Countryside Partnerships is hoping for a bumper second half to enable it to meet its profit target of £150m.
Completions, profit and earnings per share have all slumped over the past six months, but the housebuilder is sticking with its full-year forecast as it works to improve performance.
The company has reported a £184.5m operating loss over the period, down from an operating profit of £24.7m for H1 2021. Basic earnings per share fell from 6.1p to -30.5p.
Adjusted operating profit for the six months to the end of March stood at £46.9m, a 40% drop from the £78.6m reported in 2021. Adjusted basic earnings per share fell from 11.1p to 5.8p.
The difference between adjusted and reported results reflects the proportional consolidation of Countryside’s joint ventures and associates and the exclusion of £218m of adjusting items, including its Fire Safety Pledge commitments of £109m and £72m arising from its 2018 acquisition of Westleigh.
Completions also suffered, with 1958 homes built, against H1 2021’s 2,591. Revenue was around 10% lower, down from £661m to £602m.
Chair John Martin said: “We have taken significant steps to improve operational performance, augment controls and manage our cost base to enhance returns and cash generation. We are delighted with the quality and scale of new bids we have won and invested in during the first half, further strengthening our significant pipeline for profitable growth. We expect continued momentum as we move through the rest of this year and into next.”
The board said it was sticking by adjusted operating profit expectations for the full year of approximately £150m, but that would include “a significant profit growth in the second half”.
It added that the results for the six months ended 31 March 2022 “are measured against an unusually strong comparative period in HY 2021”, which benefitted from the deferral of 1,119 completions from the second half of the previous year.
But there was cause for optimism, it said. Performance in the second quarter of the year showed improvement over the first, which was impacted by delays to starting on a number of sites. It also suffered from “operational challenges, including groundworker, timber-frame and roofing contractor issues”.
In January, the company announced that CEO Iain McPherson was to step down and chair John Martin would assume the role on an interim basis, while conducting a review of the operational sites. That review has now been completed, with the housebuilder blaming the botched integration of Leicester-based Westleigh for the losses.
Martin will now return to his role of chair, while Mike Woolliscroft, CEO partnerships South, and Phil Chapman, CEO partnerships Home Counties, will jointly lead the business until a new CEO is able to join the group.
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