Weak demands hits Countryside

HOUSEBUILDER Countryside Properties has blamed the slowing house market for a 50% drop in profits. The company said the housing market has weakened since early summer on the back of five successive interest rate increases and declining consumer confidence.

Chairman Alan Cherry said: 'Potential homeowners at present appear reluctant to commit to buy or to stretch themselves to do so.

'Despite interest rates not being raised further at recent meetings of the Bank of England‘s monetary policy committee, an uncertain environment still exists.'

The company said the market for properties above £300,000 was particularly slow, although demand for lower priced properties was also weakening.

Pre-tax profit for the year to the end of September was £16.1m, down from £36.1m the previous year. Group turnover dropped from £386m last year to £330m in 2004.

During the year, the company completed the sale of 915 new homes, up from 812 in 2003, while commercial property transactions fell £10m to £6.6m.

It had twice previously warned that full year results would be significantly affected by weaker housing markets as well as a reduced contribution from its land trading activities.

Countryside has recommended a 275p per share offer for the company by Copthorn, a company which would ultimately be owned by the Cherry family and a subsidiary of HBOS. The

shares fell 0.5p to 281p.