Country & Metropolitan is aiming to acquire a rival housebuilder by the end of the year
Chief executive Stephen Wicks said that a formal bid would not be made until after June, the year-end for its financial results. Wicks said: "I have had a few tentative chats. I would be very surprised if we are not announcing another acquisition before Christmas."

Country & Metropolitan has recently been in talks with AIM-listed property company Headway, in which it built up a 9.98% stake in at the end of last year. The company had been interested in Headway's five brownfield sites in the Cotswolds and the north of England, which were considered to be ripe for development.

It is thought that this interest has since cooled, and that Country & Metropolitan is now targeting a larger acquisition, similar in size to the 拢10.2m cash plus shares deal it made for NorthCountry Homes last year. Headway's turnover is around 拢2m, compared with the 拢27.1m NorthCountry made in the 12 months to 31 March last year.

But this time, Country & Metropolitan looks likely to seek out a firm based in the South-east because of its current northern bias. Wicks said: "We're looking to do another acquisition where there is no overlap with our existing businesses."

City analysts warned that Country & Metropolitan should concentrate on cutting its debt before attempting another acquisition. The company's gearing currently stands at 160%, about double the sector average.

I would be very surprised if we are not announcing another acquisition by Christmas

Stephen Wicks, chief executive, Country & Metropolitan

One City source said: "Country & Metropolitan has quite a high level of gearing 鈥� although, to be fair, it is used to living with this. If it wants to make another acquisition, the company will have to take a look at its debt first."

Part of this debt looks likely to be erased when the company's annual results are announced in September. Pre-tax profit is forecast at 拢6.75m.