JP Morgan Cazenove starts Countryside Properties at 'overweight'

It said the company was differentiated from its UK housebuilding peers by its higher growth aspirations and its Partnerships business, where it is a market leader in public-sector housing redevelopment.

“We view the group’s aspiration to grow sales volumes by c50% by 2018 as well underpinned, by both its land bank and current contracts,” the bank said.

It pointed out that since the initial public offering, Countryside has been very successful in wining Partnerships contracts, which it reckons could drive medium-term upside to its earnings expectations.

The bank values the group at 280p per share on a sum-of-the-parts basis due to the differing capital requirements and risk profiles of its two divisions.

JPM values the housebuilding business at £594m and the Partnerships arm at £624m.

“Given we believe recent contract wins could drive earnings upside, we view H1 results on 18 May as a potential catalyst,” it said.

At 0940 GMT, Countryside shares were up 1.1% to 235.00p.