Countryside Properties Q1 completions lifted by affordable housing

Housebuilder and urban regenerator Countryside Properties posted a jump in first-quarter completions on Thursday as affordable housing provided a boost.

In the 13 weeks to 31 December 2018, total completions rose 28% to 1,094 homes, while the total order book was up 78% to £946m. Countryside said its adjusted operating margin was in line with expectations and net debt was better than expected at £12m, versus net cash of £65m the year before.

Completions growth was driven by a sharp increase in affordable homes, which were up 52% to 413 homes, and private rental sector, up 66% to 341 homes. This was thanks to the acquisition of Westleigh and the expansion of the company's PRS framework agreement with Sigma.

Private for sale completions were lower in the quarter, however, at 340 homes versus 376 in 2018, due to the phasing of completions in Partnerships in both the current and prior year.

Countryside's net private reservation rate slowed in December and as a consequence was 0.63 for the quarter compared to 0.70 the year before.

In the partnerships division, completions increased 35% to 850 homes, driven by the additional 249 homes from the Westleigh acquisition. Meanwhile, the total forward order book was 115% higher at £659m.

Countryside said it had a very strong quarter for new business, with 5,613 additional plots secured including 2,170 plots at Cambridge Road, Kingston upon Thames, with enhanced planning adding an additional 900 plots at Acton Gardens, London.

The total secured land for the partnerships division now stands at 34,254 plots compared to 19,756 in 2018.

In the housebuilding segment, completions in Q1 were up 9% to 244 homes, driven by a 30% increase in private completions to 164 homes. The total forward order book was 27% higher at £286m, while the land bank reduced slightly to 19,649 plots from 20,118 as it continues to utilise its strategic land bank.

"We have performed well in Q1, in line with our full year expectations, with lower private completions being replaced with strong growth in PRS and affordable," the company said. "While the political backdrop remains uncertain, our mixed tenure delivery model helps us meet the demand for homes of all tenures and leaves us well positioned to meet our medium term guidance."

At 0920 GMT, the shares were down 0.5% to 325.49p.

Numis said: In our view this is a solid statement and the growth in the business is impressive relative to the wider sector which is forecast to show revenue growth in 2019 of 4%. Whilst we expect a larger H2 weighting to results in 2019, this reflects the timing of site openings and this is reflected in the strength of the forward order book."