Countrywide has told shareholders that the business will be the author of its own success, and it is now ready to start the next chapter – with an inference to be drawn that the overall number of branches is under review.
Its newly published annual report covers last year, when its refinancing plan in August resulted in Countrywide raising £125m, after deduction of fees and expenses.
Executive chairman Peter Long said the company had had no alternative and he thanked shareholders for showing confidence in the group’s strategy and turnaround plan.
The annual report presents the turnaround strategy for this year and until 2021.
In the next three years, ambitious goals include growing income from complementary services to more than 55% for every £ of estate agency revenues, up from the current 44p.
Countrywide also plans to transform its “aged” IT, and deliver cost reductions of between 5% and 10% across its businesses.
There is also a hint that more branches could close. The report says that from this year to 2021, there will on average be more than 600 branches.
The report contains a number of references to loss-making branches and the impairment costs of leases.
At the end of last year, Countrywide had 714 branches plus 143 in London, totalling 857, down from the 1,200 it had before embarking on its closure programme.
The annual report also includes a section on directors’ remuneration.
It says there will be no increase this year in the pay of its executive chairman, managing director or chief financial officer.
Last year, Peter Long earned £360,000.
The annual report gives the base salary last year of chief financial officer Himanshu Raja as £410,000, up from £229,000, with a pension contribution increase from £34,000 to £62,000.
The report gives the base salary of managing director Paul Creffield as £450,000.
Former CEO Alison Platt, who resigned on January 24, 2018, received £56,000 last year, compared with £676,000 the year before. The report says that she served notice with the company until January 23 this year.
Yesterday, Countrywide’s share price closed at 8.5p.
Comments (16)
To clear up a couple of suggested routes CW should go down and why they wont / cant and for what its worth my opinion of what will happen (not what should happen)
1. Join OTM – Please i am surprised you manage a paper round with that advice. Connells, CW, LSL get HEAVILY reduced rates from RM, you are looking cirica £100 per branch featured prop, etc they pay cirica £5 for. They have no interest in seeing OTM take market share, quite to opposite.
2. Concentrate on selling houses – Yes they should but given they already have 45p in the £1 to ‘add ons’ it would be commercial suicide ignoring this. Given that there is the potential for easy repeat (and profitable) business in finance (mortgages & life cover) it is a good commercial choice, it is also more recession proof and can be automated (well almost).
3. Do away with the number of brands they have – They attribute a large portion (millions) of their overall value to the brands they have on their balance sheet. If they do away with brands they effectively wipe millions off their ‘value’ given share price is at 8/9p it just is not possible.
What they will do (in my opinion) is centralise costs even further than they already have. They will close offices, reduce staff count and have more ‘call centers’ If you have a town with 3 plus CW offices expect them to merge in the coming months. Staff will be joint sales and lettings negs. When the staff leave they will not be replaced. They will increase the call centers to book applicants calling for viewings. They will have call centers to go through their database to encourage people to come to the market. You will have a couple of listers covering probably a 10 mile radius, you may if you are lucky have a couple of viewing assistants. They will give BM’s several branches and call them area directors.
The corporates will need to decide in the coming year / months if they want to take the fight for market share to the independants (which they will not win as they just cannot control staff to do it on a process driven manual) or they centralise the operation, it is the only way they will survive. CW will have to lead the way as they are sinking fast but expect LSL, connells, sequence etc to follow suit.
The biggest surprise is amongst the brands who have forged good reputations is that some haven’t just organised themselves and upped sticks taking their clients with them gratis,
This is the way its always been where shakers and movers have a layer of deadwood above creating a ceiling
A good agent is an entrepreneurial beast,normaly not lacking in ambition so surely there must be plenty within the brands looking to strike out .Rather than run themselves ragged earning fees simply to disappear into a black hole of debt created by an inept set of BODS who are still on the premises
What is the point of hanging around. If not now when?
I
All true words.
The reason they do not leave is fear working for another company or the enormous expense it is today to set up and bankroll a new estate agents.
CW are pretty cleaver in the fact if you work Jan – Dec and due a profit share as a BM or RM you are not paid it until the following April so you have to stay to get your bonus. Also by that period you have the first quarter banking behind you for the current year.
Unless you are willing to write off a sizable bonus or a new employer gives you a golden handshake to say hello (do they still exist?) you are pretty much tied to them.
Plenty of individuals within the brands who have already trousered the multi milion pounds shovelled out by CWD buying in goodwill expensively with borrowed monies who can easily bankroll a team to take on a new office and infrastructure
Maybe not suited to those whose annual bonus is the sum total of their ambitions
Just ask the lads at BTW Shiells who sold out to LSH left and sold themsleves back again pocketing some serious wedge each time . No doubt just biding time for another rinse and repeat
Year 1 of a 3 year programme with possible closures (offices or complete brands?) this year into next year.
Sounds like the Directors know exactly what they are doing – more big write-offs i.e. “goodwill, intangible and other asset impairments” followed by a “recovery” and “trebles all round” for the select few and a coke and a bag of crisps for the poor blighters at the sharp end.
I refer to my earlier comment about a certain corporate office in town having a big paperwork clear out recently.
Probably nothing in it…
Well if they’ve had a big clear out there is probably nothing in it indeed
So the ship’s leaking money and those in charge of the finance are getting pay rises? Err……….?
CW should stick to max 2 brands and focus their marketing and energy on those 2 brands only.
Well Countrywide is not relevant!
‘In the next three years, ambitious goals include growing income from complementary services to more than 55% for every £ of estate agency revenues, up from the current 44p.’
In my opinion, this is where Countrywide went wrong in the first place, when I worked for them they were less bothered about selling houses and more interested in selling mortgages etc.
Nail on the head there, what the powers that be never realized was that if you dont have houses to sell nobody that needs a mortgage, conveyancer etc will contact you.
That was certainly my experience when I was there, All the pressure was about first mortgage appointments and referrals to their conveyancing operation. There also seemed to be a “one size fits all” mentality in that the level of business (certainly on FS and conveyancing) that could be achieved in a busy city centre office was also expected from a smaller, rural town office.
What a ridiculous comment. Either a rep an owner about to go out of business with thinking like that.
Given they pay circa £100 per branch per month for RM shows how little you know.
It’s quite obvious what Paul needs to do to quickly turn this ship around, get all of the CW listings to the top of the OTM page views (industry saviour)
Well having seen the value of their holdings diluted from 118p in May 2018 to 10p in the summer you would have thought embattered shareholders would be seeing the green grass of recovery at last especially as the SP had hit the dizzy heights of 589p only a few years earlier.
“Executive chairman Peter Long said the company had had no alternative and he thanked shareholders for showing confidence in the group’s strategy and turnaround plan.”
Considering that the SP in a dividend free world was at close of business yesterday at 8.4p a further 16% fall from what was to be seen as a new low of 10p on dilution last summer “confident” wouldn’t be a word shared by many especially with the same old faces on the board