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Economy4 hours ago (Jan 13, 2022 08:02AM ET)

UK's Countryside Properties plunges as CEO leaves after weak quarter© Reuters.

By Muhammed Husain and Aby Jose Koilparambil

(Reuters) -Countryside Properties’ shares slumped nearly 28% on Thursday after the British housebuilder said its first-quarter performance was below expectations and Chief Executive Iain McPherson was stepping down immediately.

The company forecast adjusted operating profit for the quarter more than halved, contrasting with upbeat news from rivals. Britain’s undersupplied housing market has stayed resilient during the COVID-19 pandemic, helped by low mortgage rates and government support measures for buyers.

Countryside said Chairman John Martin would conduct a review of the company’s developments, without elaborating.

The company’s shares, listed on London’s midcap index, hit their lowest in more than a year.

Peel Hunt analysts said in a note the review could find internal operational problems, since the company reported robust market conditions and said the supply of materials and labour had not gotten worse.

Martin will stand in as interim CEO until a replacement for McPherson is found. The outgoing CEO joined the firm in late 2014 and became CEO at the beginning of 2020.

The homebuilder’s shares have fallen 12% in the two years since, with Martin taking over as chairman from David Howell last year, following pressure from U.S.-based investor Browning West..

On Thursday, Countryside also appointed Browning West partner Peter Lee to its board, while reporting adjusted operating profit of 16.5 million pounds ($22.7 million) for the first quarter, compared with 36.6 million pounds a year earlier.

Britain’s No.2 housebuilder Persimmon (LON:) forecast higher profit margins for the 2021 fiscal year on Thursday, and smaller rivals MJ Gleeson and Vistry both reported healthy trading figures this week on robust demand.

Countryside, which last year had flagged delays to the start of work at its sites after coronavirus-induced lockdowns, has projects across London, north and central England among other areas, and is a key player in the affordable housing sector.

($1=0.7276 pounds)

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