

share was 40.4 pence (2023: earnings per share

7.0 pence).

Dividend

The Board proposes to pay a final dividend of

1.2 pence per share for the financial year ended

31 October 2024 which, subject to shareholder

approval, is expected to be paid on 25 April 2025

to shareholders on the Register of Members on

28 March 2025. This is in addition to the interim

dividend of 1.0 pence per share that was paid on

11 October 2024.

Land and planning

At 31 October 2024, the short-term land portfolio

comprised 13,935 (2023: 14,922) plots and the

Group’s strategic land portfolio totalled 17,700

(2023: 18,830) plots, meaning the total land

portfolio at 31 October 2024 was 31,635 plots

(2023: 33,752). The total gross development

value of the portfolio is £11.5bn (2023: £12.2bn).

During the year, the Group added 1,158 plots to the

short-term land portfolio (2023: 3,197). The Group

has sufficient land with planning consents to meet

its requirements for 2025. The Group has a well-

developed land bank for 2026 and is working to

obtain the relevant planning consents to enable

it to meet its development plans for 2026. The

Group is undertaking a thorough review of its

land bank beyond 2026 to determine its overall

suitability for the business’ medium-term needs

and strategic direction.

Bill Floydd

Chief Financial Officer

1 Represented as per note 29 of the financial statements.

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Principal risks and uncertainties

How we manage risk

The Group’s performance may

be impacted by potential risks

and uncertainties in the pursuit

of its objectives.

To continue to be a successful housebuilder

in the long term, our decision making must

be informed by a clear understanding of our

business risks and opportunities.

Our Risk Management Framework provides

assurance that we have identified our principal

and emerging risks. Risk management is an

integral part of our business and is embedded

throughout our strategy, investment decisions,

health and safety activities and core decision-

making processes.

Our divisional boards consider their risk

registers on a half-yearly basis, and site risks and

opportunities are considered on a bi-monthly

basis. Divisional risks, alongside the Group’s

principal risks, are carefully considered by the

Executive Committee at half year and full year.

They are subsequently reviewed by the Audit

and Risk Committee and the Board, together with

the Group’s emerging risks. The risks are then

assessed against the Group’s risk appetite and its

capacity to handle risk. More detailed and specific

risk matters are reviewed by the Audit and Risk

Committee on a regular basis.

RISK APPETITE

Risk appetite is the amount of risk that the Board

is prepared to accept in return for achieving

our purpose of building great places for our

customers, communities and the environment.

Our appetite for risk is based on our analysis

of market context, our strategy and input from

management and advisors. These are assessed

and reviewed throughout the year.

The Board takes a prudent view on risk and has

an overall risk appetite across its portfolio that

reflects this.

We seek to balance our risk position by:

Maintaining a strong focus on health, safety

and regulatory compliance matters

Ensuring financial stability by generating

profits and cash through our operations

to meet our stakeholder objectives

Being selective in land acquisitions - this

allows us to adapt to cyclical markets

and be flexible in our investment decisions

Being disciplined in our operational efficiency

and future growth

Establishing the right culture and shared values

RISK CULTURE

Risk awareness exists throughout our decision-

making processes and is embedded in systems,

policies, leadership, governance and behaviours.

Aligned to our values and defined in our

Operational Framework, the culture we maintain

is one where our colleagues are empowered

to make decisions within agreed parameters in

the delivery of our objectives. We ensure we

have the right accountabilities across the Group,

maintaining effective risk-based decision making.

Board

Has overall responsibility for strategy, risk management and internal control

Reviews the Group’s principal and emerging risks

Sets the Group’s appetite for risk and strategy

Delegates risk oversight to the Audit and Risk Committee and to the Executive

Committee and divisions

Audit and Risk Committee

Responsible for monitoring our risk management processes and approving

relevant disclosures

Monitors financial reporting and internal and external audit activities

Provides assurance to the Board in relation to financial, operational and compliance controls

Executive Committee

Oversees how we are managing the principal, emerging and divisional risks within the

Group’s risk appetite

Embeds risk management within the Group

Responsible for control and risk management of Group functions

Monitors divisional performance and development risks

Oversees the management and application of the internal control framework

Divisional boards

Responsible for control and risk management within the division

Monitor and assess the divisional and operational risks

Maintain an effective system of control and risk management at a site level, including

SHE and supply chain risks

TOP DOWN

Assessment and mitigation of risks at a Group level

BOTTOM UP

Assessment and mitigation of risk across divisional and functional areas

RISK MANAGEMENT FRAMEWORK

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

The Board has identified 12 principal risks that it considers material to the Group’s

performance. They have been mapped on a residual risk basis considering likelihood and

impact. The Group’s risk review process identified that some of the Group’s principal risks

had evolved during the year.

Group risk review

by principal risk

owners and Executive

Committee

Considered existing

principal and

emerging risks against

appetite

Full-year divisional

risk reviews

Including assessing

specific site risk

and sustainability

impacts considered at

meetings throughout

the year

Executive Committee

and Board risk

reviews

Considered output

of divisional and

executive risk reviews,

risk appetite and

disclosures

Principal risks and uncertainties continued

EMERGING RISKS

Emerging risks have the potential to impact our

strategy but are either currently not fully defined,

or are principal risks, which are particularly

elevated or increasing in velocity. Our emerging

risks are identified through horizon scanning by

the Board and Executive Committee and include

industry and macroeconomic trends.

Economic outlook

Although the economic outlook for the house

building sector has improved during the year,

resulting in a reduction in the residual market

conditions risk, there are still significant risks

related to the overall performance of the

economy which may impact this trend in 2025.

Growth remains fragile and there may be

additional impacts from the government’s budget,

changes in fiscal policy and proposed legislation.

This could have further implications on consumer

confidence and demand in the housing market.

Planning reform

We continue to monitor developments from

the government’s plans to unlock the planning

system and develop land planning reform. We

welcome these proposals, but clearly there

are risks that actions may take longer than

anticipated or fail to deliver the necessary

change required.

Fire remediation

We closely monitor the performance and

progress of remedial fire safety works against

our required commitments and contractual

obligations. Regulatory requirements have

continued to evolve under the Building Safety Act

2022 and there can be challenges with the scale,

complexity and capabilities required to complete

the works expediently. We are also mindful of the

impacts on residents and the disruption this can

cause. Given the increased impact, this principal

risk has increased this year.

Organisational change

As the business pursues its strategy in 2025

there may be a high degree of organisational

change and transformation required. Such

change can impact a number of risks which will

need appropriate mitigation and will be carefully

monitored throughout the year.

Artificial intelligence

With the rapid advancement of artificial

intelligence (AI) there are a number of emerging

risks that we will need to consider in this area.

There are risks that we do not make significant

investment in AI or have the necessary skills to

take advantage of the substantial productivity,

commercial or competitive opportunities that will

arise through this technology. There are further

emerging risks around data security, misinformation

and data manipulation where regulation and control

environments will need to evolve.

BOARD ASSESSMENT

The Board acknowledges that several principal

risks have increased during the year or have

remained elevated. This reflects the uncertainty

we face through challenging trading conditions,

an evolving regulatory landscape, or where

further change and transformation is required.

The Board confirms that it has performed a

robust assessment of the Group’s principal and

emerging risks, with consideration of the long

term. Overall, the Group has operated within its

risk tolerance. Actions are in place over the long

term to address specific risks where necessary,

reducing the level of residual risk.

Increasing impact

Increasing likelihood

2024 RISK REVIEW TIMELINE

MAY 2024 JUNE 2024 OCTOBER 2024 NOVEMBER 2024

Half-year divisional

risk reviews

Including assessing

specific site risks

and sustainability

impacts considered at

meetings throughout

the year

Increasing trend No change Decreasing trend

Market conditions Attracting and retaining

our skilled people

Build cost

and margin

Land availability

and planning

Supply

chain

Laws, policies

and regulations

Safety, health

and environment

Solvency

and liquidity

Information technology,

cyber security and

business continuity

Combustible

materials and

legacy obligations

Customer service

and quality

Climate

change

RISK HEAT MAP

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Our principal risks

Risk description

A decline in macroeconomic conditions in the UK

negatively impacts the residential property market

and reduces the ability of people to buy homes,

either through unemployment or low employment, or

constraints on mortgage availability.

Decreased sales volumes, occurring from a drop in

housing demand, sees an increasing number of units

held as unreserved and part exchange stock with a

potential loss realised on final sales.

Changes to regulations and taxes negatively impact

the market; for example, Stamp Duty Land Tax and

the impact of government schemes such as Help to

Buy: Equity Loan.

Actions/mitigations

We continually evaluate our strategy which we can

flex and adjust as demand profiles change.

Regular sales forecasts and cost reviews to manage

potential impact on sales volumes.

Forward sales, land expenditure and WIP are all

carefully monitored to ensure they are aligned to

levels of demand.

We focus on strategic purchase of sites, continued

development of shared ownership models and

engagement with a variety of incentive schemes.

We actively develop our sales offering by introducing

new and innovative products to reflect the nature of

market conditions.

We continually assess whether our organisational

structures are appropriate to meet the changing

demands within the housebuilding sector.

Development in the year

Market conditions have continued to improve against

a tough economic backdrop, which encompassed

political and economic instability. With reducing interest

rates, improving house buyer demand and mortgage

availability, the market outlook continues to stabilise

and we are well placed to react to these changes.

We have expanded our sales and product offering to

reflect the current market and strengthened our sales

processes and incentives.

Links to strategic priorities

Placemaking and Quality

Land Portfolio

Operational Efficiency

Strategic Land and Partnerships

Risk description

A significant health and safety event results

in injury, a dangerous occurrence or potentially

even a fatality.

Significant environmental damage occurs caused by

operations on site or in our offices.

A significant fire safety incident occurs at a legacy

building under remediation.

Lack of recognition of the importance of the

wellbeing of employees leads to increased sickness

absence or employee turnover.

These incidents or situations have an adverse effect

on people affected by our actions, our reputation

and ability to secure public contracts or, if illegal,

prosecution or significant financial losses.

Actions/mitigations

We have effective SHE management systems in place

with increased authority for divisional build managers

and Group SHE advisors to undertake incident

investigations and implement follow up actions.

We use external independent safety auditors to

conduct regular site safety reviews as appropriate

and unannounced.

Use of external specialist consultants or contractors

where specific health and safety requirements demand.

We have a network of mental health first aiders

and a dedicated Employee Assistant Programme.

Where appropriate, interim risk mitigation solutions

have been deployed in buildings where fire safety

concerns have been identified.

Development in the year

We continue to report positive safety compliance

scores and have increased our targets to drive

greater performance and set higher standards.

Director and senior leadership site visits have been

increased to drive stronger safety culture.

We continue to support and develop our network

of mental health first aiders across the divisions.

The Group continues to assess and identify risks

with legacy buildings impacted by fire-safety matters.

The risk has increased slightly during the year,

reflecting the need to drive higher health and

safety compliance.

Links to strategic priorities

Operational Efficiency

MARKET CONDITIONS

SAFETY, HEALTH AND ENVIRONMENT

Residual: High/Medium Appetite: Medium Movement in year: Reducing Residual: Medium Appetite: Low Movement in year: Increasing

Principal risks and uncertainties continued

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Risk description

Changing production levels across the industry put

pressure on our materials supply chain.

Materials availability is impacted by changes in

demand, rising energy prices and dislocation in

supply chains due to external events.

Suppliers and subcontractors face insolvency due to

adverse economic conditions.

The industry struggles to attract the next generation

of talent into skilled trade professions.

The labour market does not have the knowledge

and skills required to deliver modern methods of

construction projects.

Actions/mitigations

We establish longer-term relationships with our

supply chain partners through Group Trading

Agreements and multi-year subcontractor framework

agreements, including competitive tendering.

We engage in dialogue with major suppliers

to understand critical supply chain risks and

respond effectively.

We have developed effective procurement schedules

to mitigate supply challenges.

Development in the year

Access to site labour and materials through the

supply chain continues to be resilient, with forward

demand and capacity planned through to the end

of 2025. We have continued to build on supply chain

relationships, price competitiveness and greater

product selection. Our tendering processes have

been enhanced through our Operational Framework

and enhanced commercial controls.

Links to strategic priorities

Placemaking and Quality

Operational Efficiency

Risk description

Build quality and customer service fall below

our required standards, resulting in reduction

of reputation and trust, and impact sales

and volumes.

Unforeseen product safety or quality issues or latent

defects emerge due to new construction methods.

Failure to effectively implement or comply with new

regulations on build quality or customer service

requirements and respond to emerging technologies

impacts our sales and volumes.

Actions/mitigations

We continue to focus on enhancing build quality,

achieving high customer satisfaction ratings and a

retained commitment to excellent placemaking.

We have enhanced quality and build stage inspections

to monitor adherence to our quality standards.

There is a central team of quality assurance and

customer relationship managers to cover all divisions.

Customer service and build quality performance are

bonus metric targets across the Group, including for

Executive Directors.

The customer service dashboard which measures

key performance targets is reviewed by the Executive

Committee.

Development in the year

We have continued to refine our customer service

and quality processes to enhance the customer

experience and strengthen the quality of our homes.

We have streamlined customer service teams to

ensure greater ownership of the customer journey

at legal completion and improved the design and

layout of our sales suites. We remain on target for a

5 star customer service rating from HBF when it is

announced in March 2025, and are improving our

nine-month survey scores under the new NHBC

methodology, which will require a higher customer

service performance. This risk has increased for the

year, reflecting where further improvements can be

made. Expectations are this risk should reduce in

2025 given ongoing actions and continued focus.

Links to strategic priorities

Placemaking and Quality

Operational Efficiency

5 Star Customer Service

SUPPLY CHAIN

CUSTOMER SERVICE AND QUALITY

Residual: Medium Appetite: Medium/Low Movement in year: No change Residual: High Appetite: Low Movement in year: Increasing

Principal risks and uncertainties continued

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Risk description

A lack of oversight and control of build costs, project

progress and performance leads to margin erosion

and significant increase in costs.

Lack of awareness and understanding of external

factors impacts build costs including complex

planning permissions and emerging sustainability and

environmental regulations.

A lack of quality in the build process exposes the

Group to increased costs and reduced volume, and

impacts our reputation.

Build cost inflation and unforeseen cost increases

occur, driven by demands in the supply chain or

failure to implement adequate cost control systems.

Actions/mitigations

We benchmark our costs against existing sites to

ensure rates remain competitive. We build and

maintain strong relationships with our suppliers and

seek to obtain volume purchasing benefits.

We operate a fair and competitive tender process

and we are committed to paying our suppliers and

subcontractors promptly.

There are rigorous and regular divisional build cost

review processes and site-based quality reviews.

We continue to investigate alternative sources

of supply where possible and utilise alternative

production methods or materials where it is

appropriate to do so.

Development in the year

We have continued to strengthen our commercial

processes and controls as we have developed our

Operational Framework. The level of oversight, review

and assurance has also increased, through our second

line Group Commercial function, over key build cost

management processes. We expect to see this risk

continue to reduce in 2025 given increased certainty

and performance management over build costs.

Links to strategic priorities

Operational Efficiency

Risk description

Data breaches, ransomware or phishing attacks lead

to the loss of operational systems, market-sensitive

information or other critical data which risks non-

compliance with data privacy requirements.

Advancement of artificial intelligence impacts data

security breaches or leads to misuse in our business.

This in turn results in a higher risk of fraud and, as a

result, financial penalties and an impact to reputation.

Actions/mitigations

We employ network security measures and intrusion

detection monitoring, including virus protection on

all computers and systems, and carry out annual

security-breach tests. We utilise customer relationship

management systems for storing sensitive data to

prevent negligent misuse by employees. We operate

in a cloud environment with resilient IT providers,

reducing centralised and physical risk exposure.

This is complemented by: employee training on data

protection and internet security; data classification,

retention policies and toolsets with appropriate and

responsive procedures embedded to respond to data

privacy matters; and IT disaster recovery plans.

The IT Cyber Security and Data Sub-Board

Committee, chaired by the Chief Financial Officer,

meets through the year to address cyber security

matters, assess threat levels and to develop

appropriate policies and procedures.

We are Cyber Essentials Plus certified and are subject

to regular external and internal audit review.

Development in the year

An external third-party review to assess the Group’s

cyber security against the National Institute of

Standards and Technology Cybersecurity Framework

was undertaken and benchmarked against our peers.

The assessment deemed that Crest Nicholson is

operating at an appropriate level for cyber security

and identified opportunities for further improvement.

We have tested our cyber incident response plan

through a tabletop exercise of various scenarios and

we will use the output to improve our resilience.

A number of application security tools have been

deployed across IT operations which has further

strengthened our IT environment.

This risk has risen slightly during the year given

an increase in external threats.

Links to strategic priorities

Operational Efficiency

BUILD COST AND MARGIN

INFORMATION TECHNOLOGY, CYBER SECURITY AND BUSINESS CONTINUITY

Residual: High/Medium Appetite: Medium/Low Movement in year: Reducing Residual: Medium Appetite: Medium/Low Movement in year: Increasing

Principal risks and uncertainties continued

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Risk description

An increasing skills gap in the industry at all levels

results in difficulty with recruiting the right and diverse

mix of people for vacant positions.

We don’t have the right culture and environment

to attract and retain talent, resulting in increased

employee turnover and the requirement to induct and

embed new employees, alongside increased cost of

wages as a result of inflation.

Loss of knowledge within the Group results in

inefficiencies, productivity loss, delays to business

operations, increasing costs, and an overuse or

reliance on consultants and the supply chain.

Actions/mitigations

We provide flexible and agile working arrangements

to support employees.

Programmes of work are carried out to develop

robust succession plans and improve diversity and

inclusion across the business.

We monitor pay structures and market trends to

ensure we remain competitive against our peers.

We monitor employee turnover, absence statistics

and feedback from exit interviews.

Development in the year

Employee turnover has been steady throughout the

year, although higher than anticipated with challenges

over retention. We have focused on strengthening

our culture, delivering key and specific training in

a number of areas across the Group. We have also

enhanced our recruitment support and onboarding

procedures for new joiners.

This risk has increased during the year, given the

degree of change and transformation required and

the impact of staff turnover.

Links to strategic priorities

Operational Efficiency

Risk description

Cash headroom is affected by economic pressures

that result in delayed receipts and potentially lower

sales in the short to medium term.

Commitments to significant land and build obligations

are made ahead of revenue certainty.

Commitments to significant remediation costs as a

result of the Developer Remediation Contract.

Fall in sales during economic slowdown and lack of

available debt finance.

Reduction in margins as average selling prices

fall, inability to restructure appropriately and

unsustainable levels of work-in-progress.

The Group fails to meet the three banking covenants

that the Group’s borrowings are subject to, which are

tested on a six-monthly basis.

Actions/mitigations

Cash generation is a key focus for the Executive

Committee. Cash performance is measured against

forecast with variance analysis issued weekly. Cash

performance is considered in detail at divisional

board level.

We scrutinise the cash terms of land transactions.

Private Rented Sector and bulk sales offer us the

potential for early cash inflow.

The Group has the use of a £250m Revolving Credit

Facility, and its expiry date was extended during

the year.

Throughout the year there has been a working capital

reduction action plan in place.

We generally control strategic land rather than own it

and have limited capital tied up on the balance sheet.

These sites are subject to regular review and diligent

appraisal before being drawn down.

Development in the year

There has been a greater focus on controllable

operating cash management, which has enabled

us to manage the cash position adequately during

the year. We continue to monitor profitability impact

on interest cover covenants and liaise with banking

advisors where appropriate. The Group continued

to benefit from a balance sheet with diverse sources

of funding and has adequate liquidity to deal with all

plausible downside market scenarios.

The Group closely monitors its forecast covenant

compliance on a monthly basis. In its base case

projections, the Group will meet all its banking

covenants in the going concern and viability

statement periods. In its severe but plausible

downside projections, the Group would meet all its

banking covenants except the interest cover ratio.

See note 1 to the consolidated financial statements

on going concern.

Links to strategic priorities

Land Portfolio

Operational Efficiency

ATTRACTING AND RETAINING OUR SKILLED PEOPLE

SOLVENCY AND LIQUIDITY

Residual: High Appetite: Medium Movement in year: Increasing Residual: High/Medium Appetite: Low Movement in year: Increasing

Principal risks and uncertainties continued

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Risk description

Future regulatory changes impact our ability

to make medium- and longer-term decisions.

Failure to effectively implement new regulations

including the Future Homes Standard (which has

been delayed), the Environment Act 2021, the New

Homes Quality Code, and the Building Safety Act

2022, impacts the Group.

Actions/mitigations

We engage with the government directly and through

the Home Builders Federation and memberships of

industry groups, and build relationships in key local

authority areas.

We continue to assess and plan for emerging

regulation and developments in readiness for

potential change.

Development in the year

This continues to be an elevated risk given the

challenging regulatory landscape in the housebuilding

sector. We have increased regulatory and compliance

training during the year to drive greater understanding

of requirements on our business.

A new workstream has been established to review

and implement requirements of the Building Safety

Act 2022.

Emerging legislation such as the Employment

Rights Bill has significant reforms and implications to

employment rights that will impact our business, and

we continue to monitor developments.

Links to strategic priorities

Placemaking and Quality

Operational Efficiency

5 Star Customer Service

Risk description

Failure to further enhance our sustainable practices

and processes and transition to a carbon net zero

business by 2045, and failure to continue to meet

evolving government regulations and growing

investor expectations.

Climate change impacts our business through

transition and physical risks. Transition risks include

regulatory change, increased carbon pricing and

shifts in stakeholder preferences. Physical risks are

direct impacts from a changing climate, including

rising temperatures, changing weather patterns

increasing the risk of droughts and flooding, and

more frequent and severe weather events.

Failure to manage climate-related risk leads to

additional costs, build programme delays and

damage to our reputation.

Actions/mitigations

Our Sustainability Committee oversees our

sustainability strategy, including our approach

to climate change. The Committee monitors

performance against our climate targets and monitors

climate-related risks and opportunities.

We are members of the Future Homes Hub, an

industry-wide initiative to support the implementation

of the Future Homes Delivery Plan to meet climate

and environmental targets. We have internal

workstreams to plan for new regulations, including

the Future Homes Standard.

Near- and long-term science-based targets are

in place, driving action to reduce greenhouse

gas emissions.

Our Executive Directors have greenhouse gas

emission reduction targets within their Long-Term

Incentive Plan.

Development in the year

The rollout of air source heat pumps has increased

on a number of sites and we are delivering more

homes to the current Future Homes Standard which

will positively impact our emissions.

We have increased Board level awareness on TCFD

and CDP and increased engagement with the supply

chain through the Supply Chain Sustainability School

and procurement selection.

We are on track for 2030 greenhouse gas and 2025

waste intensity targets.

Links to strategic priorities

Placemaking and Quality

Land Portfolio

Operational Efficiency

5 Star Customer Service

LAWS, POLICIES AND REGULATIONS

CLIMATE CHANGE

Residual: High Appetite: Medium Movement in year: No change Residual: Medium Appetite: Low Movement in year: No change

Principal risks and uncertainties continued

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Risk description

Failure to maintain a supply of suitable strategic land

with planning consent at the right economic terms to

support our growth ambitions.

Acquired land is delayed in the planning process

where local authorities and public sector resources

are constrained.

Regulatory planning and environmental

requirements continue to evolve with the National

Policy Framework developments. Environmental

requirements such as nutrients, phosphates and

water neutrality, flood risk assessment requirements

and biodiversity obligations are increasing. This

increases the challenge of providing quality and

affordable homes in the locations required.

Actions/mitigations

We have expertise within our land teams to ensure

we acquire sites in the best locations that allow us to

demonstrate our placemaking credentials.

We build strong relationships with key land suppliers,

landowners and agents, and local authorities.

Land acquisitions are subject to appraisal

and viability assessment through our formal approval

process prior to bid submission and exchange

of contracts.

The planning status of all our sites is regularly reviewed.

We undertake close consultation with the government

on planning reform.

Development in the year

Although our strategy continues to focus on achieving

planning consent on land under our control, we

have reduced land acquisitions during the year.

The planning process continues to be challenging,

highly complex and time consuming. There continue

to be challenges in some of our divisions regarding

nutrients, water neutrality and the impact of flood risks.

We are pleased with the strong political consensus

behind planning reform through the National Policy

Framework and the government’s commitment to

increase the supply of new homes. However, material

change may take time to deliver the actions needed

to increase housing supply.

Links to strategic priorities

Placemaking and Quality

Land Portfolio

5 Star Customer Service

Risk description

Failure to address the issues faced by residents

impacted by combustible materials in a timely manner,

significantly impacts our brand and reputation. There

is heightened political and public awareness with

government publication of remediation progress.

This is a complex area where it is often difficult to

identify and implement remedies quickly. The rapidly

changing landscape of regulatory guidance and the

need to engage with multiple stakeholders contribute

to this complexity, as does the limited availability of

qualified resource to oversee work performed. Given

this, costs can be difficult to estimate and control

which could be subject to considerable variability and

government legislation, or regulation could further

change, increasing the scope of legacy buildings and

required remedial works.

The Group has a large number of legacy obligations

with old site remedial works and it may take longer to

address the actions than anticipated.

Actions/mitigations

A dedicated specialist team is in place with robust

controls and processes in respect of combustible

materials. There is a regular review process in place

which is overseen by the Chief Executive Officer,

Chief Financial Officer and the Special Projects

division which is responsible for this area.

There is a detailed risk register of all schemes under

review including any safety considerations, and

recent customer or stakeholder correspondence, that

considers how we may choose to respond.

In addition, the Special Projects division assesses

whether faulty workmanship or design was a factor in

the potential remedial works, and if appropriate seeks

to recover these costs directly from the subcontractor

or consultant involved.

Development in the year

During the year, the Group made substantial progress

in its assessment of required remediation related

to combustible materials, allowing it to make a full

assessment of its probable liabilities for the first time.

Management has considered the progress of any

combustible remedial works and has adjusted the

financial provision to reflect the Group’s best estimate

of any future costs. In December 2024, the Group

signed up to the Joint Plan to Accelerate, requiring

developers to complete all assessments of buildings

under the scope of Developer Remediation Contract

by July 2025 and commence work on 100% of

affected buildings by July 2027.

Divisions have increased focus on completion of

old sites and associated remedial works projects

continue including addressing resident management

company obligations. However, there are a significant

number of legacy activities to complete that will take

time to resolve.

A new division was established to address remedial

works for legacy buildings in scope.

Links to strategic priorities

Placemaking and Quality

5 Star Customer Service

LAND AVAILABILITY AND PLANNING

COMBUSTIBLE MATERIALS AND LEGACY OBLIGATIONS

Residual: High Appetite: Medium/Low Movement in year: No change Residual: High/Medium Appetite: Low Movement in year: Increasing

Principal risks and uncertainties continued

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

TCFD

Taskforce on Climate-related Financial Disclosures (TCFD)

As global greenhouse gas

(GHG) emissions rise and

the challenge of limiting

warming to 1.5°C grows,

we are committed to

reducing our emissions.

Aligned with a 1.5°C pathway, our target is to

achieve net-zero emissions across our value chain

by 2045. Achieving this requires collaboration

across our value chain to drive decarbonisation.

Climate change has been a principal risk for

the Group since 2021, with our first voluntary

TCFD disclosure published that year and our

first full disclosure in 2022. We continue to

work closely with external climate experts to

strengthen our climate risk analysis. Given

the uncertainties around the potential future

impacts of climate change, we will continue to

adapt our response as scientific and economic

understandings evolve, alongside advancements

in methodologies and risk management tools.

TCFD pillar

Recommended disclosure Page(s)

Governance

Disclose the organisation’s governance around

climate-related risks and opportunities.

A. Board oversight 41

B. Management’s role 41

Strategy

Disclose the actual and potential impacts of

climate-related risks and opportunities on the

organisation’s businesses, strategy and financial

planning where such information is material.

A. Risks and opportunities

42-45

B. Impact on organisation

C. Resilience of strategy considering climate

scenario analysis

Risk management

Disclose how the organisation identifies,

assesses and manages climate-related risks.

A. Risk identification and assessment process

B. Risk management processes

C. Integration into overall risk management 46

Metrics and targets

Disclose the metrics and targets used to assess

and manage relevant climate-related risks and

opportunities where such information is material.

A. Climate-related metrics 47

B. Scope 1, 2, 3 GHG emissions 21, 47

C. Climate-related targets 20, 47

2024 PROGRESS

Engaged third-party consultants to support

our TCFD disclosure development and climate

scenario analysis

Continued collaboration with supply chain

partners to reduce value chain emissions

Reduced absolute scope 1 and 2 emissions

by 18% compared with 2023

Reduced scope 3 emissions intensity by 9%

compared with 2023

Measures to reduce emissions are provided

on pages 20-21

2025 AREAS OF FOCUS

Expand the installation of air source heat

pumps, incorporating learnings and customer

feedback

Refine home designs to ensure future

compliance with the Future Homes Standard

Strengthen engagement with supply chain

partners and wider industry to improve

embodied carbon reporting and emission

reductions

Continue to review and evolve our

assessment of climate-related risks

and opportunities

The following pages outline our disclosures

consistent with the TCFD recommendations.

In accordance with UK Listing Rule 6.6.6(8),

the disclosure is consistent with the TCFD

recommendations and recommended

disclosures. The table below provides page

references for further details. The bullet points to

the right summarise progress over the past year

and outline actions planned for 2025 to further

enhance our approach.

In our consistency assessment, we referred

to the October 2021 publication of the TCFD’s

‘Implementing the Recommendations of the

Task Force on Climate-related Financial

Disclosures’ document.

Further information on the TCFD can be found

on the Financial Stability Board’s website

fsb-tcfd.org

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

TCFD continued

GOVERNANCE

A. Board’s oversight of climate-related risks and

opportunities

The Board is responsible for overseeing risk

management, including climate-related risks and

opportunities. This involves semi-annual reviews

and updates to the Group’s principal risks,

including climate change, which is governed by

our Risk Management Framework (see page 32).

The Board receives updates on the Group’s

approach to climate change and sustainability,

including progress against climate-related KPIs

and science-based targets. Throughout the

year, the Board has reviewed emerging

environmental regulations, assessed performance

against sustainability targets and monitored

progress towards our net-zero commitment.

The Board considers climate-related issues

when reviewing the business strategy and risk

management policies.

The Board’s oversight is supported by

three key committees: the Audit and Risk

Committee, the Remuneration Committee and

the Nomination Committee. Additionally, the

Sustainability Committee, chaired by the Chief

Executive Officer, is responsible for overseeing

the development and implementation of our

sustainability strategy. The Sustainability

Committee met four times in 2024, and

provided at least quarterly updates to the Board

and Executive Committee on climate-related

risks, opportunities and performance against

sustainability targets. Table 1 illustrates our

governance structure in more detail.

B. Management’s role in assessing and managing

climate-related risks and opportunities

Our Group Operations Director, with executive

responsibility for sustainability, leads our

climate-related work and is a member of both

the Executive Committee and the Sustainability

Committee. This role includes overseeing climate

risk assessments, managing associated risks

and pursuing business opportunities related

to sustainability. The Group Operations team

provides regular updates to the Board and

Executive Committee on progress towards climate-

related targets and regulatory developments.

Supporting this work, the Climate Risk Working

Group assesses and monitors climate-related

risks and opportunities using our standard

risk-scoring system. The Group evaluates both

physical and transition climate impacts and

maintains a climate risk register that consolidates

these risks across the business.

To build internal expertise, Climate Risk Working

Group members participated in climate scenario

workshops led by third-party consultants.

These workshops enhanced understanding

of climate impacts and risk management

practices. Additionally, our Group Operations

team collaborated with industry groups such

as the Future Homes Hub and the Supply

Chain Sustainability School to stay informed on

emerging regulations and best practices.

At the divisional level, teams assessed climate-

related risks, such as flood risk, and integrate

these into project planning and divisional risk

registers. These registers undergo semi-annual

reviews as part of the Group’s Risk Management

Framework. This multi-layered approach helps

ensure that climate considerations are embedded

into site selection, planning processes and

overall operations.

BOARD AND

EXECUTIVE

COMMITTEE

OVERSIGHT

The Board

Oversight of the Group’s sustainability strategy and its performance

Overall responsibility for risk management, including climate-related risks and

opportunities

Audit and Risk Committee

Conducts formal

reviews of principal

and emerging risks

semi-annually, including

climate-related risks

Oversees the Internal

Audit Plan which includes

climate-related audits

Remuneration Committee

Aligns relevant

incentives with

sustainability targets

Approves climate-

related targets in long-

term pay incentives for

Executive Committee

and senior management

Nomination Committee

Considers a

broad range of

skills, including

sustainability and

climate expertise, in

Board and executive

appointments

Executive Committee

Considers the Group’s principal risks and oversees the divisional risk process,

with support from functional representatives

Sustainability Committee

Met four times in 2024

Oversees the

development and

delivery of strategic

aims and initiatives to

improve sustainability

performance

SHE Committee

Met five times in 2024

Oversees the

management of the

Group’s SHE risks and

SHE strategy, including

environmental risk

management on-site

Divisional boards

Meet monthly and

are responsible for

key risks, including

climate change, within

the division.

Review and update

the divisional risk

semi-annually

MANAGEMENT

OVERSIGHT

Climate Risk Working

Group

Responsible for

assessing climate-

related risks and

opportunities

Membership includes

representatives from the

Finance, Procurement,

Sustainability, Technical

and Internal Audit teams

Group Operations team

Subject matter experts

on sustainability and

climate change

Responsible for

developing the Group’s

sustainability strategy

and supports the

divisions in driving its

implementation

Functional Forums

Meet quarterly and

are responsible for

delivering initiatives,

achieving targets

and embedding

procedures within

the Group

Functional Forums

include SHE and

Build, Technical,

Commercial, Sales

and Marketing, Land

and Planning and

Customer Service

Table 1. Governance framework and climate touch points throughout the business

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

STRATEGY

A. Climate-related risks and opportunities identified

over the short, medium and long term

While we are actively working to reduce our GHG

emissions across our value chain, climate change

presents a range of risks and opportunities

for our business. Climate change has been

designated as a principal risk since 2021 by

the Audit and Risk Committee. The extent and

severity of these risks depend on actions taken

both in the UK and internationally.

In 2024, the Climate Risk Working Group

conducted a climate scenario analysis workshop

to assess risks and opportunities, including:

Transition risks

These relate to the transition towards a low

carbon economy to mitigate severe physical

impacts of climate change. Examples include

regulatory changes, carbon taxation, new

technologies and evolving stakeholder expectations.

Physical risks

These arise directly from a changing climate and

are categorised as acute risk (event-driven, such

as increased severity of storms and floods) and

chronic risk (long-term shifts in climate patterns,

including rising temperatures, sea level rise,

chronic heatwaves and droughts).

Our physical risks were assessed across UK

regions where we operate, covering both office

and development sites, while transition risks

and opportunities were analysed at the sector

and key supply chain levels. Climate risks and

opportunities rated as ‘medium’ or ‘high’ are

considered most material to the business. More

details on our process for identifying, assessing

and managing climate risks and opportunities are

available on page 46.

Consistent with TCFD recommendations, we

evaluated three warming scenarios to assess

the potential impact of each identified risk and

opportunity on our operations and financial

planning. Our analysis uses data from recognised

climate models and frameworks, including the

International Energy Agency’s World Energy

Models, Shared Socioeconomic Pathways, the

Climate Natural Catastrophe Damage Model,

CORDEX regional climate forecasts, and

Integrated Assessment Models. By using multiple

datasets, we gain insights into how key factors

affecting our operations may change under

different climate scenarios.

These scenarios represent possible future

pathways rather than definitive forecasts,

serving as a basis for assessing both transition

and physical climate risks and opportunities.

While climate models provide guidance, they

also have limitations and may overestimate

or underestimate certain variables. We are

committed to continuously refining and updating

our assessments.

1 Representative Concentration Pathways (RCPs) are trajectories of greenhouse gas concentrations that provide a broad range of

climate outcomes.

Table 2. Climate scenario analysis summary

Scenario 1: Orderly

Transition

Scenario 2: Disorderly

Transition

Scenario 3: Hot House

Earth

Scenario source

RCP 2.6 RCP 4.5 RCP 8.5

Scenario description

Well co-ordinated and

effective global response

to climate change to limit

warming to between 1.5

and 2°C by 2100.

Emissions are not reduced

in an orderly manner; not

enough action is taken

before 2030. Warming

reaches 2–3°C by 2100.

The global response

to climate change is

poorly co-ordinated and

ineffective, resulting in

warming >3°C by 2100.

Business impacts Products and services: Climate-related risks and opportunities influence our product

development. In scenarios 1 and 2, we anticipate increased emissions reduction

regulations, requiring lower-emission and energy-efficient materials and enhanced

reporting. In scenario 3, fewer regulatory requirements are expected, but we may

need to adapt products to address physical risks such as rising temperatures and

flooding.

Supply chain: Approximately one-third of our emissions are in our supply chain,

creating potential challenges in the transition to net zero. Scenarios 1 and 2 foresee

higher carbon prices, potentially leading to increased material costs. Additionally,

there may be heightened demand for lower carbon products, potentially affecting

costs. Scenario 2 could lead to steeper carbon price increases. In scenario 3, physical

risks such as severe weather and flooding may cause delays or necessitate supplier

relocations, causing productivity reductions.

Operations: In scenarios 1 and 2, we anticipate increased energy and fuel costs,

driven by rising carbon prices and heightened demand for lower carbon alternatives.

In scenario 3, increased risks of severe storms, heatwaves and flooding may disrupt

operations and reduce the availability of suitable land development.

Access to capital: Scenarios 1 and 2 present opportunities for accessing capital

through mechanisms like sustainability-linked loans, green mortgages and increased

investment in lower carbon businesses. However, failure to meet stakeholder

expectations on climate risk management and sustainability performance could make

accessing capital more challenging. Scenario 3 may hinder investment due to higher

physical risks.

Customers and markets: In scenarios 1 and 2, demand for lower carbon homes is

likely to increase. Successfully transitioning to lower carbon homes will require high

levels of customer engagement. In scenario 3, these opportunities may diminish as

customers face greater challenges from physical climate impacts.

TCFD continued

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Our climate modelling time horizons were designed to align with the UK net-zero target by 2050

and our internal target of 2045. Table 3 below provides further detail on why these time horizons

were selected.

Table 3. Time horizons used for climate scenario analysis

Time horizon Time period Description

Short term 0–3 years Covers the current operating climate and aligns with our business planning

cycle. Existing legislation expected to remain in place.

Medium term 3–10 years Aligns with anticipated legislative changes and our 2030 science-based

targets, representing a period of possible regulatory impact.

Long term

> 10 years

This period is challenging to predict. While the climate has already changed,

and will continue to do so, long-term physical risks are expected to have a more

significant impact. Considering risks through to 2050 prompts exploratory

discussions on the likelihood and potential impact of new and evolving

risks and opportunities, which may differ from current experiences.

B. Impact of climate-related risks and opportunities on business, strategy and financial planning

Our climate scenario analysis provided insights into how climate change may impact our products,

operations, supply chain and market position. To address these risks and capitalise on opportunities,

we remain committed to reducing GHG emissions throughout our value chain while adapting our

response to evolving regulations and other climate-related impacts.

Our financial planning incorporates risks into land acquisition and appraisal processes, maintaining

resilience as climate risks evolve. We also pursue opportunities by enhancing resource efficiency and

delivering energy-efficient, lower carbon homes. Building on prior commitments, we continue to reduce

GHG emissions across our value chain while adapting to evolving regulations and climate-related

impacts. In 2024, we advanced our home designs to improve energy efficiency and reduce emissions.

In line with our internal policy, all our houses are designed to achieve a minimum Energy Efficiency Rating

of ‘B’ on the Energy Performance Certificate (EPC). Additionally, 95% of homes built in 2024 achieved

an Environmental Impact Rating of A or B. We continue to develop solutions to meet the Future Homes

Standard, with anticipated additional build costs factored into our land acquisition appraisals.

C. Resilience of strategy, taking into consideration

different climate-related scenarios, including 2°C

or lower

To mitigate risks in an evolving sustainability

landscape, we engage with peers, suppliers and

other stakeholders to anticipate and adapt to

future changes. Dedicated team members monitor

emerging developments, helping ensure our

strategy remains resilient in a low-carbon future.

We assess climate resilience through multiple

scenarios, including pathways aligned with a

below 2°C target and higher emission projections.

Physical climate risks, such as flooding and

overheating, are expected to increase,

particularly in high emission scenarios. While

there is significant uncertainty about the extent

and impact of these risks, we continue to assess

and monitor them. Although we do not foresee

significant short-term impacts, we mitigate

potential impacts through risk assessments

and strong supplier relationships.

Transition risks, including rising carbon prices and

stricter regulatory and planning requirements,

are expected to have a more substantial medium-

term impact. We factor anticipated Future Homes

Standard costs into project appraisals and continue

to monitor regulatory developments. Additionally,

we track the potential rise in carbon taxes under

the climate scenarios and continue to monitor

this risk. Short-term climate-related risks, such

as new regulations, are not currently considered

material due to existing mitigation measures.

Our ongoing horizon scanning and collaboration

enable us to identify and respond to new risks

and opportunities, ensuring our strategy remains

resilient. There has been no material impact on

financial reporting judgements or estimates in the

2024 Annual Report and Accounts. Additional

details can be found on pages 112.

TCFD continued

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TCFD continued

RISK MANAGEMENT

Risk description Primary financial driver Management response

POLICY AND LEGAL

Carbon pricing mechanisms

Carbon taxes and pricing mechanisms are key policy tools for governments to reduce

greenhouse gas emissions and drive economies towards net zero. If carbon prices

escalate, they could impact our direct fuel and energy costs, as well as increase

expenses within our supply chain.

Highest impact scenario: Disorderly transition

Increased cost of sales from carbon taxes, along with

increased procurement costs due to carbon-related taxes

imposed on suppliers.

Time horizon: Medium to long term

Risk score: High

We are committed to reducing GHG emissions across all scopes in alignment

with our science-based targets. Through active engagement with supply

chain partners and the wider industry, we aim to lower upstream Scope 3

emissions, mitigating the potential impact of carbon taxes and other pricing

mechanisms on our operations.

Mandates on and regulation of products and services

Emerging regulations aimed at reducing emissions could impact our home

specifications, particularly with additional build costs associated with standards like the

Future Homes Standard. We anticipate that further low carbon requirements from the

government or local authorities may arise, alongside increased reporting obligations

and potential future regulations addressing embodied carbon.

Highest impact scenario: Disorderly transition

Increased cost of sales to comply with evolving

regulatory standards.

Time horizon: Short to long term

Risk score: Medium

Our relevant departments monitor and respond to regulatory changes

and consultations. Active engagement with government bodies, the

Home Builders Federation and the Future Homes Hub strengthens our

understanding and preparedness for new policies. We collaborate with local

authorities, partners and expert consultants to ensure cost-effective and

compliant outcomes. Additionally, anticipated costs related to the Future

Homes Standard are factored into our new project acquisition appraisals.

TECHNOLOGY

Transition to low carbon technology

The adoption of lower carbon technologies in our homes may introduce challenges

for customers unfamiliar with these systems. Rising demand for such technologies

could strain supply chains and lead to shortages of skilled labour for installation

and maintenance, potentially increasing after-sales costs. Furthermore, certain

locations may experience electrical capacity constraints on the grid, requiring

infrastructure upgrades.

Highest impact scenario: Disorderly transition

Increased cost of sales through technology adoption,

supply chain constraints and after sales costs.

Time horizon: Medium to long term

Risk score: Medium

We engage with our supply chain to review and implement low carbon

technologies in our homes, including using low carbon heating solutions

ahead of the implementation of the Future Homes Standard across several

sites. Collaboration with local authorities and energy providers allows us

to address potential electrical capacity constraints early. By engaging in

early discussions, we aim to anticipate and plan for necessary infrastructure

upgrades during planning stages to minimise costs and risk of delays.

MARKET

Increasing cost of raw materials

Growing global demand for materials with lower embodied carbon, driven by

governments and corporations seeking emissions reduction, poses a potential risk.

This heightened demand may lead to increased prices for raw materials, such as

timber. Additionally, escalating physical risks could disrupt supply chains, impacting

material availability and costs. Regulations and carbon pricing could raise material

costs as suppliers implement new processes and technology to decarbonise.

Highest impact scenario: Disorderly transition

Increased cost of sales associated with energy and

raw materials.

Time horizon: Medium to long term

Risk score: Medium

We regularly engage with our supply chain partners to mitigate material

availability risks and assess their climate risk and sustainability performance.

Table 4: Climate-related Transition Risks

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Financial StatementsStrategic Report Governance

TCFD continued

RISK MANAGEMENT CONTINUED

Risk description Financial driver Management response

CHRONIC PHYSICAL

Rising mean temperatures

Increasing temperatures could elevate the risk of overheating within homes, requiring

enhanced mitigation measures. These measures could impact home specifications,

potentially leading to higher design and construction costs.

Highest impact scenario: Hot house earth

Increased cost of sales associated with implementing

mitigation measures.

Time horizon: Long term

Risk score: Medium

Our Group Technical team works closely with energy consultants to address

overheating risks through thoughtful design. Key considerations include

optimising window size, orientation of the home and integrating ventilation

systems to reduce solar gains in the summer while providing effective means

to remove heat from the home.

Changing precipitation patterns

Changing precipitation patterns could result in more frequent occurrences of

droughts and floods, posing challenges to planning and development. These changes

may necessitate enhanced flood mitigation measures and stricter water efficiency

requirements, potentially increasing construction costs.

Highest impact scenario: Hot house earth

Increased cost of sales due to the implementation of

flood mitigation and water efficiency measures.

Time horizon: Long term

Risk score: Medium

We conduct flood risk assessments during the land acquisition process to

identify and address flood mitigation requirements. To reduce water stress,

our homes are designed to achieve water consumption rates of less than

105 litres per person per day, exceeding current Building Regulations.

Close collaboration between our Land teams and the Group Technical

team aims to ensure that planning requirements are met while maintaining

project deliverability.

Risk description Financial driver Management response

PRODUCTS AND SERVICES

Greater demand for sustainable homes

The global transition to net zero is expected to drive increased demand for energy-

efficient and lower carbon homes. Financial incentives, such as green home

mortgages, may further stimulate demand for homes with lower carbon footprints.

Highest impact scenario: Orderly transition

Increased revenue through greater demand for low

emission homes.

Time horizon: Short to long term

Risk score: Medium

We are committed to reducing emissions associated with the operational

use of our homes while enhancing their energy efficiency. As a result, the

majority of our homes meet the criteria for green mortgages. During the

sales process, we actively educate customers about the energy-efficient

features of our homes, helping them understand their benefits and value.

Green finance

The growing availability of green finance, including sustainability-linked loans, offers

opportunities to access lower interest rates. Investors consider climate-related risks,

opportunities and emission reduction progress when reviewing portfolios, creating a

more favourable environment for organisations with strong sustainability credentials.

Highest impact scenario: Orderly transition

Lower cost financing options.

Time horizon: Long term

Risk score: Medium

We maintain open and transparent communication with investors, updating

them on our strategy and performance. Additionally, our Revolving Credit

Facility is directly linked to our sustainability metrics.

Table 5: Climate-related Physical Risks

Table 6: Climate-related Opportunities

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Annual Report and Accounts 2024

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RISK MANAGEMENT

A. Processes for identifying and assessing

climate-related risks

Climate-related risks and opportunities are

reviewed as part of our Risk Management

Framework. Our governance structure, including

the Board, Executive Committee and divisional

boards conduct formal risk assessments semi-

annually. Additionally, the Climate Risk Working

Group undertakes a detailed review of our climate-

related risks and opportunities at least annually.

Building on prior assessments, our 2024 review

applied qualitative and quantitative modelling

techniques to evaluate 13 transition risks, six

physical risks and six opportunities across short,

medium and long-term time horizons. This

assessment was tailored to our business and

included an evaluation of key suppliers’ exposure

to transition and physical risks, providing a broader

understanding of our overall risk landscape.

Risks and opportunities are scored on a 1-5 scale

for likelihood and potential impact, with their

multiplication producing an overall score from

1 (low) to 25 (high). The most material risks, scoring

medium or high, are prioritised for management

at both operational and strategic levels.

To maintain a granular focus, climate risks and

opportunities are documented in a dedicated

climate risk register. The Audit and Risk Committee

oversees climate as a singular material risk within

the consolidated principal risk register, which is

informed by our climate risk assessment.

Our 2024 assessment produced a prioritised list

of risks and opportunities, supported by analysis

under different climate scenarios. This process

helps to ensure our strategy remains resilient,

enabling us to adapt and continue delivering high

quality, energy-efficient homes.

B. Processes for managing climate-related risks

Climate change is classified as a principal risk,

reflecting its strategic importance to our business.

To manage material climate-related risks effectively,

we draw on internal expertise across the Group

and engage external specialists where needed.

Our risk management process involves detailed

assessments of climate-related risks, evaluating

their potential short and long-term impacts on

our strategy. We design and implement mitigation

measures to address these risks.

For a detailed breakdown of our current risk

mitigation actions, refer to the climate-related

risks and opportunities tables on pages 44-45.

Additional information about our overarching risk

management process, including the integration of

climate-related risks, can be found on pages 32-33.

C. Processes for identifying, assessing and

managing climate-related risks are integrated into

the organisation’s overall risk management

Climate change is recognised as a principal risk

and is integrated into our Risk Management

Framework. Semi-annual reviews of principal

risks by the Board, Audit and Risk Committee

and Executive Committee ensure climate-related

risks are considered alongside other key risks

within our evolving risk landscape. These reviews

support broader assessments of the Group’s

ongoing viability.

Our climate scenario analysis identified

and reviewed 25 climate-related risks and

opportunities, documented in a climate risk

and detailed approach to climate-related

risk management. For more information on

our principal risks and the Risk Management

Framework, see pages 32–39.

TCFD continued

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Annual Report and Accounts 2024

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METRICS AND TARGETS

A. Metrics used to assess climate-related risks and opportunities in line with its strategy and risk

management process

Table 7: Climate-related metrics, targets and performance indicators

Target/metric

Performance

Links to climate-related risks and

opportunities

GHG EMISSIONS

Reduce absolute scope 1 and 2

(location-based) GHG emissions by

60% by 2030 (2019 base year)

63% reduction in absolute scope

1 and 2 GHG emissions compared

with the 2019 base year

Carbon pricing mechanisms

Enhanced emissions-reporting

obligations

Mandates on and regulation of

existing products and services

Use of energy-efficient

technology

Greater demand for sustainable

homes

Reduce scope 3 GHG emissions

intensity by 55% by 2030 (2019

base year)

7% reduction in scope 3 GHG

emissions intensity compared with

the 2019 base year

Achieve net zero across the value

chain by 2045

Reduction in GHG emissions as

detailed above

Continued supply chain engagement

and investigation of further carbon

reduction opportunities

Environmental Impact Rating of our

homes

95% of our homes built in 2024

received an Environmental Impact

Rating of A or B

ENERGY

Procure 100% renewable electricity

by 2025

85% of scope 2 electricity procured

from renewable tariffs

Carbon pricing mechanisms

Greater demand for sustainable

homes

Green finance

NATURAL RESOURCES AND WASTE

Waste

Reduce waste intensity (t/100 sq. m)

by 15% by 2025 (2019 base year)

26% reduction in waste intensity

compared to 2019

Carbon pricing mechanisms

Divert at least 95% of waste from

landfill

Diverted 98% of waste from landfill

Water

Homes designed to use 105 litres

per person per day (lpppd)

Standard house type specification is

105 lpppd

Changing precipitation patterns

Greater demand for sustainable

homes

B. Scope 1, 2 and 3 GHG emissions and energy consumption statement

Table 8: GHG emissions and energy consumption statement

GHG scope 1 and 2 emissions data

2024

Location-based

2024

Market-based

2023

Location-based

2023

Market-based

Scope 1 (tCO

e) 2,030 2,030 2,848 2,848

Scope 2 (tCO

e) 1,075 354 956 202

Total scope 1 and 2 (tCO

e) 3,105 2,384 3,803 3,050

Scope 1 and 2 intensity (tCO

e/100 sq. m) 1.83 1.41 2.09 1.68

GHG scope 3 emissions data

2024

Location-based

2023

Location-based

Scope 3 (tCO

e) 406,345 479,972

Purchased goods and services and

capital goods

142,516

170,073

Use of sold products 255,415 300,334

Other scope 3 emissions

8,413 9,565

Scope 3 intensity (tCO

e/sq. m) 2.39 2.64

Energy consumption data

2024

2023

Scope 1 and 2 Group-wide energy use (kWh) 18,433,516 24,027,259

Scope 1 and 2 energy use intensity

(kWh/100 sq. m)

10,862 13,203

1 Other Scope 3 emissions have been grouped together within the table. The categories included are: 3. Fuel and energy-related activities;

4. Upstream transportation and distribution; 5. Waste generated in operations; 6. Business travel; 7. Employee commuting; 12. End of life

treatment of sold products.

C. Targets used to manage climate-related risks and opportunities and performance against targets

The Group is committed to achieving net-zero emissions by 2045 in alignment with the Paris Climate

Agreement’s 1.5°C target. Our science-based targets, approved by the SBTi, include reducing absolute

scope 1 and 2 emissions by 90% and scope 3 emissions intensity by 97% by 2045 from a 2019 base

year, with residual emissions being neutralised through high integrity offsets.

We report our scope 1, 2 and 3 emissions annually to track progress. These metrics help assess

climate-related risks and opportunities and guide actions to meet our targets. Details on these

emissions, including reduction measures and progress against targets, are provided on pages 20-21.

In addition to emissions reduction, we have set complementary targets addressing areas of significant

environmental impact. These metrics are chosen to directly address the climate challenges and

opportunities the Group faces. We focus on areas where our actions can have the most substantial

impact, providing a targeted approach to climate risk management.

TCFD continued

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GHG EMISSIONS CALCULATION

METHODOLOGY

We report on emission sources required under

the Companies Act 2006 (Strategic Report and

Directors’ Reports) Regulations 2013. These

sources fall within our operational control.

GHG emissions are also referred to as carbon

emissions within the report.

Scope 1 and 2 emissions

In accordance with the GHG Protocol’s Corporate

Standard, we disclose both location-based and

market-based scope 2 emissions:

Location-based emissions

Calculated using the UK Government’s GHG

Conversion Factors for Company Reporting 2024.

Our science-based targets are based on location-

based emissions.

Market-based emissions

Calculated using tariff specific factors provided by

our energy suppliers, which may be more or less

carbon intensive than the location-based factor.

All electricity and gas data for sites and offices

under our control is supplied by our utilities

management partner. Meter readings for non-plot

supplies are obtained quarterly while plot data is

recorded at customer handover. Data for shared

office utilities is apportioned based on occupied

floor area. Site diesel, hydrotreated vegetable

oil and LPG usage is recorded from supplier

data, and business travel emissions are tracked

through fuel card data and expense claims.

TCFD continued

Scope 3 emissions

Scope 3 emissions are reviewed and calculated

in line with the GHG protocol across nine

applicable categories. The most significant

categories are category 1 ‘purchased goods

and services’, category 2 ‘capital goods’ and

category 11 ‘use of sold products’. Category 1

includes emissions associated with our supply

chain that are not accounted for in our standard

house type material bill of quantities. These

emissions are calculated using a spend-based

approach. Category 2 includes all material

included in our bill of quantities and emissions

are calculated using the OneClick LCA tool.

Category 11 includes emissions related to

regulated and unregulated energy. Emissions

from regulated energy are calculated using the

dwelling emission rate, which is calculated in

line with Building Regulations. Emissions from

unregulated energy are based on guidance given

by the Royal Institute of Chartered Surveyors

(RICS) professional standard for whole life

carbon assessment for the built environment

and adapted to estimate the residential energy

consumption in the absence of primary data.

The remaining six applicable categories are

detailed below Table 8 on page 47, with their

associated emissions grouped as ‘other scope 3’

within the table.

Six categories were deemed not applicable,

including upstream leased assets, downstream

transportation and distribution, processing of sold

products, downstream leased assets, franchises

and investments. Our baseline for emission

reduction targets is the financial year 2019.

For operational joint ventures, we include GHG

emissions from our site compounds and the

homes we deliver directly.

STREAMLINED ENERGY AND CARBON

REPORTING SECR

Our SECR disclosure aligns with the methodology

above, covering scope 1 and 2 emissions and

energy consumption data, including electricity,

gas, diesel, LPG and business travel for our

Group-operated fleet. All figures relate to UK

operations. For details on energy and fuel

reduction initiatives, see pages 20-21.

Verification statement by Verco Advisory Services

Verco Advisory Services Ltd has reviewed

Crest Nicholson’s GHG calculations using the

World Resources Institute (WRI) and World

Business Council for Sustainable Development

(WBCSD) GHG Protocol: A Corporate Accounting

and Reporting Standard. Verco has provided

limited assurance for all emission scopes and

operational energy consumption data against ISO

14064. Based on its review of Crest Nicholson’s

GHG emissions inventory for 1 November 2023

to 31 October 2024, Verco has determined that

there is no evidence that the GHG assertion is

not materially correct. Furthermore, Verco finds

no evidence that Crest Nicholson’s assertion

is not a fair and accurate representation of Crest

Nicholson’s actual emissions. Verco finds that

the information submitted by Crest Nicholson

is consistent with the WRI/WBCSD GHG

Protocol’s methodology and reporting guidance

and conforms to generally accepted GHG

accounting standards.

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Non financial and sustainability information statement

The following table summarises the information required by sections 414CA and 414CB of the Companies Act 2006 and sets out where relevant information can be found throughout this report.

Reporting requirement Description of policies and standards

Related principal risks

Relevant information to understand our impact,

policy, due diligence and outcomes Page

Environmental

matters

Sustainability policy

Climate change policy

Sustainable procurement policy

Sustainable timber policy

Supply Chain Code of Conduct

Our policies are designed to support activities that preserve and enhance the

natural environment.

2. Safety, health and environment

9. Laws, policies and regulations

10. Climate change

Protect the environment

Task Force on Climate-related Financial

Disclosures

Principal risks and uncertainties

20-23

40-48

32-39

Employees Corporate health and safety policy

Speaking Up policy

Equality and diversity policy

Our policies set out our commitment to developing our employees

and to providing a safe and diverse working environment.

2. Safety, health and environment

7. Attracting and retaining our skilled people

Stakeholder engagement

Safety, health and environment

Our people

Principal risks and uncertainties

Speaking Up

15-18

26-27

32-39

Human rights Anti-slavery and human trafficking statement

Human rights policy

Speaking Up policy

Supply Chain Code of Conduct

Our policies set out our commitment to human rights and the steps

taken to reduce risk.

2. Safety, health and environment

3. Supply chain

7. Attracting and retaining our skilled people

Stakeholder engagement

Responsible practice

Speaking Up

15-18

73 and 93

Social matters Sustainability policy

Supply Chain Code of Conduct

Our policies demonstrate our commitment to maintaining high social standards

throughout our value chain and delivering lasting societal value for our

stakeholders.

2. Safety, health and environment

4. Customer service and quality

12. Combustible materials and legacy obligations

Stakeholder engagement

Making a positive impact

on our communities

Our people

Principal risks and uncertainties

15-18

26-27

32-29

Anti-bribery and

corruption

Anti-bribery and corruption policy

Speaking Up policy

Supply Chain Code of Conduct

Our policies detail the expected conduct of our employees and supply chain.

9. Laws, policies and regulations Anti-fraud and anti-bribery

Speaking Up

73 and 93

Business model 9-10

Non-financial KPIs 29

Principal risks and

uncertainties

32-39

Climate-related

financial disclosures

40-48

1 Policies and standards are available on our corporate website: crestnicholson.com/governance

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Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Viability statement

The UK Corporate Governance Code requires the

Directors to have assessed the Group’s current

position and its emerging and principal risks and

uncertainties over a longer period than the 12

months required by the going concern statement.

The following statement is made in accordance with

the UK Corporate Governance Code.

As in prior years the Board considers that a three-

year period continues to remain an appropriate

timeframe for this assessment. While the nature

of the material issues, opportunities and risks

faced by the Group limits the Directors’ ability to

reliably predict the longer term, detailed trading

and cash flow forecasts are maintained and

regularly scrutinised over the three-year period to

October2027.

As set out on pages 110-111, the Directors have

modelled a base case and Severe But Plausible

(SBP) downside model which shows a breach

of the interest cover covenant during the going

concern period to 30 April 2026 under the SBP

scenario. The going concern model is then further

extended through to October 2027 utilising the

rolling three-year forecast for the income statement,

balance sheet, cash flow and key financial ratios

at each reporting date. There is no breach in the

interest cover covenant projected beyond the

going concern period. These forecasts serve as

the assessment for the viability statement. The

Group benefits from a forward order book of

sales, providing a level of confidence in near-term

revenue delivery.

The cause of the potential breach of the interest

cover covenant is the sensitivity of the Group’s

EBIT to changes in the wider economy alongside

Group specific risk factors. The Group has £335m

of available debt facilities, the maturity of which has

been extended in 2024 and a high quality land

bank that can either be utilised to build houses or

disposed of to other housebuilders to generate

further liquidity. Given these factors, and that the

Group maintains good relationships and a regular

dialogue with its lenders, the Directors remain

optimistic about the Group’s prospects.

The Group has extended its £250m Revolving

Credit Facility by 12 months to October 2027 and

maintained the expiry date of its senior loan notes

of £85m, of which £20m is due to be repaid in

August 2025 and £50m in August 2027.

Conclusion

Based on the assessment, the Directors have

concluded there is a material uncertainty in

respect of going concern for the period through

to April 2026 in that under the SBP scenario they

would require a covenant amendment from their

lenders. Taking into account the assets that back

the Group alongside longer term opportunities

the Directors expect to be able to meet liquidity

and covenant requirements in the longer term,

continue in operation and meet its liabilities

as they fall due over the assessment period to

31October 2027.

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Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Chairman’s introduction 52

Role of the Board 53

Board of Directors 54

The Board’s year 56

Board performance, evaluation and outcomes 62

Nomination Committee report 63

Audit and Risk Committee report 66

Directors’ remuneration report 74

Directors’ report 92

Reporting against the 2018 UK

Corporate Governance Code

(the Code).

How we have applied the principles and complied

with the provisions of the Code is set out within

this report, the Directors’ Remuneration Report

and the Directors’ Report. For more information

on our compliance, see opposite.

Our compliance statement can be found on page 52

of this report.

1. Board leadership and company purpose

Chairman’s introduction 52

Role of the Board 53

Board of Directors 54-55

Board activities 56-57

Embedding and monitoring culture 58

Listening and responding to employees 59

Approach to stakeholder engagement 60-61

2. Division of responsibilities

A clear governance structure 53

3. Composition, succession and evaluation

Board performance 62

Nomination Committee report 63-65

4. Audit, risk and internal control

Audit and Risk Committee report 66-73

5. Remuneration

Directors’ remuneration report 74-91

Governance

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Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Chairman’s introduction

As Chairman of Crest Nicholson, I am pleased

to present this year’s Governance report. The

following pages explain the effective leadership

of the Group and the oversight and application

of high governance standards as we deliver

our strategy.

BOARD FOCUS AND OUTLOOK

The past year has been an eventful one for

the Group with both macroeconomic and

geopolitical headwinds, together with changes

in the composition of the Board and the internal

challenges of the unsolicited Bellway bid.

Our strong Board governance has helped us

navigate the changes of Directors during the year,

together with their induction and management

of a busy agenda through the summer during

the offer period.

We have now returned to a more normal cadence

and the Board is delighted to have welcomed

Martyn Clark, our new Chief Executive Officer, to

the Board. We look forward to working with him

over the coming years.

BOARD CHANGES

Martyn Clark joined the Board on 3 June 2024

following a rigorous appointment process, He

brings a wealth of experience and extensive

knowledge of the housebuilding industry.

Bill Floydd joined the Board as Chief Financial

Officer on 13 November 2023 and Maggie Semple

as an independent Non-Executive Director on

1 January 2024. Lucinda Bell stepped down from

the Board on 31 December 2023 and we thank

her for her valuable input on the Board and the

Committees on which she served. Peter Truscott

retired from the Board on 14 June 2024.

We continue to strive for a diversity of experience

on our Board, which includes Directors from a wide

range of backgrounds. The Board meets the FTSE

Women Leaders requirements for gender diversity

and the Parker requirement for ethnic diversity.

BOARD EFFECTIVENESS

The Board undertook an internal board

performance review this year to review its

effectiveness and performance. While it has been

three years since the last externally conducted

review, given the recent appointment of a new

Chief Executive Officer, it was considered that

it would be more informative to wait another

year before carrying out an in-depth externally

conducted review in 2025.

The results of the internal review are set out on

page 62 and an action plan has been developed

to implement the findings of the review.

SHAREHOLDER ENGAGEMENT

I have been pleased to meet with a number

of our shareholders during the year to discuss

a range of topics and understand their views

and their priorities.

We invite shareholders to our AGM in March 2025.

Further details are set out in the Notice of AGM

which accompanies this Annual Report.

On behalf of the Board, I would like to thank

shareholders for their continued support and the

Board welcomes further engagement during 2025.

Iain Ferguson CBE

Chairman

“ Our strong Board governance has helped

us navigate a busy and eventful year.”

Iain Ferguson CBE Chairman

Compliance with the UK Corporate

Governance Code (the Code)

The Group complied with the Code for the

financial year ended 31 October 2024 other

than provision 21 which requires an externally

facilitated board evaluation at least every

three years. Further information on the

board evaluation and the reason for non-

compliance can be found on page 62.

The Code is available on the FRC’s website,

frc.org.uk

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Financial StatementsStrategic Report Governance

Non-Executive Chairman

Iain Ferguson CBE

The Chairman leads the Board and acts

as the Group’s external representative

with major shareholders and other

stakeholders, seeking their views on

governance, strategy and performance.

He facilitates an environment for overall

Board and individual Director

effectiveness, driving a culture that

supports constructive discussion,

challenge and decision-making.

Chief Executive Officer (CEO)

Martyn Clark

The CEO is responsible for leadership of

the Group, development of the strategy for

Board approval, and delivery of

performance against the strategy. He

leads the Executive Committee and the

Group’s divisions and support functions.

He is responsible for the Group’s

sustainability policies and practices.

Chief Financial Officer (CFO)

Bill Floydd

The CFO leads the Group Finance

function and oversees divisions’ financial

control functions. He is responsible for the

Group’s financial statements, financial

controls, tax strategy and investor

relations. He manages the Group’s risk

profile, oversees risk management actions

and establishes effective internal controls.

Senior Independent Director (SID)

Octavia Morley

The SID acts as a sounding board for the

Chairman and is a trusted intermediary for

other Directors. She is available to discuss

concerns with stakeholders that cannot be

resolved through the normal channels of

the Chairman or the Executive Directors.

She is responsible for leading the

Chairman’s performance evaluation.

Independent Non-Executive Directors

(NEDs)

David Arnold, Louise Hardy,

Maggie Semple OBE

The role of the NEDs is to bring external

perspective, sound judgement and

objectivity to the Board’s deliberations

and decision-making. They constructively

assist and challenge the development

of Group strategy, providing independent

insight, support and specialist advice,

and review the performance of the

Executive Directors.

Group Company Secretary

Penny Thomas

The Group Company Secretary provides

advice and assistance to the Directors on all

governance matters, ensuring that Board

procedures are followed, and all relevant

statutory and regulatory requirements are

met. She supports the Chairman in

developing the Board agenda, considering

Board effectiveness and ensuring the Board

receives timely and relevant information.

Provides executive leadership to deliver

the Group’s strategy and manages the

operations of the Group on a day-to-day basis.

THE BOARD

The Board sets the Group’s strategy to promote the long-term sustainable

success of the Group in line with its purpose, values and culture. The

Board provides leadership within a framework of strong governance, risk

management and effective controls. It oversees the performance and

progress of the Group against the business plans and forecasts.

EXECUTIVE COMMITTEE

Role of the Board

A clear governance structure

Divisional boards

Each division is run by a

divisional board comprising

functional directors responsible

for specific disciplines. They

consider the operational matters

and key risks of the division,

monitor and control costs at a

divisional level and ensure high

levels of SHE performance and

customer service.

Safety, Health and

Environment (SHE)

Committee

The SHE Committee oversees

the management of the

Group’s SHE risks. It monitors

performance against the

Group’s SHE strategy and sets

associated policies, procedures

and initiatives.

Sustainability Committee

The Sustainability Committee

oversees the management of

the Group’s sustainability risks.

It monitors performance against

the Group’s sustainability

strategy and recommends

associated targets, policies

and initiatives.

Investment Committee

There is a clear dedicated

approval process for acquiring

land. There are three key stages:

Assessment and feasibility stage

Bid stage

Contract stage

The Investment Committee

provides the relevant authority

to acquire land.

The process enables the Group

to act quickly while ensuring an

appropriate level of diligence

is applied to significant capital

allocation decisions.

MANAGEMENT COMMITTEES

Audit and Risk Committee

Oversees external financial reporting and

disclosures, and monitors internal controls

and risk management.

Reviews the effectiveness and independence

of the external and internal auditors.

Reviews Internal Audit reports, findings

and actions.

Nomination Committee

Reviews the balance, diversity,

independence and effectiveness of

the Board, and monitors succession

planning for the Board and the Executive

Committee, alongside talent management.

Oversees the selection and appointment

of new Directors to the Board.

Read more on pages 66-73

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Board of Directors

Iain Ferguson CBE

Chairman

Appointed: September 2019

Experience: Iain was Chief Executive Officer

of Tate & Lyle plc, later chairing Berendsen

plc and Stobart Group Ltd. He was also Senior

Independent Director of Balfour Beatty plc and

Non-Executive Director at Greggs plc.

In addition, Iain was Lead Independent Director at

the Department for Environment, Food and Rural

Affairs (DEFRA), Chair of Wilton Park (Agency of the

Foreign and Commonwealth Office) and a Member

of the PricewaterhouseCoopers LLP UK Advisory

Board. In 2003, Iain became a Commander of the

British Empire for his services to the food industry.

What Iain brings to the Board: Iain is a highly

experienced public company Chairman, Non-

Executive Director and former FTSE 100 CEO.

He has extensive and diverse leadership

experience and a sound and practical

understanding of corporate governance.

Iain has a deep appreciation of capital markets

and investor sentiment which he brings to Board

deliberations, in addition to financial expertise

and construction experience.

External appointments: Chairman of Genus plc,

Chairman at externally managed investment trust

Personal Assets Trust plc and Pro Chancellor,

Cranfield University.

Martyn Clark

Chief Executive Officer

Appointed: June 2024

Experience: Prior to joining the Group, Martyn

was at Persimmon plc for nine years, holding

several senior roles in the South Division including

Regional Chairman before his appointment

as Group Chief Commercial Officer in 2022.

He also spent 28 years at Bloor Homes.

What Martyn brings to the Board: Martyn’s

extensive knowledge of the housebuilding industry

and strong leadership experience enable him

to lead the Group in its next phase of growth.

External appointments: None.

Bill Floydd

Chief Financial Officer

Appointed: November 2023

Experience: Bill joined the Group from a

consumer-focused listed background having been

Chief Financial Officer at Watches of Switzerland

Group plc and Rank Group plc. Prior to this, he was

the Chief Financial Officer responsible for the UK

and Ireland business of Experian plc and held a

number of senior finance roles at Logica plc. Bill

is a chartered accountant, having qualified with

PriceWaterhouse.

What Bill brings to the Board: Bill brings a wealth

of senior financial and commercial expertise

having previously served as Chief Financial Officer

across a range of sectors. He has extensive

experience within the public listed environment

and strong leadership qualities essential to

delivering growth.

External appointments: None.

N R E E

KEY TO COMMITTEE MEMBERSHIP

Audit and Risk Committee

Nomination Committee

Remuneration Committee

Executive Committee

Chair of Committee

Octavia Morley

Senior Independent Director

Appointed: May 2017

Experience: After working in management roles

at companies including Asda Stores Ltd, Laura

Ashley plc and Woolworths plc, Octavia

was Chief Executive then Chair at LighterLife

UK Ltd, Managing Director at Crew Clothing Co.

and Chief Executive at OKA Direct Ltd. Octavia

also served as a Non-Executive Director and Chair

of the Remuneration Committee at John Menzies plc

and Card Factory plc.

What Octavia brings to the Board: Octavia has

a variety of experience in senior operational

and non-executive roles in retail and multi-site

companies, both privately owned and publicly

listed. She brings customer experience insight

to the Board, gleaned through her previous retail

and consumer roles.

External appointments: Chair of Banner Ltd,

Senior Independent Director of Marston’s plc

and Senior Independent Director of Currys plc.

NA R

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Financial StatementsStrategic Report Governance

Chair of Committee

Board of Directors continued

Louise Hardy

Non-Executive Director

Appointed: January 2018

Experience: Louise was European Project

Excellence Director at Aecom and Infrastructure

Director for CLM, which was the consortium partner

for the London 2012 Olympic Delivery Authority.

Louise has been a Non-Executive Director at

Genuit Group plc and the Ebbsfleet Development

Corporation. Louise is a fellow of the Institution of

Civil Engineers and of the Chartered Management

Institute.

What Louise brings to the Board: Louise has a

wealth of relevant experience in the delivery of

complex infrastructure projects and experience

as a non-executive director of other publicly listed

companies. Louise is the Non-Executive Director

responsible for employee engagement.

External appointments: Non-Executive Director of

Balfour Beatty plc and Travis Perkins plc.

David Arnold

Non-Executive Director

Appointed: September 2021

Experience: David is Chief Financial Officer

of Grafton Group plc, having joined Grafton

in September 2013. He was previously Group

Finance Director Enterprise plc from 2010 to 2013,

and Group Finance Director of Redrow plc from

2003 to 2010. David has previously held senior

finance positions with Six Continents plc and

Tarmac plc.

What David brings to the Board: David is an

established plc board director, who brings

extensive finance, property and commercial

experience to the Group.

External appointments: Chief Financial Officer

of Grafton Group plc.

Dr Maggie Semple OBE

Non-Executive Director

Appointed: January 2024

Experience: Formerly an academic, Maggie began

advising governments on education in the 1990s.

She went on to hold several non-executive director

positions in different organisations such as Her

Majesty’s Court Service, the Criminal Cases Review

Commission, the Ministry of Justice (Chair of Audit,

Risk and Compliance) and McDonald’s Restaurants.

Maggie is the owner of three businesses –

The Experience Corps Limited, a global niche

consultancy firm, Maggie Semple Limited, a luxury

bespoke womens-wear brand, and is the co-

founder of I-Cubed Group Limited. Maggie is an

author, and she writes on inclusion matters.

What Maggie brings to the Board: Maggie has

a wealth of experience in executive and non-

executive roles across a number of different

sectors and offers great insight to the Board.

External appointments: Non-Executive Director

of Phoenix Group Holdings plc and Jamaica

National Bank UK Limited, Chief Executive of

The Experience Corps Limited, Owner of Maggie

Semple Limited, Co-Founder of I-Cubed Group

Limited and Honorary Bencher of Middle Temple.

BOARD TENURE

BOARD COMPOSITION

One Chairman

Independent on appointment

Tenure (years)

As at 3 February 2025.

A N R A N R A N R

Two Executive Directors

Iain Ferguson

Martyn Clark

Bill Floydd

Octavia Morley

David Arnold

Louise Hardy

Maggie Semple

5y 4m

0y 7m

1y 1m

7y 8m

3y 4m

6y 11m

1y 0m

Four Independent

Non-Executive Directors

Penny Thomas

Group Company Secretary

Appointed: September 2023

Experience: Penny is a chartered company

secretary and governance professional.

She has significant experience as a company

secretary in a number of FTSE250 companies,

including the real estate sector.

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Financial StatementsStrategic Report Governance

The Board plans an annual

programme of business prior to

the start of each financial year.

This ensures that essential topics are covered and

that time is built into the agenda to give the Board

the opportunity to have in-depth discussions on

key issues.

The Board has a formal schedule of matters

specifically reserved for its decision-making and

approval. These include responsibility for the

overall management and performance of the

Group and the approval of its long-term objectives,

commercial strategy, annual and half-year

results, annual forecasts, material acquisitions

and disposals, material contracts, major capital

commitments, going concern and long-term

viability statements, and key policies.

Strategy, operations and finance

Reviewed strategy in the context of external market drivers

Reviewed performance, sustainability and safety progress against KPIs

Considered the Group’s financing arrangements, capital allocation and tax strategy

Responded to bids and proposals from third parties to acquire or merge with the Group

Reviewed the Group’s approach and progress on remedial work in relation to

building safety and combustible material matters

Approved the annual forecast

and business plan

Approved half and full-year

dividends and financial

statements

Extended the Group’s

Revolving Credit Facility

Approved and published the

Modern Slavery Act statement

Reviewed compliance with the

Code

Progressed a range of agreed

actions arising from the prior

year Board performance review

Approved the appointments

of the Chief Executive Officer,

Chief Financial Officer and a

Non-Executive Director

Endorsed the implementation

of a new onboarding process

Confirmed the Group’s 2023

viability and going concern

statements

Updated the Group’s risk

appetite and principal risks

Matters considered Outcomes Stakeholders considered

Investors

Our people

Supply chain

Customers

Our people

Investors

Communities and

environment

Government and

other bodies

Investors

Our people

Investors

Our people

Supply chain

Customers

BOARD DISCUSSIONS THROUGH THE YEAR

The Board’s year

Board activities

Read more on page 62

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The Board’s year continued

MEETINGS OF THE BOARD

The Board met six times during the year as

scheduled, excluding sub-committee meetings

to approve the financial results. In between

scheduled meetings, the Board held monthly

update calls which enabled the Board to consider

operational performance and external market

developments. Short notice meetings were called

as required for approval of director resignations

and appointments and administrative approvals

such as guarantees and mandates.

In addition to scheduled meetings, the Board

convened as required between April and August

2024 to discuss matters relating to the unsolicited

bid received from Bellway. During those meetings,

the Board debated the best course of action to

promote the long-term success of the Group and

the impact on its stakeholder groups.

All scheduled meetings were held in person,

making use of hybrid facilities via Teams

video conference for ad hoc meetings and to

bring in presenters and other attendees when

appropriate. Time was also scheduled for the

Non-Executive Directors to meet without the

Executive Directors present.

The Chair and the Company Secretary ensured

that the Directors received clear, timely information

on all relevant matters. Board papers were

circulated electronically via a secure Board portal

in advance of meetings to ensure that there was

adequate time for them to be read and to facilitate

robust and informed discussion.

BOARD STRATEGY DAY

Each year the Board dedicates a day to reflect on

the Group’s strategy. This year’s Strategy Day was

particularly important with a new Chief Executive

Officer and followed the falling away of the

unsolicited bid for the Group.

The day commenced with a detailed review of the

Group’s sector from an external advisor, and an

overview of the market and planning environment

from the Group’s real estate advisors.

The Board received detailed strategic

presentations from Executive Committee members

on a number of topics including the Group’s

land bank position, legacy matters including

fire remediation and building safety, overheads,

commercial direction, sales and marketing, people,

sustainability and customer service.

COMMITTEES

The Board is assisted by three Board committees

to which it formally delegates matters as set out

in each committee’s terms of reference. These

are reviewed annually, with any amendments

approved by the Board. Terms of reference for

each committee can be found at

crestnicholson.com/governance. The reports

of the committees can be found on pages 63-91.

The Board may constitute further committees for

regular long-term duties or to address specific

short-term situations, as set out in the Company’s

articles of association. The Board may also call on

a number of Directors to form a sub-committee for

an individual decision or authorisation, such as the

approval of trading updates.

Director Board

Audit and Risk

Committee

Nomination

Committee

Remuneration

Committee

Iain Ferguson 6/6 3/3 3/3

Martyn Clark

3/3

Bill Floydd 6/6

Octavia Morley 6/6 4/4 3/3 3/3

David Arnold

6/6 4/4 3/3 3/3

Louise Hardy 6/6 4/4 3/3 3/3

Maggie Semple

5/5 3/4 1/1 2/2

Peter Truscott

4/4

Duncan Cooper

1/1

Lucinda Bell

1/1 2/2 1/1

1 Martyn Clark joined the Board on 3 June 2024.

2 Maggie Semple joined the Board on 1 January 2024.

Dr Semple did not attend an Audit and Risk Committee

meeting in March 2024 due to a pre-existing commitment.

3 Peter Truscott stepped down from the Board on 14 June 2024.

4 Duncan Cooper stepped down from Board on 13 December 2023.

5 Lucinda Bell stepped down from the Board on 31 December 2023.

ATTENDANCE AT SCHEDULED BOARD MEETINGS

Strategy, operations and finance

59%

Governance

16%

Leadership and people

10%

Internal control and risk management

15%

How time was spent in scheduled meetings

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Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

In 2023, we undertook a key

project to further define and

improve the Group’s culture.

We worked with an external consultancy to

develop a Culture Action Plan which was

presented to the Board in September 2023.

Since then, the Board has continued to be

involved, has reviewed the plan and provided

input at regular updates throughout the year.

The output of the Culture Action Plan focused

on key themes, aims and outcomes to integrate

across the Group, as set out opposite.

The Board monitors culture through a range of

indicators including the annual injury incidence

rate, customer satisfaction scores, employee

engagement scores, employee turnover and

whistleblowing incident reports – see page 29

for Key Performance Indicators.

The Board’s year continued

Embedding and monitoring culture

CULTURE ACTION PLAN  TIMELINE

Discover what matters

We listened to the perspectives of leadership and

our workforce through focus groups, speaking to

all levels of the organisation across all divisions

to understand what our current culture was.

We brought leadership together to align on the

opportunity to develop culture to drive future

business growth.

Develop what we stand for

Through a co-creative process, and using

guardrails established by leadership, we fed back

to the business what we heard and reconvened

leadership to align on the cultural framework and

build understanding of what leadership shifts were

required to drive the change. A Culture Action Plan

was then developed.

Take action

We continue to deliver on our Culture Action

Plan, working towards everyone becoming better

engaged and culture being further embedded in

tangible, measurable ways.

Summer 2023 Winter 2023/24 2024 and ongoing

Understanding who we are

Aim

Refreshing and embedding our

brand with a clear purpose and

vision

Improving our new starter

experience

Outcome

Launched a renewed Code of

Conduct with supporting training

Launched a new improved

onboarding process

Uniting our workforce

Aim

Standardising policies and

procedures across the Group

Increasing recognition and

connections with colleagues

Outcome

Launched our Operational

Framework with supporting training

Launched consistent, improved

communication across the business

Rolled out the employee

recognition CARAs (see page 59)

Growing our leadership

capabilities

Aim

Enhance information and

communication flow through the

business

Enhance leadership skills across

the business

Outcome

Launched fortnightly business

briefings, supporting managing

directors in easily sharing

procedural updates and good

practice with their divisions

Developing mandatory training

programmes for senior and middle

managers, to be launched in 2025

Creating exceptional customer

service

Aim

Increase customer satisfaction

Embed customer-centric approach

Outcome

A comprehensive review of the

customer journey is under way with

training to be launched across all

functions in 2025

THEMES, AIMS AND OUTCOMES

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Annual Report and Accounts 2024

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The Board’s year continued

Listening and responding to employees

EMPLOYEE VOICE FORUM

Our Employee Voice Forum provides insight

into what matters to our employees as well as

their views on important topics such as culture,

workload, communication and organisational

change. The forum is led by Louise Hardy and

attended by employees from each of the divisions

and across all grades, ensuring a wide range of views

is heard.

This year, the forum discussed topics including

collaboration between teams and across the

Group, onboarding of new starters and the

importance of having an open and accessible

management team.

While formal feedback was provided to the Board

at the June Board meeting, Louise Hardy ensured

that the voice of our employees was reflected

at every Board meeting, particularly where there

were discussions relating to employees.

MONTHLY BUSINESS BRIEFING

Communication is a top priority for the Executive

Committee. As part of improving employee

engagement, Martyn Clark introduced Monthly

Business Briefing calls via group video conference.

Both Martyn Clark and Bill Floydd use these

briefings to keep employees informed on the

Group’s latest opportunities and their perspectives

on the business and the market, as well as sharing

achievements, progress and important updates.

All employees are encouraged to join the calls and

participate actively. Time is allocated to answer

questions submitted ahead of the call as well as

questions from employees on the call itself, no

matter the topic.

HOW THE BOARD HAS LISTENED AND RESPONDED TO EMPLOYEES IN 2024

At the Employee Voice Forum, a lack of

consistency in how inductions were undertaken

for office and site staff and also between divisions

was raised. This feedback had been identified

in the culture perception study and included in

the Culture Action Plan which the Board regularly

reviews. Our People team listened and introduced

a new strengthened onboarding process with

easy to find resources for line managers and

new starters.

The CARAs

When discussing culture at Crest Nicholson,

employees let us know they felt that more could

be done to recognise those employees excelling

in their role. The Crest Annual Recognition Awards

(the CARAs) were developed to promote a culture

of recognition and highlight the great people we

have within the business.

We celebrated the exceptional efforts and

contributions from individuals and teams at our

inaugural CARA ceremony in September 2024

and have already started planning for next year.

The Board discussed the CARA winners following

the award ceremony and were delighted with the

quality of their nominations and that employees

were recognised across all divisions and grades.

Star Quality Award:

Molly Hill, Assistant Site Manager

Communication continued to be a discussion

topic at the Employee Voice Forums. While

communication had improved over the past year,

it was felt that there was a lack of consistency

between the divisions on how and when important

information about the Group was communicated.

In response, new channels of communication, in

the form of fortnightly business briefing notes, were

introduced to support the dissemination of key

information across the Group, allowing managing

directors to easily share procedural updates and

good practice with their divisions. In the coming

year these tools will be broadened further.

“ We value the voice of our

employees and work to

ensure it is heard when

takingdecisions.

It has been a year of change here at Crest

Nicholson, with both Martyn and Bill joining

during the year, and this has been reflected

by the questions and topics employees have

raised at the Employee Voice Forums I have

chaired around the offices.

The forums have been an invaluable way to

feel the pulse of the Group on our values and

culture and how they have developed as we have

implemented our Culture Action Plan.

I am looking forward to continuing my conversations

with colleagues as we work together to enhance

our culture.”

Louise Hardy

Non-Executive Director responsible for

employeeengagement

Read more about our people on pages 26-27

Onboarding

Communication

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Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

The Board’s year continued

Approach to stakeholder engagement

The Board actively encourages and carries out engagement

with key stakeholders and considers this to be paramount to

the long-term success and performance of the business.

Our Section 172 statement on page 15 sets out how key stakeholders are taken into consideration

by the Board when making decisions.

The Board seeks to understand the views of its stakeholders and mainly engages with them through the

Executive Directors, who ensure the Board is kept informed of any key issues or changes. It also keeps

engagement mechanisms under review to ensure they remain effective.

Information on how the Board has engaged with key stakeholders during the year can be found on pages

15-18 and information on engagement with employees can be found on page 59.

INVESTORS

Our investor stakeholders include institutional

shareholders, retail shareholders, lenders, analysts

and the financial media. The Chief Executive

Officer and Chief Financial Officer engage

proactively and constructively with shareholders

throughout the year and provide regular feedback

to the Board.

The Chairman and Senior Independent Director

are available to shareholders to discuss

governance and strategic matters and consulted

with the Group’s major investors during the year.

Committee Chairs are available to engage with

shareholders on significant matters related to their

area of responsibility.

Investor meetings

The Chief Executive Officer and Chief Financial

Officer attended 60 meetings during the year,

engaging with over half of current shareholders.

Key themes discussed included macro factors

affecting the housebuilding sector, the planning

process, land portfolio and land market, balance

sheet and capital allocation, fire remediation and

operational issues. The Chairman and Executive

Directors discussed the approach and response to

the unsolicited bid with the Group’s largest investors.

There were investor conferences, regular one-

to-one and group meetings, and investors and

analysts were invited to visit our sites.

AGM

All Directors, including the Chairs of the

Committees, attended the AGM and were available

to answer shareholder questions. Shareholders

were encouraged to vote by appointing the Chair

of the meeting as proxy if they were unable to

attend in person and all resolutions were passed.

The 2025 AGM will be held at the Crest Nicholson

offices in March 2025.

Lenders

Executive Directors met with our lenders

throughout the year, keeping them updated about

the financial and operational progress of the

Group, discussing sustainability and governance

and receiving market feedback.

Retail shareholders

Private shareholders are encouraged to access the

Group’s investor website which is kept updated

with analyst consensus, forecasts and trading

updates on the Group’s strategy.

Crest Nicholson

stakeholders

Our people

Investors

Customers

Suppliers

Communities and

environment

Government

and other bodies

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

The Board’s year continued

2023 Annual Report

published

The 2023 Annual Report and

financial statements were

published along with the Notice of

Annual General Meeting.

2024 half-year roadshow

The half-year results announcement was

followed by a roadshow, with meetings

held either in person or virtually, with

investors primarily based in the UK.

Market update

External presentation to the Board on

market developments at the Strategy Day.

Analyst site visit

Analysts visited a number of sites across

the South division, including the newly

completed Farnham site.

2023 full-year

results investor

roadshow

The 2023 results

announcement was followed

by a roadshow, with meetings

held either in person or

virtually, with investors

primarily based in the UK.

Unsolicited bid

discussions

The Chairman and Executive

Directors spent time with the

Group’s largest institutional

investors discussing the

approach and response to

the unsolicited bids received.

Annual General Meeting

The 2024 AGM was held at the Crest

Nicholson offices in Addlestone.

Shareholders were invited to attend, ask

questions and vote on the resolutions.

Full-year

dividend paid

Interim

dividend paid

Investor site visits

Representatives from shareholders

and analysts visited several sites

under construction with the Chief

Financial Officer.

NOVEMBER/DECEMBER

FEBRUARY

JUNE

SEPTEMBER

JANUARY JULY/AUGUST

MARCH

APRIL OCTOBER

The 2024 Investor Relations Programme

NOVEMBER

2023

DECEMBER

2023

JANUARY

2024

FEBRUARY

2024

MARCH

2024

APRIL

2024

MAY

2024

JUNE

2024

JU LY

2024

AUGUST

2024

SEPTEMBER

2024

OCTOBER

2024

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Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Board performance review and outcomes

The Board undertook an internal review of its performance

during the year.

The Code requires that the Board reviews its performance on an annual basis and externally every three

years. This year should have been an external review. However, with significant changes in the latter part

of the year in the Group’s executive management, it was decided to undertake a further internal review

and to delay the external review by a year.

Martyn Clark joined the Board in June 2024 and the review took place in September 2024. The internal

evaluation allowed the Board to receive initial views of how the new composition of the Board

was embedding.

Board performance

The Board considered progress against the actions from the 2023 evaluation under the

themes set out below.

CULTURE AND VALUES

Culture Action Plan

There are regular updates on the progress of the

Culture Action Plan at each meeting of the Board.

Read more on page 58

Engagement with Executive Committee

There are regular engagement opportunities

throughout the year at Board meetings

and in informal settings.

BOARD PERFORMANCE REVIEW PROCESS

STRATEGIC PRIORITIES

Customers and 5 star customer experience

The Board received regular updates

on the Group’s progression back to 5 star

customer service.

The Board discussed the evaluation and agreed that it was most

appropriate to conduct an internal evaluation for a third consecutive

year following significant changes in Board composition and due to

the proximity of the timing of the evaluation

The Board appointed Gould Consulting to assist with collating

responses to a questionnaire compiled by the Chairman.

The majority of questions followed the same format as the previous

year, to allow comparison between performance year on year, with

additional questions to reflect current topics

It was agreed that the review of the performance of the Chairman

would be led by the Senior Independent Director, Octavia Morley

All Directors completed the questionnaire

Executive Committee members completed a shorter survey

Results were analysed and shared with the Chairman

The Chairman held individual meetings with each Director

A Non-Executive Director meeting was led by the Senior Independent

Director with the Chairman not present to discuss the Chairman’s

performance

The Chairman presented the output from the evaluation

The Senior Independent Director presented the output of the review

of the Chairman’s performance

The Board considered the key findings and agreed an action plan

to progress the items from previous and current years

Succession planning

Succession planning for Board

and senior management

remains a priority with particular

focus on planning for orderly

Non-Executive Director rotation

in the years ahead as they near

the end of nine years’ service

Culture Action Plan

The Culture Action Plan remains a

focus at every Board meeting with

oversight of the key milestones

Stage 1

September 2024

Stage 2

October 2024

Stage 3

November 2024

Action plan

Priorities following

the 2024 evaluation

Board discussion

Questionnaire and

meetings

Nomination

Committee and

Board meetings

SUCCESSION PLANNING

Succession planning

The Nomination Committee continued to review

succession plans for the Board and for senior

management.

Induction

Inductions for Maggie Semple and Bill Floydd

were completed during the year. The induction

for Martyn Clark commenced when he joined

in June 2024.

Read more on page 65

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Nomination Committee report

Iain Ferguson CBE

Nomination Committee Chair

HIGHLIGHTS

Succession planning

Board composition and Committee

membership review

Executive Director succession planning

Approved appointments to the

Executive Committee

Approved the Emergency Succession Plan

Diversity and inclusion

Updated the Board and Leadership

Diversity Policy

Approved the Group’s ethnicity target for

senior leadership

Monitored progress against diversity

targets

Director appointments

Appointment of Bill Floydd as Chief

Financial Officer on 13 November 2023

Appointment of Maggie Semple as a Non-

Executive Director on 1 January 2024

Appointment of Martyn Clark as Chief

Executive Officer on 3 June 2024

Shareholder engagement

Shareholder governance consultation

Governance matters

Recommended Directors for election and

re-election at the Annual General Meeting

Development of the plan to implement the

outcomes of 2023 Board evaluation

Annual review of conflicts of interest and

Non-Executive Director independence

Committee members

Iain Ferguson CBE, Nomination Committee Chair

Octavia Morley, Senior Independent Director

David Arnold, Non-Executive Director

Louise Hardy, Non-Executive Director

Maggie Semple OBE, Non-Executive Director

(from 1 January 2024)

Lucinda Bell, Non-Executive Director

(until 31 December 2023)

I am pleased to present this year’s Nomination Committee

report. The report sets out how the Committee discharged

its responsibilities during the year, ensuring the Board and

Executive Committee have the right people leading the

business, with a balance of skills, experience, diversity,

independence and knowledge.

ROLE AND RESPONSIBILITIES OF THE COMMITTEE

Reviewing the structure, size and

composition of the Board to ensure that it

remains effective, balanced and qualified

to deliver the Group’s strategy

Leading the appointment process for

Directors and ensuring that it is formal,

rigorous, transparent and merit-based

Identifying and nominating candidates for

appointment to the Board

Ensuring relevant and tailored inductions

are provided for new Directors

Reviewing the composition of the

Executive Committee and senior

management roles, to ensure a talented

and diverse pipeline of future leaders

Emergency succession planning for the

Board and Executive Committee

Setting the Board’s approach to diversity

and inclusion

Reviewing Non-Executive Directors’ time

commitments, independence, external

appointments and conflicts of interest

Crest Nicholson

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Nomination Committee report continued

BOARD COMPOSITION AND SUCCESSION PLANNING

The Committee reviews the balance of skills, experience, independence and knowledge on the Board to

ensure the right individuals are in place to support the development and implementation of our strategy.

BOARD SKILLS AND EXPERIENCE

Male

57%

Female

43%

Male

58%

Female

42%

White British or other white

86%

Other ethnic group

14%

ELECTION AND REELECTION

TO THE BOARD

When considering Directors for re-election, careful

consideration was given to each of the Non-

Executive Directors’ existing commitments and

time required to fulfil their obligations to the Group

including any changes to their external appointments.

As part of this process, particular consideration

was given to Iain Ferguson’s two Chair mandates in

FTSE 250 listed entities (Crest Nicholson Holdings

plc and Genus plc). He holds a further Chair

mandate at an externally managed investment

trust, Personal Assets Trust plc. Taking into account

the externally managed nature of the trust and

the corresponding reduction in time commitment

required compared with FTSE 250 appointments,

the Board is satisfied that the third appointment

represents half the commitment of a FTSE 250

Chair appointment.

The Board remains satisfied that the external

appointments of the Chairman and Non-Executive

Directors do not impede their ability to allocate

sufficient time to the Company to discharge their

responsibilities. This was demonstrated

by a particularly busy and challenging year from

a Board perspective, with excellent attendance

at both scheduled and ad hoc Board meetings.

All the Non-Executive Directors are considered

to be independent.

Martyn Clark is standing for election by

shareholders at the AGM. All other Directors are

standing for re-election at the AGM in March 2025

with the support of the Board.

White British or other white

95%

Mixed/multiple ethnic groups

Asian/Asian British

DIVERSITY AND INCLUSION

The Group has a Board and Leadership Diversity

Policy which is reviewed annually by the

Committee. The Policy reflects a recognition that

diversity on the Board, Board Committees and of

leadership improves operational performance. This

Policy has targets in line with the Listing Rules and

Parker Review requirements, that at least:

40% of the Board be female

One of the Senior Board positions (comprising

the Chairman, Chief Executive Officer, Senior

Independent Director and Chief Financial

Officer) be female

One Director be appointed to the Board from

an ethnic minority background by end of 2024

40% of senior management be female by end

of 2025

The policy also includes an internally set target

of 13% ethnic minority background representation

across senior management by end of 2027.

The gender and ethnicity targets for the Board

were met during the year, and we are working

towards meeting the senior management targets.

For further information on diversity in the business

see page 27 and for Listing Rules disclosures see

page 92.

1 Executive management comprises members of the Executive Committee and their direct reports.

Housebuilding

Construction

Listed company boards

Strategy

Management and leadership

Finance

Marketing

ESG

People

Customer service

Internal controls

Direct experience Indirect experience

Housebuilding

Construction

Listed company boards

Strategy

Management and leadership

Finance

Marketing

ESG

People

Customer service

Internal controls

Direct experience Indirect experience

Board gender balance Board ethnicity balance

Executive management

gender balance Executive management

ethnicity balance

Crest Nicholson

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Nomination Committee report continued

DIRECTOR APPOINTMENTS

Recruitment of a new Chief Executive Officer (CEO)

was a key focus during the year. The Board was

mindful of both operational needs and compliance

with the Code throughout the process.

The appointment of Maggie Semple OBE as a

Non-Executive Director was completed at the end of

2023 and was described in the 2023 Annual Report.

CEO appointment process

Criteria

The process to identify a new CEO started in 2023

with the development of a detailed specification,

having considered the particular skills, experience

and background required. These included

housebuilding experience, and management,

strategic and people skills.

The Committee considered a number of external

search organisations to assist with the process.

Russell Reynolds was retained to conduct the

search. Russell Reynolds has no other connection

with the Group or any individual Director. The

search focused on candidates that met the criteria

identified. The longlisting and shortlisting processes

were robust and remained diverse throughout.

Interviews

A number of shortlisted candidates were

interviewed by the Chairman and other members

of the Board over a series of meetings. The

preferred candidate met again with the Chairman

to complete mutual due diligence.

Recommendation and offer

After due consideration of feedback from the

interviews, the Committee recommended the

appointment of Martyn Clark as CEO due to

his strong and extensive background in the

housebuilding industry. An offer was made for a

remuneration package described in the Directors’

Remuneration Report. Martyn Clark’s appointment

was announced at the same time as the Group’s

full-year results for 2023 in January 2024.

He commenced employment with the Group

on 3 June 2024.

DIRECTOR INDUCTIONS

Martyn Clark

Martyn Clark’s induction was led by the Chairman

with assistance from the Group Company Secretary.

A comprehensive induction process was completed

despite the constraints caused by the unsolicited

bid approach at the start of his tenure.

Documentation

A bible of company documentation was provided

for him to access as required as he got to know

the business. This included recent Board and

Executive meeting papers, key policies, divisional

summaries, structure charts, site layouts, house

types and land bank data.

Meetings with Directors and executives

Over the first few weeks, meetings were held with

individual Directors and members of the Executive

Committee, as well as divisional managing directors.

This provided an understanding of the culture, values,

strategy, recent developments, financial situation, key

challenges and opportunities.

He also had introductory meetings with teams

covering fire remediation and old sites activities.

Meetings with external advisors

Meetings were organised with Group advisors

including lawyers, brokers and auditors.

Site visits

Martyn Clark visited most sites across the divisions

in order to meet colleagues and understand key

issues in the build phase of developments.

Maggie Semple

Maggie Semple’s induction was led by the

Chairman with assistance from the Group Company

Secretary. As a Non-Executive Director, her

induction focused on a detailed introduction

to the business including meeting her colleagues

on the Board and members of the Executive

Committee. Site visits were organised to meet

colleagues and customers.

MEETINGS

The Committee met three scheduled times during

the year. There were a number of ad hoc meetings

predominantly to discuss the CEO appointment

process and to hold meetings with Russell

Reynolds. Committee meetings usually take place

on the same day as a Board meeting and the

activities of the Committee, and any matters of

particular relevance are reported to the Board.

All members of the Committee attended all

meetings that they were eligible to join (see page

57 for full attendance record). Attendees at each

meeting comprise Committee Chair and members,

who are all independent Non-Executive Directors,

and by invitation as appropriate the Chief

Executive Officer, the Group HR Director and the

Group Company Secretary.

NED appointments

17%

Culture

13%

Diversity and inclusion

13%

Executive succession planning

42%

Governance and shareholders

17%

CONFLICTS OF INTEREST

The Committee reviews any actual and potential

conflicts of interest on behalf of the Board. All

Directors have a duty to avoid conflicts of interest,

and where they arise to declare conflicts to the

Board. The Board has a process to identify and

manage Directors’ conflicts or potential conflicts

of interest, including those resulting from

significant shareholdings, so that the influence

of third parties does not compromise or override

independent judgement.

Directors’ interests were reviewed by the Board

at each meeting and Directors are required to

complete an annual declaration. New conflicts

arising between meetings are dealt with at the

time between the Chairman and the Group

Company Secretary. The Board confirmed that any

appointments or interests held by the Directors

that are current conflicts of interest, or that the

Board considers may be conflicts in the future,

were reviewed and authorised. Should conflicts

of interest arise in future, measures will be put in

place accordingly.

How time was spent

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Audit and Risk Committee report

Committee members

David Arnold, Audit and Risk Committee Chair

Octavia Morley, Senior Independent Director

Louise Hardy, Non-Executive Director

Maggie Semple OBE, Non-Executive Director

(from 1 January 2024)

Lucinda Bell, Non-Executive Director

(until 31 December 2023)

David Arnold is the Director with recent and

relevant financial experience. The Board is

satisfied that the Committee as a whole has

competence relevant to the sector.

David Arnold

Audit and Risk Committee Chair

I am pleased to present this year’s Audit and Risk Committee

report. The report sets out how the Committee discharged

its responsibilities during the year, predominantly monitoring

the integrity of financial reporting and the effectiveness of risk

management and internal control processes.

ROLE AND RESPONSIBILITIES OF THE COMMITTEE

Monitoring the integrity of the Group’s

financial statements and significant

announcements related to financial

performance, including assessing

significant financial reporting judgements

Reviewing the effectiveness of the Group’s

internal controls and risk management

including processes around fraud

detection, anti-bribery and corruption and

anti-money laundering

Monitoring the effectiveness of the

external auditor; advising on matters

relating to their appointment, fees,

independence, objectivity and provision

of non-audit services

Monitoring and reviewing the

independence, objectivity and

effectiveness of the internal audit function;

evaluating and agreeing the internal audit

plan; reviewing internal audit findings

HIGHLIGHTS

Financial reporting

Recommended to the Board the approval

of the 2023 full-year results, the 2023

Annual Report and the 2024 half-year

results, including

– adoption of the going concern basis for

the preparation of the 2023 financial

statements and approval of the viability

statement in the 2023 Annual Report

– advising that the 2023 Annual Report

was a fair, balanced and understandable

assessment of the Group’s position

and prospects

Reviewed the 2024 full-year results

and 2024 Annual Report including key

accounting judgements (see pages 67-69)

External audit

Assessed the effectiveness of the 2023

external audit and concluded that the

audit was effective

Approved the services and fees for non-

audit related work provided by PwC

Considered and approved PwC’s Group

audit plan for the 2024 financial results

and the recommended Audit Quality

Indicators

Led the process for tendering the external

audit work and recommended the re-

appointment of PwC as the external

auditor at the 2025 AGM

Risk management and internal control

environment

Reviewed the effectiveness of risk

management activities and internal controls

Reviewed management’s diagnosis of

reasons for control weaknesses

Agreed management’s remediation plan

and monitored progress

Concluded that the actions taken by

management were appropriate and was

satisfied with the improvements made

Considered the principal and emerging

risks and their associated mitigating

actions and related disclosures

Internal audit

Reviewed and approved the Internal Audit

plan for 2024

Instructed Internal Audit to audit divisions

with control weaknesses

Reviewed the scope, quality and

effectiveness of Internal Audit and

concluded that the Internal Audit function

provided independent and objective

assurance over the internal controls

Considered Internal Audit reports, findings

and agreed actions

Governance matters

Monitored compliance in respect of data

privacy, anti-money laundering, bribery

and corruption, speaking up reports and

investigations and other compliance matters

Considered changes to the UK Corporate

Governance Code and preparation for

compliance with new provisions on

internal control

Crest Nicholson

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Audit and Risk Committee report continued

MEETINGS

The Committee met four scheduled times during

the year and on further occasions to discuss the

audit tender. Committee meetings usually take

place on the same day as a Board meeting and

the activities of the Committee, and any matters of

particular relevance are reported to the Board. All

members of the Committee attended all meetings

that they were eligible to join other than one

meeting affected by a pre-existing commitment

(see page 57 for full attendance record).

Attendees at each meeting comprised the Committee

Chair and members, who are all independent

Non-Executive Directors, and by invitation the Chief

Executive Officer, the Chief Financial Officer, the

Head of Internal Audit, the external auditor, and other

members of the Executive Committee and senior

management as appropriate.

How time was spent

Financial reporting

29%

External audit including tender

37%

Risk management and internal controls

12%

Internal audit

13%

Governance

REVIEW OF FINANCIAL STATEMENTS

The Committee reviewed the full-year and half-

year financial statements. The reviews included

key accounting judgements (see pages 68-69),

compliance with relevant legal and financial

reporting standards and external audit findings,

including any accounting and audit adjustments.

The Committee reviewed the budget and agreed

management’s base case model for the going

concern period (through to 30 April 2026), and

the assumptions for a Severe But Plausible (SBP)

downside case. The Committee also considered the

Group’s viability modelling through to October 2027.

The SBP downside conditions incorporate potential

macroeconomic scenarios which could be

experienced by the UK, industry-wide dynamics,

and Group specific risks. The assessment also

evaluated the anticipated effectiveness of

proposed mitigating actions that are within the

Group’s control.

Whilst the Group forecasts to meet all its covenants

in the base case scenario, the cumulative impact

of the assumptions and mitigations in the SBP

downside case indicates that the Group would

not meet its interest cover covenant during the

going concern period, with the first measurement

date in April 2025. The Group maintains good

relationships and a regular dialogue with all its

lenders and is confident that an amendment to

its covenants would be secured if necessary,

however, this is not guaranteed and therefore

this represents a material uncertainty related to

going concern. In all scenarios, except for where

the interest cover covenant is breached and a

covenant amendment is not agreed, the Group

forecasts adequate liquidity.

Notwithstanding the material uncertainty related

to going concern outlined above, the Committee

satisfied itself that the going concern basis of

preparation continues to be appropriate and

made recommendations to the Board in this

regard. The Group’s viability statement is on

page 50. See note 1 to the consolidated financial

statements on going concern.

2024 ANNUAL REPORT AND ACCOUNTS 

FAIR, BALANCED AND UNDERSTANDABLE

At the request of the Board, the Committee

considered whether the 2024 Annual Report and

Accounts is fair, balanced and understandable

and provides the information necessary for

stakeholders to assess the Group’s strategy,

performance and business model.

To form its opinion, the Committee reflected on

information provided by the Chief Financial Officer,

who was supported by members of Group Finance,

the Company Secretariat, Investor Relations,

Sustainability, HR and Communications functions,

who regularly reviewed the report drafting process.

The Committee took into account reports from the

external auditor on the outcomes of their half-year

review and annual audit.

The Committee considered whether the key

messages in the narrative reflected the financial

reporting and checked whether any sensitive

material had been omitted that should have

been included.

The Committee concluded that:

The financial statements comply with all

applicable financial reporting standards and

any other required regulations

Material areas of significant judgement have

been given due consideration by management

and reviewed with the external auditor

The application of acceptable accounting policies

and practices is consistent across the Group

The disclosures provided are clear, and as

required by financial reporting standards

The reporting and commentary provide a fair

and balanced view of Group performance

The Committee subsequently made a

recommendation to the Board, which in turn

reviewed the report as a whole, confirmed the

assessment and approved publication.

Crest Nicholson

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Financial StatementsStrategic Report Governance

Audit and Risk Committee report continued

KEY ACCOUNTING JUDGEMENTS CONSIDERED IN THE 2024 FULLYEAR FINANCIAL STATEMENTS

Key issues Committee review and decision

Valuation of inventory

Inventory is the most significant balance on the consolidated statement of

financial position and is held at the lower of cost and net realisable value

(NRV). A forecast is maintained for the NRV of each development and this

contains several key assumptions. Due to the influence of external factors

and the cyclical nature of the housing market, there is a risk that the

calculation of the developments’ NRV may be subject to estimation error,

leading to inventory being held at an incorrect value when an impairment

charge to reduce its value would be appropriate.

Value £1,137.4m

Management regularly reviews the selling prices and build costs of all the Group’s housing stock, including the impact on future

forecasts for developments not yet under construction, considering latest market valuations. Where forecasts determine that a site may

no longer generate a margin, an impairment is recognised in the consolidated income statement.

During the year £14.2m of impairment was charged consisting of £8.5m on legacy developments and £5.7m on freehold reversionary

interest. £12.1m of impairment was used in the year on housing units sold, resulting in a net movement in the NRV provision of £2.1m in

the year. See note 18 to the financial statements.

The Committee reviewed and understood the controls in place concerning NRV, including the minimum hurdle rates management

requires before projects are approved and how management monitors NRV on an ongoing basis. Where impairment was recognised

during 2024, the Committee challenged management to ensure that appropriate assumptions were in place, in particular around

expected levels of sales prices and build costs.

Outcome: The Committee was satisfied that the inventory carrying value, and associated impairment, was appropriate.

Margin recognition and forecasting

The Group’s margin recognition framework is based on the margin

forecast for all phases of development. These margins, which drive the

recognition of costs as revenue is taken, reflect estimated selling prices

and costs for each development. This methodology then guides the

allocation of total forecast costs, matching both land and build costs of

a development, to each component of revenue. There is a risk that the

margin forecast for the site, and the margin subsequently recognised on

revenue, is not appropriate and reflective of the actual final profit that

will be recognised on a development, based on this best estimate of

information available.

Sales prices and build costs are inherently uncertain as they are influenced by changes in external market factors, such as the

availability and affordability of mortgages, changes in customer demand due to market uncertainty and availability of labour and

materials.

The Committee reviewed management’s internal control processes, the main areas of estimation and challenged management to

improve the process. Management undertook a number of control improvements in the year including the appointment of a Group

Commercial Director to oversee the Cost Value Recognition (CVR) process. The CVR process was improved and a significant increase

in oversight from Group functions was implemented which was monitored through the internal audit process and reported to the

Committee.

Outcome: The Committee was satisfied that the changes and additional work by management to gain comfort over the build cost

position had improved the control environment and the margins recognised were appropriate.

Combustible materials provision

The provision relates to forecast costs associated with remedial works to

be performed on legacy buildings with potential fire safety issues due to

combustible materials and where the Group has a legal or constructive

obligation to remediate.

The Directors have used Building Safety Fund (BSF) cost information, other

external information and internal assessments as a basis for the estimated

remedial costs, as well as considering the impacts of build cost inflation.

These estimates are inherently uncertain due to the highly complex and

bespoke nature of the buildings, actual costs differing to the amounts

notified by the BSF costed projects, and that fire safety assessments in

progress may require different levels of remediation and associated costs

than those currently estimated.

Value £249.3m

The Group recognised a net exceptional combustibles materials related charge of £131.7m in the year, in addition to that recognised in

prior years. The year end provision balance was £249.3m. This increase reflected that the Group has now, with more surveys completed

and better information, been able to make an assessment of costs in respect of all buildings in scope of the Developer Remediation

Contract, as well as forecast changes in build costs and the imputed interest on the provision balance, net of amounts spent in the year.

This is a complex area with judgements in respect of the extent of those properties within the scope of the Group’s combustible

materials commitments and the provision could be extended as the interpretation of government guidance continues to evolve or due

to cost estimation changes. By contrast, the Group expects to recover some costs from architects and subcontractors involved in the

construction of these schemes but does not recognise these recoveries until they are received.

The Committee reviewed and challenged the appropriateness, quantum, adequacy and completeness of the provision taking into

account government guidance in this area, experience gained since 2019 and potential exposure over the population of legacy

developments.

Outcome: The Committee was satisfied that the provision and related disclosures were appropriate. Due to the size and nature of the

individual items within the charge, the Committee agreed with management’s opinion to continue to treat the combustible materials

charge, and associated recoveries, as an exceptional item.

Crest Nicholson

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Audit and Risk Committee report continued

Key issues Committee review and decision

Completed sites costs

During the first half of the financial year, the Group became aware of

certain build defects on four sites that were completed prior to 2019 when

the Group closed its Regeneration and London divisions. The Group

subsequently completed a thorough review of all completed sites assisted

by third-party consultants. The Group has recognised a one-off completed

sites costs related charge of £32.3m, of which £25.0m is treated as an

exceptional item as it relates to developments no longer part of the core

strategy. The balance of £7.3m is recorded as pre-exceptional.

Completed sites costs include accruals for costs to complete outstanding

site infrastructure and amenities, and completed site provisions for costs

to complete remedial works on buildings where faults have been identified

and the Group is responsible for remediation. At 31 October 2024,

the Group held completed site accruals of £21.8m and completed site

provisions of £23.6m.

Value £45.4m for completed site accruals and provisions combined

The Group considered the pre-exceptional/exceptional presentation of the prior year completed sites charge to the income statement

and the classification of the closing completed sites accrual on the statement of financial position.

Completed sites costs require a number of estimates and assumptions in their calculation. The Group has estimated the costs to

complete outstanding site infrastructure and amenities within developments and the cost of remediation required where faults have

been identified. The Group has internal controls that are designed to ensure an effective assessment of estimates is made of the costs

to finalise completed developments.

The Committee reviewed and challenged the results of the third-party completed sites review, the presentation of the income statement

charge between pre-exceptional and exceptional, and the classification of liabilities between accruals and provisions. The prior year

representation and presentation was also reviewed and challenged.

Outcome: The Committee was satisfied that the income statement, statement of financial position and prior year completed sites cost

related disclosures were appropriate.

Going concern

As part of the process for the preparation of the financial statements

management modelled a set of scenarios for the Committee and the Board

to consider in order to be able to make a statement of going concern.

The base case and SBP downside, including aggregates of multiple factors

were modelled. The base case scenario considered the period through

to 30 April 2026, the going concern period, reflecting the Group’s current

financial position and the prevailing economic landscape, taking into

account that the Group has already secured a proportion of sales for 2025

by way of its forward order book.

The Severe But Plausible (SBP) downside conditions incorporate potential

macroeconomic challenges experienced by the UK, industry-wide

dynamics, and Group specific risks. The assessment also evaluated the

anticipated effectiveness of proposed mitigating actions that are within the

Group’s control.

The Committee considered the detailed modelling prepared by management of the base case and the SBP downside case,

challenging them on the risk factors being applied. The Committee also considered the detailed risk mitigation options and

considerations.

Outcome:

The Committee considered the going concern statement in light of the detailed review of the base case and SBP downside

case. After detailed consideration, the Committee satisfied itself that the going concern basis of preparation continued to be appropriate

and made recommendations to the Board in this regard acknowledging the disclosure of a material uncertainty around going concern

was required.

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AUDIT TENDER KEY ACTIVITIES

Request for Information issued and firm

expressions of interest received from

two firms

FRC’s AQR assessments of the firms

reviewed

Tendering parties confirmed after

independence reviews, and lead partners

selected following interviews with

Committee Chair

Request for Proposal issued and data room

populated with relevant material. Tendering

parties reviewed data room, additional

information supplied and meetings held

Written responses to the Request for

Proposal provided and presentations made

to Committee. Thecriteria used included:

– Audit quality and independence

– Challenge and professional scepticism

– Alignment to our Group values.

– Strength and clarity of audit approach.

– Diversity and skills of proposed team

– Value for money

– Sustainability credentials

Committee recommended PwC as the

preferred audit firm to the Board and formal

approval given

Feedback sessions held with tendering

parties

Audit and Risk Committee report continued

EXTERNAL AUDIT

The Committee considered a number of areas in

relation to the external audit, including the auditor

performance in discharging the audit and the half-

year review, their independence and objectivity,

and their re-appointment and remuneration.

PwC has acted as external auditor to the Group since

2015. Darryl Phillips, the Group’s lead audit partner,

is in the fifth and final year of his tenure in 2024.

Further to the completion of an audit tender (see

opposite), PwC was re-appointed as auditor from

2025 going forward. A successor lead audit partner

was appointed and shadowed the current partner

throughout the 2024 year end process as part of

their onboarding.

PwC provided the Committee with its strategy,

scope and plan for undertaking the year end audit,

alongside proposed Audit Quality Indicators (AQIs).

AQIs are designed to assess the quality of the

audit and have been developed by PwC alongside

management to assist the Committee in measuring

both management’s and PwC’s performance.

The plan described the proposed approach of

the audit and identified the key areas of audit risk,

including the audit approach for these areas. The

Committee reviewed and robustly challenged

the basis for the audit plan before agreeing the

proposed approach and scope of the external audit.

Committee meetings allowed time for the

Committee and the external auditor to meet

without management being present and the

Committee’s Chair had regular contact with the

external audit partner outside of Committee

meetings. PwC met with the Chief Financial Officer

and the Group Finance team at regular intervals

during the audit process.

Independence and non-audit services

The Committee assessed PwC’s independence

from the Group during the year. The Committee

reviewed reports from PwC on its internal quality

controls and assurances confirming that all

partners and employees involved with the audit

were independent of any links to the Group.

The Committee carried out its annual review

of the Group policy for the provision of non-

audit services and concluded that it had been

implemented consistently. The policy is aligned

with the regulatory framework for statutory audit.

It sets out the types of non-audit service for

which the use of the external auditor is prohibited

(including accounting and valuation services)

and provides a list of activities that are Permitted

Non-Audit Services that require the approval of the

Committee prior to any service being provided.

Non-audit services approved by the Committee

and carried out by PwC during the year consisted

of the review of the half-year results, which the

Committee considers supports PwC’s work on the

statutory full-year audit.

Total fees payable for these non-audit services

were £130,000 (2023: £154,000). The ratio of fees

for non-audit services to those for audit services

for the year was 8% (2023: 16%), within the 70%

cap in the FRC’s guidance.

Both the Group and PwC operated robust

processes to prevent auditor independence being

compromised when carrying out any non-audit

work. The Committee considered the nature and

level of non-audit services provided by the external

auditor and was satisfied that the objectivity and

independence of the external auditor was not

compromised by the non-audit work undertaken

during the year.

PwC also provides audit services to the Group’s

defined benefit pension scheme. The associated

fees are met by the scheme and this is therefore

not a non-audit service provided to the Group.

See note 5 to the consolidated financial statements.

Audit tender

The Committee led a tender exercise during the

year, in accordance with the EU Audit Regulation

and Directive (as it forms part of UK law).

The Committee confirmed compliance with the

requirements of the Statutory Audit Services for

Large Companies Market Investigation (Mandatory

Use of Competitive Tender Processes and Audit

Committee Responsibilities) Order 2014 with

respect to both the approach to the tender of the

external audit and the provision of non-audit services.

Following the tender process, the Committee

determined that it had received two strong

proposals from the bidding firms. Both bidding

firms were given access to management and

the business during the process. The process

concluded with a formal presentation by both

firms. Further details are shown to the right.

The Committee recommended to the Board the

reappointment of PwC based on the overall quality

of its tender.

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Audit and Risk Committee report continued

The Chief Financial Officer is responsible for

maintaining a sound system of internal control

that supports achievement of the organisation’s

policies, aims and objectives, and for reviewing

its effectiveness. The Committee considered the

outputs of the Chief Financial Officer’s review

of the internal control framework as well as key

assurance activities outlined on page 72. Where

appropriate, employees responsible for functional

areas associated with principal risks were asked to

present updates to the Committee.

Committee conclusions

The Committee noted that the embedding of the

Operational Framework together with the control

improvements implemented were addressing

the previously identified issues. Based on the

improvements initiated by management and the

testing by Internal Audit, the Committee is satisfied

with the improvements made in the control

environment, whilst noting that management will

continue to refine the control environment in 2025.

The Committee is satisfied that the Group’s

risk management and internal control systems,

including the control and compliance culture

within the business, provide a reasonable level of

assurance that the financial statements are free

from material error and misstatement.

The Committee was satisfied that relevant systems

and processes were in place and were operating

effectively at the year end.

EXTERNAL AUDIT ASSESSMENT PROCESS

PwC presented findings from the annual FRC

review on Audit Quality Inspections of audits

carried out by PwC

The Committee discussed and agreed at the

planning stage the draft list of specific risks to

audit effectiveness and quality and approved

auditor remuneration

The Committee assessed audit planning work

in respect of specific audit quality risks and

ensured that matters of key interest (including

those listed as significant issues on pages 68-

69) were addressed in the audit plan

PwC reported against audit scope and

subsequent meetings provided the Committee

with an opportunity to monitor progress and

raise questions

The Committee discussed both internally

and with PwC the extent to which PwC

demonstrated professional scepticism and

challenged management’s assumptions through

the audit process, particularly in areas of

estimation and judgement

Private discussions took place regularly

between the Committee and representatives

from PwC without management being present to

encourage open and transparent feedback by

both parties

The Committee assessed final audit work and

reporting along with the overall conclusion

reached regarding significant audit risks

Regular meetings were held between the Chair

of the Committee, the Chief Financial Officer

and the audit engagement partner

All Committee members, key members of

management, and those who regularly provide

input into the Committee or have regular

feedback with the external auditor were asked

for feedback on PwC’s performance and the

quality and technical skills of the audit team

Feedback and conclusions were discussed,

along with the conclusion and transparency

of reporting regarding specific audit risks

and issues, with an overall conclusion on

audit effectiveness and quality reached. Any

opportunities for improvement were brought to

the attention of PwC

The Committee, having considered all relevant

matters, concluded that it was satisfied

that auditor independence, objectivity and

effectiveness has been maintained

RISK MANAGEMENT AND INTERNAL

CONTROL

Overall accountability for risk management and

internal controls sits with the Committee, and it

reviewed pertinent information at every meeting.

The Group’s approach to risk management and

process for review are set out on pages 32-33.

During the year the Board, with support from

the Committee, reviewed its risk appetite, which

was themed around market, operational and

governance matters. The Board, with input from

the Committee, carried out an assessment of the

principal and emerging risks facing the Group and

how those risks affect the prospects of the Group

alongside the mitigations in place, as set out on

pages 34-39.

Effectiveness of internal controls

The Committee reviewed the Group’s control

environment alongside the principal risks. The

Group’s internal controls are designed to mitigate,

rather than eliminate, the risk of not achieving the

Group’s strategy and objectives. As such, they

provide reasonable, and not absolute, assurance

against material misstatement or loss.

Following the identification of control failures

in two divisions in 2023, management, supported by

the Committee, initiated a number of improvement

actions related to culture, people and process.

Culture change focused on an increased emphasis

on clear expectations of standards set by

senior leadership. People changes included the

appointment of a Chief Operating Officer and two

new divisional finance directors. The reporting line

for divisional finance directors was moved from

divisional managing directors to the Chief Financial

Officer to increase the level of independence and

oversight within divisional management teams.

The Cost Value Recognition (CVR) process was

improved with increased oversight from the Group

and appointment of a Group Commercial Director.

Internal Audit tested the adequacy of divisional

key controls and also tested the CVR process

in all divisions.

Effectiveness and quality of external audit

An annual review of external audit effectiveness is undertaken at the conclusion of each year end audit.

The review of the 2023 audit concluded that the audit process and the audit team continued to perform

well. Their key strengths included a good quality audit plan, good communication and keeping the

Committee and management informed throughout the process.

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

KEY ELEMENTS OF THE INTERNAL CONTROL FRAMEWORK

Strategy and risk

Key risks and assumptions within the strategy are regularly assessed

and stress tested, including assessment of emerging risks and risk

combinations that threaten the Group

Risk assessments are performed periodically throughout the year,

and risk registers for the Group and each division are maintained and

updated regularly

Performance monitoring

The financial and operational results of each division are reviewed

periodically and compared against the plan

Divisional performance is assessed against approved budgets and

explanations are provided for significant variances on a periodic basis

The Chief Operating Officer attends all divisional board meetings and

the Group Commercial Director attends all divisional CVR meetings

Group and divisional controls

There is a structure of divisional key controls in place, defined in our

Operational Framework and enforced by management teams across the

business. They are periodically assessed by Internal Audit.

Clearly defined authorisation and approval levels are in place for all key

business decisions with appropriate segregation of duties.

Group control activities include:

Periodic reviews of cash, liquidity and headroom positions against our

budget and compliance with covenants

Approval of all land purchases by the Investment Committee, and

Board approval for high value acquisitions

Operation of multiple IT applications and systems which are subject to

regular enhancements, disaster recovery testing and review by both

Internal Audit and the external auditor

Continual monitoring of IT infrastructure for external threats and

vulnerabilities, backed up by comprehensive IT controls

Application of financial reporting standards and reviews of significant

judgments and financial performance

Regular reviews of tax processes, controls and tax accounting

arrangements

Reviews of the Group’s fraud risk register to ensure it remains relevant

and complete, supported by policies related to fraud prevention

KEY ASSURANCE ACTIVITIES

Board, Board Committees and management committees: monitor

performance, recommend policies, procedures and initiatives and

oversee the management of risks and the operation of internal

controls

Internal Audit: the Internal Audit plan covers the specific key risks

of the Group and is approved by the Committee annually. All Internal

Audit reports are distributed to the Executive Committee and Board

and are available to the external auditor

Safety, Health and Environment (SHE) function: drives continual

improvement in SHE performance across the Group’s sites. It engages

with the business via SHE inspections, the provision of training,

information and advice to all employees and by reporting to the SHE

Committee, with the Board considering appropriate SHE-related matters

Sustainability function: drives continual improvement in sustainability

performance across the Group and is responsible for driving

performance against targets

Functional forums: each divisional function of the Group meets on

a regular basis to review new and emerging risks, including new

regulations. They also review and update policies and procedures,

and recommend improvements to internal controls

Divisional key control attestation: the managing directors and

finance directors of each division are required to sign off compliance

with the established divisional key controls every year. Any identified

control breaches, material risks and uncertainties and fraud incidents

are required to be disclosed as part of this assessment

Fraud: where instances of fraud are suspected or alleged, Internal

Audit will investigate the circumstances and report to the Committee

and management with the results of the investigation and any agreed

actions to be taken

External assurance provides additional assurance in the

following areas:

–

The external audit of financial statements and reporting

–

Carbon emissions data assured to ISO 14064 standard

–

External independent safety auditors are engaged to conduct

regular and unannounced site safety reviews

–

Security Operations Centre monitor the Group’s networks

and have Cyber Essentials Plus certification

Audit and Risk Committee report continued

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Audit and Risk Committee report continued

INTERNAL AUDIT

Internal Audit is an important part of the Group’s

corporate governance framework. Its role is to

provide independent and objective assurance,

and advice and insight on risk management and

internal control to the Committee. Internal Audit

reports directly to the Committee Chair.

Internal Audit reviews the effectiveness and

efficiency of internal controls, providing assurance

that internal controls remain fit for purpose and

that they are applied consistently throughout the

Group. In addition, Internal Audit agrees actions

with management to address any key observations

and improve processes. Management is

responsible for ensuring actions are implemented.

Internal Audit monitors their implementation and

reports to the Committee on progress.

Internal Audit plan

The Internal Audit plan was approved by the

Committee. The scope of individual audits were

aligned to the principal risks faced by the Group.

The plan was continually assessed against

progress and any emerging risks, resulting in

amendments to the plan where necessary.

The Committee considered the internal control

recommendations raised by the external auditor

during the external audit and incorporated these

recommendations into the Internal Audit plan

as appropriate.

The internal audit methodology aligns with the

Institute of Internal Auditors Code of Practice and

International Professional Practice Framework.

This provides a quality benchmark for the

performance of internal audit work.

Internal Audit effectiveness

The Committee reviewed Internal Audit

effectiveness, considering quality, objectivity

and expertise. Feedback was received from key

stakeholders including the Board, the Executive

Committee, and divisional and functional

management. The Committee confirmed that both

the processes and management of Internal Audit

were appropriate and effective.

Internal Audit independence

The Committee reviewed the independence of

the Internal Audit function and concluded that

the processes in place to maintain independence

were effective. These included that the Head

of Internal Audit can report any impairment to

objectivity or independence direct to the Chair of

the Committee, and that Internal Audit liaises with

the external auditor, discussing relevant aspects of

their respective activities, which ultimately supports

the assurance provided to the Committee and

the Board.

POLICIES AND BEHAVIOURS

The Board and Committee are committed to the

highest standards of ethical behaviour, honesty

and integrity in the Group’s business practices.

Employees and supply chain partners are made

aware of the Group’s strategy and how their

behaviours impact delivery. The Group Code of

Conduct was refreshed and relaunched during the

year, to ensure that employees are aware of the

Group’s values and expected behaviours.

The Group operates and maintains policies and

procedures which set out required actions in

more detail. These policies and procedures are

supported by mandatory online training which

employees are required to complete on a regular

basis. The Committee oversees the implementation

of these policies, reviews any incidents arising and

receives regular reports on training progress.

Supply chain partners are required to sign up to

the Group’s Supply Chain Code of Conduct and to

abide by relevant policies.

Anti-fraud and anti-bribery

The Group has an anti-bribery and corruption

policy and an anti-fraud policy which all employees

must follow. Employees are required to comply

with the Group’s gifts and entertainment policy.

Employees must declare any actual or potential

conflicts of interest, and these are reviewed by the

Group Company Secretary.

The Group has in place robust anti-money

laundering policies, processes and oversight,

supported by anti-money laundering guidance.

Mandatory training is provided on these policies

and procedures to all employees.

Speaking Up

The Board is responsible for the Group’s

arrangements with regard to reporting actual or

suspected wrongdoing including breaches of law,

regulations and Group policies. The Committee

received updates on these matters at each of its

meetings.

The Committee is responsible for reviewing

the Group’s speaking up arrangements and

concluded that they remain effective. The Group’s

Speaking Up policy is written in accessible

language to support employees, supply chain

and subcontractors and is made available at all

sites. Employees and supply chain partners are

encouraged to report any concerns of malpractice

in an open and honest way.

The policy provides details of a free independent

helpline that can be used to report concerns

and includes confidential support services that

individuals could use if they need assistance in

making a report. This is advertised with posters at

all sites in shared areas and all offices.

2024 INTERNAL AUDIT PLAN

The 2024 Internal Audit plan focused on specific

key and emerging risk areas across the Group.

Continued audits of divisional commercial site

cost review process

A review of compliance with the New Homes

Quality Code (NHQC) from the reservation

process, through to handover to customer

service following legal completion of the sale

Testing the subcontractor tender and payment

management processes across divisions

Reviewing the effectiveness of partnership

deals

Testing of key processes introduced to support

closing our sites effectively

A specific audit to review fire remediation

projects and assess performance against policy

A rolling audit programme testing key divisional

controls defined in our control frameworks

An audit of key IT controls to support the

delivery and integration of financial reporting

Outcomes

Throughout the year, the audits have identified

where controls have not operated effectively, or

where the design can be improved. Specifically,

audits identified gaps in customer service

processes, and where further improvements

can be made in closing our sites effectively.

Actions have been addressed and improvements

have been made to address observations from

these audits and all agreed actions raised are

tracked and monitored by management and the

Committee to ensure appropriate closure.

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Directors’ remuneration report

MEETINGS

The Committee met three scheduled times during

the year and on further occasions as required.

Committee meetings usually take place on the

same day as a Board meeting, and the activities

of the Committee, and any matters of particular

relevance are reported to the Board. All members

of the Committee attended all meetings that

they were eligible to attend (see page 57 for full

attendance record).

Attendees at each meeting comprised the

Committee Chair and members, who are

independent Non-Executive Directors and the

Group’s Chairman, who was independent on

appointment, and by invitation the Chief Executive

Officer, the Group HR Director, the Group Company

Secretary and the Committee’s independent

advisor, Korn Ferry.

Octavia Morley

Remuneration Committee Chair

Committee members

Octavia Morley, Remuneration Committee Chair

Iain Ferguson CBE, Non-Executive Chairman

David Arnold, Non-Executive Director

Louise Hardy, Non-Executive Director

Maggie Semple OBE, Non-Executive Director

(from 1 January 2024)

Lucinda Bell, Non-Executive Director

(until 31 December 2023)

I am pleased to introduce our Directors’ remuneration report

(Report) for the year ended 31 October 2024. This Report

sets out how the Committee has considered the performance

of the Group in determining remuneration outcomes,

and in setting targets for 2025.

2024 has been a challenging year for the Group,

the housebuilding industry and house buyers

with sales continuing to be impacted by ongoing

affordability concerns. An unsolicited offer for the

Group which fell away in August further impacted

the Group’s performance.

However, despite these challenges, under the

leadership of our new Chief Executive Officer,

Martyn Clark, the 2024 results were delivered in

line with guidance updated at the start of his tenure.

It is in this context that the Remuneration Committee

has reviewed the 2024 incentive outturns.

Board changes

Bill Floydd joined the Board on 13 November 2023.

His remuneration arrangements were disclosed in

the 2023 Directors’ remuneration report.

Martyn Clark joined the Board on 3 June 2024.

The Committee determined a remuneration

package in line with the Directors’ remuneration

policy (Policy) summarised below. Martyn Clark’s

fixed pay is lower than that of his predecessor, had

he remained in post, and his variable pay is in line

with the Policy.

Salary of £600,000 per annum

Annual bonus opportunity of 150% of salary

(applicable from 2025)

LTIP award of 150% of salary (200% for 2024

was agreed as an exception as part of Martyn

Clark’s buy-out arrangements)

Pension of 6% of salary

Benefits aligned with wider workforce

As part of Martyn Clark’s recruitment, the

Committee agreed compensation for remuneration

forfeited from his previous employer. The buy-

out of the awards forfeited was structured on

consistent terms. Full details of the buy-out awards

are set out on page 83.

Peter Truscott retired and stepped down from

the Board and his role as Chief Executive Officer

on 14 June 2024, but remained an employee of

the Company until 21 October 2024. His leaving

arrangements are in line with the treatment for

good leavers under the Policy and are set out in

further detail on page 86 of this report.

2024 REMUNERATION OUTCOMES

In determining that the outcomes for 2024 were

appropriate and that the Policy had operated

as intended, the Committee considered overall

performance and the incentives payable across

the Group, the relativities in pay between

employees and the Executive Directors, noting the

impact of roles and seniority on pay, and the wider

stakeholder experience.

Annual bonus

Martyn Clark joined the business on 3 June 2024

and was not eligible to receive a bonus for 2024.

Bill Floydd, who joined on 13 November 2023,

was eligible for a bonus. The Committee

determined that Peter Truscott, the former Chief

Executive Officer, would not receive a bonus.

The 2024 bonus targets were 40% on adjusted

profit before tax (APBT), 30% on net cash, and

30% on a range of non-financial measures focusing

on customer service, reduction in waste and

Safety, Health and Environment (SHE) leadership.

The Group’s performance was impacted by a

number of factors including persistently high

interest rates and subdued consumer confidence

which reflected the weak sales environment along

with build cost increases. As a result, the APBT

target was not achieved.

Remuneration policy

Risk and reward

43%

Annual remuneration discussions

28%

Governance

20%

Defined terms are set out in the Glossary on

page 162

How time was spent

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Directors’ remuneration report continued

Net cash targets were set that reflected the

challenging operating environment at the start of

the year. The strong performance on cost control,

cash conversion, and other efficiencies in the

second half of the year meant that the target was

achieved in full.

Strong progress was also made in improving

customer service and reduction in waste.

Performance was above the stretch targets that

were set resulting in performance above maximum

for both measures. The Committee assessed SHE

leadership performance during the year and was

satisfied no downward modifier should apply.

Based on the targets, the Group’s performance

resulted in an overall formulaic outcome of

60% of maximum against all measures, with full

achievement against net cash, customer service

and waste. However, using its discretion, the

Committee determined that taking into account

disappointing shareholder experience and that,

while APBT was delivered in line with recent

guidance, it did not reach the threshold target set

at the beginning of the year, the Chief Financial

Officer’s bonus outcome should be reduced from

60% to 20% of maximum. The Committee believes

this is a fair outcome in a difficult year, including

disruption from the unsolicited bid and reflecting

a strong cash performance. This approach was

broadly consistent with the approach taken for

the entire senior management team.

LTIP

The 2022 LTIP award measured performance over

the three financial years 2022 to 2024. The 2022

LTIP award will lapse in full as none of the targets

were achieved. See page 82.

2025 REMUNERATION APPROACH

The Committee reviewed remuneration for 2025,

taking into account the new leadership team, the

strategy going forward and recognising 2025 is a

transitional year for the Group.

Salary

An average salary increase of 2% was applied in

January 2025 for employees including Bill Floydd.

Martyn Clark did not receive an increase to his

salary for 2025.

Annual bonus

The annual bonus opportunity for Martyn Clark is

150% of salary and the opportunity for Bill Floydd

will be increased from 125% to 150% of salary for

2025. The Committee considers this increase,

within the shareholder approved policy limit, to be

appropriate taking into account market positioning of

the Chief Financial Officer’s total package, his strong

performance and the stretch inherent in the targets

that have been set.

Performance measures will be based on 60% financial

measures (30% APBT (reduced from 40%) and 30%

on net cash) and 40% on non-financial measures

(20% customer service, 10% build quality and 10%

employee engagement). The inclusion of build quality

as a performance measure reflects its importance as a

strategic aim for the Group in 2025.

Recognising the slight increase in the weighting

towards the non-financial measures for 2025

compared with 2024, before any bonus may be

payable under the non-financial performance

measures, the Group’s APBT must achieve a

predefined threshold level set by the Committee.

LTIP

Awards to Executive Directors at 150% of salary will

be made in February 2025.

Using their flexibility under the Policy, the

performance measures have been reviewed by the

Committee and reweighted for 2025, in line with

our strategic priorities. Performance will be based

40% on ROCE, 22.5% on a significant improvement

in the Group’s share price, 22.5% on Total

Shareholder Return (TSR) relative to a housebuilder

peer group, and 15% on ESG measures to incentivise

further reductions in emissions by 2027, in line with our

science-based targets, approved by the SBTi.

The Committee reviewed the TSR peer groups

for the 2025 award and determined that TSR

performance should be assessed solely against

HIGHLIGHTS

Considered 2024 bonus scheme outcomes

and final vesting of LTIP awards

Reviewed 2024 AGM outcomes and

feedback from shareholders

Reviewed the pay of Executive Directors

and Chairman

Determined leaver terms for Chief

Executive Officer and other senior

management roles

Agreed remuneration package for

incoming Chief Executive Officer

Determined the annual bonus scheme

structure for 2025

Considered 2025 LTIP measures and

targets

Reviewed employee pay and benefits.

Considered potential remuneration

outcomes in light of the unsolicited bid

from Bellway

LOOKING AHEAD

Ongoing consideration of employee pay

Monitor performance of in-flight incentive

awards during the year and consider 2025

outcomes

Consider annual bonus and LTIP measures

and targets for 2026

Review the Directors’ Remuneration Policy,

for approval at the 2026 AGM

Engage with employees and shareholders

as part of setting the 2026 Directors’

Remuneration Policy

sector peers so that payouts are determined by

outperformance against our peers only rather than

in part by outperformance of the FTSE 250 index.

The Committee considers this approach to align

more closely with the interests of our investors.

The introduction this year of share price as a

measure will apply to the 2025 grant only. The

measure is intended to provide a direct focus for

management on the restoration of the Group’s

share price through the successful execution

of the strategy. The target has been set such

that it will require a significant improvement in

the Group’s share price and, based on back-

testing, would require significant stock market

performance over the three year period.

Fair pay

Employee remuneration continued to be an area

of focus for the Committee during the year. The

workforce’s remuneration was reviewed in the year

and there continued to be good alignment with the

Executive Directors.

We ensure our employees’ remuneration packages

are attractive, aligned to our strategy and

positioned to enable us to retain our workforce

and attract new talent.

CONCLUSION

I would like to thank our shareholders for their

ongoing support on our approach to remuneration.

The Committee continues to welcome shareholder

feedback and will be proactively engaging with

investors during the year in advance of the AGM

in 2026 where the Directors’ Remuneration Policy

will be proposed for approval. We will continue to

align our remuneration approach with our strategy

and ensure that all measures will be subject to the

achievement of stretching targets.

We hope that you will support the advisory vote

on the Directors’ remuneration report at the

2025 AGM.

Octavia Morley

Remuneration Committee Chair

3 February 2025

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Salary, benefits

and pension

Fixed remuneration in

conjunction with the

variable elements to attract,

retain and incentivise high

calibre talent to execute

the Group’s strategy.

Annual bonus

Incentivises and rewards

individuals to execute

the Group’s strategy and

achieve objectives linked to

the strategic priorities and

foundations.

Long-term

incentive plan

Incentivises shareholder

value creation and execution

of the strategy over the

longer term.

Executive Directors’ total remuneration for 2024 (excluding buy-out)

Remuneration at a glance

Fixed pay

Short-term

incentives

Long-term

incentives

£0

Martyn

Clark

Bill

Floydd

£200,000 £400,000

£600,000

Fixed pay Annual bonus LTIP

Executive Director’s shareholding

Martyn

Clark

Bill

Floydd

0% 50% 100% 200%

Progress towards shareholding requirement

150%

Balance to achieve 200% shareholding requirement

2024 PERFORMANCE SNAPSHOT

Net

(debt)/cash

£(8.5)m

EBIT margin

5.1%

Customer service

and quality

95%

ROCE

4.1%

Performance measure

Outturn % achieved

APBT¹ £22.4m 0%

Net(debt)/cash £(8.5)m 30%

Customer service and quality² 95% 20%

Reduction in waste³ 7.1 t/unit 10%

TSR Below

median

EBIT margin 5.1% 0%

ROCE 4.1% 0%

REMUNERATION FRAMEWORK FOR 2025

Directors’ remuneration report continued

Salary

APBT

30%

Benefits

Net Cash

30%

Pension

Customer

service

20%

Fixed pay

ESG

10%

Annual bonus

Total

pay

Relative TSR

22.5%

ROCE

40%

ESG

15%

LTIP

Build

quality

10%

Share price

22.5%

1 As shown on page 159

2 12-month NHBC ‘recommend your housebuilder’ score for 2024

3 tonnes per 100 square metres

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

KEY

Summary of the Directors’ remuneration policy

Directors’ remuneration report continued

Fixed pay Short-term incentives Long-term incentives

Below is a summary of the Policy that was approved by shareholders at the AGM on 23 March 2023. The Policy is set out in full in the 2022 Annual Report and can be found at crestnicholson.com/results

Element of remuneration 2025 2026 2027 2028 2029 Link to strategy Framework

Fixed

Base salary Attracts, retains and incentivises the best people in

the market to execute the Group’s strategy.

Provides an appropriate level of fixed remuneration

without over-reliance on variable elements.

Reviewed annually or when change in position or

responsibility. Increases usually in line with market and

general increases across the Group.

Benefits A range of competitive benefits in line with what is

available to our employees.

Pension contribution Payable in line with the pension contribution available to

the majority of the workforce, currently 6% of salary.

Non-Executive

Director fees

Remunerates appropriately based on an

individual’s experience, time commitment and

responsibilities.

Non-Executive Directors’ fees are paid in cash and are

not performance related.

Additional fees may be payable in relation to extra

responsibilities undertaken or time commitments.

Variable

Annual bonus

Cash

Deferred period

Incentivises and rewards individuals to execute the

Group’s strategy and achieve objectives linked to

the strategic priorities and foundations.

Deferred element encourages longer-term

shareholding and links part of annual bonus

payment to the further success of the Group and

stakeholder and shareholder interests.

The maximum bonus opportunity is capped at 150%

of salary for Executive Directors, with on-target

performance receiving 50% of maximum and up to 25%

of the maximum payable for threshold performance.

Two-thirds of the bonus is paid in cash. One-third of the

bonus is paid in shares (post tax, National Insurance

and other statutory deductions) and subject to a holding

period of three years (deferred shares).

Long-term incentive

Performance period

Holding period

Incentivises shareholder value creation and

execution of the strategy over the longer term.

Drives and rewards achievement of key long-term

Group objectives aligned with the strategy and with

shareholder interests.

Contributes to building a meaningful shareholding

by aligning interests with wider shareholders.

Awards take the form of nil-cost options or conditional

share awards. LTIP awards normally vest on the

third anniversary of grant subject to achievement of

performance measures and (other than in good leaver

situations) provided the Director remains in office with

the Company.

Award levels will be at a maximum of 200% of salary.

Amounts equivalent to any dividends or shareholder

distributions made during the vesting period may

be awarded in respect of vested or exercisable LTIP

awards, normally in the form of shares.

A two-year post-vesting holding period will apply to all

vested LTIP awards.

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

OUR STRATEGIC PRIORITIES

Land Portfolio

Strategic Land and Partnerships

Placemaking and Quality

Operational Efficiency

5 Star Customer Service

EXECUTIVE DIRECTORS’ BASE SALARY

Executive Director salary increases are aligned to the average increase for the wider workforce. In 2025,

the increase for the wider workforce will be 2% of salary. Bill Floydd will receive an increase in line with

the wider workforce. Martyn Clark will not receive a salary increase for 2025.

Director

2025 salary

(annual)

Martyn Clark No increase awarded in January 2025 £600,000

Bill Floydd Increase of 2% awarded in January 2025 £408,000

NONEXECUTIVE DIRECTORS’ FEES

Non-Executive Director fees are reviewed on an annual basis. Fees were not increased in 2024 but will

be increased by 2% for 2025.

Director

Role Base fee Role/Chair fee

2025 fee

(annual)

Iain Ferguson Chairman £216,424 N/A £216,424

David Arnold Audit Committee Chair £55,750 £9,200 £64,950

Louise Hardy Non-Executive Director responsible

for employee engagement

£55,750 £5,410 £61,160

Octavia Morley Senior Independent Director and

Remuneration Committee Chair

£55,750 £18,400 £74,150

Maggie Semple Non-Executive Director £55,750 N/A £55,750

PENSION

The Executive Directors receive the same level of pension as the majority of the workforce. Executive

Directors can elect whether to contribute some of the benefit directly into the Group’s defined

contribution pension plan and receive any balance (or all the benefit) as cash.

Director

Pension or cash equivalent

Martyn Clark 6% of salary

Bill Floydd 6% of salary

ANNUAL BONUS

For 2025, the annual bonus opportunity for Martyn Clark is 150% of salary and the opportunity for Bill Floydd

will be increased from 125% to 150% of salary. The rationale for this change is set out in the Chair’s letter.

Targets are considered to be commercially sensitive and will be disclosed in the 2025 Directors’

Remuneration Report. The Committee will review performance in the context of wider stakeholder

experience over the performance period when determining bonus payments. One-third of any bonus

earned will be paid in shares which are subject to a three-year holding period.

The Committee has reviewed and agreed the combination of measures and weighting in line with the

Group’s strategy and these are set out below. The Committee is satisfied that the annual bonus scheme

framework is applied in a similar way to employees across the Group, tailored to roles and functions.

Performance

measure

Measure detail Links to strategy

Weighting (%

of total bonus

opportunity)

Financial

APBT Performance is measured

between threshold and maximum

Net cash Performance is measured

between threshold and maximum

Non-financial

Customer service HBF satisfaction score as at

31 October 2025

Build quality Average Reportable Items (RIs)

from the NHBC and Premier

Guarantee Quality Score

ESG Employee engagement Underpinned by the People and Sustainability

and Social Value foundations

Recognising the slight increase in the weighting towards the non-financial measures for 2025 compared

with 2024 (which was 70:30 in favour of financial measures), before any bonus may be payable under the

non-financial performance measures, the Group’s APBT must achieve a predefined threshold level set by

the Committee. The threshold will be disclosed next year.

Directors’ remuneration report continued

Implementation of the Policy in 2025

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

LTIP

The Committee intends to grant awards at 150% of base salary to both Executive Directors but will

consider the grant level at the time of the award taking into account the share price level at grant.

The final vesting value of any awards will be considered carefully by the Committee at that time to

ensure the value delivered to participants remains appropriate relative to the performance of the Group,

shareholder experience, and employee workforce impact over the performance period.

Awards are subject to a three-year performance period and a two-year post-vesting holding period.

The Committee has reviewed the measures for 2025 and these are set out below:

Performance measure

% of award

Threshold

(25% of element)

Maximum

(100% of element) Links to strategy

TSR¹ 22.5 Median Upper Quartile

Share price 22.5 250p 300p

ROCE 2027 40 9.5% 12%

ESG 15 1.81 tCO

e/sq. m 1.56 tCO

e/sq. m

Underpinned by the Sustainability

and Social Value and Safety, Health

and Environment foundations

1 versus a selection of sector peers (see opposite).

TSR is measured against a selection of sector peers. The 2025 peer group comprises Barratt Redrow

plc, Bellway plc, The Berkeley Group plc, MJ Gleeson plc, Persimmon plc and Taylor Wimpey plc.

Performance will be measured on a straight-line basis between a threshold of median TSR (earning 25%

of the element) and a maximum at upper quartile TSR (earning 100% of the element). TSR provides a focus

on the Company’s relative TSR performance against the sector.

The share price performance condition provides a direct incentive and focus on the restoration of the

Group’s share price. This is intended to apply for the 2025 LTIP award only. To the extent dividends are

payable over the performance period, the aggregate value of these will be added to the share price for

the purpose of assessing the achievement of the performance condition.

ROCE will reward operational efficiency and margin accretion and will be an adjusted measure as defined

on pages 158-159.

The ESG measure is aligned to the Group’s 2030 science-based greenhouse gas emissions reduction

target. It includes scopes 1, 2 and 3 emissions measured on an intensity basis (tCO

e/sq. m of legally

completed floor area). The stretch target represents a linear reduction in emissions from the 2019 base

year to the 2030 target. The threshold target represents a linear reduction from the 2023 performance

level to the 2030 target.

In determining the targets the Committee considered forecast performance and analyst consensus

to ensure that threshold targets were incentivising and achievable and that the stretch targets were

sufficiently challenging beyond internal targets considering market conditions and external benchmarks.

OUR STRATEGIC PRIORITIES

Land Portfolio

Strategic Land and Partnerships

Placemaking and Quality

Operational Efficiency

5 Star Customer Service

Directors’ remuneration report continued

OUR APPROACH TO REMUNERATION IN 2025

Risk Discretion can be applied to variable pay outcomes to ensure these are consistent

with underlying Group performance and stakeholder experience

Withholding and recovery terms apply to variable pay

Proportionality Higher weighting to variable pay for the Chief Financial Officer with delivery of higher

variable pay at higher performance levels

Link to strategy set out against performance measures in the Report and a more direct

focus on the restoration of the Company’s share price

Committee discretion to override outcomes

Clarity Remuneration structures are set out clearly in the Report

Performance targets are fully disclosed (retrospectively, where commercially sensitive)

Alignment with

culture

Strategic KPIs link reward to strategy and align with stakeholders and employees

People and ESG targets focus on non-financial priorities

Bonus scheme framework and measures align to employee schemes

Simplicity Simple methodology for annual bonus and LTIP

Clearly articulated measures, targets and narrative in the Report

Predictability Award limits set out in the Directors’ Remuneration Policy and Report

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Annual Report on remuneration

The information in this Report is audited where this is indicated, and otherwise unaudited.

2024 REMUNERATION PAYABLE TO EXECUTIVE DIRECTORS AUDITED

Salary

£000

Benefits

£000

Bonus

£000

LITPs

£000

Retirement

benefits

£000

Other

£000

Total

pay

£000

Total

fixed

pay

£000

Total

variable

pay

£000

Martyn Clark

2024 250 12 – – 15 325 602 277 325

2023 – – – – – – – – –

Bill Floydd

2024 388 23 100 – 23 – 534 434 100

2023 – – – – – – – – –

Former Executive Directors

Peter Truscott

2024 437 17 – – 26 – 480 480 –

2023 697 26 – – 46 – 769 769 –

Duncan Cooper

2024 47 3 – – 3 – 53 53 –

2023 392 23 – – 23 – 438 438 –

1 Where salaries are adjusted for benefits which are provided via salary exchange, such salaries are quoted as the gross figure disregarding

the effect of salary exchange.

2 The figure shown includes the value of car benefit, private medical insurance, group income protection, personal accident, life assurance

and an annual health check.

3 Salary supplement of 6% (employee majority rate). No Director has a prospective interest in a defined benefit scheme.

4 Payments related to the buy-out awards to Martyn Clark. Full details can be found on page 83.

5 Martyn Clark was appointed to the Board as Chief Executive Officer on 3 June 2024. Remuneration is shown from this date.

6 Bill Floydd was appointed to the Board as Chief Financial Officer designate on 13 November 2023 and became Chief Financial Officer

on 13 December 2023. Remuneration is shown from 13 November 2023.

7 Peter Truscott retired and stepped down from the Board on 14 June 2024 and remained an employee with the Company until 21 October 2024.

Remuneration in the table above is shown for the period to 14 June 2024.

8 Duncan Cooper stepped down from the Board on 13 December 2023. In accordance with the Policy and scheme rules, no annual bonus

was payable and unvested LTIPs lapsed as a result of resignation.

2024 NONEXECUTIVE DIRECTORS FEES AUDITED

2024

£000

2023

£000

Iain Ferguson 212 211

David Arnold 64 63

Lucinda Bell

9 54

Louise Hardy 60 60

Octavia Morley 73 72

Maggie Semple

46 –

1 Lucinda Bell stepped down from the Board on 31 December 2023. The fee shown is pro rata for the period of service during the year.

2 Maggie Semple joined the Board on 1 January 2024. The fee shown is pro rata for the period of service during the year.

Directors’ remuneration report continued

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

PAY FOR PERFORMANCE 2024 AUDITED

Annual bonus targets and outcomes

The 2024 annual bonus scheme followed a similar format to previous years with targets for APBT and net cash (70%) as well as non-financial measures (30%) focusing on customer service, reduction in waste and

SHE leadership. The maximum target for each element was set to stretch and further challenge the Executive Directors. Achievement was calculated on a straight-line basis between threshold and target, and target

and maximum/stretch with a maximum bonus potential of 125% of salary for Bill Floydd.

While appropriately stretching targets had been set based on forecasts relating to the financial and market outlook at the end of 2023, the APBT target was not met this year. The Group’s performance was impacted

by a number of factors including persistently high interest rates and subdued consumer confidence which reflected the weak sales environment along with build cost increases. Strong performance against the net

cash targets however resulted in performance above maximum.

During the period, the Group made good progress with respect to customer service and waste reduction with performance for both above the maximum target.

The Committee considered the SHE leadership shown by the Executive Directors during the year and taking into account a range of factors including divisional performance and leadership, and the level of incidents,

the Committee considered that appropriate leadership had been demonstrated. As such, no deduction was necessary under this annual bonus measure.

Therefore, the formulaic bonus outcome for 2024 was 60% of maximum. However, taking into account the APBT outcome for the year and disappointing shareholder experience, the Committee exercised its

discretion to reduce the outcome by two-thirds. As a result, the final bonus payout will be 20% of the maximum bonus potential of 125% to Bill Floydd. The Committee believes this is a fair outcome in a difficult year,

including disruption from the unsolicited bid and reflecting a strong cash performance.

The results for each element of the annual bonus incentive are set out below:

Director

Measure (weighting) Description and link to strategy

Threshold

(25% of

maximum)

On-target

(50% of

maximum)

Stretch and

maximum

(100% of

maximum)

Actual

performance

outcome % achieved

% of salary

after

discretion

applied

Financial Adjusted profit before tax (40%) Adjusted profit before tax as shown on page 159.

£45m £45m £55m £22.4m 0 0

Net (debt)/cash (30%) Cash and cash equivalents plus noncurrent and current interest bearing

loans and borrowings as at 31 October 2024.

£(120)m £(114)m £(50)m £(8.5)m 30 12.5

Non-financial Customer service and quality (20%) The 12-month NHBC ‘recommend your housebuilder’ score for 2024.

90% 92% 94% 95% 20 8.3

Reduction in waste (10%) Reduction in waste in 2024 compared to 2023¹. See page 22 for further

information on the Group’s action to manage and minimise waste.

Underpinned by the Sustainability and Social Value foundation

9.80

t/unit

9.33

t/unit

8.86

t/unit

7.1 0

t/unit

10 4.2

SHE leadership (-10%) A downwards adjustment of up to 10% of the bonus achieved should

SHE leadership fall below the standard expected by the Group.

Underpinned by Safety, Health and Environment foundation

downwards

adjustment

applied

Total bonus 60 25

1 Unit for waste intensity is tonnes per 100 square metres of legally completed homes

Directors’ remuneration report continued

OUR STRATEGIC PRIORITIES

Land Portfolio

Strategic Land and Partnerships

Placemaking and Quality

Operational Efficiency

5 Star Customer Service

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

2024 bonus payments and deferral

One-third of the annual bonus is delivered in shares (post tax, National Insurance and other statutory

deductions) and subject to a holding period of three years (Deferred Shares). The Deferred Shares are

subject to withholding and recovery conditions and continue to be subject to the holding period after

cessation of employment.

The 2024 bonus payment and share deferral is set out below:

Bonus total Bonus paid in cash Bonus deferred into shares

£ £ % bonus £ % bonus

Bill Floydd 100,000 67,000 67 33,000 33

2022 LTIP targets and outcomes (audited)

The 2022 LTIP award, granted on 28 January 2022, was based on performance over the three years

ended 31 October 2024 and would have become exercisable from 28 January 2025 (subject to the

Director still being in employment or otherwise having been a good leaver) had the performance targets

been achieved. The table below sets out details of the measures, performance targets and actual

performance which resulted in 0% of the awards vesting.

Measure

Weighting

Threshold

(25%)

Maximum

(100%) Actual performance

% of award

achieved

TSR in 2024

40% Median Upper

quartile

Below median compared

with both peer groups

ROCE in 2024

30% 19% 22% 4.1% 0%

EBIT margin in 2024

30% 16% 18% 5.1% 0%

Total 100% – – – 0%

1 Measured using the companies comprising the FTSE 250 index (excluding investment trusts) as at 1 November 2021 (one-third) and a

selection of sector peers (two-thirds). The 2022 peer group comprised Barratt Developments plc, Bellway plc, Countryside Properties plc,

Vistry Group plc, Persimmon plc, Redrow plc and Taylor Wimpey plc. Countryside Partnerships was acquired by Vistry Group and delisted on

14 November 2022. Redrow was acquired by Barratt and delisted on 23 August 2024. For the purposes of calculating actual performance,

both Countryside Partnerships and Redrow were retained in the peer group with their TSR performance tracked forward by reference to an

index derived from their peers from the dates of delisting.

2 ROCE has been calculated using unrounded numbers. ROCE presented in the financial statements and elsewhere in the Annual Report has

been calculated using numbers rounded to £0.1m.

3 EBIT margin as defined on page 28.

SCHEME INTERESTS AWARDED DURING THE FINANCIAL YEAR AUDITED

2024 LTIP Awards

Awards were granted to Executive Directors under the LTIP for the performance period 1 November 2023

to 31 October 2026. As explained in the Chair’s letter, Martyn Clark received a 200% of salary award

exceptionally in 2024.

Award

Type

Date of

grant

Number of

Face value

of award

£000 % of salary

% of award

receivable

at threshold

Martyn Clark Performance Nil-cost

option

17 June

2024

498,628 1,200 200 25

Bill Floydd Performance Nil-cost

option

5 February

2024

287,301 600 150 25

1 Face value for Martyn Clark calculated based on 240.66 pence, the average of the closing middle market share price for the 10 dealing days

preceding the date of grant. Face value for Bill Floydd calculated based on 208.84 pence, the average of the closing middle market share

price for the five dealing days preceding the date of grant.

2024 LTIP Performance conditions

Weighting Threshold (25%) Maximum (100%)

TSR in 2026 50% Median Upper quartile

ROCE in 2026 35% 10.5% 15%

Reduction in scope 1 and scope 2 carbon emissions 15% 4,260 tCO

e 3,834 tCO

Clawback and malus applies to all LTIP awards should an event occur within three years of an award

vesting or, in the case of an option, when it first becomes exercisable. Repayments may be made through

a reduction in future bonus or share awards on vesting, or by direct repayment. Circumstances in which

clawback or malus may be applied are set out in full in the 2022 Annual Report that can be found at

crestnicholson.com/results.

A two-year post-vesting holding period applies to all vested LTIP awards with those shares held by the

Company until the end of the period.

DBP

No awards were made under the deferred bonus plan in 2024.

Directors’ remuneration report continued

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

BUYOUT ARRANGEMENT  MARTYN CLARK CHIEF EXECUTIVE OFFICER AUDITED

As set out in the Chair’s letter, Martyn Clark joined the Company as Chief Executive Officer on 3 June 2024.

As part of his recruitment, the Committee agreed to provide compensation for the remuneration he forfeited

from his previous employer as a result of taking up the role of Chief Executive Officer of the Group.

The buy-out awards were structured taking into account the terms and quantum of the remuneration

forfeited, and all payments are subject to the relevant applicable Persimmon plc performance conditions.

The awards set out in the table below were forfeited by Martyn Clark and replaced by buy-out awards

in the form of shares, cash and options over shares. Shares arising from these awards will be retained

towards satisfying the shareholding requirement of 200% of salary.

The deferred bonus awards, payable 50% in cash and 50% in shares, mirror the shareholding requirement

that 50% of any share awards must be retained to count towards the shareholding requirement, after the

date they would have originally vested.

The Committee has also committed to buy-out Martyn Clark’s 2024 Persimmon bonus in relation to the

four months of the year he worked in role and subject to the achievement of Persimmon’s 2024 bonus

performance conditions. This award will be made in cash in March 2025 and has not been included in the

table below as the value is currently unknown. Full details will be provided in next year’s report.

Buy-out award

Buy-out

arrangement

Date of

grant

Number of

shares/options

awarded by

Crest Nicholson

Face

value of

award

Cash payment

(including any

dividend

equivalent

payment)

Amounts

included

in 2024

Single

Figure

Table

(actual)

Amounts to

be included

in future

Annual

Reports

(estimated)

End of

performance

period

Vesting

date Operation

Persimmon plc

2021 LTIP Award

Shares 17 June

2024

13,234 £33,032 £9,261 £42,293 – N/A N/A The number of shares granted reflects the extent to which the applicable Persimmon plc performance

conditions were achieved, which was 14.3% of maximum as reported in the 2023 Persimmon plc annual

report on remuneration. Persimmon dividend equivalents were paid as cash on the date of grant. No service

conditions apply to this award. A two-year holding period applies to these shares.

Persimmon plc

2022LTIP Award

Option over

17 June

2024

138,037 £334,540 – – £32,200 31 December

2024

8 March

2025

The shares will vest to the extent the applicable Persimmon plc performance conditions are achieved over

the three-year period to 31 December 2024. Persimmon and Crest Nicholson dividend equivalents for the

applicable periods will be payable. A two-year holding period applies to vested shares.

Persimmon plc

2023LTIP Award

Option over

17 June

2024

224,909 £561,373 – – £541,266 31 December

2025

2 May

2026

The shares will vest on 2 May 2026 to the extent the applicable Persimmon plc performance conditions are

achieved over the three-year period to 31 December 2025. Dividend equivalents will be payable.

No service conditions apply to this award. A two-year holding period applies to vested shares.

Persimmon plc

2022Deferred

BonusPlan

Cash and

17 June

2024

8,734 £21,800 £26,484 £48,284 – N/A N/A The award, which would have vested in March 2024, was satisfied 50% by a cash payment made to Martyn

Clark following commencement of employment and 50% in shares which are not subject to any holding

period. Persimmon dividend equivalents were paid as cash on the date of grant.

Persimmon plc

2023Deferred

Bonus Plan

Cash and

N/A To be granted

31March 2025

– – – £28,522

N/A N/A This buy-out award is payable 50% in cash and 50% in shares.

Crest Nicholson shares equivalent to 2,348 Persimmon plc shares will be granted on 31 March 2025 (which

would have been the original vesting date of the award). The actual number of Crest Nicholson shares

granted will be determined based on the average Persimmon and average Crest Nicholson share price over

the 10 dealing days prior to 31 March 2025. Dividend equivalents will be payable.

The cash payment, equivalent to the value of 2,348 Persimmon plc shares valued over the 10 dealing days prior to 31

March 2025, will be made on or after 31 March 2025, being the original vesting date of the award.

Persimmon plc

2023 CashBonus

and 2024 Deferred

Bonus Plan

Cash and

option over

17 June

2024

97,544 £234,749 £234,750 £234,750 £234,749 N/A 1 March

2026

The total bonus reflects the extent to which the applicable Persimmon plc performance conditions

were achieved, which was 85.2% of maximum, as reported in the 2023 Persimmon plc annual report on

remuneration.

The cash payment for 50% of the total bonus was made to Martyn Clark following commencement of

employment. The shares awarded for the remaining 50% will vest on 1 March 2026 (which would have been

the original vesting date of the award). Dividend equivalents will be payable.

1 The number of shares granted has been calculated based on converting the number of Persimmon plc shares which were, or would have been, awarded into Crest Nicholson shares, using the average Persimmon plc share price and average Crest Nicholson share price over the period

3 to 14 June 2024, being the 10 dealing days prior to grant.

2 Face value for the shares granted as options on 17 June was calculated based on the average closing middle market Crest Nicholson share price of 240.66 pence per share over the period 3-14 June 2024. The face value for the shares granted on 17 June is based on the share price

at the time of grant (being 249.6 pence per share on 17 June 2024).

3 The total value of the buy-out award relating to Martyn Clark’s 2023 Deferred Bonus Plan is an estimate based on the method set out in footnote 1. The actual value of the award will be determined based on the average Persimmon and average Crest Nicholson share price over the

10 dealing days prior to 31 March 2025, being the date the original award would have vested.

Directors’ remuneration report continued

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

DIRECTORS’ SHAREHOLDINGS AT THE END OF THE FINANCIAL YEAR AUDITED

There have been no changes to Directors’ interests between 31 October 2024 and 3 February 2025.

Shares held,

including

connected

persons, at

31 October

2024

Outstanding

share awards

31 October 2024

with performance

conditions

Outstanding

share awards

31 October 2024

without

performance

conditions

Total share

interests at

31 October

2024

Shareholding

as a percentage

of salary and

share price of

169.3 pence at

31 October

2024

Iain Ferguson 150,000 N/A N/A 150,000 N/A

Martyn Clark 11,621 861,574 108,391 981,586 20.9%

Bill Floydd – 287,301 10,847 298,148 4.6%

Peter Truscott³ 491,659 753,133 164,261 1,409,053 139%

Duncan Cooper⁴ 69,552 – – 69,552 30%

David Arnold 15,250 N/A N/A 15,250 N/A

Lucinda Bell⁵ 11,650 N/A N/A 11,650 N/A

Louise Hardy – N/A N/A – N/A

Octavia Morley 5,600 N/A N/A 5,600 N/A

Maggie Semple – N/A N/A – N/A

1 Share awards take the form of nil-cost options other than Sharesave awards which are fixed price options. There are no conditional or

restricted share awards. There were no vested but unexercised share awards at 31 October 2024.

2 Shareholding includes shares held by connected persons, outstanding share awards without performance conditions (e.g. Deferred Bonus

Plan (DBP) net of tax and Sharesave) and excludes outstanding share awards with performance conditions (e.g. LTIP).

3 Peter Truscott retired and stepped down from the Board and as Chief Executive Officer on 14 June 2024. The table above reflects the

position at that date.

4 Duncan Cooper stepped down from the Board and as Group Finance Director on 13 December 2023. The table above reflects the position

at that date.

5 Lucinda Bell stepped down from the Board on 31 December 2023. The table above reflects the position at that date.

DIRECTORS’ SHAREHOLDINGS AND SHARE INTERESTS

Share ownership plays a key role in aligning Executive Directors’ interests with the interests of

shareholders over the long term. The Policy requires Executive Directors to build up and maintain a

significant shareholding of 200% of salary. On cessation of employment, they are required to continue

to hold the lower of their shareholding requirement or their shareholding at the date of leaving for a

period of two years. Under the Policy, shares owned outright and deferred shares (without performance

conditions) count towards the shareholding requirement.

The chart below shows the Executive Directors’ shareholdings and share interests. It includes unvested

DBP and Sharesave awards and the illustrative effect if 50% of outstanding LTIP awards vested in the

future. Unvested DBP and LTIP shares are shown net of tax (i.e. excluding that proportion of those shares

expected to be sold on vesting to settle the associated tax liability).

Bill Floydd

Martyn Clark

20% 40%

200%

Shares owned outright

80%

Effect of 50% of LTIPs vesting

100%

60%

120% 160% 180%

Unvested DBP and Sharesave shares

Balance of shareholding requirement

EXECUTIVE DIRECTORS’ ALIGNMENT TO SHARE PRICE

The table below contains the value of shares held by the Executive Directors, those awarded under the

DBP but not yet released (net of tax) and Sharesave. It illustrates the Executive Directors’ alignment to

share price movement through their ordinary shareholdings.

owned outright

Unvested DBP

(post-tax)

Unvested

Sharesave

Total

Indicative

value

31 October

2024

(£)

Consequence

of a +/- £1

share price

change (£)

Martyn Clark 11,621 97,544 10,847 120,012 203,180 120,012

Bill Floydd – – 10,847 10,847 18,364 10,847

1 Value calculated using the share price of 169.3 pence as at 31 October 2024.

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EXECUTIVE DIRECTORS’ SCHEME INTERESTS AT THE END OF THE FINANCIAL YEAR AUDITED

The LTIP awards have performance criteria attached to them in accordance with the Policy. The DBP and Sharesave (SAYE) awards do not have any performance criteria attached to them.

Outstanding share

options/

awards at

31 October

2023

Date

of grant Granted Exercised Lapsed

Outstanding

share options/

awards at

31 October

2024

Market

price on

award

Exercise

price

Market

price at

exercise

/vesting

Gain

receivable

Date

exercisable

or capable of

vesting Expiry date

Martyn Clark

LTIP

2024 – 17 June 2024 498,628 – – 498,628 2.407 Nil – – 16 June 2027 17 June 2034

BUY-OUT

2024 – 17 June 2024 224,909 – – 224,909 2.407 Nil – – 2 May 2026 2 May 2029

2024 – 17 June 2024 138,037 – – 138,037 2.407 Nil – – 8 March 2025 8 March 2028

2024 – 17 June 2024 97,544 – – 97,544 2.407 Nil – – 1 Mar 2026 17 June 2034

SAYE

2024 – 13 September 2024 10,847 – – 10,847 2.136 1.710 – – 1 October 2027 31 March 2028

Bill Floydd

LTIP

2024 – 5 February 2024 287,301 – – 287,301 2.088 Nil – – 4 February 2027 5 February 2034

SAYE

2024 – 13 September 2024 10,847 – – 10,847 2.136 1.710 – – 1 October 2027 31 March 2028

Peter Truscott

LTIP

2021 297,364 8 February 2021 – – 297,364 – 3.279 Nil – – 8 February 2024 7 February 2031

2022 320,764 28 January 2022 – – – 320,764 3.131 Nil – – 28 January 2025 27 January 2032

2023 432,369 27 January 2023 – – – 432,369 2.439 Nil – – 27 January 2026 26 January 2033

DBP

2022 73,597 28 January 2022 – – – 73,597 3.064 Nil – – 28 January 2025 27 January 2032

2023 90,664 27 January 2023 – – – 90,664 2.439 Nil – – 27 January 2026 26 January 2033

Duncan Cooper

LTIP

2021 166,981 8 February 2021 – – 166,981 – 3.279 Nil – – 8 February 2024 7 February 2031

2022 180,121 28 January 2022 – – 180,121 – 3.131 Nil – – 28 January 2025 27 January 2032

2023 242,792 27 January 2023 – – 242,792 – 2.439 Nil – – 27 January 2026 26 January 2033

DBP

2022 41,328 28 January 2022 – – 41,328 – 3.064 Nil – – 28 January 2025 27 January 2032

2023 50,911 27 January 2023 – – 50,911 – 2.439 Nil – – 27 January 2026 26 January 2033

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LOSS OF OFFICE PAYMENTS AUDITED

Peter Truscott retired from the Board on 14 June 2024 and will not receive any compensation for loss of

office. His remuneration arrangements have been treated in line with the shareholder approved Policy

and the rules of the annual bonus and executive share schemes. The Committee determined that Peter

Truscott would not receive a bonus. In accordance with his nine-month notice period, Peter Truscott

remained an employee of the Group until 21 October 2024, continuing to receive his salary and normal

benefits during this period, totalling £245,192 as salary, £14,712 as pension and £40,480 as benefits.

Peter Truscott’s outstanding award under the LTIP made in 2023 will be pro-rated to the leaving date

and will be eligible to vest at the normal time based on the achievement of the performance conditions.

A two-year post-vesting holding period will continue to apply in accordance with the condition of the

awards. His DBP options in respect of the annual bonuses for the financial years ended 31 October 2022

and 31 October 2023 will vest at the normal time in accordance with the relevant rules together with any

dividend equivalent payments.

His two-year post-employment shareholding requirement, which requires him to hold 491,659 shares in

Crest Nicholson Holdings plc, commenced on 14 June 2024.

Duncan Cooper’s leaving arrangements were set out in the 2023 Remuneration Report. No payments

were made to him during the year, other than as disclosed in the remuneration payable to Executive

Directors table on page 80.

PAYMENTS TO PAST DIRECTORS AUDITED

Other than in respect of Peter Truscott and Duncan Cooper disclosed above under Loss of Office

Payments, there were no payments to past Directors made during the year.

DIRECTORS’ SERVICE CONTRACTS AND LETTERS OF APPOINTMENT

Executive Directors have contracts of employment providing for a maximum of nine months’ notice

from either party. Non-Executive Directors have letters of appointment for an initial three-year term and

generally serve two to three terms. The required notice is three months from either party.

Initial date of appointment Notice period

Unexpired term remaining

31 October 2024

Martyn Clark 3 June 2024 Nine months Terminable on nine months’ notice

Bill Floydd 13 November 2023 Nine months Terminable on nine months’ notice

Iain Ferguson 16 September 2019 Three months Terminable on three months’ notice

David Arnold 1 September 2021 Three months Terminable on three months’ notice

Louise Hardy 24 January 2018 Three months Terminable on three months’ notice

Octavia Morley 1 May 2017 Three months Terminable on three months’ notice

Maggie Semple 1 January 2024 Three months Terminable on three months’ notice

The Group has the right to terminate the contracts of Executive Directors by making a payment in lieu

of notice. Any such payment will typically reflect the individual’s salary, benefits in kind and pension

entitlements. Further information is found on page 109 of the Remuneration Policy set out in the 2022

Annual Report.

PERFORMANCE GRAPH AND TABLE

The graph below illustrates the Group’s total shareholder return performance relative to the constituents

of the FTSE 250 Index (excluding investment trusts) from 31 October 2014. As a member of the FTSE 250,

the Committee considers this to be an appropriate comparator.

Total shareholder return

October

2014

Value (£) (rebased)

Crest Nicholson FTSE 250 (excl. investment trusts)

October

2015

October

2016

October

2017

October

2018

October

2019

October

2020

October

2021

October

2022

October

2023

October

2024

100

150

200

250

Source: Datastream (Refinitiv)

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HISTORICAL CHIEF EXECUTIVE OFFICER REMUNERATION

The table below sets out total Chief Executive Officer remuneration for 2024 and prior years, together

with the percentage of maximum annual bonus outcome and the percentage of maximum LTIP vested in

that year.

£000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Chief Executive

Officer total

remuneration

4,127 2,345 2,150 714

1,495

739 1,422 1,768 769 1,082

Annual bonus %

of maximum

82 82 84 0 3.5 0 84 80 0 0

Long-term

incentive plan

award % of

maximum

100 100 100 25 0 0 0 54 0 0

1 Based pro rata, on salaries and total remuneration of Stephen Stone to 21 March 2018 and Patrick Bergin from 22 March 2018 to 31 October 2018.

2 Based pro rata, on salaries and total remuneration of Patrick Bergin to 26 March 2019, Chris Tinker from 26 March 2019 to 8 September 2019

and Peter Truscott from 9 September 2019. It includes the cost of buy-out arrangements for Peter Truscott.

3 Based pro rata, on salaries and total remuneration of Peter Truscott to 14 June 2024 and Martyn Clark from 3 June 2024. It includes the cost

of buy-out arrangements for Martyn Clark.

RELATIVE IMPORTANCE OF SPEND ON PAY

The table below shows how employee remuneration costs compare with distributions made to shareholders

in 2023 and 2024.

This includes data for all employees, including those who were promoted, had salary changes, were new

starters or received incentive-based remuneration, as well as pay in respect of individuals who left during

the year but had some service. Distributions to shareholders for 2023 and 2024 are made up of cash

paid to shareholders in each respective year.

The decrease in total spend on pay is reflective of generally static pay levels during the year, and weaker

financial performance in 2023 which impacted bonus levels and LTIP outcomes. The level of distributions

to shareholders reflects the reduced dividend payment in comparison with 2023.

The measures shown below are those specified by the applicable disclosure requirements and total

spend on pay reflects actual expenditure in the year.

Total spend on pay

£50.3m2024

£56.3m2023

Change

-£6.0m

-11%

Distributions to shareholders by way of dividend

£32.1m2024

£43.5m2023

Change

£-11.4m

-26%

1 Total spend on pay is calculated using cash amounts paid to employees in the respective financial year. This is different to the disclosure in

note 6 of the financial statements that uses accrued amounts which will be paid in future periods.

Directors’ remuneration report continued

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Our approach to fair pay

This section sets out how we monitor that the remuneration

framework is transparent and fair across the wider workforce and

covers pay and alignment across the business, pay comparisons

(Chief Executive Officer pay ratios, percentage change in

remuneration) and gender pay gap reporting.

The Committee reviews the remuneration framework applicable to all employees annually, ensuring

that the Policy framework applies in a similar way across the Group in terms of types of benefits

and variable pay relative to role grades and disciplines. This ensures alignment across the Group

and encourages shared goals and objectives.

When making remuneration decisions for Executive Directors, the Committee considers the wider

economic environment and conditions within the Group. In particular, the Committee is sensitive to

pay and employment conditions across the employee workforce and carefully considers the broader

employee salary increase budget when making reward decisions for Directors.

OUR FAIR PAY OBJECTIVES

Become an employer of choice for all in construction and housebuilding

Foster a culture of work-life balance that respects responsibilities outside of work

Remove any barriers to career progression for all employees

Continue to ensure salaries and bonuses are inclusive regardless of role

CASCADE OF REMUNERATION ACROSS THE GROUP

The table below summarises the information the Committee received as part of its annual review process and shows how remuneration compares across the Group in a transparent and fair way.

Base salary Base salary is set with reference to the specific nature of the role and responsibility, individual

experience and performance, relative to other Group employees and market practice among

other UK housebuilders. This is normally reviewed and increased with reference to cost of living,

inflation, role benchmarking and Group performance. All employees are paid at or above the

voluntary Real Living Wage.

Matters considered during the year

After consideration of Group performance and wider economic factors such as inflation and

role benchmarking, the average annual salary increase across the Group for 2025 was 2%. The

Group’s HR team regularly reviews base pay across the Group and compares this with market

analysis and will continue to do so in 2025.

Benefits The Group’s benefit programme applies to all employees in a similar way including access to

healthcare coverage and life assurance. Certain benefits have a service requirement or have

enhanced cover for management roles and above. Employees have access to a real-time total

reward statement via our MyReward platform which also allows them to access and manage their

benefits.

Matters considered during the year

The Committee considered the Group’s benefits programme, noting that it continued to be in

alignment across the Group.

Pension All employees are initially auto-enrolled into the Group pension plan with a 6% employer

contribution or have the ability to opt in. Employees can opt to increase or decrease their

contribution amounts. The maximum employer contribution is 10% depending on employee

contribution level and service. The majority of employees receive an employer contribution of

6%. More than 94% of our employees are members of the Group pension plan.

Matters considered during the year

The Committee reviewed the Group’s pension contribution framework and no changes were

recommended.

Annual bonus All employees are eligible for participation in a relevant bonus scheme.

Matters considered during the year

Where performance targets have been met, payments under employee schemes will be made.

These are consistent with the performance of the Executive Directors’ scheme.

Share schemes All employees are invited to participate in the annual Sharesave scheme. A proportion of

management and senior management participate in the LTIP by annual invitation.

Matters considered during the year

Performance against the targets for the 2022 LTIP were assessed and were not met. The

Committee approved the launch of the 2024 Sharesave scheme to all employees which had 24%

participation this year. The Committee approved in principle the introduction of a Share Incentive

Plan for 2025, subject to shareholder approval at the 2025 AGM.

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1 An element of employee bonus schemes is based on customer satisfaction scores on 31 January each year which falls after publication of this

report. The figures for the selected employees are calculated using the customer satisfaction score on 31 December in the respective year.

EMPLOYEE ENGAGEMENT

At the Employee Voice Forum meetings, Louise Hardy, Non-Executive Director responsible for employee

engagement, discussed remuneration matters. In 2025, as part of the Policy review, forum members will

discuss remuneration matters in more detail.

On the monthly briefing calls hosted by the Chief Executive Officer and Chief Financial Officer, employees

were also encouraged to participate by asking questions (anonymously in advance or in person), and

remuneration concerns were regularly addressed. Of those eligible, 24% of employees joined the 2025

Sharesave scheme and employee participation across all the Sharesave schemes remained high at 48%.

The Committee considers Sharesave to be a valuable mechanism that provides employees with a path to

share ownership. The Committee will continue to review employee pay structures and levels during 2025.

CHIEF EXECUTIVE OFFICER TO EMPLOYEES PAY RATIO FOR 2024

The table below reports the pay ratio for 2024 and has been calculated using the method known as

Option B. Option B is considered to provide an appropriate and representative calculation based on the

information available at this time. Previous years are shown below for comparison and will continue to

build to show a rolling 10-year period.

Year

Method

25th percentile

pay ratio

Median

pay ratio

75th percentile

pay ratio

31 October 2020 Option A Ratio 25:1 17:1 11:1

31 October 2021 Option A Ratio 46:1 32:1 21:1

31 October 2022 Option A Ratio 55:1 37:1 25:1

31 October 2023 Option B Ratio 16:1 12:1 10:1

31 October 2024 Option B Ratio 31:1 16:1 13:1

Employees’ total pay £34,548 £68,991 £80,829

Employees’ salary £31,570 £51,660 £68,000

To calculate Option B, the latest available gender pay gap data (April 2024) was used to identify three

Group employees whose hourly rates of pay were at the 25th, 50th and 75th percentiles of all Group

employees. The total remuneration for the three employees at each percentile was calculated as at 31

October 2024 on the same basis as the Chief Executive Officer single total figure of remuneration. The

remuneration of employees above and below the selected employees was also reviewed to ensure that

they were the best equivalents for each percentile.

Employee pay includes such items as overtime, commission, bonus¹ and any long-term incentives.

Benefits include company car or car allowance, private medical insurance and employer pension

contributions. Other than any bonus elements, all other payments are included on a cash basis. The

bonus elements are for the bonus earned during 2024.

The Policy is designed taking into account the remuneration arrangements, policies and practices

throughout the Group and when reviewing the implementation of the Policy, the Committee ensures

outcomes throughout the Group are fair and appropriate. On this basis, the Committee considers the

median pay ratio is consistent with the Group’s wider policies on employee pay, reward and progression.

The total remuneration for the selected employees has been compared against the combined total

remuneration of Peter Truscott to 14 June 2024 and Martyn Clark from 3 June 2024. The inclusion of the

cost of buy-out arrangements for Martyn Clark has resulted in an increase of the ratio relative to last year,

where the Chief Executive Officer did not receive any variable pay.

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Directors’ remuneration report continued

PERCENTAGE CHANGE IN DIRECTORS’ REMUNERATION

The table below sets out the percentage change between 2019 and 2024 for salary, benefits and annual

bonus of Directors compared with a selected cohort of employees. The parent company, Crest Nicholson

Holdings plc, does not have any direct employees. However, disclosure is made on a voluntary basis of

the comparison of the pay decisions taken by the Committee for Directors against the experience of the

wider workforce using a comparator group of employees.

To provide the best like-for-like comparison, this group of employees have similar employment terms

to the Executive Directors and have not joined or left employment during the latest comparison period.

The average increase in salary of 5.8% for the cohort of employees during 2024 is due to role changes,

promotions and market rate adjustments during the year. The average increases for benefits and bonus

are affected by these salary and role changes.

% change in basic salary/fees % change in benefits % change in bonus

2023 to

2024

2022 to

2023

2021 to

2022

2020 to

2021

2019 to

2020

2023 to

2024

2022 to

2023

2021 to

2022

2020 to

2021

2019 to

2020

2023 to

2024

2022 to

2023

2021 to

2022

2020 to

2021

2019 to

2020

Martyn Clark

-1.4% 4.7% 2.5% 0.0% 35.2% 10.5% 3.6% 1.7% -0.3% -6.1% 0.0% -100.0% -1.9% 100.0% -100.0%

Bill Floydd

2.1% 4.7% – – – 5.7% 1.2% 0.4% 4.6% 18.4% 100.0% -100.0% -1.9% 100.0% -100.0%

Iain Ferguson

0.5% 3.0% 2.5% 0.0% -26.4% – – – – – – – – – –

David Arnold

0.5% 3.0% 2.5% 0.0% – – – – – – – – – – –

Octavia Morley

0.5% 3.0% 2.5% 5.5% 8.3% – – – – – – – – – –

Louise Hardy

0.5% 3.0% 2.5% 9.7% 0.0% – – – – – – – – – –

Maggie Semple

0.5% – – – – – – – – – – – – – –

Average cohort employees 5.8% 7.1% 9.4% 7.1% 2.8% 14.2% 5.2% 16.5% 11.2% 13.8% 233.9% -79.3% 4.7% 244.0% -35.0%

1 The figures used for 2019 are the blended salaries for Patrick Bergin, Chris Tinker (who acted as Interim Chief Executive Officer) and Peter Truscott, in respect of their time serving as Chief Executive. They do not include buy-out awards in respect of Peter Truscott. 2024 remuneration is the

blended remuneration of Peter Truscott and Martyn Clark and do not include buy-out awards in respect of Martyn Clark.

2 For comparison, the figure for 2023 and prior years relate to the remuneration of Duncan Cooper, former Group Finance Director. For 2024 we have used annualised amounts in respect of Bill Floydd.

3 The figure used for 2019 is the salary for Stephen Stone who was Chairman during this period.

4 The figure used for 2020 is the fee for Sharon Flood who served in the same role during this period.

5 The 2021 increase for Octavia Morley reflected her extra responsibilities as Senior Independent Director.

6 The 2021 increase for Louise Hardy reflected her extra responsibilities as Non-Executive Director responsible for employee engagement.

7 For comparison, the figure used for 2023 is the fee for Lucinda Bell who served in the same role during this period. For 2024 we have used annualised amounts in respect of Maggie Semple.

8 An element of employee bonus schemes is based on customer satisfaction scores on 31 January each year which falls after publication of this report. These figures for the cohort group are calculated using the customer satisfaction score on 31 December in the respective year.

GENDER PAY GAP REPORTING

During 2023, the mean hourly pay gap remained at 20% (2022: 20%) and the median hourly pay gap

increased to 20% (2022: 13%). The workforce is majority male with men generally still holding the more

senior roles, however, there has been a slight increase to the number of women in the upper quartile to

26% in 2023 (2022: 25%).

Women account for 38% of the workforce (compared with 39% in 2022) and work is under way to

increase diversity and gender balance within all roles and at all levels. More details can be found on

pages 26-27. The Committee continues to take into account gender pay gap when making pay decisions

and works in conjunction with the Nomination Committee to improve the diversity of employees.

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ADVISORS TO THE COMMITTEE

The Chief Executive Officer and Group HR Director provide input to the Committee on matters concerning

remuneration and the Group Company Secretary acts as Secretary to the Committee.

The Committee received external remuneration advice in the year from Korn Ferry (total fees £74,166).

Korn Ferry was appointed by the Committee following a competitive selection process in 2018. Korn

Ferry is a founder member of the Remuneration Consultants’ Group, which operates a code of conduct.

Fees paid to external remuneration advisors are typically charged on an hourly basis with costs for work

agreed in advance where possible. During the year, Korn Ferry provided professional search services to

the Company. These services were carried out by a division separate to the remuneration advisory team.

The Committee manages conflicts of interest by ensuring the relevant member of management or the

Committee is not present when their own remuneration is determined or discussed. Taking into account

their work in the year and their relationship with the Company, the Committee is satisfied that the advice

received by Korn Ferry in relation to executive remuneration matters was objective and independent.

STATEMENT OF VOTING AT ANNUAL GENERAL MEETING

The tables below set out the votes received for the 2023 Directors’ Remuneration Report at the 2024

AGM and the Directors’ Remuneration Policy at the 2023 AGM.

Directors’ remuneration report (2024 AGM)¹ Directors’ remuneration policy (2023 AGM)²

Shares voted in favour 172,275,257 98.25% Shares voted in favour 185,680,904 97.28%

Shares voted against 3,067,217 1.75% Shares voted against 5,199,216 2.72%

1 Votes withheld 21,045 (0.01% of share capital).

2 Votes withheld 21,988 (0.01% of share capital).

The Committee welcomes feedback and encourages shareholders to contact the Remuneration

Committee Chair via the Group Company Secretary (see page 161) to provide their views and feedback.

APPROVAL

This Directors’ Remuneration Report was approved by the Board of Directors on 3 February 2025

and signed on its behalf by

Octavia Morley

Remuneration Committee Chair

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Directors’ report

The Directors present their

report for the year ended

31 October 2024.

The Strategic Report on pages 1-50 of this Annual

Report and Accounts, together with the Corporate

Governance Report, the reports of the Board

Committees and the Directors’ Remuneration

Report on pages 51-91 of this Annual Report and

Accounts, include information that would otherwise

need to be included in this Directors’ Report.

DISCLOSURES BY REFERENCE

Items required to be included in this report under

Schedule 7 of the Large and Medium-sized

Companies and Groups (Accounts and Reports)

Regulations 2008, The Companies Act 2006,

Disclosure and Transparency Rule 7.2, and Listing

Rule 9.8.4R, which are not located in the Directors’

Report, are located as follows.

Content Page(s)

Business model 9-10

Directors’ interests 84

Directors’ remuneration report 74-91

Dividend 31

Employment of persons with a disability 27

Energy consumption and efficiency action 21 and 47

Financial risk management 142-144

Future developments 1-50

Greenhouse gas emissions 47

Key Performance Indicators 28-29

Listening and responding to employees 59

Our people 26-27

Principal risks 32-39

Stakeholder engagement 15-18

Viability statement 50

ARTICLES OF ASSOCIATION

The Articles of Association regulate the internal

affairs of the Company and are available on the

Company’s website.

Amendment to the Articles of Association may

be made in accordance with the provisions of

the Companies Act 2006 by special resolution

of the shareholders.

POWERS OF DIRECTORS

Directors’ powers are conferred on them by UK

legislation and by the Articles of Association.

Authority was given to the Directors at the AGM

in March 2024 to allot shares, disapply statutory

pre-emption rights and make market purchases of

its own shares up to a maximum aggregate number

of 25,692,053 (equivalent to 10% of the Company’s

issued shares).

DIRECTORS

The following were Directors of the Company

during the year: Iain Ferguson CBE, Peter Truscott

(to 14 June 2024), Martyn Clark (from 3 June

2023), Duncan Cooper (to 13 December 2023), Bill

Floydd (from 13 November 2023), Octavia Morley,

David Arnold, Lucinda Bell (to 31 December 2023),

Louise Hardy and Maggie Semple OBE (from

1 January 2024).

The biographical details of the current Directors

are set out on pages 54-55 of this report.

The service contracts of the Executive Directors

and letters of appointment of the Non-Executive

Directors are available for inspection at the

Company’s registered office.

Data on the diversity of the individuals on the

Board and Executive Committee as required

by Listing Rule 9.8.6R(10) is set out opposite,

as at 31 October 2024. Data is collected through

self-disclosure from the individuals concerned.

GENDER IDENTITY OR SEX

Number of Board

members

Percentage of the

Board

Number of senior

positions on the

Board

Number in

executive

management

% of executive

management

Men 4 57% 3 35 58%

Women 3 43% 1 25 42%

Not specified/

prefer not to say – – – – –

ETHNIC BACKGROUND

Number of Board

members

Percentage of the

Board

Number of senior

positions on the

Board

Number in

executive

management

% of executive

management

White British

or other White

(including minority

groups) 6 86% 4 57 95%

Mixed/Multiple

ethnic groups – – – 1 2%

Asian/Asian

British – – – 2 3%

Black/African/

Caribbean/Black

British 1 14% – – –

Other ethnic

group, including

Arab – – – – –

Not specified/

prefer not to say – – – – –

ELECTION AND REELECTION OF DIRECTORS

The Board may appoint any person to be a

Director (so long as the total number of Directors

does not exceed the limit prescribed in the

Company’s Articles ). Any such Director shall

hold office until the next AGM and shall then

be eligible for election. All current Directors will

submit themselves for election or re-election at

the 2025 AGM. The Board confirms that it has

the appropriate balance of skills, experience,

independence and knowledge, and shareholders

should support the re-election of the Directors.

See page 64 for further details.

DIRECTORS’ INDEMNIFICATION

The Company has granted qualifying third-party

indemnities to the extent permitted by law to the

Directors and to the Directors of Crest Nicholson

Pension Trustee Limited, which acts as trustee to

the Group’s defined benefit pension scheme.

The Company also maintains Directors’ and

Officers’ liability insurance.

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Financial StatementsStrategic Report Governance

SHARE CAPITAL

As at 31 October 2024, there were 256,920,539

ordinary shares of 5 pence in issue. No ordinary

shares were issued during the financial year.

GOING CONCERN

The Directors have concluded that it continues

to be appropriate to prepare the consolidated

and company financial statements on a going

concern basis. In a severe but plausible downside

scenario there is a material uncertainty, in particular

with respect to the ability to achieve a covenant

amendment which may be required, which

may cast significant doubt on the Group’s and

Company’s ability to continue as a going concern.

See note 1 of the consolidated financial statements

and note 1 of the Company financial statements for

further information.

RIGHTS AND RESTRICTIONS ATTACHED TO

SHARES AND RESTRICTIONS ON TRANSFERS

Subject to the provisions of relevant statutes, and

without prejudice to any rights attached to any

existing share or class of shares:

Any share may be issued with such rights or

restrictions as the Company may by ordinary

resolution determine or, subject to and in

default of such determination, as the Board

shall determine

In any general meeting, on a show of hands,

every member who is present in person shall

have one vote, and on a poll every member

present in person or by proxy shall have one

vote for every share of which they are the

holder

There are no specific restrictions on transfer of

shares, other than where these are imposed by

law or regulations

There are no current restrictions on voting

rights and the Company is not aware of any

arrangements between shareholders that may

result in restrictions on the transfer of securities

or voting rights.

AGM

The AGM will be held on 26 March 2025. Details

and arrangements for the meeting, together with

the resolutions to be proposed and explanatory

notes, are set out in the Notice of Annual General

Meeting which is sent to shareholders and is

available at crestnicholson.com/shareholders

EMPLOYEE SHARE OWNERSHIP TRUST

As at 31 October 2024, the Group’s Employee

Share Ownership Trust (ESOT) held 580,164

ordinary shares for the purposes of satisfying

awards under the Company’s share and incentive

plans. The ESOT has waived rights to receive a

dividend now and in the future.

ANTIBRIBERY AND CORRUPTION

The Group operates an anti-bribery and corruption

policy and all employees must complete

mandatory online training annually.

The Group operates a Speaking Up policy

whereby employees and supply chain partners

can report concerns via an independent, free

and confidential helpline. The policy details

the appropriate lines of communication, and an

escalation procedure enables any reports to be

dealt with effectively and efficiently. See page 73

for further details.

SIGNIFICANT CONTRACTS

The Group does not have any contracts that are

considered alone to be essential to the business

of the Group. The Group does, on occasion, make

significant purchases of goods and services from a

sole supplier where this is deemed necessary for

efficiency, practicality or value. However, it does

so only after a tender or appropriate selection

process and in the context of the level of risk such

sole supply might bring.

POLITICAL DONATIONS

The Group made no political donations during the

year (2023: nil).

EVENTS AFTER THE BALANCE SHEET DATE

There were no significant events after the balance

sheet date.

BRANCHES

The Group has no branches outside the United

Kingdom.

CHANGE OF CONTROL

The Group has in place several agreements with

its lending banks, private placement note holders,

joint venture partners, government authorities

(such as Homes England), private investors and

customers, which contain certain termination rights

that would have an effect in the event of a change

of control. The Directors believe these agreements

to be commercially sensitive and consider that

their disclosure would be seriously prejudicial to

the Group.

The Group’s share schemes contain provisions

that, in the event of a change of control, would

result in outstanding options and awards

becoming exercisable.

There are no agreements between the Group

and its Directors or employees providing for

compensation for loss of office or employment that

occurs because of a takeover bid.

SUBSTANTIAL SHAREHOLDINGS

Set out below are the percentage interests in

ordinary share capital of the Company, disclosable

under the Disclosure Guidance and Transparency

Rules, that were notified to the Company as at

31October 2024 and 3 February 2025.

Shareholder

31 October

2024

% of voting

rights held

3 February

2025

% of voting

rights held

Shanlis Investment Unlimited 6.03 6.03

FIL Limited 5.66 11.01

Boldhaven Management LLP 4.36 4.36

Janus Henderson Group plc 5.01 5.01

Aberforth Partners LLP 5.08 5.08

Norges Bank 2.89 2.89

APPROVAL

The Directors’ Report was approved by the Board

of Directors on 3 February 2025 and signed

on its behalf.

Penny Thomas

Group Company Secretary

Directors’ report continued

Crest Nicholson

Annual Report and accounts 2024

Financial StatementsStrategic Report Governance

Statement of Directors’ responsibilities 95

Independent auditors’ report 96

Consolidated income statement 105

Consolidated statement of comprehensive

income 106

Consolidated statement of changes in equity 107

Consolidated statement of financial position 108

Consolidated cash flow statement 109

Notes to the consolidated financial

statements 110

Company statement of financial position 153

Company statement of changes in equity 154

Notes to the company financial statements 155

Alternative performance measures

(unaudited) 158

Historical summary (unaudited 160

Shareholder services and Glossary 161

Glossary 162

Financial

statements

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Statement of Directors’ responsibilities

in respect of the financial statements

The Directors are responsible for preparing the Annual Report and the financial statements in

accordance with applicable law and regulation.

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 UK-adopted

international accounting standards and the Company financial statements in accordance with United

Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising

FRS 101 ‘Reduced Disclosure Framework’, and applicable law).

Under company law, 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 Company and of the profit or loss

of the Group for that period. In preparing the financial statements, the Directors are required to:

Select suitable accounting policies and then apply them consistently

State whether applicable UK-adopted international accounting standards have been followed for

the Group financial statements and United Kingdom Accounting Standards, comprising FRS 101,

have been followed for the Company financial statements, subject to any material departures

disclosed and explained in the financial statements

Make judgements and accounting estimates that are reasonable and prudent, and

Prepare the financial statements on the going concern basis unless it is inappropriate to presume

that the Group and Company will continue in business.

The Directors are responsible for safeguarding the assets of the Group and Company and hence for

taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are also responsible for keeping adequate accounting records that are sufficient to

show and explain the Group’s and Company’s transactions and disclose with reasonable accuracy at

any time the financial position of the Group and Company and enable them to ensure that the financial

statements and the Directors’ Remuneration Report comply with the Companies Act 2006.

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.

Directors’ confirmations

The Directors consider that the Annual Report and financial statements, taken as a whole, is fair,

balanced and understandable and provides the information necessary for shareholders to assess the

Group’s and Company’s position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed on pages 54-55 confirm that, to the best

of their knowledge:

The Group financial statements, which have been prepared in accordance with UK-adopted

international accounting standards, give a true and fair view of the assets, liabilities, financial

position and profit of the Group

The Company financial statements, which have been prepared in accordance with United

Kingdom Accounting Standards, comprising FRS 101, give a true and fair view of the assets,

liabilities and financial position of the Company, and

The Strategic Report includes a fair review of the development and performance of the business

and the position of the Group and Company, together with a description of the principal risks and

uncertainties that it faces.

In the case of each Director in office at the date the Directors’ Report is approved:

So far as the Director is aware, there is no relevant audit information of which the Group’s and

Company’s auditors are unaware, and

They have taken all the steps that they ought to have taken as a Director in order to make

themselves aware of any relevant audit information and to establish that the Group’s and

Company’s auditors are aware of that information.

On behalf of the Board

Martyn Clark

Chief Executive Officer

3 February 2025

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Independent auditors’ report

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

In our opinion:

Crest Nicholson Holdings plc’s Group financial statements and Company financial statements

(the “financial statements”) give a true and fair view of the state of the Group’s and of the

Company’s affairs as at 31 October 2024 and of the Group’s loss and the Group’s cash flows

for the year then ended;

the Group financial statements have been properly prepared in accordance with UK-adopted

international accounting standards as applied in accordance with the provisions of the Companies

Act 2006;

the Company financial statements have been properly prepared in accordance with United

Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards,

including FRS 101 “Reduced Disclosure Framework”, and applicable law); and

the financial statements have been prepared in accordance with the requirements of the

Companies Act 2006.

We have audited the financial statements, included within the Annual Report and Accounts 2024 (the

“Annual Report”), which comprise: the Consolidated and Company statements of financial position as at

31 October 2024; the Consolidated income statement, the Consolidated statement of comprehensive

income, the Consolidated cash flow statement and the Consolidated and Company statements of

changes in equity for the year then ended; and the notes to the financial statements, comprising

material accounting policy information and other explanatory information.

Our opinion is consistent with our reporting to the Audit and Risk Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”)

and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’

responsibilities for the audit of the financial statements section of our report. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the Group in accordance with the ethical requirements that are relevant

to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, as

applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in

accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s

Ethical Standard were not provided.

Other than those disclosed in note 5 of the consolidated financial statements, we have provided no

non-audit services to the Company or its controlled undertakings in the period under audit.

Material uncertainty related to going concern

In forming our opinion on the financial statements, which is not modified, we have considered

the adequacy of the disclosure made in note 1 of the consolidated financial statements and note 1

of the Company financial statements concerning the Group’s and the Company’s ability to continue

as a going concern.

The Company relies on the overall performance of the Group to fulfil its liabilities and obligations in the

foreseeable future. The Group has prepared rolling forecasts covering the period until 30 April 2026.

In a severe but plausible downside scenario the Group is forecast to breach its interest cover covenant

during the going concern period, with the first measurement date in April 2025. If this covenant breach

were to occur, it would constitute an event of default under the terms of the revolving credit facility

agreement and senior loan notes. The Group is confident that amendments to its covenants would

be secured if necessary, however, this is not guaranteed and therefore this represents a material

uncertainty related to going concern.

These conditions, along with the other matters explained in those notes to the financial statements,

indicate the existence of a material uncertainty which may cast significant doubt about the Group’s and the

Company’s ability to continue as a going concern. The financial statements do not include the adjustments

that would result if the Group and the Company were unable to continue as a going concern.

In auditing the financial statements, we have concluded that the directors’ use of the going concern

basis of accounting in the preparation of the financial statements is appropriate.

Our evaluation of the directors’ assessment of the Group’s and the Company’s ability to continue to

adopt the going concern basis of accounting included:

Evaluating the base case scenario for the Group and Company going concern assessment,

including the directors’ assumptions over open market sales volumes and sales prices. We also

considered the ability of the Group to make further land sales, as well as the gross profit margins

which could be achieved across all revenue streams.

Assessing the appropriateness of the level of potential build cost increases forecast in the context

of recent financial performance, including the level of completed site costs and net realisable

value (“NRV”) charges.

Verifying the source data and calculations used by the directors to determine the assumptions

used in the severe but plausible downside scenario, in particular over the sales per outlet week

(“SPOW”) rate, sales price reductions and level of additional build cost increases.

Validating the accuracy of management’s modelling and the calculations of the covenant

outcomes across the going concern period, including confirming the forecast breaches over the

going concern period.

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Independent auditors’ report continued

In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code,

other than the material uncertainty identified in note 1 of the consolidated financial statements and

note 1 of the Company financial statements, we have nothing material to add or draw attention to in

relation to the directors’ statement in the financial statements about whether the directors considered

it appropriate to adopt the going concern basis of accounting, or in respect of the directors’

identification in the financial statements of any other material uncertainties to the Group’s and the

Company’s ability to continue to do so over a period of at least twelve months from the date

of approval of the financial statements.

Our responsibilities and the responsibilities of the directors with respect to going concern

are described in the relevant sections of this report.

Our audit approach

Context

Crest Nicholson Holdings plc is a residential housebuilder listed on the London Stock Exchange.

The Group is wholly UK based. The Group is susceptible to external macroeconomic factors such

as government regulation, mortgage availability and changes in the wider housing sector such as

customer demand, supply chain availability and build cost inflation. This is particularly relevant for

our work in the areas of margin forecasting and recognition and valuation of inventory. During the

year ended 31 October 2024, the Group’s revenues and profits have decreased from the prior year,

reflecting a lower level of home completions and reduction in profit margins. The Group has also

recorded an additional net exceptional charge in relation to the combustible materials provision and

completed site costs. Our audit procedures, as set out below in the related key audit matters, focused

on the appropriateness of the significant accounting estimates made by management.

Overview

Audit scope

We conducted an audit of the complete financial information of five of the Group’s revenue-

generating housebuilding divisions, which form the majority of the Group. Specific balances and

financial statement line items were audited within additional reporting units based on their size.

Revenue, the carrying value of inventory, pensions, completed site costs and the combustible

materials provision, amongst other items, were tested at the Group level.

Key audit matters

Material uncertainty related to going concern (Group and Company)

Accounting for completed site costs (Group)

Margin forecasting and recognition (Group)

Valuation of the combustible materials provision (Group)

Valuation of intercompany receivables (Company)

Materiality

Overall Group materiality: £3,400,000 (2023: £4,800,000) based on approximately 5% of a 3-year

average of the Group’s profit before tax and exceptional items (2023: a 3-year average of the

Group’s profit before tax and exceptional items).

Overall Company materiality: £1,640,000 (2023: £1,800,000) based on approximately 1% of total

assets.

Performance materiality: £1,700,000 (2023: £3,600,000) (Group) and £820,000 (2023: £1,350,000)

(Company).

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Independent auditors’ report continued

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material

misstatement in the financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most

significance in the audit of the financial statements of the current period and include the most

significant assessed risks of material misstatement (whether or not due to fraud) identified by the

auditors, including those which had the greatest effect on: the overall audit strategy; the allocation

of resources in the audit; and directing the efforts of the engagement team. These matters, and any

comments we make on the results of our procedures thereon, were addressed in the context of

our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not

provide a separate opinion on these matters.

In addition to going concern, described in the Material uncertainty related to going concern section

above, we determined the matters described below to be the key audit matters to be communicated

in our report. This is not a complete list of all risks identified by our audit.

Material uncertainty related to going concern and accounting for completed site costs are new key

audit matters this year. Valuation of inventory, which was a key audit matter last year, is no longer

included because of the greater level of audit effort focusing on the new key audit matters given

developments during the year, and the inherent connection of this accounting estimate to the existing

key audit matter for margin forecasting and recognition. Otherwise, the key audit matters below are

consistent with last year.

Key audit matter How our audit addressed the key audit matter

Accounting for completed site costs (Group)

Refer to Note 1 (Accounting Policies), Note 4 (Exceptional items) and Note 22 (Provisions) of the

Consolidated financial statements and the Key accounting judgements section of the Governance

report.

The Group has held expected amounts on the consolidated statement of financial position for

completed sites for a number of years, as this is normal practice within the industry where further

costs are required on sites where there are no further revenues to be recognised. This is due to the

time gap between incurring costs in cash terms and the completion of sites. These costs typically

include items such as S106 matters (planning obligations or contributions agreed with planning

authorities) and snagging works.

During 2024 the Group announced it had identified certain defects on complex legacy developments

which predominantly were started prior to 2019 and part of an older strategy which the Group no

longer follows. This resulted in an additional charge and an increase in the completed site liability

recognised as at 31 October 2024. The majority of the charge has been recognised as exceptional

where these sites meet the above classification of not being part of the current strategy. Classification

of these charges as exceptional was a change in accounting policy which management has applied

retrospectively and represented corresponding figures as a result. Charges on sites not of this nature

have been recorded as pre-exceptional.

Management has also presented some of these balances as provisions based on their nature and

certainty over the amount required to complete the works, and represented the consolidated financial

statements for this change given previously all balances were presented as accruals.

The valuation and presentation and disclosure of the accruals/provisions recognised is a key audit

matter given the judgements management has to make in determining the amount to provide which

meant we have treated this as a significant risk.

Our audit procedures included:

Obtaining and reviewing balance sheet reconciliations to ensure the accuracy of the calculations;

Testing of expenditure related to the completed site costs on a site basis during the year;

Challenging audit evidence to support the year end balance recorded. In most cases third

party evidence such as contracts or subcontractor quotes was obtained to support the

valuation. In cases where internal evidence only was available this was benchmarked to costs

incurred elsewhere in the Group or other comparative forms of evidence available. Samples

were targeted before performing non-statistical sampling at a high level of assurance;

Evaluating the nature of the site to determine if management’s classification as exceptional

was appropriate, this included both the current year charge and the represented prior year

charge; and

Assessing the appropriateness of the balance sheet presentation of these amounts as accruals

or provisions based on their nature, and the determination of the current and non-current split,

including over the represented amounts.

We raised certain audit adjustments where appropriate, which management corrected.

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Independent auditors’ report continued

Key audit matter How our audit addressed the key audit matter

Margin forecasting and recognition (Group)

Refer to Note 1 (Accounting policies) of the Consolidated financial statements and the Key accounting

judgements section of the Governance report.

The Group’s margins are recognised on a plot by plot basis by reference to the margin forecast

across the related development site. The margin per site reflects the best estimates of sales prices

and costs at that time. There is a risk that the margin forecast for the site, and consequently the

margin recognised on each unit sale, is incorrect and not reflective of management’s current best

estimate of the future final margin that will be recognised on a development. As a result, profit margins

could be manipulated or subject to error through the high level of management estimation involved

in ensuring the accuracy and completeness of an individual site forecast, and the monitoring of these

estimates over time.

Sales prices and build costs are inherently more uncertain as they are influenced by changes

in external market factors, such as government regulations, the availability and affordability of

mortgages, changes in customer demand due to market uncertainty or build cost inflation. There is

higher uncertainty when a development is scheduled to be completed over a long timeframe. Whilst

management has put in place business performance review controls to monitor these processes, we

do not rely on these for our audit.

In view of the high inherent estimation uncertainty and the potential for manipulation of margin

forecasts, we consider the accuracy and completeness of margin forecasting and recognition across

the life of the site to be a significant risk for the audit.

Our audit procedures included:

Performing risk-based enquiries with management to determine our sample selection of the

Group’s sites, upon which we tested the site margins. This included validating costs to complete,

forecast revenues and the approach to equalisation of the margin where sites were being

developed across multiple phases. Sample selection was focused on sites with high or low

margins, or those where large movements have arisen during the year;

Confirming, through sampling of additions to inventory, that costs were being allocated to

appropriate developments and therefore impacting the correct site margin;

Assessing management’s overall historical accuracy of forecasting by analysing the changes to

margins in the year and adjustments made to margins through cost of sales. We also assessed

how margins had moved across divisions to consider whether there were any systemic trends

that could indicate manipulation of forecasts;

Evaluating, by testing the automated control in management’s ERP (COINS), that the system

correctly calculates the margin upon revenue recognition;

Testing any material manual adjustments to margins to ensure these were appropriate by

agreeing these costs/income to third party support. This included the recognition of net

realisable value (“NRV”) charges, and costs associated with completed sites; and

Evaluating cost and margin movements post-year end to understand the impact on the margins

recognised in the current year.

We proposed certain audit adjustments, some of which management corrected and the remaining

uncorrected items were quantitatively immaterial.

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Independent auditors’ report continued

Key audit matter How our audit addressed the key audit matter

Valuation of the combustible materials provision (Group)

Refer to Note 1 (Accounting policies), Note 4 (Exceptional items) and Note 22 (Provisions) of the

Consolidated financial statements and the Key accounting judgements section of the Governance

report.

Since 2019 the Group has held a provision in relation to combustible materials to comply with the Fire

Safety Order. In March 2023, the Group signed the Developer Remediation Contract (the “Contract”)

which formalised the commitments made in the signing of the Building Safety Pledge in the prior year.

Management’s provision was previously estimated based on where building surveys identified

external remediation work, or where other known issues had arisen. Unsurveyed buildings were

generally identified as contingent liabilities on the basis that reliable information was not yet

available, principally because a low level of buildings had been surveyed so it was not appropriate to

extrapolate this data, to determine if outflows were probable and hence any provision was required.

During 2024, management has significantly increased the numbers of buildings surveyed and hence

has a greater level of experience in the costs required to remediate buildings in the portfolio, and

therefore more reliable information. As a result it has increased the provision to reflect changes in

cost estimates and scope of works, finalisation of scope on other buildings and the calculation of

a provision for the remaining unsurveyed buildings in the portfolio. These increases are marginally

offset by the impact of discounting and expenditure during the year.

The provision is material, inherently judgemental and an area of significant estimation uncertainty. The

provision is identified as a critical accounting estimate as it requires a number of judgements over key

assumptions in its calculation principally around the estimated cost of work required on the building.

Given the related estimation uncertainty, we identified the valuation of the combustible materials

provision as a significant risk for the audit.

Our audit procedures included:

Inquiring with senior management to understand changes in the provision in the year and

evaluating that the approach taken continues to align with accounting standards;

Reperforming management’s completeness assessments, and performing other validation

procedures, to ensure the assessment of buildings in scope remains up to date. We understood

the rationale for any changes and management’s assessment that there were no material prior

period errors;

Recalculating and checking the integrity of management’s manual model to confirm its accuracy;

Challenging the valuation of the provision recognised at the year end. We stratified the

population into different risk categories’ and our levels of testing reflected our risk assessment.

For sites where the Building Safety Fund (BSF) made full or partial awards to the BSF applicants

and the Group is not performing, but is paying for the remediation work, we agreed the amounts

provided to correspondence from the BSF to the Group. For the remaining sites, where the

scope of work was assessed by the Group, our testing focussed on agreeing the scope of works

to external fire assessment reports and costs to third party tenders. On sites where the scope

of work is yet to be determined, we tested management’s assumptions in relation to the scope

and estimates of the work required by agreeing the scope to draft fire assessment reports and

comparing these costs to those of other similar sites. In the absence of this information, we

agreed the amounts provided to the initial BSF awards as that is the best available evidence for

the estimated cost of remediation on those sites;

Testing the inputs into the calculation used by management to estimate the required provision

on unsurveyed buildings, including verifying costs incurred on other buildings to date and the

nature of the building identified;

Assessing the technical capabilities and expertise of the Group’s employees and consultants

involved in assessing the provision;

Making enquiries of the Group’s General Counsel and external lawyers in relation to claims

that have come through in relation to fire safety and reviewing the latest report on claims and

assessing the impact of any fire safety related claims on the provision; and

Validating the current and non-current split of the provision based on management’s plans for

remediation as well as expected payments to the BSF. This is based on management’s best

estimate of when the cash is likely to outflow.

We proposed certain audit adjustments, some of which management corrected and the remaining

uncorrected items were quantitatively immaterial.

Valuation of intercompany receivables (Company)

Refer to Note 5 (Trade and other receivables) of the Company financial statements. Intercompany

receivables are the largest financial statement line item in the Company financial statements and are

repayable on demand. The recoverability, and any expected credit losses, of these balances from

other Group companies depends on the ability of the Group as a whole to generate cash flows to

enable future repayment. Whilst this is not a significant risk for the audit, in the context of the audit of

the Company it is the area of highest audit effort.

Our audit procedures included:

Testing the outcomes of the Group’s going concern model, in particular the cash flow forecasts,

and confirming that there were no liquidity issues in the Group that would impact the ability of

subsidiaries to repay amounts due; and

Verifying the level of cash and other assets held by the subsidiaries of the Group and confirming

their ability to repay amounts due to the Company on the basis that sufficient cash reserves or

current assets and access to further credit facilities are available as required.

100

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Independent auditors’ report continued

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an

opinion on the financial statements as a whole, taking into account the structure of the Group and the

Company, the accounting processes and controls, and the industry in which they operate.

The Group’s financial statements are ultimately a consolidation of 21 reporting units (each of which is

deemed to be a financial reporting component) representing the Group’s six geographically-based

housebuilding divisions, other smaller trading subsidiaries and the centralised functions, including

those which contain the combustible materials provision and completed site costs. The reporting

units vary in size, but the bulk of the Group’s operations is represented by five of the six revenue-

generating housebuilding divisions. Consequently, we determined each of these five divisions

required an audit of its complete financial information due to its size. These five reporting units were

all audited by the Group engagement team. The reporting units where we performed an audit of

the complete financial information, in addition to the audit of consolidation journals and the audit of

specific financial statement line items for other reporting units, accounted for 100% of the Group’s

revenues and more than 94% of the Group’s absolute profit before tax and exceptional items. We

audited exceptional items, including the combustible materials provision and completed site costs, at

the Group level. The audit of specific financial statement line items included a further three reporting

units, to provide additional coverage over items such as inventory and administrative costs. Our audit

work across these reporting units, together with the additional procedures performed at the Group

level on revenue, the carrying value of inventory, the consolidation, goodwill, taxation, retirement

benefit obligations, payroll expense, finance expense and loans and borrowings gave us the evidence

we needed for our opinion on the Consolidated financial statements as a whole. The audit of the

Company financial statements consisted of the full scope audit of one reporting unit which operates as

the holding company function.

The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the extent of the potential

impact of climate risk on the Group’s and Company’s financial statements. The risks are primarily

transitional and relate to additional regulatory and/or reporting requirements, which may result in

further cost to the Group. These costs, for example by applying the Future Homes Standard to new

homes built from 2025, will impact the whole housebuilding sector and therefore become a feature of

house price valuation at that time. The Group also procures land, factoring in these costs to its future

margin appraisals, but there is a risk that for some existing parts of the Group’s land portfolio that

these costs have to be absorbed by the Group, or there may be instances where the full additional

costs cannot be passed on to end customers. We have evaluated management’s assessment of this

risk. Our procedures did not identify any material impact as a result of climate risk on the Group’s and

Company’s financial statements.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative

thresholds for materiality. These, together with qualitative considerations, helped us to determine the

scope of our audit and the nature, timing and extent of our audit procedures on the individual financial

statement line items and disclosures and in evaluating the effect of misstatements, both individually

and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a

whole as follows:

Financial statements – Group Financial statements – Company

Overall materiality

£3,400,000 (2023: £4,800,000) £1,640,000 (2023: £1,800,000)

How we determined it

approximately 5% of a 3-year

average of the Group's profit before

tax and exceptional items (2023: a

3-year average of the Group's profit

before tax and exceptional items).

approximately 1% of total assets.

Rationale for benchmark

applied

Profit before tax and exceptional

items is one of the key measures

used by the shareholders in

assessing the performance of the

Group and is a generally accepted

auditing benchmark. Using an

average over 3 years is appropriate

given the fluctuation in the Group's

financial performance in each of

these periods, whilst the Group's

statement of financial position has

not moved to the same extent.

We believe that total assets is

the primary measure used by the

shareholders in assessing the

performance of the entity, which

acts solely as a holding company,

and is a generally accepted

auditing benchmark.

For each component in the scope of our Group audit, we allocated a materiality that is less than our

overall Group materiality. The range of materiality allocated across components was between £0.2

million and £2.2 million.

We use performance materiality to reduce to an appropriately low level the probability that the

aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically,

we use performance materiality in determining the scope of our audit and the nature and extent of

our testing of account balances, classes of transactions and disclosures, for example in determining

sample sizes. Our performance materiality was 50% (2023: 75%) of overall materiality, amounting to

£1,700,000 (2023: £3,600,000) for the Group financial statements and £820,000 (2023: £1,350,000) for

the Company financial statements.

In determining the performance materiality, we considered a number of factors - the history of

misstatements, risk assessment and aggregation risk and the effectiveness of controls - and concluded

that an amount at the lower end of our normal range was appropriate.

We agreed with the Audit and Risk Committee that we would report to them misstatements identified

during our audit above £170,000 (Group audit) (2023: £240,000) and £82,000 (Company audit) (2023:

£90,000) as well as misstatements below those amounts that, in our view, warranted reporting for

qualitative reasons.

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Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial

statements and our auditors’ report thereon. The directors are responsible for the other information.

Our opinion on the financial statements does not cover the other information and, accordingly, we do

not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form

of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other

information and, in doing so, consider whether the other information is materially inconsistent

with the financial statements or our knowledge obtained in the audit, or otherwise appears to be

materially misstated. If we identify an apparent material inconsistency or material misstatement, we

are required to perform procedures to conclude whether there is a material misstatement of the

financial statements or a material misstatement of the other information. If, based on the work we

have performed, we conclude that there is a material misstatement of this other information, we are

required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Strategic report and the Directors’ report, we also considered whether the

disclosures required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to

report certain opinions and matters as described below.

Strategic report and the Directors’ report

In our opinion, based on the work undertaken in the course of the audit, the information given

in the Strategic report and the Directors’ report for the year ended 31 October 2024 is consistent with

the financial statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the Group and Company and their environment

obtained in the course of the audit, we did not identify any material misstatements in the Strategic

report and the Directors’ report.

Directors’ Remuneration

In our opinion, the part of the Directors’ remuneration report to be audited has been properly

prepared in accordance with the Companies Act 2006.

Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern, longer-

term viability and that part of the corporate governance statement relating to the Company’s

compliance with the provisions of the UK Corporate Governance Code specified for our review. Our

additional responsibilities with respect to the corporate governance statement as other information

are described in the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following

elements of the corporate governance statement is materially consistent with the financial statements

and our knowledge obtained during the audit, and, except for the matters reported in the section

headed ‘Material uncertainty related to going concern’, we have nothing material to add or draw

attention to in relation to:

The directors’ confirmation that they have carried out a robust assessment of the emerging and

principal risks;

The disclosures in the Annual Report that describe those principal risks, what procedures are in

place to identify emerging risks and an explanation of how these are being managed or mitigated;

The directors’ statement in the financial statements about whether they considered it appropriate

to adopt the going concern basis of accounting in preparing them, and their identification of any

material uncertainties to the Group’s and Company’s ability to continue to do so over a period of

at least twelve months from the date of approval of the financial statements;

The directors’ explanation as to their assessment of the Group’s and Company’s prospects, the

period this assessment covers and why the period is appropriate; and

The directors’ statement as to whether they have a reasonable expectation that the Company

will be able to continue in operation and meet its liabilities as they fall due over the period of its

assessment, including any related disclosures drawing attention to any necessary qualifications

or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the Group and Company

was substantially less in scope than an audit and only consisted of making inquiries and considering

the directors’ process supporting their statement; checking that the statement is in alignment with the

relevant provisions of the UK Corporate Governance Code; and considering whether the statement

is consistent with the financial statements and our knowledge and understanding of the Group and

Company and their environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the

following elements of the corporate governance statement is materially consistent with the financial

statements and our knowledge obtained during the audit:

The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced

and understandable, and provides the information necessary for the members to assess the

Group’s and Company’s position, performance, business model and strategy;

The section of the Annual Report that describes the review of effectiveness of risk management

and internal control systems; and

The section of the Annual Report describing the work of the Audit and Risk Committee.

We have nothing to report in respect of our responsibility to report when the directors’ statement

relating to the Company’s compliance with the Code does not properly disclose a departure from

a relevant provision of the Code specified under the Listing Rules for review by the auditors.

Independent auditors’ report continued

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Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Directors’ responsibilities in respect of the financial

statements, the directors are responsible for the preparation of the financial statements in accordance

with the applicable framework and for being satisfied that they give a true and fair view. The directors

are also responsible for such internal control as they determine is necessary to enable the preparation

of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group’s and the

Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless the directors either intend to liquidate

the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that

includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that

an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on

the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in

respect of irregularities, including fraud. The extent to which our procedures are capable of detecting

irregularities, including fraud, is detailed below.

Based on our understanding of the Group and industry, we identified that the principal risks of non-

compliance with laws and regulations related to government guidelines on fire safety and other

health and safety requirements, employment law, including legislation relating to pensions, and

we considered the extent to which non-compliance might have a material effect on the financial

statements. We also considered those laws and regulations that have a direct impact on the

financial statements such as the Companies Act 2006. We evaluated management’s incentives and

opportunities for fraudulent manipulation of the financial statements (including the risk of override of

controls), and determined that the principal risks were related to management bias, in particular in

areas of significant estimation uncertainty as set out in note 1 to the consolidated financial statements,

or where management has the ability to post inappropriate journals. The Group engagement team

shared this risk assessment with the component auditors so that they could include appropriate

audit procedures in response to such risks in their work. Audit procedures performed by the Group

engagement team and/or component auditors included:

Discussions with the Executive Leadership Team, Divisional management teams and the Audit

and Risk Committee, review of internal audit reports and consideration of known or suspected

instances of non-compliance with laws and regulation and fraud;

Challenging the assumptions and judgements made by management in determining their

significant accounting estimates, in particular in relation to margin forecasting and provisions (see

related key audit matters above); and

Identifying and testing journal entries, in particular any journal entries posted with unusual

account combinations.

There are inherent limitations in the audit procedures described above. We are less likely to become

aware of instances of non-compliance with laws and regulations that are not closely related to

events and transactions reflected in the financial statements. Also, the risk of not detecting a material

misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may

involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through

collusion.

Our audit testing might include testing complete populations of certain transactions and balances,

possibly using data auditing techniques. However, it typically involves selecting a limited number of

items for testing, rather than testing complete populations. We will often seek to target particular items

for testing based on their size or risk characteristics. In other cases, we will use audit sampling to

enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located

on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of

our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the Company’s members as a

body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose.

We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any

other person to whom this report is shown or into whose hands it may come save where expressly

agreed by our prior consent in writing.

Independent auditors’ report continued

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OTHER REQUIRED REPORTING

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

we have not obtained all the information and explanations we require for our audit; or

adequate accounting records have not been kept by the Company, or returns adequate for our

audit have not been received from branches not visited by us; or

certain disclosures of directors’ remuneration specified by law are not made; or

the Company financial statements and the part of the Directors’ remuneration report to be audited

are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit and Risk Committee, we were appointed by the

members on 23 March 2015 to audit the financial statements for the year ended 31 October 2015 and

subsequent financial periods. The period of total uninterrupted engagement is ten years, covering the

years ended 31 October 2015 to 31 October 2024.

OTHER MATTER

The Company is required by the Financial Conduct Authority Disclosure Guidance and Transparency

Rules to include these financial statements in an annual financial report prepared under the structured

digital format required by DTR 4.1.15R - 4.1.18R and filed on the National Storage Mechanism of the

Financial Conduct Authority. This auditors’ report provides no assurance over whether the structured

digital format annual financial report has been prepared in accordance with those requirements.

Darryl Phillips

(Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

3 February 2025

Independent auditors’ report continued

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					Represented¹	Represented¹
		Pre-	Exceptional		Pre-	Exceptional
		exceptional	items		exceptional	items	Represented¹
		items	(note 4)	Total	items	(note 4)	Total
		2024	2024	2024	2023	2023	2023
	Note	£m	£m	£m	£m	£m	£m
Revenue	3	618.2	–	6 18.2	6 5 7. 5	–	6 5 7. 5
Cost of sales		(5 31 .4)	(158 .4)	(689.8)	(5 51 .9)	(20.9)	(57 2.8)
Gross profit/(loss)		86.8	(158.4)	(71.6)	105.6	(20.9)	84 .7
Other operating income	5	75. 8	–	75.8	4 4.7	–	44 .7
Other operating expenses	5	(6 9.9)	–	(6 9.9)	(4 0.9)	–	(40. 9)
Administrative expenses		(60.8)	(1.6)	(62.4)	(58.0)	–	(58.0)
Net impairment losses on financial assets	17	(0.6)	–	(0.6)	(0.6)	–	(0.6)
Operating profit/(loss)	5	31.3	(16 0.0)	(1 28 .7)	50.8	(20.9)	2 9.9
Finance income	7	4.0	–	4.0	4 .1	–	4.1
Finance expense	7	(12.8)	(6 .1)	(18.9)	(9.6)	(4.6)	(1 4. 2)
Net finance expense		(8.8)	(6 .1)	(14.9)	(5 .5)	(4 .6)	(10.1)
Share of post-tax (losses)/profits of joint ventures using the equity method	14	(0.1)	–	(0 .1)	2 .7	0.6	3. 3
Profit/(loss) before tax		22. 4	(1 6 6 .1)	(143. 7)	48 .0	(24.9)	2 3 .1
Income tax (expense)/credit	8	(8 .0)	48. 2	40.2	(11 .7)	6.5	(5. 2)
Profit/(loss) for the year attributable to equity shareholders		14.4	(1 1 7. 9)	(103 .5)	36.3	(18.4)	1 7. 9
Earnings/(loss) per ordinary share
Basic	10	5.6p		(40.4p)	14 . 2p		7. 0p
Diluted	10	5.6p		(40.4p)	1 4.1p		7. 0p

1 See note 29 for an explanation of the prior year representation.

The notes on pages 110–152 form part of these consolidated financial statements.

Consolidated income statement

For the year ended 31 October 2024

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		2024	2023
	Note	£m	£m
(Loss)/profit for the year attributable to equity shareholders		(103 .5)	1 7. 9
Other comprehensive income/(expense):
Items that will not be reclassified to the consolidated income statement:
Actuarial gains/(losses) of defined benefit schemes	16	8.5	(2.5)
Change in deferred tax on actuarial gains/(losses) of defined benefit schemes	15	(2.1)	1.1
Other comprehensive income/(expense) for the year net of income tax		6.4	(1. 4)
Total comprehensive (expense)/income attributable to equity shareholders		(9 7.1)	16.5

The notes on pages 110–152 form part of these consolidated financial statements.

Consolidated statement of comprehensive income

For the year ended 31 October 2024

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			Share
		Share	premium	Retained
		capital	account	earnings	Total equity
	Note	£m	£m	£m	£m
Balance at 1 November 2022		12.8	74 . 2	79 6 .1	8 8 3 .1
Profit for the year attributable to equity shareholders		–	–	1 7. 9	1 7. 9
Actuarial losses of defined benefit schemes	16	–	–	(2.5)	(2.5)
Change in deferred tax on actuarial losses of defined benefit schemes	15	–	–	1.1	1 .1
Total comprehensive income for the year		–	–	16.5	1 6.5
Transactions with shareholders:
Equity-settled share-based payments	16	–	–	1.5	1 .5
Deferred tax on equity-settled share-based payments	15	–	–	(0. 2)	(0. 2)
Purchase of own shares	23	–	–	(1.9)	(1.9)
Transfers in respect of share options		–	–	0.9	0. 9
Dividends paid	9	–	–	(43 .6)	(43.6)
Balance at 31 October 2023		12. 8	74 . 2	769. 3	856. 3
Loss for the year attributable to equity shareholders		–	–	(103 .5)	(103 .5)
Actuarial gains of defined benefit schemes	16	–	–	8.5	8.5
Change in deferred tax on actuarial gains of defined benefit schemes	15	–	–	(2.1)	(2 .1)
Total comprehensive expense for the year		–	–	(9 7.1)	(9 7.1)
Transactions with shareholders:
Equity-settled share-based payments	16	–	–	1.8	1 .8
Deferred tax on equity-settled share-based payments	15	–	–	0.1	0.1
Purchase of own shares	23	–	–	(0.5)	(0.5)
Transfers in respect of share options		–	–	0.4	0.4
Dividends paid	9	–	–	(32.1)	(32.1)
Balance at 31 October 2024		12.8	74 . 2	641 .9	728.9

The notes on pages 110–152 form part of these consolidated financial statements.

Consolidated statement of changes in equity

For the year ended 31 October 2024

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			Represented 1
		2024	2023
	Note	£m	£m
ASSETS
Non-current assets
Intangible assets	11	29.0	29.0
Property, plant and equipment	12	3.2	2. 2
Right-of-use assets	13	1 0.9	6.1
Investments in joint ventures	14	8.6	10.7
Financial assets at fair value through profit and loss		2. 3	2.6
Deferred tax assets	15	39.7	3.3
Retirement benefit surplus	16	19.5	10.0
Trade and other receivables	17	1 4.6	6.0
		1 2 7. 8	69. 9
Current assets
Inventories	18	1 , 1 3 7. 4	1 ,1 6 4. 8
Financial assets at fair value through profit and loss		1.0	1 .1
Trade and other receivables	17	98 .1	12 0.0
Current income tax receivable		4.1	11 .9
Cash and cash equivalents	19	7 3.8	1 62.6
		1, 314.4	1 ,46 0.4
Total assets		1,4 42. 2	1 ,53 0.3

Consolidated statement of financial position

As at 31 October 2024

			Represented 1
		2024	2023
	Note	£m	£m
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings	20	(6 3. 2)	(83.5)
Trade and other payables	21	(42 . 3)	(69.7)
Lease liabilities	13	(8.8)	(4 .4)
Deferred tax liabilities	15	(4.9)	(2. 5)
Provisions	22	(1 92. 5)	(7 5. 2)
		(3 1 1 .7)	(235.3)
Current liabilities
Interest-bearing loans and borrowings	20	(1 9.1)	(1 4. 2)
Trade and other payables	21	(28 5. 2)	(328 .6)
Lease liabilities	13	(3. 2)	(2.0)
Provisions	22	(9 4.1)	(93.9)
		(40 1 .6)	(43 8 .7)
Total liabilities		(713 .3)	(6 74 . 0)
Net assets		728.9	856.3
EQUITY
Share capital	23	12.8	12. 8
Share premium account	23	74 . 2	74 . 2
Retained earnings		641 . 9	769. 3
Total equity		728.9	856. 3

1 See note 29 for an explanation of the prior year representation.

The notes on pages 110–152 form part of these consolidated financial statements.

These consolidated financial statements on pages 105–152 were approved by the Board of Directors

on 3 February 2025.

On behalf of the Board

Martyn Clark Bill Floydd

Director Director

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		2024	2023
	Note	£m	£m
Cash flows from operating activities
(Loss)/profit for the year attributable to equity shareholders		(103 .5)	1 7. 9
Adjustments for:
Depreciation on property, plant and equipment	12	0.4	0.5
Depreciation on right-of-use assets	13	2. 3	2. 3
Retirement benefit obligation administrative expenses	16	0.7	0.6
Net finance expense	7	14.9	1 0.1
Share-based payment expense	16	1.8	1.5
Share of post-tax losses/(profits) of joint ventures using the equity
method	14	0 .1	(3.3)
Impairment of inventories movement	18	2.1	7. 6
Net impairment of financial assets	17	0.6	0.6
Income tax (credit)/expense	8	(4 0. 2)	5.2
Operating cash (outflow)/inflow before changes in working capital, provisions and contributions to retirement benefit obligations		(120. 8)	43. 0
(Increase)/decrease in trade and other receivables		(10.6)	2 7. 0
Decrease/(increase) in inventories		22. 2	(1 82. 3)
Increase/(decrease) in trade and other payables and provisions		35.6	(31 .9)
Contribution to retirement benefit obligations	16	(1 .1)	(1. 5)
Cash used by operations		(74 .7)	(1 45 .7)
Finance expense paid		(5 .1)	(5.6)
Income tax received/(paid)		12.0	(14.3)
Net cash outflow from operating activities		(6 7. 8)	(1 65.6)

		2024	2023
	Note	£m	£m
Cash flows from investing activities
Purchases of property, plant and equipment	12	(1.4)	(1.8)
Disposal of financial assets at fair value through profit and loss		0. 2	0. 9
Funding to joint ventures		(1 3 .1)	(13 .0)
Repayment of funding from joint ventures		36.4	1 1.7
Dividends received from joint ventures		2.5	1.5
Finance income received		0.4	2. 3
Net cash inflow from investing activities		25.0	1.6
Cash flows from financing activities
Principal elements of lease payments	13	(1.9)	(2. 4)
Dividends paid	9	(32 .1)	(43.6)
Net purchase of own shares		(0 .1)	(1 .0)
Proceeds from borrowings		112.0	–
Repayments of borrowings		(127 .0)	–
Sale and leaseback proceeds		3.1	–
Net cash outflow from financing activities		(46. 0)	(47. 0)
Net decrease in cash and cash equivalents		(88.8)	(211.0)
Cash and cash equivalents at the beginning of the year		162.6	37 3.6
Cash and cash equivalents at the end of the year	19	73.8	162 .6

The notes on pages 110–152 form part of these consolidated financial statements.

Consolidated cash flow statement

For the year ended 31 October 2024

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Notes to the consolidated financial statements

1 ACCOUNTING POLICIES

Basis of preparation

Crest Nicholson Holdings plc (Company) is a public limited company incorporated, listed and domiciled

in the UK. The address of the registered office is 500 Dashwood Lang Road, Bourne Business Park,

Addlestone, Surrey, KT15 2HJ. The Group financial statements consolidate those of the Company and

its subsidiaries (together referred to as the Group) and include the Group’s interest in jointly controlled

entities. The parent company financial statements present information about the Company as a

separate entity and not about its Group.

The financial statements are presented in pounds sterling and amounts are denominated in millions

(£m), unless otherwise stated.

The Group financial statements have been prepared and approved by the Directors in accordance

with UK-adopted international accounting standards, and with the requirements of the Companies

Act 2006 as applicable to companies reporting under those standards and have been prepared on

the historical cost basis except for financial assets at fair value through profit and loss, which are as

otherwise stated. The parent company financial statements are presented on pages 153–157.

The preparation of financial statements in conformity with UK-adopted international accounting

standards requires the Directors to make assumptions and judgements that affect the application of

policies and reported amounts within the financial statements. Assumptions and judgements are based

on experience and other factors that the Directors consider reasonable under the circumstances.

Actual results may differ from these estimates.

Judgements made by the Directors, in the application of these accounting policies that have a

significant effect on the financial statements and estimates with a significant risk of material adjustment

in the next year are discussed below.

Going concern

In determining the appropriateness of the basis of preparation, the Directors have considered whether the

Group can continue to meet its liabilities and other obligations for the foreseeable future. These include its

ability to meet the financial covenants as required under its sustainability-linked Revolving Credit Facility

(RCF) and senior loan notes as detailed in note 24. The Directors consider the possibility of breaching one

of the three financial covenants (Gearing, Tangible Net Worth and Interest Cover) as being the first sign

that the Group could be in distress and is the basis of its going concern assessment in this year’s financial

statements.

The Directors have assessed the Group’s going concern position through to 30 April 2026 (the going

concern period), which aligns with its half year reporting for the 2026 financial year. The going concern

model is made up of a Board approved base case and a Severe But Plausible (SBP) downside.

Within the base case, the Group has already secured a proportion of sales for 2025 by way of its

forward order book. The base case forecast is that the Group maintains sufficient liquidity headroom

throughout the going concern period and will be compliant from a covenant perspective for all

required reporting periods.

The base case has then been used to model a range of adverse scenarios that are deemed to be

plausible downside conditions derived from the scenarios that are outlined below. These scenarios

incorporate potential macroeconomic scenarios that could be experienced by the UK, industry-wide

dynamics, and Group-specific risks.

The SBP downside scenario aggregates the impacts of multiple risk factors. In conducting this test,

the Directors drew on extensive prior experience in navigating economic downturns, including the

COVID-19 pandemic, and considered the implications of current market conditions. This assessment

also evaluates the anticipated effectiveness of proposed mitigating actions that are within the Group’s

control and can be enacted in good time, ensuring a robust framework for managing potential

disruptions and safeguarding the Group’s financial stability.

Risk factors applied against future forecasts

The following risk factors have been applied in reaching the SBP downside scenario:

Scenario 1 – Reduction in sales volumes

Linking to market conditions and solvency and liquidity risk, a potential decline in

macroeconomic conditions in the UK, which negatively impacts the UK residential property

market and reduces the ability for people to buy homes. The Directors have considered a

reduced sales per outlet week (SPOW) of 0.43 in 2025 and 0.47 in 2026 (2024 actual SPOW

0.48), based on a decline commencing imminently.

Scenario 2 – Fall in sales price

Also linking to a potential decline in market conditions, a reduction in sales prices during an

economic slowdown and / or lack of available debt finance. A greater than 2.0% reduction in

average selling prices compared to the current market experience of prices increasing.

Scenario 3 – Increase in build cost

Linking to supply chain risks, unexpected costs occurring on low margin or NRV sites cause an

immediate reduction in profitability of c. £4m in each six months of the going concern period.

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Notes to the consolidated financial statements continued

Mitigation options and considerations

The Directors have considered the mitigations that could be applied in a deteriorating trading

environment to either increase profit or conserve cash to reduce interest cost. Some of these

measures are implicit outcomes of a downturn (such as reduction in build spend) rather than mitigating

actions which the Group would have to apply.

The Group has experience of applying such mitigations in the past, which include but are not limited to:

A reduction in the Group’s headcount driving a reduction in overheads, site and sales and

marketing spend to reflect the lower build and selling activity in a weaker trading environment;

Potential renegotiation of some supplier arrangements as the amount of build activity contracts, and

materials suppliers and subcontractors are required to be more competitive, reducing build spend;

Mothballing unproductive and/or capital-intensive schemes;

Reduction or elimination of management incentives;

A reduction in discretionary land acquisitions and therefore land expenditure as the Group would

require less land to replenish the land portfolio;

Disposal of land to generate cash; and

Removal of dividends after April 2025 to conserve cash.

Conclusion on going concern

Whilst the Group forecasts to meet all its covenants in the base case scenario, the cumulative impact

of the assumptions and mitigations in the SBP downside case indicates that the Group would not

meet its interest cover covenant during the going concern period, with the first measurement date

in April 2025. If this covenant breach were to occur, it would constitute an event of default under the

terms of the Revolving Credit Facility agreement and senior loan notes. The Gearing and Tangible

Net Worth covenants are forecast to be met in all reporting periods in the SBP downside scenario.

The Group maintains good relationships and a regular dialogue with all its lenders and is confident

that an amendment to its covenants would be secured if necessary, however, this is not guaranteed

and therefore this represents a material uncertainty related to going concern. In all scenarios, except

where the interest cover covenant is breached and a covenant amendment is not agreed, the Group

forecasts adequate liquidity.

In reviewing the assessment outlined above, the Directors are confident that the Group has the

necessary resources and mitigations available to continue operations and discharge its obligations as

they fall due for at least 12 months from the date of approval of the financial statements. Accordingly,

the consolidated financial statements continue to be prepared on a going concern basis. However, a

material uncertainty exists, in particular with respect to the ability to achieve the covenant amendments

which may be required, which may cast significant doubt on the Group’s ability to continue as a going

concern. The financial statements do not include any adjustments that would result from the basis of

preparation being inappropriate.

Critical accounting estimates and judgements

The preparation of the consolidated financial statements under UK-adopted international accounting

standards requires the Directors to make estimates and assumptions that affect the application of

policies and reported amounts of assets and liabilities, income and expenses and related disclosures.

In applying the Group’s accounting policies, the key judgements that have a significant impact on the

financial statements, including those involving estimates are described below.

The judgement to present certain items as exceptional (see note 4)

Certain revenue policies relating to part exchange sales

The identification of performance obligations where a revenue transaction involves the sale of

both land and residential units and revenue on the units is then subsequently recognised over

time where the land sale element takes place at the start of the contract (see note 3 for the split

of revenue recognised at a point in time and recognised over time and also the more detailed

revenue accounting policy)

The recognition of the defined benefit pension scheme net surplus (see note 16)

The current and non-current presentation of the combustible materials provision

The presentation of completed site liabilities as either accruals or provisions.

Estimates and associated assumptions affecting the financial statements are based on historical

experience and various other factors that are believed to be reasonable under the circumstances.

The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting

estimates may be necessary if there are changes in the circumstances on which the estimate was

based or as a result of new information.

Revisions to accounting estimates are recognised in the year in which the estimate is revised if the

revision affects only that year, or in the year of revision and future years if the revision affects both

current and future years.

The Directors have made consistent estimates and assumptions in reviewing the going concern

assumption as those detailed above. The Directors consider the key sources of estimation uncertainty

that have a risk of causing a material adjustment to the carrying value of assets and liabilities as

described below.

Carrying value of inventories

Inventories of land, work-in-progress, completed buildings including show homes and part exchange

inventories are stated in the consolidated statement of financial position at the lower of cost or

NRV. On a regular basis management updates estimates of future revenue and expenditure for

each development. Future revenue and expenditure may differ from estimates which could lead to

an impairment of inventory if there are adverse changes. Where forecast revenues are lower than

forecast total costs an inventory provision is made. This provision may be reversed in subsequent

periods if there is evidence of sustained improved revenue or reduced expenditure forecast on a

development. If forecast revenue was 10.0% lower on sites within the short-term portfolio (total land

portfolio excluding strategic land) as at 31 October 2024, the impact on loss before tax would have

been £13.1m higher (2023: the impact on profit before tax would have been £15.9m lower).

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Notes to the consolidated financial statements continued

Estimation of development profitability

Due to the nature of development activity and, in particular, the length of the development cycle, the

Group has to make estimates of the costs to complete developments, in particular those which are

multi-phase and/or may have significant infrastructure costs. These estimates are reflected in the

margin recognised on developments in relation to sales recognised in the current and future years.

There is a degree of inherent uncertainty in making such estimates. The Group has established

internal controls that are designed to ensure an effective assessment of estimates is made of the

costs to complete developments. The Group considers estimates of the costs to complete on longer-

term sites, which typically have higher upfront shared infrastructure costs to have greater estimation

uncertainty than sites of shorter duration with less infrastructure requirements. A change in estimated

margins on sites, for example due to changes in estimates of build cost inflation or a reduction

in house prices, could alter future profitability. If forecast costs were 10.0% higher on sites which

contributed to the year ended 31 October 2024 and which are forecast to still be in production beyond

the year ending 31 October 2026 (2023: beyond the year ending 31 October 2025), cost of sales in

the current year would have been £29.1m (2023: £32.3m) higher.

The Group has assessed the potential financial impacts of transitional and physical climate-related

risks and opportunities. The primary known climate-related policy that will affect our product is the

Future Homes Standard, due to be legislated in 2025, which will increase build costs for individual

units. Anticipated additional build costs are incorporated into project acquisition appraisals. These

costs are not expected to have a material impact on the carrying value of inventories or their

associated project margins or the value of goodwill. Flood risk and broader planning requirements

are also evaluated and accounted for during new project acquisitions. Longer-term climate-related

costs are beyond the time horizon of the Group’s contracted projects and therefore do not impact the

carrying value of inventories or their associated project margins. Additional information on climate-

related risks and opportunities is provided on pages 40–48. This area is considered an area of

estimation rather than a critical accounting estimate.

Completed site costs

Completed site costs include completed site accruals which is predominantly the cost to complete

outstanding site infrastructure and amenities within developments where the last housing unit has

been completed, and, completed site provisions which is the forecast cost to complete remedial works

on buildings where faults have been identified and the Group is responsible to remedy. Completed

site costs can require a number of estimates and assumptions in their calculation, though provisions

also have a level of estimation uncertainty. The Group has to make estimates of the costs to complete

outstanding site infrastructure and amenities within developments and the cost of remediation

required where faults have been identified post completion. The Group has internal controls that are

designed to ensure an effective assessment of estimates is made of the costs to finalise completed

developments. If forecast completed site costs are 10.0% higher than provided, the charge in the

consolidated income statement would be £2.2m higher for completed site accruals and £2.3m higher

for completed site provisions.

Valuation of the pension scheme assets and liabilities

In determining the valuation of the pension scheme assets and liabilities, the Directors utilise the

services of an actuary. The actuary uses key assumptions being inflation rate, life expectancy, discount

rate and Guaranteed Minimum Pensions, which are dependent on factors outside the control of the

Group. To the extent that such assumptions differ to that expected, the pension liability would change.

See note 16 for additional details.

Combustible materials

The combustible materials provision requires a number of key estimates and assumptions in its

calculation. During the year, the combustible materials provision has been increased to reflect the

latest assessment of these costs. Additionally, the Group has now performed sufficient surveys and

has greater experience of survey outcomes to make an appropriately reliable estimate of its probable

liabilities across non-surveyed buildings.

The key assumptions used to determine the provision include but are not limited to identification

of the properties impacted through the period of construction considered. The key estimates then

applied to these properties include the potential costs of investigation, replacement materials and

works to complete, along with the timing of forecast expenditure. The Directors have used Building

Safety Fund (BSF) cost information, other external information and internal assessments as a basis

for the estimated remedial costs. The Group has used estimates and assumptions to evaluate the

probable remediation works required to non-surveyed buildings after applying experience gained from

buildings with surveys and applying risk categories to groups of buildings with similar characteristics.

These estimates are inherently uncertain due to the highly complex and bespoke nature of the

buildings. The actual costs may differ to the amounts notified by the BSF costed projects, and fire

safety reports in progress may require different levels of remediation and associated costs than those

currently estimated. The number of non-surveyed buildings requiring remediation may differ from current

estimates, which cannot be fully known until surveys have been completed. Management expects

assessments to have been completed by late summer 2025. If forecast remediation costs on buildings

currently provided for are 10.0% higher/lower than provided, the pre-tax exceptional items charge in the

consolidated income statement would be £24.9m higher/lower. See notes 4 and 22 for additional details.

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Notes to the consolidated financial statements continued

Adoption of new and revised standards

There are no new standards, amendments to standards and interpretations that are applicable to the

Group and are mandatory for the first time for the financial year beginning 1 November 2023 which

have had a material impact on the Group.

Impact of standards and interpretations in issue but not yet effective

There are a number of standards, amendments and interpretations that have been published that

are not mandatory for the 31 October 2024 reporting period and have not been adopted early by

the Group. The Group does not expect that the adoption of these standards, amendments and

interpretations will have a material impact on the financial statements of the Group in future years.

Other accounting policies

The accounting policies set out below have, unless otherwise stated, been applied consistently

to all periods presented in these Group financial statements with the exception of the prior period

representation as disclosed in note 29.

Alternative performance measures (APM)

The Group has adopted various APM, as presented on pages 158–159. These measures are not

defined by International Financial Reporting Standards (IFRS) and therefore may not be directly

comparable with other companies’ APM, and should be considered in addition to, and are not

intended to be a substitute for, or superior to, IFRS measurements.

Consolidation

The consolidated financial statements include the financial statements of Crest Nicholson Holdings plc,

its subsidiary undertakings and the Group’s share of the results of joint ventures and joint operations.

Inter-company transactions, balances and unrealised gains on transactions between group companies

are eliminated on consolidation.

(a) Subsidiaries

Subsidiaries are entities in which the Group has control. The Group controls an entity when the Group

is exposed to, or has rights to, variable returns through its power over the entity. In assessing control,

potential voting rights that are currently exercisable or convertible are taken into account. The profits

and losses of subsidiaries are included in the consolidated financial statements from the date that

control commences until the date that control ceases.

The acquisition method of accounting is used by the Group to account for the acquisition of

subsidiaries that are a business under IFRS 3. On acquisition of a subsidiary, all of the subsidiary’s

separable, identifiable assets and liabilities existing at the date of acquisition are recorded at their fair

values reflecting their condition at that date.

All changes to those assets and liabilities and the resulting gains and losses that arise after the

Group has gained control of the subsidiary are charged to the post-acquisition consolidated income

statement or consolidated statement of comprehensive income. Accounting policies of acquired

subsidiaries are changed where necessary, to ensure consistency with policies adopted by the Group.

Acquisitions of subsidiaries which do not qualify as a business under IFRS 3 are accounted for as an

asset acquisition rather than a business combination. Under such circumstances the fair value of the

consideration paid for the subsidiary is allocated to the assets and liabilities purchased based on their

relative fair value at the date of purchase. No goodwill is recognised on such transactions.

(b) Joint ventures

A joint venture is a contractual arrangement in which the Group and other parties undertake an

economic activity that is subject to joint control and these parties have rights to the net assets

of the arrangement. The Group reports its interests in joint ventures using the equity method

of accounting. Under this method, interests in joint ventures are initially recognised at cost and

adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses and

movements in other comprehensive income. The Group’s share of results of the joint venture

after tax is included in a single line in the consolidated income statement. Where the share of

losses exceeds the Group’s interest in the entity and there is no obligation to fund these losses,

the carrying amount is reduced to nil and recognition of further losses is discontinued, unless

there is a long-term receivable due from the joint venture in which case, if appropriate, the loss

is recognised against the receivable. If an obligation to fund losses exists the further losses and

a provision are recognised. Unrealised gains on transactions between the Group and its joint

ventures are eliminated on consolidation. Accounting policies of joint ventures are changed where

necessary, to ensure consistency with policies adopted by the Group.

A joint operation is a joint arrangement that the Group undertakes with other parties, in which

those parties have rights to the assets and obligations of the arrangement. The Group accounts for

joint operations by recognising its share of the jointly controlled assets and liabilities and income

and expenditure on a line-by-line basis in the consolidated statement of financial position and

consolidated income statement.

Goodwill

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s

interest in the fair value of the identifiable assets and liabilities of the acquired entity at the date of

the acquisition and is not amortised. Goodwill arising on acquisition of subsidiaries and businesses

is capitalised as an asset. The goodwill balance has been allocated to the strategic land holdings

within the Group. The Group expects to benefit from the strategic land holdings for a further period

of 13 years to 2038. The period used in the assessment represents the estimated time it will take

to obtain planning and build out on the remaining acquired strategic land holdings. Goodwill is

assessed for impairment at each reporting date. The sites acquired are considered as a singular

cash generating unit and the value in use is calculated on a discounted cash flow basis with more

speculative strategic sites given a lower probability of reaching development. The calculated

discounted cash flow value is compared to the goodwill balance to assess if it is impaired. Any

impairment loss is recognised immediately in the consolidated income statement.

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Notes to the consolidated financial statements continued

Revenue and profit recognition

Revenue comprises the fair value of the consideration received or receivable, net of value added tax

and discounts.

The Group has made a judgement to not recognise revenue on the proceeds received on the

disposal of properties taken in part exchange against a new property as they are incidental to the main

revenue-generating activities of the Group. As part exchange sales are deemed incidental, the income

and expenses associated with part exchange properties are recognised in other operating income and

other operating expenses in the consolidated income statement. Income is recognised when legal title

is passed to the customer.

Revenue is recognised on house and apartment sales at legal completion. For affordable and other

sales in bulk, revenue recognition is dependent on freehold legal title being passed to the customer

as it is considered that upon transfer of freehold title that the customer controls the work-in-progress.

Where freehold legal title and control is passed to the customer, revenue is recognised on any

upfront sale of land (where applicable) and then on the housing units as the build of the related

units progresses, via surveys of work performed on contract activity. Where freehold legal title is not

passed to the customer, revenue is not recognised on any upfront sale of land and the revenue on

the housing units and sale of land is recognised at handover of completed units to the customer. The

transaction price for all housing units is derived from contractual negotiations and does not include

any material variable consideration.

Revenue is predominantly recognised on land sales when legal title passes to the customer. If the

Group has remaining performance obligations, such as the provision of services to the land, an

element of revenue is allocated to these performance obligations and recognised as the obligations

are performed, which can be when the works are finished if the work-in-progress is controlled by the

Group or over the performance of the works if they are controlled by the customer.

Revenue recognition on commercial property sales is dependent on freehold legal title being passed

to the customer, as it is considered that upon transfer of freehold title that the customer controls the

work-in-progress. Where freehold legal title is passed to the customer, revenue is recognised on any

upfront sale of land (where applicable) and then on the development revenue over time as the build

of the related commercial units progress. Where freehold legal title is not passed to the customer

revenue is not recognised on any upfront sale of land and the revenue on the commercial property is

recognised at handover of the completed commercial unit to the customer.

Revenue is recognised on freehold reversion sales when the customer is contractually entitled to the

ground rent revenue stream associated with the units purchased.

Revenue on specification upgrades paid for by the customer or on the cost of specification upgrades

offered to the customer as part of the purchase price is recognised as revenue when legal title passes

to the customer.

Profit is recognised on a plot-by-plot basis, by reference to the margin forecast across the related

development site. Due to the development cycle often exceeding one financial year, plot margins are

forecast, taking into account the allocation of site-wide development costs such as infrastructure, and

estimates required for the cost to complete such developments.

Other operating income

Other operating income comprises rental income, joint venture and other management fee income

and the income associated with part exchange sales. In the prior year rental income was included

within cost of sales and joint venture and other management fees was included within administrative

expenses. Part exchange income was previously presented within net administrative expenses. See

note 29 for further information.

Other operating expenses

Other operating expenses represent cost of sales of part exchange properties. In the prior year this

was included within net administrative expenses. See note 29 for further information.

Exceptional items

Exceptional items are those which, in the opinion of the Directors, are material by size and/or non-

recurring in nature such as significant costs and settlements associated with combustible materials,

significant legal matters, changes in estimate of costs associated with completed sites which are no

longer part of the core strategy, significant costs associated with corporate bid approaches and the

write down of freehold inventories. Where appropriate, the Directors consider that items should be

considered as categories or classes of items, such as any credits/costs impacting the consolidated

income statement which relate to combustible materials or certain site costs, notwithstanding where an

item may be individually immaterial. The Directors believe that these items require separate disclosure

within the consolidated income statement in order to assist the users of the financial statements to

better understand the performance of the Group, which is also how the Directors and chief operating

decision maker internally manage the business. Additional charges/credits (including reversals) to

items classified as exceptional items in prior years will be classified as exceptional in the current year,

unless immaterial to the financial statements. As these exceptional items can vary significantly year on

year, they may introduce volatility into the reported earnings. The income tax impacts of exceptional

items are reflected at the actual tax rate related to these items.

Net finance expense

Interest income is recognised on a time-apportioned basis by reference to the principal outstanding

and the effective interest rate. Interest costs are recognised in the consolidated income statement on

an accruals basis in the period in which they are incurred. Imputed interest expense on deferred land

creditors and combustible materials discounting is recognised over the life of associated cash flows.

Income and deferred tax

Income tax comprises current tax and deferred tax. Income tax is recognised in the consolidated

income statement except to the extent that it relates to items recognised in other comprehensive

income, in which case it is recognised in other comprehensive income. Current tax is the expected tax

payable on taxable profit for the year and any adjustment to tax payable in respect of previous years.

Taxable profit is profit before tax per the consolidated income statement after adjusting for income

and expenditure that is not subject to tax, and for items that are subject to tax in other accounting

periods. The Group’s liability for current tax is calculated using tax rates that have been enacted or

substantively enacted by the consolidated statement of financial position date. Current tax assets are

recognised to the extent that it is probable the asset is recoverable.

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Notes to the consolidated financial statements continued

Deferred tax is provided in full on temporary differences between the carrying amounts of assets

and liabilities in the financial statements and the corresponding tax bases used in the computation of

taxable profits.

Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available

against which deductible temporary differences can be utilised. Deferred tax liabilities are recognised

for all temporary differences. Deferred tax is calculated using tax rates that have been substantively

enacted by the consolidated statement of financial position date.

Dividends

Final and interim dividend distributions to the Company’s shareholders are recorded in the Group’s

financial statements in the earlier of the period in which they are approved by the Company’s

shareholders, or paid.

Employee benefits

(a) Pensions

The Group operates a defined benefit (DB) scheme (closed to new employees since October 2001

and to future service accrual since 30 April 2010) and also makes payments into a defined contribution

scheme for employees.

In respect of the DB scheme, the retirement benefit deficit or surplus is calculated by estimating the

amount of future benefit that employees have earned in return for their service in the current and

prior periods, such benefits measured at discounted present value, less the fair value of the scheme

assets. The rate used to discount the benefits accrued is the yield at the consolidated statement of

financial position date on AA credit rated bonds that have maturity dates approximating to the terms

of the Group’s obligations. The calculation is performed by a qualified actuary using the projected

unit method. The operating and financing costs of such plans are recognised separately in the

consolidated income statement; past service costs and financing costs are recognised in the periods

in which they arise. The Group recognises expected scheme gains and losses via the consolidated

income statement and actuarial gains and losses are recognised in the period they occur directly in

other comprehensive income, with associated deferred tax.

The retirement benefit deficit or surplus recognised in the consolidated statement of financial position

represents the deficit or surplus of the fair value of the scheme’s assets over the present value of

scheme liabilities, with any net surplus recognised to the extent that the employer can gain economic

benefit as set out in the requirements of International Financial Reporting Interpretations Committee 14.

Payments to the defined contribution scheme are accounted for on an accruals basis.

(b) Share-based payments

The fair value of equity-settled, share-based compensation plans is recognised as an employee

expense with a corresponding increase in equity. The fair value is measured as at the date the options

are granted and the charge amended if vesting does not take place due to non-market conditions

(such as service or performance) not being met. The fair value is spread over the period during which

the employees become unconditionally entitled to the shares and is adjusted to reflect the actual

number of options that vest. At the consolidated statement of financial position date, if it is expected

that non-market conditions will not be satisfied, the cumulative expense recognised in relation to the

relevant options is reversed.

The proceeds received are credited to share capital (nominal value) and share premium when the

options are exercised if new shares are issued. If treasury shares are used the proceeds are credited to

retained reserves. There are no cash-settled share-based compensation plans.

Own shares held by Employee Share Ownership Trust (ESOT)

Transactions of the Company-sponsored ESOT are included in both the Group financial statements

and the Company’s own financial statements. The purchase of shares in the Company by the ESOT are

charged directly to equity.

Software as a Service (SaaS) arrangements

Implementation costs including costs to configure or customise a cloud provider’s application software

are recognised as administrative expenses when the services are received, and the Group determines

that there is no control over the asset in development.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and accumulated

impairment losses. Cost includes the original purchase price of the asset and the costs attributable to

bringing the asset to its working condition. Depreciation is calculated to write off the cost of the assets

on a straight-line basis to their estimated residual value over its expected useful life at the following

rates:

Fixtures and fittings	10%
Computer equipment and non-SaaS software	20% to 33%

The asset residual values, carrying values and useful lives are reviewed on an annual basis and

adjusted if appropriate at each consolidated statement of financial position date.

Right-of-use assets and lease liabilities

The Group assesses at lease inception whether a contract is, or contains, a lease. The Group

recognises a right-of-use asset and a lease liability at lease commencement.

The right-of-use asset is initially recorded at the present value of future lease payments and

subsequently measured net of depreciation, which is charged to the consolidated income statement

as an administrative expense over the shorter of its useful economic life or its lease term on a straight-

line basis. The right-of-use asset is also reduced for impairment losses.

The Group recognises lease liabilities at the present value of future lease payments, lease payments

being discounted at the rate implicit in the lease or the Group’s incremental borrowing rate as

determined with reference to the most recently issued financial liabilities carrying interest. The

discount is subsequently unwound and recorded in the consolidated income statement over the lease

term as a finance expense. The lease term comprises the non-cancellable period of the contract,

together with periods covered by an option to extend the lease where the Group is reasonably certain

to exercise that option.

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that

have a lease term of 12 months or less and leases of low value assets. The Group recognises the lease

payments associated with these leases as an expense on a straight-line basis over the lease term.

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Inventories

Inventories are stated at the lower of cost and NRV.

Land includes land under development, land options purchased and land exchanged on an

unconditional basis with or without planning consent.

Work-in-progress and completed buildings including show homes comprise direct materials, sub-

contract work, labour costs, site overheads, associated professional fees and other attributable

overheads, but excludes interest costs.

Part exchange inventories are held at the lower of cost and NRV, which includes an assessment of

costs of management and resale.

Land inventories and the associated land payables are recognised in the consolidated statement of

financial position from the date of unconditional exchange of contracts. Land payables are recognised

as part of trade and other payables.

Options purchased in respect of land are recognised initially as a prepayment within inventories and

written down on a straight-line basis over the life of the option. If planning permission is granted and

the option exercised, the option is not written down during that year and its carrying value is included

within the cost of land purchased.

Provisions are established to write down inventories where the estimated net sales proceeds less

costs to complete exceed the current carrying value. Adjustments to the provisions will be required

where selling prices or costs to complete change. NRV for inventories is assessed by estimating

selling prices and costs, taking into account current market conditions.

Financial assets

Financial assets are initially recognised at fair value and subsequently classified into one of the

following measurement categories:

At amortised cost

Subsequently at fair value through profit or loss (FVTPL)

Subsequently at fair value through other comprehensive income (FVOCI)

The classification of financial assets depends on the Group’s business model for managing the asset

and the contractual terms of the cash flows. Assets that are held for the collection of contractual cash

flows that represent solely payments of principal and interest are measured at amortised cost, with any

interest income recognised in the consolidated income statement using the effective interest rate method.

Financial assets that do not meet the criteria to be measured at amortised cost are classified by the

Group as measured at FVTPL. Fair value gains and losses on financial assets measured at FVTPL are

recognised in the consolidated income statement and presented within administrative expenses. The

Group currently has no financial assets measured at FVOCI.

Financial assets at fair value through profit and loss

Financial assets at fair value through profit and loss (which comprise shared equity receivables) are

classified as being held to collect and initially recognised at fair value. Changes in fair value relating

to the expected recoverable amount are recognised in the consolidated income statement as a

finance income or expense. These assets are held as current or non-current based on their contractual

repayment dates.

Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at

amortised cost, using the effective interest method, less provision for impairment. A provision for

impairment of trade and other receivables is established based on an expected credit loss model

applying the simplified approach, which uses a lifetime expected loss allowance for all trade and other

receivables. The amount of the loss is recognised separately in the consolidated income statement.

Current trade and other receivables do not carry any interest and are stated at their amortised cost, as

reduced by appropriate allowances for estimated irrecoverable amounts. Non-current trade and other

receivables are discounted to present value when the impact of discounting is deemed to be material,

with any discount to nominal value being recognised in the consolidated income statement as interest

income over the duration of the deferred payment.

Contract assets

Contract assets represent unbilled work-in-progress on affordable and other sales in bulk on contracts

in which revenue is recognised over time. Contract assets are recognised initially at fair value and

subsequently measured at amortised cost, using the effective interest method, less provision for

impairment. Contract assets do not carry any interest and are stated at their amortised cost, as

reduced by appropriate allowances for estimated irrecoverable amounts.

Cash and cash equivalents

Cash and cash equivalents are cash balances in hand and in the bank and are carried in the

consolidated statement of financial position at nominal value.

Interest-bearing loans and borrowings

Interest-bearing loans and borrowings are recognised initially at fair value, net of direct transaction

costs, and subsequently measured at amortised cost. Finance charges are accounted for on an

accruals basis in the consolidated income statement using the effective interest method and are

added to the carrying amount of the instrument to the extent that they are not settled in the period in

which they arise or included within interest accruals.

Financial liabilities

Financial liabilities are initially recognised at fair value and subsequently classified into one of the

following measurement categories:

At amortised cost

Subsequently at FVTPL.

Non-derivative financial liabilities are measured at FVTPL when they are considered held for trading

or designated as such on initial recognition. The Group has no non-derivative financial liabilities

measured at FVTPL.

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Notes to the consolidated financial statements continued

Land payables

Land payables are recognised in the consolidated statement of financial position from the date of

unconditional exchange of contracts. Where land is purchased on deferred settlement terms then

the land and the land payable are discounted to their fair value using the effective interest method in

accordance with IFRS 9. The difference between the fair value and the nominal value is amortised over

the deferment period, with the financing element being charged as an interest expense through the

consolidated income statement.

Trade and other payables

Trade and other payables are recognised initially at their fair value and subsequently measured at

amortised cost using the effective interest method. Trade and other payables on deferred terms

are initially recorded at their fair value, with the discount to nominal value being charged to the

consolidated income statement as an interest expense over the duration of the deferred period.

Included within trade and other payables are completed site accruals.

Contract liabilities

Contract liabilities represent payments on account, received from customers, in excess of billable work-

in-progress on affordable and other sales in bulk on contracts. Contract liabilities are recognised initially

at their fair value and subsequently measured at amortised cost using the effective interest method.

Provisions

A provision is recognised in the consolidated statement of financial position when the Group has a

present legal or constructive obligation as a result of a past event and it is probable that an outflow of

economic benefits will be required to settle the obligation, and the amount can be reliably estimated.

Provisions are discounted to present value on a discounted cash flow basis using an interest rate

appropriate to the class of the provision, where the effect is material. Included within provisions are

completed site provisions.

Seasonality

In common with the rest of the UK housebuilding industry, activity occurs throughout the year, with

peaks in sales completions in spring and autumn. This creates seasonality in the Group’s trading

results and working capital.

2 SEGMENTAL REPORTING

The Executive Committee (ExCo) is accountable to the Board and has been identified as the chief

operating decision-maker for the purposes of determining the Group’s operating segments. During

the year Martyn Clark (Chief Executive), Bill Floydd (Chief Financial Officer), Joe Lindsay (Group

Commercial Director), Vicky Cullen (Group Sales and Marketing Director), Jenny Matthews (Head of

Investor Relations) and Dean Cooke (Group IT Director) joined the ExCo and Peter Truscott (former

Chief Executive) and Duncan Cooper (former Group Finance Director) left the ExCo. The ExCo

approves investment decisions, allocates group resources and performs divisional performance

reviews. The Group operating segments are considered to be its divisions, each of which has its

own management board. All divisions are engaged in residential-led, mixed-use developments in the

United Kingdom and therefore with consideration of relevant economic indicators such as the nature

of the products sold and customer base, and, having regard to the aggregation criteria in IFRS 8, the

Group identifies that it has one reportable operating segment.

3 REVENUE

	2024	2023
Revenue type	£m	£m
Open market housing including specification upgrades	493.5	550.0
Affordable housing	79.0	88.0
Total housing	572.5	638.0
Land and commercial sales	45.7	19.5
Total revenue	618.2	657.5
Timing of revenue recognition
Revenue recognised at a point in time	525.0	552.4
Revenue recognised over time	93.2	105.1
Total revenue	618.2	657.5
Assets and liabilities related to contracts with customers
Contract assets (note 17)	7.6	6.9
Contract liabilities (note 21)	(6.9)	(6.0)

Contract assets have increased to £7.6m from £6.9m in 2024, reflecting more unbilled work-in-

progress on affordable and other sales in bulk at the year end. This is in line with the trading of the

Group and the contractual arrangements in the Group’s contracts. Contract liabilities have increased

to £6.9m from £6.0m in 2024, reflecting a higher amount of payments on account received from

customers in excess of billable work-in-progress on affordable and other sales in bulk on contracts on

which revenue is recognised over time.

Based on historical trends, the Directors expect a significant proportion of the contract liabilities total

to be recognised as revenue in the next reporting period.

Included in revenue during the year was £2.9m (2023: £16.1m) that was included in contract liabilities at

the beginning of the year.

During the year £nil (2023: £nil) of revenue was recognised from performance obligations satisfied or

partially satisfied in previous years.

As at 31 October 2024 there was £151.9m (2023: £229.1m) of transaction price allocated to

performance obligations that are unsatisfied or partially unsatisfied on contracts exchanged with

customers. Forecasts recognise £111.3m (2023: £114.3m) of transaction prices allocated to performance

obligations that are unsatisfied on contracts exchanged with customers within one year, £40.6m (2023:

£112.0m) within two to five years, and £nil (2023: £2.8m) over five years.

117

Crest Nicholson

Annual Report and Accounts 2024

Financial StatementsStrategic Report Governance

Notes to the consolidated financial statements continued

4 EXCEPTIONAL ITEMS