Countryside “well positioned” for growth
Countryside has seen its mixed-tenure housing model prove resilient this year in the face of the Covid-19 pandemic and the firm has continued to see strong demand for all tenures of housing.
In a trading statement covering the year ending September 30, Countryside said it completed 4,053 homes (2019: 5,733 homes) of which 1,454 were private (2019: 2,177 homes), 1,691 were affordable (2019: 2,179 homes) and 908 were for the private rental sector (2019: 1,377 homes). The firm was active on a total of 124 sites as at September 30 2020 (2019: 137 sites) of which 62 were open selling outlets (2019: 58).
Countryside said that, despite the national lockdown, private sales activity remained robust throughout the year. Its net reservation rate was 0.78 for the full year (2019: 0.84) which was “at the upper end” of the group’s target range of 0.6 to 0.8, despite an elevated cancellation rate due to customer uncertainty caused by Covid-19. “The healthy levels of activity seen earlier in the year gradually returned as we reopened in June 2020 and since then we have seen a sustained period of demand during the summer as the market recovered from the lockdown,” the statement says.
Countryside ended the year delivering adjusted operating profit of approximately £54 million, in line with the Board’s expectations. Private average selling price (ASP) was £364,000 (2019: £367,000) and the group’s total forward order book is up 17% at £1.4 billion (2019: £1.2 billion). Its private forward order book stands at £528 million, 119% higher than the same period last year (2019: £241 million) “partly as a result of homes completing later than originally planned due to Covid-19. In addition, our affordable and PRS order book has been maintained at £0.9 billion despite our increased focus on delivering these tenures through the second half of the year.”
Iain McPherson, Countryside group chief executive, said: “We have seen significant disruption to our business this year as a result of Covid-19 and I would like to thank all our staff for the way they have adapted to new ways of working in these unprecedented times. We have been pleased by robust customer demand throughout the second half and our mixed tenure model continues to prove resilient, positioning us well in the current market. We are focused on delivering our enhanced growth plan, building on our strong pipeline of work and our relationships to further expand our geographical footprint. We will continue to work with our partners to deliver sustainable communities across the country.”
Countryside’s Housebuilding division delivered total completions of 840 homes (2019: 1,308 homes) in the year. Overall, its land bank stood at 25,042 plots at September 30 2020 (2019: 24,303). “As we reposition the Housebuilding division to be more balanced around London and continue to manage our exposure to higher price points in the south east, we have announced the merger of our Millgate business with our existing Housebuilding West region and the closure of the Millgate offices in Twyford as we combine the regional teams.”
Countryside has signed two new framework agreements in Q4 including the expansion of its partnership with Sigma, alongside its new investment partner EQT Real Estate, to deliver 367 homes as the initial phase of a larger London PRS framework. In addition, Countryside signed a new PRS framework agreement with Goldman Sachs to deliver up to 1,000 PRS homes over the next three years. This will initially include 410 homes across three sites in Bicester.
Countryside has invested £20 million in a second modular panel factory in Bardon, Leicestershire, which is set to become operational in Autumn 2021. Once fully operational in 2022 it is expected to have the capacity to deliver more than 3,000 homes per year.