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Countryside Partnerships slumps after review prompts profit warning

·1-min read

(Reuters) - British housebuilder Countryside Partnerships warned of lower annual profit on Thursday after a business review flagged several issues, including costly expansions and manufacturing losses, sending its shares to a more than five-year low.

The company said its manufacturing capacity exceeded its production needs and that it was considering options to align operations and minimise losses from the sector.

Countryside said it failed to realise any benefits from its 2018 acquisition of Westleigh Group, while it plans to consolidate its resources to cut costs as previous expansion plans have been too ambitious.

"While the new profit guidance for FY22E is better than we had forecast, the lack of visibility on the outer years is unhelpful, and the lack of clarity on the likely cost of cladding remediation is likely to muddy the waters further," said Peel Hunt analysts.

Countryside, which flagged a number of charges related to the review of its 128 sites, expects annual adjusted operating profit of 150 million pounds ($196.28 million), lower than 167 million pounds last year.

The London-listed group said it had joined other homebuilders in signing a government-backed safety pledge to remove flammable roof coverings from buildings.

Shares of the company fell as much as 18% to 228 pence, their lowest since March 2017.

($1 = 0.7642 pounds)

(Reporting by Muhammed Husain in Bengaluru; editing by Uttaresh.V and Subhranshu Sahu)