Builder's profits drop despite turnover rise

Price competition, higher raw material costs and labour shortages at house builder Countryside Properties caused pre-tax profits to fall 16 per cent to pounds 3.1m in the half-year to March.

The decline came despite an increase in turnover to pounds 79.6m from pounds 67.8m at the interim stage last year. The company warns that tight margins have continued. Chairman Alan Cherry said profits for the full year may not improve on last year's result.

The reduction in profit from the company's residential operations was due to tight margins in its design and build operations for social housing. The company also experienced higher raw material costs and delays due to labour shortages.

Countryside said it intends to be more selective in taking on similar business and expects turnover from design and build to peak this year. Profits from speculative housing projects have increased despite turnover falling due to difficult economic conditions. Commercial property saw a fall in profitability from pounds 457,000 to pounds 83,000 on turnover of pounds 8.8m.

Earnings per share are 2.7p, down from 4.1p. The dividend is held at 1.41p.