Coun­try­side boss ‘per­plexed’ as 11pc wiped off share price

The Daily Telegraph - Business - - Business - By Jack Tor­rance

THE boss of prop­erty de­vel­oper Coun­try­side played down con­cerns about the com­pany’s prospects yes­ter­day after a warn­ing of weaker con­fi­dence among some home­buy­ers wiped nearly 11pc off its shares.

In an oth­er­wise up­beat full-year trad­ing up­date, the FTSE 250 com­pany said it had seen signs of “a more sub­dued tone” among so-called dis­cre­tionary buy­ers – those who al­ready own a home – after a slow­down in the sec­ond-hand mar­ket.

While most of its pri­vate home sales are to first-time buy­ers and the com­pany has a large af­ford­able hous­ing divi­sion that sells to lo­cal coun­cils, the warn­ing came as a red flag to in­vestors, who sent its shares down 34.2p to 282.2p yes­ter­day.

Ian Sut­cliffe, the chief ex­ec­u­tive, said he was “per­plexed” by the re­ac­tion, adding: “We think we had a re­ally great set of re­sults. The sec­ond-hand mar­ket has clearly been slow­ing, so where peo­ple are trad­ing up or trad­ing down, it’s made that process slower and in some cases made buy­ers more cau­tious.

“But I don’t want to over­sell that – I just want to make the point that if the wider econ­omy does get into dif­fi­cul­ties over the next six or 12 months, that area of the busi­ness will be im­pacted like ev­ery­body else.”

Coun­try­side built 4,295 homes in the 12 months to Septem­ber, up 27pc on the pre­vi­ous year, and ended the year with net cash of £45m, well ahead of man­age­ment’s ex­pec­ta­tions. While for­ward pri­vate sales were down 11pc at £215m, the value of its over­all or­der book soared 40pc com­pared with last year to £900m as it picked up more work in its part­ner­ships divi­sion.

Its av­er­age sales price in the year fell 7pc to £402,000 but rose 2pc on an un­der­ly­ing ba­sis.

Mr Sut­cliffe said the dis­crep­ancy was due to the com­pany’s ac­qui­si­tion of Le­ices­ter-based com­peti­tor Westleigh and a new of­fice in the West Mid­lands, which meant pricier homes in the South ac­counted for a smaller pro­por­tion of those sold.

The warn­ing prompted an­a­lysts at Peel Hunt to cut their full-year profit fore­cast by 10pc to £215m.

Ian Sut­cliffe, the chief ex­ec­u­tive of Coun­try­side, said ‘we think we had a re­ally great set of re­sults’

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