In a trading update this morning Countrywide said that in the third quarter this year, its estate agency revenue was down almost £10m compared with the same time last year.
It also looks to have paused its digital roll-out, pending evaluation.
Estate agency revenue was £47.8m, compared with £57m in the same quarter last year. However, transaction levels were up compared with the first two quarters of this year, with Q3 revenue up 2% on the second quarter.
Its total group revenue was £175.1m, up 2% on the second quarter but 7% down year on year.
It said: “This represents a resilient performance in London sales and lettings and in financial services, and a solid performance in business-to-business, offsetting the effects of slower housing transactions across the UK.
“Despite the sustained challenges in the estate agency market, our cost actions are delivering. As in previous years, the final quarter remains important and we currently expect our results for the full year to be towards the lower end of the range of market expectations.”
Countrywide said its digital proposition has now been rolled out to over 50% of its network “and generally delivers a net benefit in market share”.
It added: “We are continuing to evaluate our position in the markets that benefit from the digital offering before rolling out this proposition to the rest of the network.”
In July, Countrywide said that its digital offering was available in 50% of its branches and that it remained on track to “broaden our digital capability”.
This morning’s trading update continues: “Year on year revenue for Q3 in London was down 5% while the UK estate agency declined 23%, reflecting the strong comparatives in Q3 2016 prior to the full effect of the market uncertainty which affected the fourth quarter of 2016.”
Third quarter lettings revenue also declined, down from £49m in the same quarter last year to £47.3m.
Business to business revenue was up, with Countrywide renewing its partnership with Nationwide as its primary provider of valuations and surveys.
Countrywide CEO Alison Platt said that Countrywide has a “clear strategy” founded on being the provider of choice for property services in the UK, and that the group’s focus on cost remains unabated. She said: “We are mobilising the next phase of our cost transformation programme.
“The market for housing transactions remains challenging and is likely to be down overall compared with 2016.
“As in previous years, the final quarter remains important and we currently expect our results for the full year to be towards the lower end of the range of market expectations.”
Comments (26)
Is the share price of countrywide really a quarter of what it was when Alison Platt took over only three years ago?
The problem with us high street agents offering a pay up front option is that in that sector of the market Purplebricks have it sewn up….and they’ll only get bigger. They have the backing, the experience and the capability to do it better than anyone.
We should not be trying to compete with them because we can’t. They currently have 7% of the UK market and 75% of the online market. Give it two years and that first figure will be closer to 20% and the latter closer to 90%. We need to stick to what we do best and let them stick to what they do best. And yes, Counrtywide are a shambles at the moment. I’ll give Alison Platt until the end of the first quarter next year.
Happy Thursday everyone!
Out of curiosity, where do you get the 7% of the UK market figure from?
er…….that’s the % of the UK market they have. Sorry I should have put it in bold.
I’ve seen first hand how this car-crash has been developing. There are good people working at Countrywide however the strategy is not clear at all! No logic seems to go into the road map for this proposition! Where PB has come from the ground up as a digital brand, CW are trying to fit a square peg into a triangle hole.. ‘We’re digital’ but when you get into the gritty details of the proposition you realise its far from it.
There is no way this could be making them money. It can only be doing brand damage to those that have accepted the proposition.
Needs to be binned!
It’s the longest slow-motion car crash that I’ve ever witnessed ….even the klaxons, flashing lights and warning signs are being ignored.
I have sympathy with the good staff there who are merely passengers in this calamity!
How the shareholders continue to support Alison Platt eludes me.
The best advice would be for the shareholders to dispose of the CEO for gross incompetence and, if he would come out of retirement, bring back Harry Hill to run the show !
Sorry, my personal view of Harry Hill is that he should stick to comedy.
There must be someone better than him!
The TV comedian would probably do a better job get him in!
Clearly some didn’t approve, but he made it an exceedingly successful and valuable company.
Harry Hill is of a bygone era, his methods were acceptable of sorts then, in my view they would be unacceptable today.
I remember him smugly boasting that he bought the entire Nationwide business including cars & people for £1! He lingered like a slobbering rabid dog over the £1 part of that comment. There and then he sh*t upon the very people who had worked so hard for that business. So, frankly, I wouldn’t allow him to wipe a dog’s *rse!
Lets leave Harry to keep ironing those big shirt collars.
‘UK estate agency declined 23%’ – this is a shocking result and very telling about the effectiveness of their ‘clear strategy’.
‘We are mobilising the next phase of our cost transformation programme’ – I bet the shareholders can’t wait!
I can’t for the life of me understand how Alison Platt is still in the job. I can’t see her about-turning on her strategy now, which means it will only get worse. I wished her well at the beginning, but really…it’s just embarrassing now.
It really demonstrates that you can have the big business marketing budget and numerous talented employees, but if you’ve got a duff skipper you’re going to end up on the rocks regardless.
C’wide had been trialling their digital roll out for quite some time at hybrid reduced fee levels. So it it really a surprise transactions were up and revenues were 7% down on last year. It would be interesting to see the split on transactions.
I love the “spin” on reality. Taking a so called credit on net benefit in market share from hybid with no mention of the detriment to operational profits is straight out of the Purple Bricks song book. The same “song” they have been critical of when P.B. sing it. The difference being P.B. right or wrong have a “clear” strategy which the market supports for the moment (market value £1billion approx) whereas C’wide flip flops all over the place on the way forward.
Alison certainly uses the “buzz words reference book” with…… “mobilising!…… great stuff as the competitions tanks are sitting on C’wides lawns.
She also talks about market uncertainty. Nothing compared to the corporate uncertainty in the C’wide board room.
When will this nonsense end? Dreadful management. Misguided and il-thought out initiatives, poorly executed leading to even poorer performances, and then excuse upon excuse in addition to propaganda that would make Dr Goebbels blush!! Embarrassing.
This performance is being replicated by many regional agents who have costs that are unsustainable.
Head Office overheads, looming lettings fee ban and now a review of solicitors referral fees will cripple the corporates and medium size agencies that cannot charge enough in the current climate.
Agency is becoming smaller, lower cost base – more personal service – realtor lead – but with modern techniques (not on-line only).
Sorry clicked thumbs down by mistake! Meant to do the opposite – your comment is absolutely spot on.
Agency is becoming smaller, lower cost base – more personal service – realtor lead – but with modern techniques (not on-line only)
This is exactly what we do….to the extreme side of personal service.
It’s embarrassing when you see once solid trading names giving it ‘sell your home for £999’. The staff put on a brave face, but do you want to be giving 10/20 years to a company for it to position itself with the paid listings offerings….
If you read the trading statement it says
“Our digital proposition has been rolled out to over 50% of the network and generally delivers a net benefit in market share. We are continuing to evaluate our position in the markets that benefit from the digital offering before rolling out this proposition to the rest of the network.”
Not sure that warrants the tabloid headline
When they ran the initial trial they said there was an increase in overall revenue.
Now they are saying an increase in market share.
It appeared to me that part of their strategy was to get people to switch from the online only deal to the full commission deal. It would be interesting to see how many customers remained happy with the online only offering. Perhaps that’s why they are waiting.
having worked for countrywide and at an office that was one of the first to have the roll out it is the complete opposite. customers hate the idea, ones that do the systems in place do not work. when they don’t sell they hate the agent that they cut all ties and sign a standard agreement with another agent and not the countrywide agent.
I generally couldn’t disagree with the model they have put in place as a previous employee. truly terrible.
>when they don’t sell they hate the agent that they cut all ties and sign a standard agreement with another agent and not the countrywide agent.
Interesting. Thanks. I thought the fee deduction might encourage customers to switch.
I guess that says a lot about people, happy to go for pay up front option and then get angry when it doesn’t work out for them.
the idea was they would have a ‘deduction on the fee’ but after being marketed for a period of time with no viewings and no systems to work they blame the countrywide agent and want no dealings with them. The relationship is then lost even though it was ultimately there decision.
i think the problem is they see the upfront option doesnt work and it comes across very badly for the countrywide agent.
when i was working there we didnt have a single person upgrade to a normal service. just people leave to other agents.
Transactions up but revenue down, who on earth would have thought that might happen!
>Alison Platt said that Countrywide has a “clear strategy”
It can’t be that clear if the full National digital roll-out has been put on hold.
She has a clear strategy…accept an executive role with Tesco! Love it. She has her finger on the pulse, this from 1 of her interviews ‘“One of the things we’re keen to do is to move away from that short-term transactional view and acknowledge that actually property is going to be something that is going to feature right across your life’
Glad she has worked out that houses are for life not just christmas!
Then there is this insight into the London market ‘The rates of growth we’ve seen in prime central London have slowed since the stamp duty changes. We don’t anticipate that this will alter very much. There are also fewer foreign investors.”
While that’s slowing, other areas are racing ahead. “The stuff we’re excited about at present is our classic Bairstow Eves patch in east London. Crossrail as well is going to create commuter zones which were not there before. I think we’ll see a very healthy property market in areas of what we call ‘real London’.”