Countryside Properties swung to a pre-tax profit over the past year, on the back of an increase in homes sold and rising selling prices.
The housebuilder posted a pre-tax profit of £85.4million for the year ending 30 September, against a loss of £1.9million a year ago.
Revenue rose to £1.37billion, up from £892million a year earlier. The group’s average selling price increased by 4 per cent to £380,000, up from £364,000 the year before.
Upturn: Countryside Properties swung to a pre-tax profit over the past year, on the back of an increase in homes sold and rising selling prices
It said the upturn in selling prices had been driven by house price inflation of 2.6 per cent and its focus on building new homes in the south of England, where property prices are often higher than elsewhere in the country.
The group said house price inflation in its forward order book stood at around 6 per cent, against 2 per cent the previous year.
It added that the selling prices of its properties in the ‘affordable’ homes category had increased by 7 per cent to £161,000 year-on-year.
Shares in FTSE 250-listed Countryside have fallen sharply today and are currently down 7.32 per cent or 32.20p to 407.60p. A year ago the share price was 427.40p.
The group said it bolstered total completions by 33 per cent to 5,385 homes over the period, against 4,053 homes the year before.
Countryside said the increase in completions was ‘driven by a strong increase in private delivery, where completions were 65 per cent higher than last year at 2,394 homes (2020: 1,454 homes) as we completed on homes deferred as a result of Covid from the prior year.’
It said it will continue to see supply side ‘constraints’ generating inflationary pressure, but added that there was ‘strong demand across all tenures with house price inflation offsetting much of the build cost inflation.’
The company’s board opted not to declare a final dividend, stating it planned to continue to invest in its partnerships business.
The group said: ‘Given the excellent opportunities for us to invest in the Partnerships business, the Board does not recommend the payment of a final dividend in respect of 2021 performance.’
Completions: Countryside’s completions increased to 5,385 homes over the period
In March 2021, the Competition and Markets Authority announced it had started the consultation stage of its inquiry into the sale of leasehold properties.
Today, Countryside said: ‘In September 2021 we announced we had agreed voluntary undertakings with the CMA where we would seek to address all leases where the ground rent doubled more frequently than every 20 years either directly or through negotiations with the current freeholder, a positive outcome for affected leaseholders.’
The group said it had also set aside millions of pounds to cover remedial cladding works.
It added: ‘The quality of the homes that we build is a central tenet of our strategy and is of paramount importance to us and our customers.
‘Since the Grenfell Tower fire, there has been considerable analysis of the impact of cladding and fire safety issues in multi-occupancy tall buildings. We have examined all buildings developed by Countryside over the last 15 years and identified 69 buildings across 17 sites where remedial works are required to bring them in line with current building regulations.’
‘As a result, we have established a provision of £41million to cover the cost of remedial works and losses suffered by building owners where it is identified that the works are necessary because we fell short of our high standards at the time of construction.’
Iain McPherson, the group’s chief executive, said: ‘We have achieved a strong recovery from Covid, with adjusted revenue growing by 54 per cent, with a continued focus on quality of delivery.
‘This is testament to the effort and commitment of our employees and the strength of our relationships with our partners.
‘After a strategic review of the business, we have the structure and the team to continue to grasp the compelling opportunity that is ahead of us. This will see us create places people love, whilst delivering strong growth and attractive returns for shareholders over the medium term.’
John Martin, chair of Countryside, said: ‘Countryside is uniquely positioned to fulfil the considerable demand for homes in mixed-tenure developments and we believe that this represents a multi-year growth opportunity.
‘We have made significant investments to align our resources – both capital and people – with this market opportunity and we believe that this will generate attractive returns for our shareholders in a sustainable, low-risk way.’
Countryside said it expects adjusted operating profit in the range of £200million to £210million for fiscal 2022.
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