Countryside Properties Plc (LON: CSP) : Should you hold on to this stock?

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Countryside Properties Plc (LON: CSP) : Should you hold on to this stock?

 Countryside Properties Plc (LON: CSP) : Should you hold on to this stock?
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Highlights 

  • Revenue and profit of Countryside Properties Plc have gone down in the first quarter of 2022.
  • CEO Iain McPherson has stepped down and chair John Martin would be serving as interim CEO while the search for a new CEO is on.

UK housebuilding and urban regeneration firm Countryside Properties Plc has been in news recently due to its latest trading update and board reshuffle. CEO Iain McPherson has stepped down amid falling profits. Let’s take a look at the announcements made by the company and analyse how they might impact its share price performance.

Board changes and trading update

On 13 January 2022, Countryside Properties announced that its CEO Iain McPherson will step down with immediate effect. Until the board finds a new CEO, Chair of Countryside John Martin would be serving as the interim CEO of the company.

Countryside Properties also released its trading update for the three months ended 31 December 2021. The adjusted revenue of the group fell from £ 363.8 million in Q1 2021 to £249.8 million this year, falling short of the expectations. Meanwhile, the adjusted operating profit of the group went down from £36.6 million to £16.5, with the number of homes sold falling from 1,280 to 809 in the first quarter of 2022. As of 31 December 2021, the net debt of the company stood at £72 million.

 

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UK housebuilder Countryside Properties Q1 performance

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Share price performance

UK housebuilder Countryside Properties is listed on the London Stock Exchange’s main market and is also a constituent of the FTSE 250 index. The market cap of the company stands at £2,190.16 million as of 18 January 2022.

As mentioned above, the performance of the compnay has fallen short of the expectations, and thus it has given a negative return of -18.90% to its shareholders in the last one year, while its year-to-date return stands at -24.49% as of 18 January 2022. Countryside Properties PLC’s (LON: CSP) shares were trading at GBX 339.00, down by 0.12%, at 10:57 AM (GMT) on 18 January 2022.

On 17 January 2022, the company announced that under its existing share buyback programme, it has purchased 102,000 ordinary shares from Numis Securities Limited at an average price of 339.71p. The repurchased shares are to be kept in treasury, and after repurchasing the ordinary shares, Countryside Properties has 511,761,463 ordinary shares in issue and 12,865,407 ordinary shares in treasury. A buyback generally increases the share prices of companies by creating a shortage in the share supply, and thus the share buyback may lead to Countryside Properties’s shares going up in the future.

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Way forward

Even though the revenue and profits of the company have gone down in Q1 this year and the search for a new CEO is still on, the company has potential to grow in the UK’s booming housing market. The current goal of the company is to boost its usage of modern methods of construction, and construct 50% of the homes using its in-house manufacturing facilities by 2025.

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