Today Countrywide told the London Stock Exchange that the changes it has made to its business are “beginning to bear fruit”. Countrywide remains heavily debt-laden  but said it had agreed a new lending package.

Reporting on the first six months of this year, it said it is continuing to rebuild market share across both sales and lettings. It said that by listings, it has an 8.4% share of the sales market, and that in lettings, it has a 7.3% share.

However, it warned of a weak market, as group income declined by 4% to £290.6m, down from £302.9m in the same period last year.

Sales and lettings brought in revenues of £157,854,000, down 4%. It reported total house sale exchanges of 21,624, down only slightly on the 22,026 in the first half of last year. Countrywide also had 126,198 properties under management, up from 124,767.

The group has cut its pre-tax losses significantly. It made a statutory loss of £37.7m, down from £206.4m, but emphasised an operating profit of £10m for the six months to the end of June.

Countrywide also expressed optimism for the rest of the year, with a pipeline £13.5m higher at the end of June than at the start of the year.

Net debt at the end of June stood at £194.3m, but Countrywide said that its lenders “remain supportive of the business”. Countrywide said it had agreed “a new covenant package with lenders provides the financial flexibility to continue to execute the turnaround plan”.

The new covenant deal enables greater debt levels  through next year and 2021, and requires Countrywide to share more information with the banks.

Countrywide also confirmed this morning that it shut a number of loss making branches in the first half of this year, cutting staffing levels and reducing marketing spend, to “reset our cost structure”.

No number has been put on the closures or job losses and in a call this morning between EYE and Countrywide group managing director Paul Creffield, he would not be drawn on the subject. However, he did say that the review of branches had completed, other than for a possible  “small handful”.

Creffield also dismissed speculation that he and executive chairman Peter Long – both in their sixties – could be contemplating retiring. He said: “We are both sticking around for as long as it takes.”

Yesterday, Countrywide’s shares dropped over 15%, starting the day at about 5.4p and ending at 4.5p.

Connells Group posts £26m profits

Connells Group is not a listed company, but is owned by Skipton Building Society, and also issued its results today – announcing strong profits and revenue.

Pre-tax profits of £26.2m were down from £28.9m in the same period in 2018, but total revenue increased with its lettings, mortgage services, land, new homes, conveyancing and survey and valuation divisions all producing positive results in the period.

Although the number of exchanges across Connells Group’s estate agency business was 8% below the comparative period in 2018, reflecting the significant fall away in the market this year, total income was almost exactly the same as  last year at £215.0m (2018: £214.9m).

Connells Group said this morning that it is “the most successful estate agency business in the UK on a number of measures – its profitability, it sells the most houses and has the largest market share”.

Group CEO David Livesey said: “We are proud of our ability to respond to challenging market conditions and to have produced such good results showing the strength, resilience and diversification of our business.

“The immense contribution of our people has again been a key driver in our success.

“Our people remain our biggest differentiator and greatest single asset, and we continue to attract and retain the best talent in the industry.

“The vast majority of our middle and senior management have been with us for many years and have experienced all types of markets in the past which is, again, proving invaluable.  Their continuity and experience provides the backbone of our business.”