The results were boosted by the acquisition of Westleigh, acquired in April 2018 for £135m. With Westleigh, total completions in the year to 30th September 2019, rose by 33%, up from 4,295 to 5,733.
Countryside’s Partnerships business delivered more than 75% of the group's 5,733 completions and just over 50% of the profit, due to the lower average selling prices.
Pre-tax profit was £203.6m (2018: £180.7m) on revenue of £1,237m (2018: £1,018m).
Countryside Properties opened a panel factory in Warrington in March. It produces complete structural wall panels from a semi-automated production line. It is producing the equivalent of 15 homes per week but with the addition of a second shift it is expected to ramp up output to around 1,400 homes per year in the current financial year.
Commenting on the results, chief executive Ian Sutcliffe said: "We have continued our excellent growth trajectory during the past year and have exceeded our expectations in operating margins, return on capital employed and cash generation. Our differentiated Partnerships division continues to go from strength to strength, while our Housebuilding division is benefitting from operational efficiency and continued capital discipline to deliver improved returns. With strong demand from first-time buyers and ongoing political support, the board looks forward to delivering continued growth from both of our operating divisions."
He said: “In Partnerships, our expansion into the Midlands and the North, including Yorkshire, provided the growth. This has largely been an expansion of our affordable and PRS [private rented sector] delivery, following the Westleigh acquisition, assisted by the framework agreements with Sigma Capital to deliver PRS and with Midland Heart to deliver affordable homes. The greater emphasis on these tenures has reduced operating margin as expected, but we plan to mitigate this going forward as we deliver a greater proportion of private for sale homes in the North and Midlands.”
He added: “The increase in average selling prices has not translated into stronger margins due to build cost inflation, from both materials and labour, as well as additional cost from changes to fire safety regulations. While we have not seen any direct impact from the prolonged Brexit negotiations, we do anticipate further build cost increases from currency fluctuations and potential EU labour migration.”
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