42 Friday April 8 2022 | the times
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actual amount raised from the new levy
will be closer to £3 billion.
Vistry, formerly known as Bovis
Homes, had said that it would cost
somewhere between £60 million and
£75 million to sort out buildings it had
worked on. While many of its peers
have lifted their cost estimates on the
back of signing the pledge, Vistry thinks
the money that it has set aside already
should be enough. It does, however, ex-
pect to spend up to an extra £3 million
a year as it builds a team to “effectively
manage these remediation works”.
Bellway had set aside £187 million to
fix fire safety issues at its buildings.
Given the increased commitments, it
expects to spend another £300 million.
It means that all nine of the house-
builders on the FTSE 100 share index or
the FTSE 250, including Vistry and
Bellway, have put their names to the
building safety pledge. “Realistically
there is no option but to sign,” the boss
of one developer said this week.
Vistry shares fell 51p, or 5.3 per cent,
to 912½p, while Bellway’s stock dropped
49p, or 1.9 per cent, to £25.05.All the big listed housebuilders have
signed up to the government’s building
safety pledge after Bellway and Vistry
confirmed that they had fallen into line
with their peers.
Michael Gove, the housing secretary,
has written to 53 housebuilders asking
them to fix cladding and other fire
safety issues at buildings they have
built.
Developers had proposed carrying
out work on buildings they had been
involved with since 2000, but the
government told them to go back
further to 1992.
Those that have signed up to the
pledge have also committed to not
drawing on the building safety fund to
help to cover the costs of repair works.
The big builders are contributing to
that fund through the residential
developer property tax — also known
as the cladding tax — which the gov-
ernment thinks will raise about £2 bil-
lion over the next decade.
The industry calculates that theTom HowardBuilders pledge cladding repairs
The botched integration of a rival house-
builder and overambitious expansion
plans were blamed by Countryside
yesterday after it warned that this year’s
profits would be even worse than
previously feared.
The FTSE 250 developer expects
annual operating profits of about
£150 million, 25 per cent shy of what the
City had expected.
It also revealed that operating profits
between October and March, the first
half of its financial year, had fallen by
42 per cent to £45.6 million from
£78.6 million a year earlier.
Analysts at Peel Hunt had thought
that Countryside’s operating profits
would improve to £330 million by 2024,
but yesterday they noted that this
“looks to be something of a stretch”.
Countryside shares, which began the
year above 450p, fell another 14.8 per
cent, or 40½p, to 228p last night.
The company was founded in 1958,
starting out building small residential
developments in Essex and east
London. It is now focused on building
in partnership with housing asso-
ciations and institutional landlords.
Iain McPherson, 48, the group’s chief
executive, agreed to leave in January
after a dire trading update knocked
more than a fifth off its share price. In
the wake of that move, John Martin, the
chairman who is standing in as chief
executive until a replacement is found,
launched a review of the business to
find out what had been going wrong.
Among the key findings published
yesterday was an admission that
Countryside had “failed to realise
the benefits” of its acquisition of
Westleigh, a Leicester-based builder of
affordable housing for which it paid
£135 million four years ago. Margins at
Westleigh developments had beenStock markets across the world
are hugely volatile following
Russia’s invasion of Ukraine. Oil
and gas prices have been
spiralling, while British
companies are scrambling to
cope with the effects of soaring
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Countryside
rues costs
of takeover
“very low”, while some of its sites were
“not completed to Countryside’s high
standards”. Martin said that “these are
the poorest-performing sites in our
business”.
The purchase of Westleigh took
Countryside into the Midlands and
Yorkshire, two areas where it saw
“strong underlying demand” and part
of a wider drive to look beyond its
traditional markets of London and the
southeast in search of growth.
In the early stages of the pandemic,
the company continued to expand,
moving into new regions. Some of
those have fared well, but others,
notably the Chilterns and the south
Midlands, have struggled.
“I think we have been a little bit over-
ambitious in our expansion plans.
We’ve spread ourselves a bit too thinly,”
Martin, 55, said. When opening offices
in new areas, Martin suggested that the
company’s previous management had
not planned well enough, nor had built
the relationships needed with local
contractors. “You need that supply
chain,” he said. “Do you have local
contractors who can actually lay the
slabs, do the scaffolding, do the
windows? You can’t just assume that’s
going to happen.”
Countryside plans to scale back its
expansion plans and is merging some of
its newer offices with others near by.
That will help to shave £15 million a
year from its cost base.
Alongside the conclusions of the
review, Countryside confirmed that it
had signed up to the government’s
building safety pledge to fix fire safety
issues on the 290 high-rise blocks that
it had built over the past 30 years.
Previously, it had set aside £41 million
to fund such works, but it has yet to
decide how much additional expense
will result from agreeing to the govern-
ment’s request.Tom Howard