Trading Statement

Crest Nicholson PLC
23 November 2005


                                                              23rd November 2005

                              Crest Nicholson PLC
                           Year End Trading Statement

Crest Nicholson PLC (Crest) the residential and mixed use development company,
is providing the following trading update in advance of its results for the year
ended 31st October 2005 expected to be announced on 25th January 2006.

Commenting today, Stephen Stone, Chief Executive said:

"Trading for the full year 2005 has been in line with our expectations. We are
pleased with our volume performance in both open market and affordable housing.
The fundamentals of the housing market remain good and we enter the 2006 year
with forward sales 13% higher than a year ago. Our focus now is to build on our
excellent reputation for urban regeneration and to drive shareholder returns by
combining the design excellence of our current product offering with improved
cost effectiveness."

HOUSING

Against a background of challenging market conditions, open market housing
completions rose by about 3% in 2005, slightly higher than we predicted at the
interim stage.

As expected, completions of affordable units sold to housing associations were
lower than in 2004 but we ended the year with over 600 completions, well ahead
of the 550 units predicted in our interim announcement.

The average selling price rose by about 5% to around £220k due to the mix effect
of lower volumes of affordable units sold.

Forward sales at the financial year end were around 13% up on 2004.

MIXED USE COMMERCIAL

As anticipated, commercial property sales from our mixed use schemes grew
strongly and ended the year over 30% higher than in 2004. The revenue increase
reflects construction progress on offices and retail properties at Bristol
Harbourside and Riverside in Hemel Hempstead which were presold in 2004.

LAND SALES

Land sales continue to be an integral part of Crest's method of operation as our
strength in land buying and planning enables us to secure more developable land
than we need for our own production requirements. As planned, the land sale
programme for 2005 exceeded 2004 levels and was similar to that achieved in
2003.

OPERATING MARGINS

As flagged at the interims, operating margins for the 2005 year as a whole were
a little over 1% lower than in 2004 reflecting higher sales discounts and
incentives, modest build cost inflation and increased mixed use commercial
sales.

LAND BANKS

We adopted a more cautious and selective approach to land buying in 2005 and
have maintained the short term land bank at around the October 2004 level.

CHANGES IN FINANCIAL STRUCTURE AND ACCOUNTING POLICIES

On 2nd November 2005, the 5.5% Cumulative Redeemable Preference Shares of £38m
were repaid at par. The preference shares were no longer convertible and would
have been categorised as borrowings under International Financial Reporting
Standards (IFRS) which Crest adopt for the 2006 financial year. The repayment of
the preference shares has converted non tax deductible preference dividends into
tax deductible interest charges. While this reduces pretax profit by around £2m,
repayment enhances earnings.

A thorough review of Crest's accounting policies has been performed to coincide
with the implementation of IFRS in 2006. As a result, with effect for 2006,
revenue on housing units will be recognised upon legal completion rather than
upon build completion as at present.

Crest sees operational and cash flow advantages in bringing the revenue
recognition point into line with cash collection and this change also brings
Crest into line with its listed peer group.

If implemented in 2005, recognising housing revenue on legal completion would
have increased profits by over £10m because of the unusually high numbers of
apartments which were exchanged and build complete at the 2004 year end but were
not legally completed until 2005. At the 2005 year end there was no such
bunching of apartment build completions, so while the 2005 year would have
benefited from recognising revenue on legal completion rather than on build
completion, it is probable that the change in policy will have a negative effect
of about 100 units in 2006.

Nevertheless, Crest believes that implementing IFRS and the change to legal
completion in the same year is in the best interests of shareholders.

BUSINESS DEVELOPMENT AND IMPROVEMENT

We are recognised as a market leader in urban regeneration and we intend to
build on this base. Engaging with the public sector to bring large urban
regeneration projects into production is, however, a lengthy process, the
benefits of which will be more clearly seen in 2007 and later years.

Establishing a leading position in urban regeneration has required significant
investment both in product and overhead as we have tested a wide range of
designs and built up skills to deliver bespoke solutions which meet local and
national planning and design objectives. We are now working to extract maximum
benefit from this investment and to eliminate cost through simplification of our
product range. We expect this to enhance future shareholder returns by combining
the design excellence of our current product offering with improved cost
effectiveness.

MARKET OUTLOOK

The housing market continues to be stable but customers remain cautious. In
2006, we expect open market housing market conditions to be similar to 2005 and
we expect our affordable homes business to grow to around 900 units.

The fundamentals of the housing market remain good with low unemployment and a
continuing shortage of housing supply in our main areas of operation in Southern
England and the Midlands.

Enquiries to:

Stephen Stone, Chief Executive 
Peter Darby, Finance Director 
Crest Nicholson PLC 
Tel: [phone] (day of announcement) 
Tel: [phone] (thereafter)

Andrew Fenwick/Kate Miller
Robert Gardener
Brunswick Group LLP
Tel: [phone]


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