Rothschild appointed to mastermind sale
Countryside chair David Howell will step down from the firm next year, a day after one of the firm’s major shareholders said he should resign.
The news came as Countryside reported a £2m loss for the year to 30 September, on adjusted revenue of just under £1bn. It also announced it had appointed Rothschild to advise on the sale of its housebuilding business.
Countryside at the same time published a public response to the intervention of US investor Browning West, which yesterday publicly called for Howell to stand down and for the housebuilding business to be sold.
Countryside said it was “disappointing” that the shareholder had chosen to launch a “public attack”, just one day before its results announcement, at which “our board has put into motion many of the very things that you have recently raised with us”.
The firm said it had been planning to announce the measures called for by Browning West today – the sale of the housebuilding division and the deaprture of Howell (pictured) – before the shareholder launched its public campaign yesterday.
But Countryside rejected Browning West’s call for its chief investment officer, Usman Nabi, to be appointed to the firm’s board. It told Nabi that after consulting with other shareholders “we do not believe it is either necessary or in the best interests of the company or its shareholders to appoint you to the board”.
Howell, who has been Countryside’s chair since its listing on the stock market in 2016, said: “It has been a privilege to serve as chairman of Countryside. I wish the company every success for the future with its strong potential for further profitable growth in the years ahead.”
The firm said the nomination committee will begin a process to select a new chairman in “due course”, with Howell committing to resign “during 2021”.
The news came as Countryside released annual results confirming the extent of the hit from the covid crisis, which chief finance officer Mike Scott said had come at the worst part of the financial year for the business. The firm fell to a £1.9m pre-tax loss – compared to a profit of £204m in 2019 – on adjusted turnover of £989m, down 31%.
As previously indicated, it saw completions in its private for sale housebuilding business fall by 36% to 840, while completions for its partnerships business – which builds homes for councils and housing associations – dropped by 27% to 3,213.
Announcing the appointment of Rothschild to explore the possibility of a sale of the private housebuilding business, Countryside’s results statement said: “Our focus on allocating capital to growing partnerships, the opportunities to grow the housebuilding business may be restricted.”
It added that Rothschild had been appointed to “advise the board on the best time and process to realise best value from the separation of housebuilding from the Group”.
The firm said it was now in a “strong position” to recover from the pandemic, with 70% of sales for the current year already made but that the sheer volume of forward sales taken meant that reservations a week in recent weeks had been below the level seen in 2019.
It said the firm was expected to report operating profit at the “upper end” of market expectations for 2021.