Countrywide shares soared 14% on Friday after it announced selling its commercial arm, Lambert Smith Hampton, for £38m.
The group had owned the firm for six years but, said Countrywide managing director Paul Creffield, had never been fully integrated with the rest of the group – for example, retaining its own HR function.
Countrywide said the sale would significantly improve its financial position.
In the six months to June 30, Countrywide’s debts stood at £90m.
Countrywide now expects its debt to fall to around £55m by the end of this year.
At the end of 2018 the debts stood at £70.7m, down from almost £200m (£196.4m) at the end of 2017.
Countrywide also announced an amended credit arrangement with its lenders, with provisions for a minimum credit facility of £95m to September 2022.
In an analysts’ call on Friday after the announcement, executive chairman Peter Long said: “The banks are supporting us heavily by easing our covenants as we continue our turnaround and trade in a challenging market.
“This will enable us to focus on our core residential services where we see huge opportunities.”
In addition, Countrywide told the stock market that it is simplifying its share capital, proposing to consolidate 50 existing shares into one.
Countrywide bought Lambert Smith Hampton in a pre-pack administration in 2013 for £34.1m – meaning that it paid some £4m less than it is selling the business for.
The buyer is Monaco-based Bengt Moeller, who owns Great Global Holdings, a retail-focused commercial property firm.
In the first six months of this year Lambert Smith Hampton reported a 20% drop in revenue due to an “extremely challenging” commercial property market.
Comments (6)
This company is ~*=ked. They’re consolidating their losses. Maybe the investors know something I dont.
How times change so quickly !
Creffield interviewed in May 2018 discussing Lambert Smith Hampton
“That’s absolutely off the agenda, now and for the long-term. LSH is significant in its own right, a respected brand and a successful one, so we’re not selling it” says Creffield.
He’d make a good politician.
Next trading update to the City scheduled for 23rd December. Probably considered the 25th to stop even more awkward questions but even this bunch of inept BODS couldn’t have got away with that one!
It shows the level of desperation the business has when they are selling their most profitable business and one of their most (pre-CW) long standing brands just to raise some capital. What’s next? FS? Lettings book? One of the big brands (Taylors/Bairstows/Dixons/Abbotts)?
Self fulfilling prophecy – “We aren’t making money, so lets sell the bits of the business that actually make us some money……”
Makes sense!
“Countrywide bought Lambert Smith Hampton in a pre-pack administration in 2013 for £34.1m – meaning that it paid some £4m less than it is selling the business for.”
What of course they convenientally fail to mention that since the acquistion they aggressively expanded LSH by chequebook buying in 6 additional business expensively bought including . BTW Shiells in Belfast , the nationwide ES Group. Manchester based retail specialists Tushingham Moore and Douglas Gordon
These acquisitions alone will have added an additional cost North of £25m to the £34.1m so the loss is even greater in addition the £38m nets down to £34.5m after costs acording to the RNS
The investment agents at LSH can only be grateful that the BODS were not part of their negotiating team Selling LSH at a price reflecting a lowball 6 YP capitalised against the profit for the worst year of trading the BODS buying in the additional businesses at 8-10+ YP against the best years .
Staff morale must be low as the Sword of Damocles hovering over even the star performers. Wondering who they might be answering too next LSH being bandied about the market like a sack of spuds .
Should have taken what was achievable in 2016 Strutt &Parker who have some comparability dished out at £75m+ Shareholders holding £100k of shares in June 2015 those are worth less than £1k today.
Retirements ruined and the BODS still have the neck to blame past management .
You really couldn’t make it up