Connells this morning announced a reduction in profits as it sold fewer houses last year.
The group reported EBITDA – profits after costs are stripped out – of £75m, down from £80.1m the year before. Its pre-tax profits were £56.9m, down from £65.7m.
The figures exclude a gain from the sale of its ZPG shares.
Despite the drop in profits, Connells said its results were “solid” in a difficult year for the UK housing market.
While sales were down, lettings income was up 5%.
Connells underlined its commitment to the high street with group CEO David Livesey declaring: “Last year was a tough period for the property market with Brexit uncertainty continuing to weigh heavily on customers’ minds and depressed levels of UK housing transactions.
“Despite this, our core estate agency business performed well and we continue to benefit from a strong and diverse business model which is resilient to market change.”
He said that Connells Group maintained its strategy of high level investment throughout 2018 to ensure its strong position for the future. This included further innovations in technology and proptech propositions to support and enhance the business’ offering, expanding and developing teams to provide the best service to customers and clients.
Connells Group employs over 7,000 people and, said Livesey, remains “fully committed to its network of nearly 600 high street estate agency branches as demonstrated by the decision to close its online estate agency Hatched last year”.
This followed the conclusion that the ‘online-only’/hybrid business model does not produce a viable economic result nor give house sellers the best outcome as compared to the Group’s full service high street operation.
Livesey went on: “We remain committed to expanding the Group – be it through acquisitions that add value to our business or organic growth – to support our strategy of remaining a market leader in both our core estate agency practice and our successful business to business activities.
“It has been, and remains, an uncertain time for those operating in the property sector and we pay tribute to the skill and tenacity of our staff, our greatest asset, who have faced the challenges head on to deliver another commendable performance.”
As at the end of last year, Connells Group had 586 branches, down only slightly on the 591 12 months earlier. This morning the firm said it will look to grow its business organically and through acquisitions.
Comments (9)
So 56.9 mill verses 100 mill in 2017-is 76% down.isnt it ??.
Interesting statement in Skiptons announcement today ref Connells
…………………… however the 2018 results have benefited from a £4.2m credit (2017: £9.7m charge), which is held centrally, in relation to the long term management incentive scheme in place for senior managers within the Group’s Estate Agency division and reflects the ongoing subdued housing market; That is a £14 million swing !!
Connells issue from what I hear form recruitment companies is that they are losing top tier management and some serious long term players who helped build the company before they acquired what is now Sequence . That has to be the real underlying worry for the Skipton. Countrywide may have had their Annus Horribilis -Connells soon to have theirs I think 2019/20.
If I could short Connells Group as a stock I would.
What Recruitment companies are these then that are saying that?
‘So 56.9 mill verses 100 mill in 2017-is 76% down.isnt it ??.’ ………not by my calculation
The £100m in 2017 included £38m from Zoopla shares so the like for like is £56m vs £65m – pretty good compared to others. Unless I am mistaken Livesey / Shipperley / Plumtree and the top team are all still there and Connells are pretty unique in having so many of their team with 20+ years service which probably explains why they deliver the results they do. If Connells were a plc I would be buying their shares.
I guess those other comments will be from the recruitment companies that Connells never use.
Despite what the Fake Onliners try to portray …..High Street Estate Agency is far from dead.
Pretty impressive / their aggressive client strategy clearly pays.
I agree, good numbers in a challenging market. My dealings with them as a business are mixed at best, but they are making money! Multi practice is the answer, although these numbers won’t be as healthy next year without a strong cross referral fee culture, mortgages and new homes….and these issues are now in the cross hairs of those that pursue these things
Surprised countrywide and connells don’t lobby rightmove and zoopla to ban pay any way agents.
They are an honest company playing a game they can’t win if the public is continued to be misled by the pay any way fake business model.
Not sure about them being an honest company having worked there for a while! Would interesting to see how they got on without forcing buyers to use their mortgage advisors…
No need to be afraid of a little competition.