For Subscribers

Get the complete article now!

TWST: Could we start the interview off with an overview of Countryside Properties (CYD.L) ?

Mr. Cherry: Countryside Properties is a developer based in the South East of England. During the past few years we’ve moved from being a predominately traditional house builder – building low rise quality residential developments with a certain amount of commercial property expertise – to today being a developer specializing in creating sustainable communities and urban and rural regeneration. Many of our developments now comprise a mix of housing both private and affordable, commercial property, as well as recreational and community facilities. We’ve gone through this transition to enable us to better meet the challenges laid down by Government planning policy which is encouraging high levels of sustainable development using fewer greenfield sites in preference to recycled brownfield land. The Group has seen further increases in its activities in the year ended September 30. The turnover from our development activities rose by 50 million pounds to 358.7 million pounds with increases across all of our operations, including private house sales, commercial property development, and land sales. Our design and build contracting business which specializes in social house building has also increased its output with a turnover of just under 100 million pounds. The Group has a significant land bank of exceptional quality. We currently control land with planning permission for some 4,900 new homes, which is equivalent to 5 years of production and is one of longest land banks of any British house builder. In addition to that we are also taking 17,800 additional plots through the planning process which puts us in an excellent position to significantly increase our housing output and therefore profit growth over the next few years. We recently obtained planning permission for a number of our larger projects and we’ve introduced joint venture development partners who will enable us to develop these schemes out. Basically their sheer size and profile would otherwise mean we would have to sell those sites and that is something we don’t want to do. And in fact we’ve introduced a number of American partners to help us with the developments. US developer Liberty Property Trust will be developing with us a commercial scheme in Manchester near the airport. We’ve also teamed up with GE Real Estate, part of the GE Group of Companies of course, to develop a significant residential scheme also in Manchester. And we’re also currently working with Citigroup developing a city center site again in Manchester. We believe the future of our Group is now well established and will enable it to play a leading role as a specialist developer in the urban renaissance now so urgently required in the United Kingdom. The future holds greater opportunities than we’ve never seen before. We’ve demonstrated we have the skills and experience to successfully meet the challenges that lie ahead. Countryside’s development program is substantial and greater than any time in its history. And the potential for profit growth is significant.

TWST: Are there any other issues, perhaps political, perhaps global, that are affecting your business?

Mr. Cherry: Not really. I think the key things that are affecting our business today are very much dictated by the government’s planning policy. The British government through its planning regulations is very much encouraging sustainable development. They want to see more homes built on brownfield sites – less on greenfield sites. They want to see more higher densities of development. The theory being the more houses built on brownfield sites the fewer greenfield sites are required for release. They want to see homes mixed in tenure to enable a more inclusive society, as well as a mix of uses for greater sustainability. They want to encourage much higher standards of architecture and design and as a Group we have been positioning ourselves well to deliver developments for this new era for developers. I think we are extremely well placed for the future.

TWST: Then in regards to the brownfields – am I correct to say that there are a lot of regulations regarding brownfields?

Mr. Cherry: Well the government is obviously keen to encourage the development of brownfield sites because there is public pressure to resist the development of green fields. So while being encouraging of brownfield development the Government wants to make sure that other initiatives and policies are maintained, in particular, the provision of affordable housing that is subsidized for key workers in particular and those who can’t afford to buy their own homes. In those particular cases in London where the selling prices are so high it is obviously putting strain on development solutions which have to plan for the local community.

TWST: Does technical innovation play an important role in your present and future planning?

Mr. Cherry: Definitely, because firstly there is a chronic shortage of skilled labor in Britain to build the products we are producing. As a consequence, we are looking for more and more alternative solutions for the way we build our projects out. Also because of the change in direction from low rise to much more high rise and more complex projects; adopting such non-traditional methods are going to obviously better suit those schemes. Therefore we are gradually developing less and less traditionally and we’re using framed and other pre-fabricated solutions more and more.

TWST: Finally, as a summary, what are two or three reasons you would give investors to buy your stock?

Mr. Cherry: Firstly, we have a land bank of exceptional quality in terms of location and value. This puts us in a very good position to be able to expand our business for the future. That is in spite of the increasing planning difficulties others are experiencing in our industry. And secondly, because of the way we’ve transformed our business in recent years. We’re perfectly set to be able to deliver schemes to meet the government’s planning agenda. And that puts us in a very good position to open up new opportunities for the Group’s future benefit. The potential for profit growth is therefore significant.