(Reuters) -Countryside Properties will focus solely on its more successful Partnerships business and scale back building of private homes, the UK housebuilder said on Wednesday, in an effort to return more cash to shareholders.
The company's Partnerships business delivers buildings in partnership with housing associations, public bodies andinstitutional private rental operators, while its Housebuilding unit is focused on building private homes for owner-occupiers in the Home Counties region, the area comprising counties surrounding London.
The decision follows a strategic review of the potential separation of the Housebuilding business. The company said a new Partnerships region will be established to serve the Home Counties.
"The value of the additional recurring earnings that this (strategy) will generate, along with the 450 million pounds ($621.2 million) proceeds from the disposal of surplus assets, clearly significantly exceeds the value of any of the other strategic options available" Chairman John Martin said in a statement.
The FTSE Midcap firm said its board expects the new Partnerships business in Home Counties to generate financial returns consistent with the rest of Partnerships over time and forecast annualised adjusted operating profit of at least 60 million pounds by 2023.
The company also said it intends to change its name to Countryside Partnerships Plc.