Housebuilder puts £109m aside and sets up standalone division to meet 'developer pledge' demands
Countryside has posted a £181.5m loss in the first half of the year as fire safety remediation costs and impairment charges made themselves felt. The partnerships housebuilder reported the pre-tax loss for the six months to 31 March, compared to a profit of £38m in the same period the previous year.
The group's profit figure was hit by a £109m provision to fix fire safety issues in its blocks over 11 metres in height under Michael Gove's developer pledge. Countryside is spending a further £19m to set up a standalone division to manage and deliver the works, which are expected to take around 10 years.
The group also recorded a £77m goodwill impairment charge relating to Westleigh, the Leicestershire-based housebuilder Countryside acquired in 2018. This followed a site-by-site review earlier this year after a profit warning in the first quarter of the year, which led to the departure of chief executive Iain McPherson.
The firm's turnover also fell from £661m to £602m year-on-year, while completions decreased from 2,591 to 1,958 over the same period. Countryside said this was due to "an unusually strong comparative period which had benefited from Covid related deferrals". See also>> The Building Safety Bill is now law – here's what you need to know
The housebuilder also said that despite losses in its modular business it remains "absolutely committed" to modern methods of construction (MMC) and said it is aiming for half of all homes to be built by MMC by 2025. However, it repeated that it is "considering all options to minimise future losses" through its modular business after a £6.5m deficit in the first half of the year, £3m of which related to its new factory in Bardon, Leicestershire.
The housebuilder said it expects adjusted operating profit of £150m for the full year. Its order book, stands at £1.5bn, 25% higher than for the same period last year . It said: "Performance in the second quarter of the year showed improvement following a weaker performance in the first quarter which was impacted by delays to starting on a number of sites and operational challenges, including groundworker, timber-frame and roofing contractor issues."