Countryside Properties reported results slightly ahead of market expectations on Tuesday, but its share price was taking a hit as its revised its forecasts downwards due to a wind-down in housebuilding.
The FTSE 250 company reported a 54% improvement in adjusted revenue to £1.53bn, while adjusted operating profit rocketed 209% to £167.3m for the 12 months ended 30 September.
Its adjusted basic earnings per share were 220% higher at 23.7p, and its return on capital employed was 11.5 percentage points higher at 18.6%.
Completions for the year were 33% ahead of the prior year at 5,385.
Due to “excellent opportunities” for the company to invest in its partnerships division, the board said it was not recommending a final dividend.
Looking ahead, the company said it was 48% forward sold for 2022, including £426m from private sales as at 30 September, with a private net reservation rate in the nine weeks to 28 November of 0.94.
As the growth plans it set out last year were progressing, and the company’s “attractive market conditions” were expected to continue, it said it was expecting to deliver adjusted operating profit in the range of £200m to £210m in the 2022 financial year, including a £40m contribution from legacy housebuilding operations.
“We have achieved a strong recovery from Covid, with adjusted revenue growing by 54%, with a continued focus on quality of delivery,” said group chief executive Iain McPherson.
“This is testament to the effort and commitment of our employees and the strength of our relationships with our partners.”
McPherson said that, after a strategic review of the business, the company had the structure and the team to continue to grasp the “compelling opportunity” ahead.
“This will see us create places people love, whilst delivering strong growth and attractive returns for shareholders over the medium term.”
Analysts at Numis noted that Countryside’s new EBIT target of £200 to £210m for 2022 was down from its previous expectations for £249m.
“These reductions reflect lower expected profit from the legacy housebuilding division and also a one-year shifting to the right in our partnerships forecasts, including the benefit of the new Homes County division,” Numis said.
“Beyond this timeframe, Countryside anticipates growing profits at 10% to 15% per annum.
“Offsetting these lower forecasts is the remaining £400m share buyback by 2023, which results in our 2024 earnings per share forecast of 47p; previously 56p.”
At 0903 GMT, shares in Countryside Properties were down 5.37% at 416.2p.
