Even before the Prime Minister told workers to get on their bikes and get back to work on Sunday night, most large housebuilders had announced plans to reopen their construction sites. 

Although these firms were not formally required to close during the lockdown, most did so. But they’ve assessed the situation and devised COVID-safe working practices that will enable them to get back to work.

One of the latest to reopen its building sites is my subject this week, FTSE 250 group Countryside Properties (LON:CSP)

Is this really the right time?

If you’re a regular reader, you probably won’t be surprised to learn that I have a fairly bearish view on the outlook for the housing market. But I’ve been wrong on this many times before. I’m also conscious that housebuilders are coming into this crisis with robust balance sheets and a healthy backlog of orders. I don’t expect to see any of the big players collapse or need refinancing, eliminating one major investment risk.

Countryside Properties has popped up in the results of the SIF screen recently, prompting me to take a look. It turns out this firm’s business model is a little different to some rivals, with a focus on urban regeneration and affordable homes. Countryside’s Partnerships business generated more than half the group’s operating profit last year, with the remainder coming from conventional housebuilding. 

I see this as an attractive mix at the moment. Projects providing affordable housing and urban regeneration could be supported by government policy during a recession, even if the owner-occupier housing market weakens.

On the other hand, Partnership homes have lower profit margins. This business model also means that Countryside is somewhat more of a construction firm than some housebuilders. This has implications for its balance sheet and profitability, as I’ll try to explain.

Value: better than it looks

Stockopedia’s stats show Countryside with a ValueRank of just 48. This suggests that the algorithms don’t see too much value in this stock at the moment.

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The trailing 12-month valuation statistics aren’t very encouraging, either:

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Having taken a look at the accounts, I don’t think things are quite this bad.

Balance sheet: Countryside Properties’ latest accounts show relatively modest inventories (land, property and work-in-progress) of £809m. 

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