Countryside Partnerships Share Discussion Threads

[blueclyde] 26/8/2019 18:44

Good post Bogdan! I located the results presentation and it gives the 2019 full year projected earnings in black in white which are very good year on year growth.I also noted the slide which details the cash balance which is projected to be £80-£90 million at year end and to grow by £60 million year on year. That is serious money. This share doesn't seem to be on anyones radar as backed up by the lack of posts here.I am happy to take the dividends and wait. The huge land bank and cash generation to me makes it a top take over target with the pound weak.

[blueclyde] 28/7/2019 12:34

However, we are fully reserved for private sales for the full year and fully sold for both PRS and Affordable homes. With build programmes on track, our focus now continues to be one of converting our private for sale reservations into completions in the fourth quarter.I am not sure the market managed to pick up just how good the trading update was. I am not sure what the full year expectations for there year are EPS wise but it looks like they will be hit. Also does anyone have a link to the presentation the did a month or so back at the investor day?

[blueclyde] 26/7/2019 07:41

The RNS splits out the plots between the two divisions. So they increased the number of plots by over 3000 whilst completing 200 builds in the quarter. They really are going to start ramping up big time as far as I can see.

[bogdan branislov] 25/7/2019 23:58

The new plots are partnership deals as far as I can see, which means they do not have a high capital outlay as CSP do not generally own the plots. The new plots are therefore mostly contracts to build. In terms of 3,000 plots per quarter, I think that CSP will have to ramp up to this output quite quickly as over 12,000 new plots, or rather no of contracts to build were obtained in H1 alone. These contracts to build are not like a land bank in the sense that the local authorities will want CSP to get on with it, they won't be allowed to sit on the build contracts for years like they might a land bank. Output in H1 was c43% up year on year, less in Q3, but Q4 is expected to be expansive again, perhaps the full year will see a c30% increase in output. Even thought the partnership model is capital light, the high rate of expansion inevitably creates a drain on cash as so many new build sites are being set up and established, also, CSP is investing heavily in its timber housing frame production sites which are expected to support the strong margins on the partnership side of the business. All looks compelling to me. This is all good, I would also point out that if any company was expanding at c30% per annum and was sitting on a growing cash surplus during such a period of expansion, then I would be very suspicious of the cash figures. For CSP, the growth profile linked to the margins and the cash position for the rapid expansion phase all make make sense to me.

[blueclyde] 25/7/2019 12:45

I could be wrong but they are selling pretty much all they are building for the year and this is ramping up. You can't really say debt is a negative when I think off the top of my head they have now acquired over 30,000 plots.For example this quarter they purchased 3000 plots and completed 200 builds which keeps them on track to deliver full year earnings. For example at some point they can ramp up to 3000 builds per quarter?

[bogdan branislov] 25/7/2019 09:46

I think that the statement is okay actually. Bear in mind that the first half of the year was well ahead of the previous year and the construction schedule suggests that the final quarter should be well ahead also. Woodford is likely to have to unload, but it may well be another block transfer to another fund(s). The profit growth for this year is forecast to be decent, but there is a lot going on with the business and the full extent of CSP's profit growth and the underlying balance sheet equity growth won't be fully clear until the year end results. Seeing the year end results linked to a clearer outcome timetable for Brexit and the resolution of the Woodford holdings would clear the way for CSP to re-rate significantly. All should become clear over the next few months. In the meantime, CSP is selling very cheaply relative to its growth projection, giving investors a considerable margin of safety. The recovery in the share price, will happen at some point and is likely to rapid when it does. Those waiting on the sidelines are likely to lose out. Remember that share prices climb the 'wall of worry'. By the time all factors becomes fully clear, the share price could easily be twice the current level and not at such a great entry point. Bogdan

[king_baller] 25/7/2019 07:35

I’m not sure it will be that well received short term. Quotes include: ‘Laying the foundations for future growth’, and ‘Despite ongoing political uncertainty’. Net debt up, average sale price slightly down, completions slightly down. I agree a long term buy, but with Woodford still needing to eventually sell his large stake I think this will stay at these levels in the short term.

[blueclyde] 25/7/2019 06:52

Nice trading update! That order but well over a billion now! I expect this to break the highs pretty soon!

[blueclyde] 13/6/2019 17:54

I think the news is hugely bullish! I was wondering why the share price has been going down for the last month and in that period Woodford has sold down from 15% to 10%. His lose is going to be someone else's gain here!

[eaglebeagle] 13/6/2019 09:31

I’ll buy them. Great opportunity

[king_baller] 12/6/2019 23:10

Is anyone concerned that Woodford, after he sells off his illiquid assets and reopens his equity income fund, will face a huge wave of redemption requests? I don’t think he’ll close his fund, but I’m concerned that half may want to leave at the earliest opportunity. This would mean around 5 per cent of CSP will be up for immediate sale. Surely dreadful for the SP? What a mess.

[king_baller] 20/5/2019 10:40

My understanding was the leaseholds were sold on to private companies. But like I said, everyone who bought a house on a lease has been offered a chance to buy the freehold back. This is an historic issue. The liverpool labour mayor has only brought it up it to play up to his extreme left, anti capitalist, Momentum base.

[shallwe] 20/5/2019 10:31

These would have been built by their Partnership side who work in conjunction with the local authority and build on their land. Purely a guess, but I would suggest that the land does not actually belong to CSP but belongs to Liverpool Council and therefore it would be leasehold not freehold owned?

[king_baller] 20/5/2019 10:12

The leasehold deals are undoubtedly bad for the property buyers. However they bought at a discount to the freehold price. And CSP have said they have offered everyone on leasehold a chance to buy the freehold.

[diogenes1960] 20/5/2019 09:37

Countryside have told the world that they no longer do this. The evidence that I have found dates from when the practice was uncovered 2 years ago and does not appear to have related to many of their developments. I haven't seen any recent articles or examples and I have looked. In light of that, as the disclaimer says, the past is not necessarily a guide for the future.

[archy147] 20/5/2019 08:37

Do a google search of “Countryside leasehold scandal” and you’ll see plenty of evidence they are guilty of this.

The scandal was covered by the media when it was first exposed in 2017. The problem is greedy companies like Countryside were able to rip off people buying their homes and do it perfectly legally through selling leasehold properties with escalating ground rent clauses.The issue hasn’t gone away, but it is now being dealt with by government reforms.

[diogenes1960] 18/5/2019 14:19

Having
Having read the response of CSP to this, it looks like a case of an under-informed Councillor (not exactly a rare breed) trying to raise his profile. I would like some evidence of CSP doing this before making a judgement. Strange that the media have not run with it, isn't it?

[blueclyde] 16/5/2019 18:22

At 31 March 2019, we had 31 open selling outlets with a further 73 sites under construction (HY 2018: 22 and 27 respectively).Looks like things should ramp up as someone mentioned in the next 12 months.

[blueclyde] 16/5/2019 11:54

I noticed too they purchased £13 million worth of shares for employee trust. I am not the best at trying to read a balance sheet like this but it does imply that they are expecting a strong second half.Also a large increase in the dividend. They also acquired a lot of plots which will fuel further growth. The yield pays you to wait.

[bogdan branislov] 16/5/2019 07:51

At first glance I was a little disappointed, on closer inspection less so. The key info is under the Partnership heading under the sub-heading of Operating Profit and Margin. Reported operating profit for the Partnership business fell to 9.5% for H1, but is expected to revert back to target figure of c15% for the full year, so the profit growth figures for H1 are not actually meaningful due to reporting requirements. i.e. H1 results are not a half year representation of the full year, even when allowing for the H2 volume weighting, due to the H1 reported margin being c35% lower than the anticipated margin for the full year. Big increase in dividend, active sites up 49% from H1 2018 and additional plots acquired during H1 over 12,000. Interesting to see if Peel Hunt revise upwards following these results. Given the second half output weighting and the fact that the operating margin of the Partnership business is expected to increase from the 9.5% reported in H1 to c15% for the full year, suggests the current full year forecast is conservative. Bogdan

[podgyted] 15/5/2019 17:54

The figures tomorrow will be very good even though the major numbers will come in H2.

The market, however, continues to have a valuation metric on house builders tied to share price to book value - hence benefiting inefficient builders and having an adverse impact on those that efficiently use their assets.

I've a stake here, and would like to see this break tomorrow or in the near future but I have my doubts the market will wake up anytime soon.

[bogdan branislov] 15/5/2019 07:33

rimau1 - It will be interesting to see both the EPS for H1 and whether there is any change in Peel Hunt's projections. You mention 2020-21 and how the value plays out in that period. What is your thinking here, what is it that happens during that period to make it stand out do you think? Bogdan