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AGM Statement and Major Commercial Letting


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10 February 2000

"I am pleased to inform shareholders that the progress achieved by the Group over the past few years is continuing.

"Whilst recent and expected further increases in interest rates have slowed the pace of the upturn in the housing markets I am pleased to report that forward sales of our new housing by value are currently 72 per cent ahead of the position this time last year. The ever improving range of our products and the excellent locations of our projects are clearly finding favour with homebuyers in more competitive market conditions. Planning delays and shortages of skilled labour are, however, still of concern to the Group as well as to the industry at large.

"We expect to build and sell slightly fewer new homes this financial year than we did last, but at an average selling price in excess of £200,000, well up on the £165,000 achieved last year. This change in mix is simply a reflection of the market sectors we are currently targeting.

"We expect our operations to give rise to a continuing improvement in the return on capital generated and this is considered of far greater importance to the Group than volume growth.

"The buoyant housing markets have led to ever higher prices being paid for development land by some developers. This is a direct reflection of the shortage of sites available and of the increasingly restrictive planning policies being applied by some local authorities around the country.

"The Group is therefore in a very strong position in having substantial land holdings with planning permission for over 4,500 new homes, acquired at prices significantly below current market value.

"The Group is also expecting to benefit in the future from sites which it has secured by way of options or conditional contracts, where we believe we have a realistic prospect of obtaining planning permission for potentially 10,500 new homes. In the main the prices to be paid for these sites when planning permission is granted will be at a discount to market value.

"Our design and build contracting business is moving ahead well and, as anticipated, profit margins from these operations are recovering from the disappointing levels of last year.

"A noticeable improvement in the occupier demand from commercial property users is creating shortages of suitable properties for business and industry in some areas. This bodes well for our increasing portfolio of limited risk commercial projects.

"I am delighted to report that we have just let the 54,000 sq. ft new office building which we have recently developed in Cobham through a joint venture with British Land. We have agreed to sell, subject to contract, the resultant investment to an institutional purchaser.

Overall I am very pleased with the progress being achieved. Indeed, providing that current economic conditions continue, I expect that the results this financial year will be the best ever achieved by the Group. I also expect further significant progress to be made in the following financial year which should re-establish the Group as a top performer in the industry".

For further information, please contact:

Countryside Properties PLC
Alan Cherry MBE, Chairman
Graham Cherry, Chief Executive
Michael Pearce, Finance Director

 

01277 260000
Square Mile Communications
Nick Osborne or Louise Robson
020 7601 1000



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Information correct as at 10/02/2000