Pre-tax profits at Countrywide tumbled 25% in the first half of this year, the UK’s largest estate agency chain reported this morning.
Countrywide chief executive Alison Platt also warned that a period of uncertainty post-Brexit will “inevitably impact the level of transactional activity in the second half of the year and, although it is too early to quantify accurately, we will not meet last year’s results at the EBITDA level.
“Notwithstanding this, and following the significant investment we made in the business in the second half of 2015, we continue to make real progress in executing our strategy.”
Countrywide this morning said that while operating profits were up 75% from £16.1m to £28.3m, adjusted profit before taxation was down from £28.9m in the first half of last year to £21.8m in the first half of this year.
Adjusted EBITDA was down 8% from £41m to £37.8m
Total revenue rose 9%, from £338.5m last year to £370.2m in the six months to the end of June.
Countrywide said that there had been “strong operational performance in uncertain markets” and that there had been revenue growth across all business units helped by market share gains.
Countrywide’s balance sheet was also helped by a gain of £13m on the part disposal of shares in Zoopla in the first half of this year.
House sales exchanged were up 10% compared with last year, to stand at 33,940. The number of properties under management also rose, by 11%, to 117,794.
Countrywide said that its profits had been impacted by a market slowdown in May and June in the run-up to the EU referendum and said that post-referendum, residential transactions in London had stalled.
It was, it said, “too soon” to call a trend on either price or transactions.
Countrywide also revealed it had spent £39m on acquisitions in the first half of this year.
Chief executive Alison Platt said: “We always said 2016 would be about execution and in H1 we began to see the benefits of a strategy that puts the customer at the heart of all we do.”
Countrywide also confirmed what EYE has already reported – that in London, it is consolidating some of its brands and branches “with the aim of creating bigger, better and businer branches that are open for longer with a wider range of services for our customers and an improved working environment for our people.
“As part of the Building Our Future strategy, we will continue to identify ways to consolidate our brands and rationalise the branch network.”
It also said that its online estate agency trial is under way, with initial indications positive.
One quarter of its network will have access to the online product by the end of this year.
Comments (8)
The crux of this online strategy is that the vendor pays £700 up front, or a deferred payment via a close brothers agreement, but has the alternative to switch to traditional agency and have the £700 knocked off the fee at the end.
With changes in the market can’t help but think they’re a little too late, which is typical of CW.
So the staff are left with the over priced rubbish and no one makes any money….confused strategy.
The branches office valuer would be the person doing the initial valuation like they would do. So if the property is over priced when it comes back to the branch on the traditional method they only have themselves to blame.
It’s not your purple bricks model where you have “local property experts” (who actually probably don’t know the first thing about the area they operate but that’s another story) and then it goes into branch.
the valued for purple brick is ex CW with 20 years experience and he is still not setting the world alight . Why because he needs man power to cover the ground
Oddly this has been piloted as CW like to call it, and has seen little impact and a large proportion of sellers have then converted to selling their property the traditional way due to lack of interest.
The old fashioned Agency is more than capable of competing and succeeding anyone who says differently probably didn’t ever work in the “good old days”.
Ha! I see the editor has fixed that!!!
Shouldn’t these figures be millions?
“Countrywide this morning said that while operating profits were up 75%, from £16,176 to £28,325, adjusted profit before taxation was down from £28,904 in the first half of last year, to £21,796 in the first half of this year.”
I think my local hairdresser makes more.
Countrywide – Profits down
Connells – Profits up
The old-fashioned, has-been, worn-out, traditional estate agency model is just never going to work, is it.