The Prowting family has given senior executives, led by chief executive Steve Rosier, five years to raise the firm's share price and net asset value.
The targets they have been given have not been disclosed, but analysts are speculating that the aim is to allow the Prowting family to sell some or all of its 62% holding in the company at a handsome profit.
The problem that Rosier's team has to overcome is that the City has only limited interest in companies with a dominant family shareholding. Analysts and fund managers fear that the family has too much say over management.
One said: "Housebuilders used to be dominated by owner-drivers, like David Wilson at Wilson Bowden and Lynn Wilson at Wilcon, and the City tends not to like it, despite how successful some of them are. The more liquid the stock the better and Prowting is not that liquid, explaining why the share price is relatively low."
Prowting's share price has hovered around 150p for the last year and between 100p and 160p for the last three years (see graph above).
The 62% stake is owned by former chief executive Peter Prowting. Part of his strategy may be to sell some shares to improve liquidity and push the price up.
A spokesperson said: "It's not a fire sale but he wants to support the growth of the business. If he was a barrier to that goal then he would sell some of his shares."
Prowting's holding is currently worth about £70m. Sources say he will wait to see if the new strategy improves the share price significantly before selling a large slice. "He's a businessman and if people come to him with a decent price he would take it," said the spokesperson.
Prowting's strategy also includes building up the brand's reputation by concentrating on lower volume, higher-priced houses. Prowting recorded a pre-tax profit of £27.5m on turnover of £244.8m in the year to 28 February 2001.
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