Countryside Properties (CSP) has been around since 1958 and was taken into private ownership in 2005, before floating on the London Stock Exchange in February of this year. Half-year results to March contained all the upbeat metrics associated with a buoyant housebuilding sector, but there were also targets to deliver 3,600 completions annually in the medium term (against 1,095 in the first half), together with an adjusted operating margin of 17 per cent and a 28 per cent return on capital employed (ROCE) by 2018.
But where Countryside differs from its peers is in the make-up of its revenue stream, with nearly half of adjusted operating profits coming through its partnership agreements with local authorities and housing associations. The latter may seem like dull work, but with more completions in the south of the country, adjusted operating profits jumped 42 per cent to £23.1m, and the ROCE grew 840 basis points to a remarkable 50.6 per cent. And while private unit completions rose by a modest 6 per cent to 444 units, a 60 per cent rise in completions through the premium Millgate brand lifted average selling prices by nearly a half to £505,000.
Affordable completions including the private rental sector grew by 43 per cent to 611 units, although with more completions in the north of England, average selling prices decreased by 6 per cent to £109,000. Buyer demand has been accelerated by the government's Help to Buy scheme, and while overall forward sales rose just 4 per cent, albeit to a record £205m, this was up against some tough comparatives from the previous year.
In the Partnerships division, Countryside has been named as preferred bidder on eight sites, adding 4,703 units and taking the total pipeline to 7,188, up from 3,111 a year earlier. On top of this, the group is actively bidding for work on more than 30,000 units.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to September 2016 of £90m and EPS of 16.3p (from 34.6m and 5.9p in 2015).
| COUNTRYSIDE PROPERTIES (CSP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 252p | MARKET VALUE: | £1.13bn | |
| TOUCH: | 252-253.25p | 12-MONTH HIGH: | 261p | LOW: 222p |
| DIVIDEND YIELD: | nil | PE RATIO: | 43 | |
| NET ASSET VALUE: | 121p | NET DEBT: | 2% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 223 | 12.1 | 1.7 | nil |
| 2015 | 286 | 18.1 | 3.1 | nil |
| % change | +28 | +50 | +82 | - |
Ex-div:- Payment:- | ||||
