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Countryside Properties PLC AGM Statement

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11 February 2004

Chairman of Countryside Properties PLC
at the Company’s Annual General Meeting on Wednesday, 11th February 2004

The overall performance of Countryside Properties is encouraging. Our total forward sales and order books are currently at record levels. Forward sales of new housing are 40% ahead by value of this time last year and our design/build contracting order book including contracts awarded, subject to contract, has a value in excess of £500 million – an alvl-time high. This is a healthy position at this time of the financial year and gives the Directors confidence that the results for the year will show further improvement and progress for the Group. The Directors are however aware that because of the timing of completions the results will be more than usually weighted towards the second half of the year.

The Government’s Review of Housing Supply being undertaken by Kate Barker is most welcome. Her interim report issued in December has recognised that the long-term trend in house prices and recent problems of affordability are the clearest manifestations of a housing shortage in the UK.

It is to be hoped that Kate Barker’s analysis of the housing situation in the UK will lead to recommendations in her final report that will assist the development industry in making a more significant contribution to housing supply in the future.

We also welcome and support the Government’s Communities Plan.

The Group is at the forefront in the creation of sustainable communities and regeneration. Several of our current projects are being widely recognised as examples of responsible development. We were pleased that the Group topped the Insight Investment/World Wildlife Fund ranking of leading housebuilders’ sustainability performance. With an increasing focus on these issues by Government, local authorities and society generally, this will undoubtedly help us to improve our reputation further and secure new business opportunities.

Our land position is strong with the potential to accommodate some 22,000 new homes. However, it is to be hoped that recent Government action, and the outcome of the Kate Barker Review will result in the planning process being speeded up, which is essential if the supply of new housing is to increase. We already have planning permission for 5,600 new homes, including our share of joint venture developments.

An improvement in the planning process should result in more of the land in which we have an interest, subject to planning permission, being brought forward for development earlier than had previously been anticipated.

The expected increase in new housing production will put pressure on the limited resource of skills and ability currently available in the industry. We are, however, well placed in this respect having successfully recruited and trained key personnel during the past few years. We recognise that a key to the Group’s success is our people, and we are encouraged by the success being achieved through our training academy which is producing some excellent graduates for future management positions.

Our impressive urban regeneration programme continues to expand; our leading reputation and proven abilities in mixed-use and mixed-tenure sustainable development giving us a strong competitive advantage. We have recently been named by Salford City Council as the Council’s development partner to transform Lower Broughton. The project will regenerate this depressed area and will see more than 3,000 new homes and a range of local facilities being developed. We have also recently been selected, with Capital & Counties, by Redbridge Borough Council as its development partner for a major mixed-use regeneration scheme in Ilford Town Centre, which is projected to have a completed development value of £120 million.

Several of our developments are being undertaken through joint ventures which are an important part of our operational profile allowing the Group to participate in large, capital intensive projects which increase overall Group returns whilst maintaining a balanced risk exposure.

Our objective is to optimise returns on shareholders’ funds and to deliver growth in earnings per share. We seek to do this in a highly responsible way that enhances our track record and reputation, which will in turn open up new business opportunities.

Our future development prospects are most encouraging and will, we are confident, show improving financial results and progress for the Group in the coming years.

Alan H Cherry CBE DL
11th February 2004

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Information correct as at 11/02/2004