Countryside eyes break-up after slump into loss

Aaron Morby 4 years ago
Share

Countryside Properties has appointed advisers to look into breaking up its house building and partnership business after reporting a £1.9m loss in the year to September.

Iain McPherson, group chief executive, says Partnserships arm can deliver sector leading growth
Iain McPherson, group chief executive, says Partnserships arm can deliver sector leading growth

A simmering row between the board and major US shareholder Brown West, which owns a 9.4% stake, went public this morning after the lacklustre performance.

Browning West founder and chief investment officer Usman Nabi had been calling for the business to be spilt into two parts to allow the Partnership business to thrive.

This morning Countryside revealed that over the year to September, completions dropped by 29% to around 4,000 units, depressing revenue by a similar percentage to £988m.

Iain McPherson, group chief executive, revealed this morning that the board had appointed Rothschild to advise on the separation of the house building business from the Partnerships arm now seen as the crown jewels of the group.

He said: “Since July, we have been accelerating the growth plans as we progress towards our goal of delivering 10,000 homes in our Partnerships division.

“As more capital is allocated to Partnerships we are reorganising the business to facilitate a future separation of the house building division to optimise long-term shareholder value.

“We are on track to deliver sector leading volume growth and high returns in Partnerships.

“We have signed a number of significant new framework agreements, our expansion into new regions is progressing well and our second modular factory is underway, all of which underpins our confidence in delivering mixed-tenure homes across the country.

“Our record forward order book, growing geographical footprint and strong balance sheet, provides a significant platform for our next phase of growth.”

Yesterday shareholder Browning West went public with its concerns that house building was draining the Partnership of vital capital needed to deliver its full growth potential.

Nabi said: “We strongly believe that partnerships can deliver tremendous value to its shareholders, employees, and customers,” he said in a letter to directors.

“We do not think it is unreasonable to suggest that a stand-alone Partnerships business could deliver nearly a ten-fold return for shareholders over the next ten years.”

“However, shareholders must insist on excellence from the board, and the board must act now to implement our plan, which we believe will place Countryside on a far stronger trajectory than the status quo.”

Nabi is seeking a position on the board to help to find a new chairman, after Countryside also revealed that David Howell, non-executive chairman, had informed the board of his intention to step down during 2021.

In a response to a letter from Browning West, Countryside’s non-executive directors confirmed that the board has appointed Rothschild & Co to advise on the ‘best time and process to realise best value from the separation of house building from the group”.

In the letter, the directors expressed dismay that Nabi had decided to go public setting up a website highlighting his call for a strategic rethink at the housing business.

“We regret that you choose to launch a public campaign against Countryside and its board rather than continue to engage with us in a constructive dialogue.

“It is clear that had you waited for one more day until it was appropriate to share these latest developments with you and other shareholders at the same time, you would have seen that out board has put in motion many of the very things that you have recently raised.”

Latest news

26 face fight to renew spots on £1bn NEPO civils deal

Next generation framework to start in March 2025
1 hour ago

Go-ahead for £170m King’s Cross life sciences office project

Innovative arched design to carry landmark building over railway tunnels
2 hours ago

Mitie buys power contractor ESM for £8.5m

Building FM firm strengthens high voltage contracting offer
34 mins ago

New vision unveiled for £5bn Liverpool Waters

More housing included in central docks area after Labour £55m funding boost
9 hours ago

String of contract wins sees turnover surge 25% at Mace

Construction division sees revenue leap to £1.73bn
2 hours ago

Morgan Sindall wins £32m Walsall waste centre

Contract will transform former metal factory site
2 hours ago

Kier wins £30m Greenwich teaching block

London South East Colleges plans to spend £47m on Greenwich Campus redevelopment
12 hours ago

Blenheim House Construction applies for administration

Surrey contractor employs around 80 staff generating £87m turnover
1 day ago

GMI chief jumps to Henry Boot Construction

Lee Powell will replace Tony Shaw as MD when he leaves at the end of 2024
1 day ago

Avant Homes makes £109m loss

House builder reveals huge loss just days after entering Crest Nicholson bid race
2 days ago

Greggs unveils plans for giant distribution centre

Bakery giant to build 311,551 sq ft logistics centre in Kettering
1 day ago

£330m south east London 1,250 homes scheme approved

Outline planning for New Belvedere development near the Thames
1 day ago

Green light for Birmingham 1,200-bed student scheme

Cambrian Wharf project will rise to 14 and 35 storeys
1 day ago

Welsh fit-out specialist files administration notice

£30m turnover employee-owned Paramount D&B lodges court notice
2 days ago

Skanska signs £105m London Millbank office rebuild

Original 1915 building facade will be dismantled and rebuilt
2 days ago

Historic facade contractor goes into administration

Administrator seeking buyer for Charles Henshaw & Sons
5 days ago

Three-year HS2 station box excavation completed

Enough clay to fill 300 Olympic sized swimming pools removed from Old Oak Common site
2 days ago

BAM starts £88m Fife passivhaus school job

1,800-pupil school will be built near Rosyth Docks
2 days ago

Torsion appoints new Chief Operating Officer

David Worsley promoted as leadership team shuffled at Leeds based firm
2 days ago

Tilbury Douglas site manager saves schoolboy’s life

Site manager carries collapsed schoolboy to resuscitation unit he helped build
5 days ago

Extra HS2 payment sees SCS contract jump to £4.24bn

Skanska Costain Strabag JV additional payments rise to £650m after third handout
2 days ago

Plans lodged for 3,300-home Salford tower cluster

£1bn Regent Park scheme includes UK's third tallest building at 70 storeys
5 days ago

Domis founder Lee McCarren steps down

Fellow director Kingsley Thornton takes helm as co-founder retires
5 days ago

Spencer lands civils package on £300m energy plant

Subcontract worth £23m on pioneering Manchester green energy storage scheme
5 days ago

Van Elle and M&J Evans team-up for housing works

Piling and groundworks specialist start new collaboration deal
5 days ago

Muse JV closes Wolverhampton City Centre West quarter deal

English Cities Fund completes council partner deal for 1,000-home plan
5 days ago

Ofwat approves £88bn AMP8 water spending spree

Spending on infrastructure ringfenced, unspent funds returned to customers
6 days ago

‘Bellingham Bridge’ takes shape on HS2 in Birmingham

Watch work on four huge piers for bridge named after England superstar
6 days ago

Construction swings from weakest to strongest sector

Construction output rebounds by 1.9% in May after three months of decline
6 days ago

Costain appoints new commercial director

Paul Morris takes over from David Taylor
6 days ago

Contractor services