14th May 2020 10:09
(Alliance News) - Countryside Properties PLC on Thursday reported a sharp drop in interim profit and has seen a significant fall in reservations amid the coronavirus pandemic.
Shares in the housebuilder were down 14% in London on Thursday at 317.20 pence each, the biggest faller in the midcap index.
In the six months to March 31, Countryside's pretax profit slumped 38% to GBP43.7 million from GBP70.3 million the year before.
Operating profit is down 32% year on year to GBP41.0 million from GBP60.2 million.
Revenue slipped 5.1% to GBP481.2 million from GBP507.0 million.
Completions in the first half fell 4% to 2,271 from 2,362.
Chief Executive Iain McPherson said: "The first half ended in a period of significant uncertainty for all of us. Our first priority was to protect our staff, customers, supply chain and the general public and we took the decision to temporarily suspend production on our sites and in our factories. The business had been performing well and our construction programmes were on track for full year delivery. We were proud to achieve HBF Five Star Builder status for the first time in the group's history."
Countryside's net reservation rate in the first half improved to 0.93 per open sales outlet per week, up from 0.86 a year before. The firm's average private selling price declined to GBP368,000 from GBP377,000.
McPherson continued: "As we move into the second half of the year, we have cautiously restarted construction on around 80% of our sites albeit with significantly reduced build rates as we adjust to new ways of working. We welcome the revised guidance from government allowing anyone looking to move home to be able to do so. Whilst the market outlook remains highly uncertain, our resilient mixed-tenure business model and strong forward order book benefit us both operationally and financially as we work alongside our partners to restart our operations as efficiently as possible."
Countryside estimates around 184 completions, including 79 private sales, were lost due to the Covid-19 lockdowns. The firm also saw lowered construction activity, which resulted in the cancellation of five land sales.
As a result, the housebuilder said it lost revenue of about GBP116 million, with an operating profit hit of GBP29 million.
Countryside has suspended its dividend payments.
The housebuilder began a phased return to construction activity on May 11, but has seen "significantly" lower private reservations.
"We have sufficient liquidity for the foreseeable future with our existing GBP300 million revolving credit facility and a further GBP300 million through our commercial paper programme to facilitate access to the Covid Corporate Financing Facility," Countryside added.
By Paul McGowan; [email protected]
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