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Developer closes MMC factory after review of manufacturing facilities
Developer Countryside has closed one timber-frame factory after a trading statement revealed the house builder is looking to claw back some of its manufacturing losses.
Countryside’s third quarterly update for 2022 to the London Stock Exchange revealed it had taken the decision to exit from the site in Bardon, Leicestershire.
It is one of three modular housing factories owned by Countryside and the update said the closure of the site should lead to a reduction in losses from its manufacturing arm as the house builder identified £15m in annual savings across the group.
The update, for the period between 1 April 2022 to 30 June 2022, showed the number of partnership completions was broadly unchanged over the same period on the previous year at 817 homes.
Revenue was up 20% to £219m and group net debt stands at £74.8m.
Despite what the developer described as a “challenging macro-economic backdrop”, it still expects an operating profit for the full year of around £150m.
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The trading update stated: “Partnerships South and Home Counties continued to perform well, there has been a solid year-on-year improvement in the Midlands and the North division is beginning to demonstrate a recovery from the challenges experienced at the start of the year.
“Following a review of the group’s manufacturing facilities, the board has taken the decision to exit its site in Bardon, one of three MMC [modern methods of construction] factories owned by the group, and we expect a reduction in the run-rate of manufacturing losses as a result.
“During the period, we also completed the review of cost savings across the business, identifying at least £15m of savings on an annualised basis, and delivery is well underway.”
Countryside said it remains on track to deliver its target of £450m in asset realisation from the exit of the legacy business and it has realised £174m as at the end of June.
In June, the developer announced a formal sale process, which it said is “progressing well and further announcements regarding the timing and formal launch of the process will be made as appropriate”.
The house builder is also still searching for a new chief executive and said it will update the market in due course.
Earlier this month, Countryside appointed a new non-executive chair after John Martin resigned from the company with immediate effect.
The developer announced last year that it would be abandoning standalone housebuilding plans to focus on partnerships with housing associations, public bodies and institutional private rent operators.
In March, Barking and Dagenham Council acquired more than 900 homes in a joint deal with the developer and housing association L&Q.
In April, Countryside completed a £20m deal with Cross Keys Homes to build more than 100 homes in Peterborough.
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