Countrywide yesterday reported a £17m drop in revenues last year, and said that the tenant fees ban had cost it £12m.
It also said that the buyer of its commercial arm has failed to complete the £38m transaction.
Countrywide said that the delay in the sale of Lambert Smith Hampton (LSH), originally due for the end of last year, is despite “protracted efforts and after agreeing a revised timetable” on more than one occasion.
Monaco-based John Bengt Moeller should have completed the purchase of LSH by noon yesterday.
In an update to shareholders issued just five minutes later, Countrywide said that it continues to engage with Moeller, and “wishes to effect completion as soon as possible”.
However, given the delay, it has told Moeller it will now also explore alternative options for the sale “and is considering its legal options to pursue Mr Moeller for damages and costs from continuing delay in completion”.
Countrywide said it has now entered into discussions with another interested purchaser.
It said that for the purposes of its 2019 preliminary accounts, LSH will be classified as an asset held for sale, and reported as a discontinued operation.
Giving a brief trading update, Countrywide said total group income was £498m last year, down from £515m in 2018. It described this as a “highly resilient performance in a challenging market and after absorbing the loss of tenant fees income of c. £12m”.
However, it said that its back to basics turnaround plan had returned the group to a growth in profitability.
It said EBITDA – the profit that would have been made had it not been for costs – is expected to be ahead of expectations.
It said that this year has seen a strong start in agreed sales. It did, however, warn that coronavirus has had an effect in recent days.
There was no mention in the update about LSL’s possible takeover of Countrywide. Under stock market rules, LSL has until March 23 to put in an offer.
Yesterday, Countrywide shares were down by over 10% to finish at 230.4p.
It was by no means the only faller on yesterday’s volatile stock market – Foxtons shares fell more than 11% to 63.1p.
Comments (18)
None of the RM’s from the EA side were retained in my Region most were made redundant and their Lettings counterparts promoted to run both businesses which was my point.
Whilst I accept they probably didn’t stare at Propco all day either not many had a clue what inexus was about and very few EA RM’s I met stared out of the window all day unless to see if it was raining. They were far too busy trying to convince their troops that a **** on-line proposition which halved their commission overnight would work.
I met many good Lettings people during my time at CWD but even they knew the two sides of the business were/are chalk and cheese and trying to combine the two wouldn’t work and guess what? It didn’t.
What an insight… tell me, what are your thoughts on the average estate agents that got put in to run the lettings business in to the ground? The lettings team at countrywide had / has a lot more quality individuals than the sales people who just sit looking at inexus every day!
Countrywide’s share price fell over 55 pence or minus 24% on the stock market today.
At that terrible rate the shares will be a penny stock (again!) by next week.
The current senior management team, Board and Non Execs are just not up to the job. Many of them have worked at other firms from which they were let go from before ending up at Countrywide.
Far too many poor quality managers in the business. If LSL proceed with the take over then most of the Countrywide area, regional and national management will be removed.
I repeat my earlier comment an eye watering £498 MILLION worth of income and the company is still a train wreck.
Agreed. Far too few decent Regionals/ BM’s left in place with the majority of the profit making EA Regionals ( those who were at the coal face ) made to re-apply for their jobs four years ago and replaced by their lesser quality (cheaper ) Lettings counterparts who didn’t know an applicant from an appliance!
Gone were the days when you actually saw/heard of someone above your own line manager. Ask anyone now in Branch who runs the whole show and they wouldn’t have a clue!
Back to Basics my ar*e.
No way this survives the inbound speed bumps.
Think this will be kaput by xmas
It is a curates egg
Dixons who must be scratching their heads at all those they answer to . Any ambitious guys there must be looking to take this out
Operating from mainly cheap branch offices,many showing well over 50% sold STC and now short of stock
Happily batting away profitably ,doing what they do best just hoping that anyone from Head Office at CWD doesn’t arrive on the scene,tinker and spoil the party
Surveys are surely propping them up
Agreed.
Their survey business is a major contributor as it doesn’t rely on income/leads referred in Branch in fact they are treated as something as an annoyance by the call centres as they would rather deal with their panel business due to the turnaround deadlines agreed by B2B.
The other major contributor is their huge Financial Services arm which is highly profitable, Countrywide Conveyancing is a plus contributor and their Lettings business remains profitable. Which leaves the poor old Branch Offices to rack up the losses.
CWD caught between a rock and a hard place so cut the Branch network further to reduce those losses which then squeezes the number of referrals to 3 core parts of their business or tough it out with the remainder but with the Banks at their throat not sure that’s an option.
I have to ask how on earth they are still turning over £498m? Every one of the 35 branches near my neck of the woods are a shadow of their former selves. Branches that used to have a sales manager, 2 listers, 3 negs, 3 lettings staff and 2 mortgage advisers with upwards of 80 properties available for sale at any one time, now have less than 10 properties on the market and barely enough staff to carry out a viewing and a mortgage appointment at the same time.
Are the mortgage advisors doing viewings now?
Not sure about that, but they often are the only ones in branches whilst the dwindled members of sales or lettings staff are out viewing/having lunch etc
The agent with the most horrendous lettings fee charges in my area was guess who! It was this behaviour that was instrumental into reasonable fees by other agents being banned.
“the profit that would have been made had it not been for costs”
Lol, always makes me smile though with gritted teeth this bean counting line…
Me too!
As I once described it (the Purple version of EBITDA, anyways…) “Total income less the cost of the stamp to post the accounts”.
Death by 1,000 paper cuts continues..
The unfortunate talented deal makers at LSH everyday cutting high end investment deals must rue the day their future careers were left in the hands of the Dynamic Duo of Creffield &Long , Laurel &Hardy
Hawked around the market like a bag of spuds.
The tone of yesterday’s announcement which they clearly tried to bury in the Budget news does seem 3 months down the line they still thought the the deal might still happen
More worrying part and parcel of the proposed merger with LSL who no doubt were led to believe that the debt arriving would be vastly reduced by the sale They must be thinking very hard about this potential l merger
What a mess
Just one look at Streaky Bacon with his 1 company in the UK in liquidation and an unsatisfied charge you would have run a mile let alone incur a huge abortive fee bill when some simple due diligence would have sufficed to walk away
What is now even worse they announced they are going to try and chase him for the money no doubt incurring extra costs in doing so
Nothing in the budget about stamp duty so no respite for John D Wood and Hamptons high end London offices or those with high High rateable values Groundhog day
How are Longand Creffield still in a job?
£498m reported trading income is still one heck of a business just a pity those at the top table bet most of it on red when it turned out to be black. Shameful.
Far too many expensive offices running on empty
Current sales instructions at some of Hamptons London offices
St,Johns Wood 8
Dulwich 23
Chelsea 15
Earlsfield 19
Kingston 18