HOUSEBUILDER Crest Nicholson has had a stellar return to the stock market, seeing its shares rise 15.9% on their first day of trading nearly six years after it was taken private by Ayrshire entrepreneur Sir Tom Hunter and Bank of Scotland.
The 50-year-old firm priced its shares at 220p, the upper half of its original 195p to 230p range.
The listing raised £225 million, with £169m going to existing shareholders, including Varde Investment Partners and Deutsche Bank, and another £56m to the company to pay down debt and buy more land. After its shares gained 35p to close at 255p, Crest was left with a market value of £641m.
Sir Tom and Bank of Scotland bought Crest in May 2007, the peak of the housing market, for £715 million but its £1.1 billion of debt weighed on it as the housing market plunged.
After two sets of debt restructurings, the company landed in the hands of US distressed investment fund Varde Partners in 2011.
Stephen Stone, chief executive of Crest Nicholson said: "We are delighted that our initial public offering has been successful and there has been strong interest from investors.
"This is the first significant IPO (initial public offering) of 2013 which bodes well for our industry and the wider market.
"Having spent 39 of our 50 years as a listed company, we look forward to re-joining the public markets."
The company, focused on the buoyant housing markets of southern England, has returned to financial health, posting annual pre-tax profit of £62.1m for the year to October 31, 2012, after a £27m loss in 2011.
Robin Hardy, analyst at Peel Hunt, wrote in a note for clients: "There are many things to like about Crest Nicholson: a heavy bias towards the true South East/Home Counties markets; it is closely aligned with government, which is rainmaker in this cycle; there is a drive for productivity gains, unheard of in this sector; it benefits from higher design standards; it has a long (nine-year) land bank."
Crest's flotation has seen the company recruit as senior independent director Jim Pettigrew, currently a non-executive director at Aberdeen Asset Management and Clydesdale Bank and chairman of Edinburgh Investment Trust.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article