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Countryside into the red on fire safety pledge

Comparisons with the previous half-year are distorted
Countryside into the red on fire safety pledge
  • Still in search of a chief executive
  • Signing of the 'fire safety pledge'

There were few details in Countryside Partnerships’ (CSP) full-year figures that weren’t foreshadowed in its April trading update. It would be unfair to suggest the urban regeneration specialist is in a state of flux, but the group remains on the lookout for a permanent chief executive. Countryside’s chairman, John Martin, took the reins on an interim basis, but after he successfully completed a review of all the group’s operational sites, two divisional heads have been tasked with the top job until a permanent appointment is made.

Adjusted revenue decreased by 12.7 per cent to £659mn, although there was an enhanced contribution to gross profits from land and commercial sales (further such sales are expected to complete in the second half, in line with the partnerships business model).

Nevertheless, the group booked an interim operating loss of £185mn, largely a consequence of fire safety provisions and an impairment of intangible assets. After giving its support to the government’s proposed ‘fire safety-pledge’ – an effective industry prerequisite to avoid reputational damage in the wake of the Grenfell Tower disaster – the housebuilder has provided a further £109mn in remediation costs on buildings developed by Countryside over the past 30 years.

Completions were down by around a quarter on an “unusually strong” 2021 comparator, which was buoyed by a sizeable number of deferrals from the second half of the prior year, so we shouldn’t read too much into the contrasting year-on-year fortunes. The ripple effects of the pandemic took a while to dissipate. Countryside’s share price is about two-thirds that of the consensus target, while the shares change hands at a modest 11 times forecast earnings. At this stage, however, it is difficult to gauge the likely impact of rising interest rates on the commercial housing sector. Hold.  

Last IC view: Hold, 496p, 13 May 2021

COUNTRYSIDE PARTNERSHIPS (CSP)   
ORD PRICE:221pMARKET VALUE:£ 1.1bn
TOUCH:221-222p12-MONTH HIGH:580pLOW: 218p
DIVIDEND YIELD:NILPE RATIO:NA
NET ASSET VALUE:181pNET DEBT:6.7%
Half-year to 27 MarTurnover (£mn)Pre-tax profit (£mn)Earnings per share (p)Dividend per share (p)
202066138.86.10nil
2021602-182-30.5nil
% change-9---
Ex-div:-   
Payment:-