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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Countryside Partnerships Plc | LSE:CSP | London | Ordinary Share | GB00BYPHNG03 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 229.80 | 227.00 | 227.60 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMCSP
RNS Number : 0832S
Countryside Properties PLC
16 December 2016
16 December 2016
COUNTRYSIDE PROPERTIES PLC (THE "COMPANY")
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
The following documents have today been posted or otherwise made available to shareholders:
-- Annual Report 2016 -- Notice of Annual General Meeting -- Proxy Form -- Electronic Communications Letter
In accordance with Listing Rule 9.6.1R, a copy of each of these documents has been uploaded to the National Storage Mechanism and will be available for viewing shortly at http://www.morningstar.co.uk/uk/NSM
The above documents may be viewed online at www.investors.countryside-properties.com.
A condensed set of the Company's financial statements and information on important events that have occurred during the financial year and their impact on the financial statements were included in the Company's Preliminary Results Announcement on 29 November 2016. That information together with the information set out below, which is extracted from the Annual Report 2016, constitute the material required by Disclosure and Transparency Rule 6.3.5R which is required to be communicated to the media in full unedited text through a Regulatory Information Service. This announcement is not a substitute for reading the full Annual Report 2016. Page and note references in the text below refer to page numbers in the Annual Report 2016. To view the preliminary announcement, slides of the results presentation and the webcast please visit www.investors.countryside-properties.com.
Enquiries: Tel: +44 (0) 1277 260 000
Ian Sutcliffe - Group Chief Executive
Rebecca Worthington - Group Chief Financial Officer
Victoria Prior - Investor Relations & Strategy Director
PRINCIPAL RISKS AND UNCERTAINTIES
Countryside has policies and procedures in place for the timely identification, assessment and prioritisation of the Group's material risks and uncertainties. This section describes how these risks are identified, managed and mitigated appropriately in order to deliver the Group's strategic objectives.
How We Manage Risk
Risk identification and management is built into every aspect of Countryside's daily operations, ranging from the appraisal of new sites, assessment of the prospects of planning success, building safely, and selling effectively to achieve long-term success through the property market cycle. Risk management is built into standardised processes for each part of the business at every stage of the housebuilding process. Financial risk is managed centrally through maintenance of a strong balance sheet, forward selling new homes and the careful allocation of funds to the right projects, at the right time and in the right locations. Risk management also includes the internal controls described within the Corporate Governance Report on page 48.
The Risk Management Committee normally meets every quarter to review the Group's risk register. Given the uncertainty leading up to the outcome of the EU Referendum on 23 June 2016, on the UK's continuing membership of the European Union, additional meetings were held by members of the Risk Management Committee to agree appropriate mitigating actions should they be required.
The Group's risk register is maintained to record all principal risks and uncertainties identified in each part of the business and an appropriate "risk owner" for each risk. The risk owners conduct an analysis of each risk, according to a defined set of assessment criteria which includes:
3/4 How does the risk relate to the Group's business model and/or strategy? 3/4 What is the likelihood of the risk occurring? 3/4 What is the potential impact were the risk to occur? 3/4 Would the consequences be short, medium or long term? 3/4 What mitigating actions are available and which are cost effective? 3/4 What is the degree of residual risk and is it within the Group's risk appetite parameters? 3/4 Has the risk assessment changed and what is expected to change going forward?
The Risk Management Committee reviews the assessments made, compares it to the Group's appetite for each risk, reviews the current level of preparedness and determines whether further actions or resource are required. In reviewing and agreeing the mitigating actions, the Risk Management Committee considers the impact of risks individually and in combination, in both the short and the longer term.
Board and Audit Committee Responsibility
The Audit Committee reviewed the Group's risk register and the assessment of the Group's principal risks and uncertainties prepared by the Risk Management Committee at its meetings in February and July 2016. The Audit Committee also considered the effectiveness of the Group's systems, and has taken this into account in preparing the Viability Statement on the next page.
The Audit Committee reported on its findings to the Board at the Board's July and September meetings, in order to support it in making its confirmation that it had carried out a robust assessment of the principal risks. The table on pages 38 to 39 of the report sets out the Group's principal risks and uncertainties, mitigation and any change during the period.
The Board
- determines the Group's approach to risk, its policies and the procedures that are put in place to mitigate exposure to risk.
Audit Committee
- has delegated responsibility from the Board to oversee risk management and internal controls; - reviews the effectiveness of the Group's risk management and internal control procedures; and
- monitors the effectiveness of the Internal Audit function and the independence of the external audit.
Risk Management Committee
- is responsible for the effective maintenance of the Group's risk register; - oversees the management of risk; - monitors risk mitigation and controls; and - monitors the effective implementation of action plans.
Internal Audit
- undertakes independent reviews of effectiveness of internal control procedures; - reports on effectiveness of management actions; and - provides assurance to the Audit Committee.
Executive Committee
- is responsible for identification of operational and strategic risks; - is responsible for ownership and control of specific risks; and - is responsible for establishing and managing the implementation of appropriate action plans.
Referendum on 23 June 2016 on the UK's Continuing Membership of the European Union
Given the considerable uncertainty in the lead up to the EU Referendum vote, members of the Risk Management Committee met with the senior management of all business divisions to ensure that appropriate mitigation plans were agreed, and ready for implementation if required, to mitigate the full range of possible Brexit vote outcomes foreseen by some commentators.
The uncertainty in the market leading up to the EU Referendum vote lasted for two to three weeks after the vote. This impacted customer confidence and, while visitor levels and gross reservations remained largely unchanged, we did experience higher levels of cancellations and some price renegotiation. However, this period was relatively short-lived and we have experienced good trading conditions from August onwards.
The wider economic impacts of the EU Referendum vote may also be felt by the housebuilding industry in future, such as a slowdown in economic growth, higher imported material costs and possible restrictions on foreign labour. However, all of these risks are monitored and will be mitigated where possible by the Risk Management and Executive Committees with the appropriate action being taken in a timely manner.
PRINCIPAL RISKS AND UNCERTAINTIES FACING THE GROUP
The Group's principal risks are monitored by the Risk Management Committee, the Audit Committee and the Board.
The table below sets out the Group's principal risks and uncertainties.
PRINCIPAL RISKS RISK MITIGATION ----------------------------- ------------------------------------ Adverse macroeconomic conditions (change over year - increase) A decline in macroeconomic Funds are allocated between conditions, or conditions the Housebuilding and Partnerships in the UK residential divisions. In Housebuilding, property market, can land is purchased based reduce the propensity on planning prospects, to buy homes. Higher forecast demand and market unemployment and/or resilience. In Partnerships, interest rates affect contracts are phased and, consumer confidence where possible, subject and can reduce demand to viability testing. In for new homes. Constraints all cases, forward sales, on mortgage availability, cash flow and work in progress or higher costs of are carefully monitored mortgage funding, may to give the Group time make it more difficult to react to changing market to sell homes. conditions. ----------------------------- ------------------------------------ Adverse changes to Government policy and regulation (change over year - no change) Adverse changes to The potential impact of Government policy in changes in Government policy areas such as tax, and new laws and regulations housing and the environment are monitored and communicated may result in increased throughout the business. costs and/or delays. The discontinuation of Government-backed purchase assistance programmes may adversely affect the Group's sales. ----------------------------- ------------------------------------ Build cost inflation (change over year - no change) Build costs may increase Use of standard house types beyond budget due to is optimised and designed
the reduced availability to maximise buying power. of skilled labour, Use of strategic suppliers increases in sub-contractor to leverage volume price or material costs, reductions and minimise errors, omissions or unforeseen disruption. unforeseen technical Robust contract terms to conditions. control costs. ----------------------------- ------------------------------------ Programme delay including rising project complexity (change over year - no change) Poor project forecasting, The budgeted programme unforeseen operational for each site is approved delays due to technical by the divisional board issues, disputes with before acquisition. Sites third party contractors are managed as a portfolio or suppliers, bad weather to control overall Group or changes in purchaser delivery risk. Weekly monitoring requirements may cause at both Divisional and delay or potentially Group level. termination of a project. ----------------------------- ------------------------------------ Inability to source and develop suitable land (change over year - no change) Competition or poor A robust land appraisal planning may result process ensures each project in a failure to procure is financially viable and land in the right location, consistent with the Group's at the right price strategy. and at the right time. ----------------------------- ------------------------------------ Poor sales performance (change over year - no change) Poor forecasting of Market demand for design, market demand, or inability product type and price to react quickly enough is assessed for each potential to changes in market site prior to acquisition. demand, in terms of Forward sales are monitored product, location, closely to react to changing time and price will market conditions. impact the Group's competitiveness and reduce sales or sales prices. ----------------------------- ------------------------------------ Product quality declines (change over year - no change) ------------------------------------------------------------------- Failure to deliver Standard house types and high quality product strategic suppliers are and customer service used to maximise maintenance may reduce sales, adversely of Group standards. Regular affect the Group's quality reviews are performed brand and reputation at each stage of construction. and potentially lead Customer surveys are conducted to third party liabilities. on handover of homes and results are analysed to improve product quality. ----------------------------- ------------------------------------ Inability to attract and retain talented employees (change over year - no change) ------------------------------------------------------------------- Inability to attract Remuneration packages are and retain highly skilled, regularly benchmarked against competent people at industry standards to ensure all levels could adversely competitiveness. Succession affect the Group's plans are in place for results, prospects all key roles within the and financial condition. Group. Exit interviews are used to identify any areas for improvement. ----------------------------- ------------------------------------ Delays or refusals in planning (change over year - no change) Failure to secure timely A planning and risk assessment planning permission is conducted prior to any on economically viable land purchase. Strong relations terms is critical to are maintained with local the value of the Group's communities, the local land bank. authority and planning officers to best understand underlying policy and planning prospects. ----------------------------- ------------------------------------ Inadequate health, safety and environmental procedures (change over year - no change) A deterioration in Procedures, training and the Group's health, reporting are all carefully safety and environmental monitored to ensure that standards could put high standards are maintained. the Group's employees An environmental risk assessment and contractors or is carried out prior to the general public any land acquisition. Appropriate at risk of injury or insurance is in place to death and could lead cover the risks associated to litigation or penalties with housebuilding. or damage the Group's reputation. ----------------------------- ------------------------------------
RELATED PARTY TRANSACTIONS
Transactions with Group joint ventures and associate
Joint ventures Associate ---------------------- -------------------- -------------------- 2016 2015 2016 2015 GBP'000 GBP'000 GBP'000 GBP'000 ---------------------- --------- --------- --------- --------- Sales during the year 26,150 20,648 674 1,522 ---------------------- --------- --------- --------- --------- At 1 October 62,117 45,442 - - Net advances during the period 22,116 16,675 - - ---------------------- --------- --------- --------- --------- At 30 September 84,233 62,117 - - ---------------------- --------- --------- --------- ---------
The transactions noted above are between the Group and its joint ventures and associate whose relationship is described in Note 13 and Note 14 respectively.
Sales of goods to related parties were made at the Group's usual list prices. No purchases were made by the Group from its joint ventures or associate. The amounts outstanding ordinarily bear no interest and will be settled in cash.
Remuneration of key management personnel
The aggregate remuneration of the Executive Committee, who are considered to be key management personnel of the Group, was GBP6.1m (2015: GBP6.4m).
Transactions with key management personnel
In 2014, properties were sold at market value by the Group to parties related to key management personnel who continue to lease them back to the Group as follows:
3/4 Close family members of Ian Sutcliffe received GBP17,250 (2015: GBP17,250)
3/4 A company of which Graham Cherry, a member of the Executive Committee, is a Director and shareholder received GBP21,000 (2015: GBP21,000).
In 2016 a close family member of Ian Sutcliffe jointly purchased a property from Acton Gardens LLP, an entity in which the Group has a 50 per cent interest, at market value of GBP530,000.
Last financial year, a close family member of Ian Sutcliffe and a close family member of Graham Cherry were employed by a subsidiary of the Group. Both individuals were recruited through the normal interview process and are employed at salaries commensurate with their experience and roles. The combined annual salary and benefits of these individuals is less than GBP100,000 (2015: less than GBP100,000).
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union, and the parent company financial statements in accordance with Financial Reporting Standard 102 (FRS102) the financial reporting standard applicable in the UK and Republic of Ireland (FRS 102).
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently; - make judgements and accounting estimates that are reasonable and prudent;
- state whether IFRSs as adopted by the European Union and FRS 102 have been followed, subject to any material departures disclosed and explained in the Group and parent company financial statements respectively;
- notify its shareholders in writing about the use of disclosure exemptions, if any, of FRS 102 used in the preparation of the parent financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy.
Each of the Directors, whose names and functions are listed on page 42 to 43 of the Annual Report confirm that, to the best of their knowledge:
- the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and
- the Directors' Report contained on page 70 of the Annual Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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(END) Dow Jones Newswires
December 16, 2016 06:00 ET (11:00 GMT)
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