(Alliance News) - Shares in Countryside Partnerships PLC dropped on Thursday after a profit warning and the results of an operational review which found "execution-related" failures.
Shares in the Brentwood, England-based firm were down 12% at 246.00 pence each on Thursday morning in London.
The UK housebuilder and urban regeneration firm said that adjusted revenue fell 13% to GBP658.6 million in the six months to March 31, from GBP755.0 million a year before.
Adjusted operating profit dropped 42% in the period to GBP45.6 million from GBP78.6 million a year before.
Countryside blamed this on an "unusually strong" comparative period with the first half of financial 2021. The results for the comparable period include operating profit of GBP30 million for the sale of 1,000 homes, which had been delayed from the second half of financial 2020 due to Covid-19, it explained.
Further, the results from this period were hurt by one-off charges that amounted to GBP10.1 million.
As a result, adjusted operating profit for the year ending September 30 is expected to be roughly GBP150 million, down 10% from GBP167 million the year before.
Countryside said that it has completed a review of its site operations, in which it identified several areas where it can improve performance.
It plans to build a "strong and sustainable" business in the north, as the region has experienced "significant" operational challenges.
The company also noted that its expansion into new regions has been "too ambitious." It has already taken action to consolidate regional resources, reduce costs and create a strong platform for growth.
"It is now apparent that the group could not manage expansion at this rate, particularly due to the constraints of the supply chain. Management announced a review of the Chilterns region in the autumn and we will now merge this team with the adjacent regional teams to allow us to focus our resources most effectively," Countryside stated.
The firm said its issues are "primarily execution-related" and "solvable".
The review identified no concerns with Countryside's pipeline of new opportunities. The company emphasised that it has a strong pipeline that should support significant growth in years to come.
The housebuilder also said it has signed the UK government's fire-safety pledge. It plans to meet the costs for remediating buildings currently proposed to be remediated through the Building Safety Fund or ACM funds. This currently amounts to GBP24 million.
"After conducting a review of all operational sites, management has identified a number of areas where we can raise our game and our team is moving quickly to improve performance. There remains significant market demand for our homes and we did not identify any competitive issues during our review. Large parts of the group continue to perform strongly, building high-quality, affordable homes and developing places people love as a trusted partner of local authorities, registered providers and private rented sector investors," Interim Chief Executive & Chair John Martin said.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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