Countryside Properties (CSP) delivered a strong performance in the six months to March 2018, and provided evidence to suggest that the housebuilding sector is alive and well. Private completions rose by 23 per cent to 773 homes, while average selling prices were down 11 per cent at £392,000 reflecting an increase in private completions from within its partnership business. The key point here is that underlying house price inflation was around three per cent, which just about covered build cost inflation of 3-4 per cent. In fact, adjusted operating margins grew from 16.3 per cent to 17.2 per cent, while the return on capital employed rose from 25.8 per cent to 27.9 per cent.
The partnership business is the biggest revenue generator, and involves working with a local authority to build a mix of affordable homes and private dwellings. Private completions jumped by 35 per cent to 482, while affordable completions were up 10 per cent at 690. Average selling prices on affordable homes rose 5 per cent to £129,000.
After the reporting period, Countryside bought partnership business Westleigh for £135.4m out of existing resources. Operating in the East Midlands, this will allow Countryside to broaden its geographical reach. The plan is to increase output at Westleigh from 1,200 a year to around 3,000 a year over the next five years.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to September 2018 of £194m and EPS of 35.3p (from £150.9/27.6p in 2017).
| COUNTRYSIDE PROPERTIES (CSP) | ||||
| ORD PRICE: | 373.2p | MARKET VALUE: | £ 1.68bn | |
| TOUCH: | 373.2-373.8p | 12-MONTH HIGH: | 387p | LOW: 291p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 159p | NET CASH: | £13.7m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 351 | 60.3 | 11.1 | 3.4 |
| 2018 | 399 | 73.7 | 13.6 | 4.2 |
| % change | +14 | +22 | +23 | +24 |
| Ex-div: | 24 May | |||
| Payment: | 06 Jul |
