Countrywide has continued to shut branches, with 23% of physical locations closed since 2016, new figures suggest.
The research found that there are currently 610 Countrywide branches, down 181 from 791 in January 2016.
According to the data presented to Property Industry Eye, 47% of Gascoigne Pees branches have closed, while Dixons and Abbots have seen 31% of branches close, followed by Bridgfords branches at 28%, and Taylors at 25%. Others have seen smaller losses.
Meanwhile, 24.3% of Countrywide departments have closed during the corresponding period, including estate agency, lettings, mortgage services, land and new homes, surveying, conveyancing and property management.
The figures, supplied by a source who has asked to remain anonymous, shows that the estate agency group currently has 930 departments, down from 1,228 in 2016.
Some 140 departments closed in 2019, while 76 departments have ceased operation so far this year.
The individual said that while branch closures were always in the pipeline “there was nothing planned on this scale”.
They added: “There is very little client overlap between many of Countrwide’s brands in a number of areas, and so by closing branches on this scale, the company is effectively reducing its chances of securing new instructions.”
EYE asked Countrywide to comment on the data presented to us, but a company spokesperson insisted that the estate agency group “does not report on branch numbers”.
The company spokesperson told EYE: “The reality is that there are always going to be branch closures, for a wide variety of reasons, such as leases not being renewed. We currently have former branches that are now being converted into blocks of flats, for instance.”
“While we are closing branches, we are opening branches too,” the spokesperson added. “Trading wise we are doing well.”
Countrywide later issued EYE with a statement that has also been shared with several other publications.
It states: “Our branches and our colleagues who work within them remain at the heart of our customer offering. As a responsible business we must constantly assess our branch footprint, the customers they serve and their profitability. We have recently agreed to opening new branches where the market opportunity exits. Sadly, due to the impact of Covid-19 and in particular the closure of the housing market during lock-down, we have had to make the difficult decision to close some branches. Wherever possible, we will seek to redeploy the teams and service our clients from branches close by.”
Research by Alchemy’s PR team and dished out to the media !
Only to be expected that there will be continuing selective pruning of under performing offices and same rules apply amongst other brands elsewhere . Nothing of course mentioned of those which are showing a 40% uplift in sales since July.
However the timing of this announcement which is being flagged up in a negative light, I guess is just part of the apparatus designed to convince shareholders and staff that somehow the gift wrapped deal served up to Alchemy is beneficial to staff & shareholders when it is anything but.
PR machine in overdrive .
This is a set of BODS with a warped sense of arithmetic as proven by their handling of CWD over the last few years with countless amendments to credit agreements and capital raises .
From the recent update:
“Net debt(2) was £55.6 million at 30 September 2020 against total available facilities of £135 million. The underlying net debt after adjusting for agreed time to pay PAYE/NI and VAT deferrals was £90.2 million.”
Credit agreement up for renewal Sept 2021 and the banks apparentally have intimated that they would like to see this facility reduced by £50m.Wouldn’t they just.
So even if they did that today currently still leaves a decent headroom of £35m today &, a worst case scenario of -£5.2m
So they are now suggesting in the sellout to Alchemy shareholders pay a staggering £8m in fees for the privilege of raising £90m unecessarily.diluting shareholders value when £15-£20m would be more than sufficent to givean adequate buffer.
Makes no sense whatsoever
The ultimate umbrella being offered when the sun is shining when the coffers are still filling up sales up 40% since July and only last week Matthew Cumber, managing director of Countrywide Surveying Services, confirms that they are handling RECORD monthly volume levels.
The only justification in the deal seemingly to gift control to Alchemy at the expense of existing shareholders
Furthermore with trade currently at records levels when the rest of the country is on its backside due to pandemic and a new set of BODS you would have thought that any bank would be more supportive rather than allow CWD turn to lenders of last resort
“Whilst the business returned to profitable growth in 2019 (based on a 16 per cent. year-on-year increase in adjusted EBITDA (pre-IFRS 16)), the Group is at a critical inflection point ”
Alchemy unwittingly have made their intentions clear
“Furthermore, the lenders have indicated that they would not be supportive of a disposal strategy as a means by which to deleverage the Group’s balance sheet.”
In other words ,once we have got that monkey off our backs we are free to slash and burn and claim all the prizes at the expense of existing shareholders
A carve up and exiting with a fat profit
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I am so glad you changed your mind Hill! If the board of directors allowed the operational heads of departments to get on and do Countrywide would be an incredible investment opportunity.
Himanshu Raja’s back to basics strategy is exactly what Countrywide should be doing. Its what Connells do; they sell and let property in the most efficient way possible, they use their economies of scale to provide their profits, they go and win business but working like the best traditional independent agency.
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Exactly ,all the BODS had to do was lock themselves in the boardroom with a bottle of port with the cheque book locked in the drawer and stop interfering
Literally blown hundreds of millions unnecessarily an even buying their own shares back at one point as the share price was plumetting only to go out and raise more capital
Let the exemplar brands and get on what they are doing best The staff must be horrifed with yet more uncertainty hanging over their heads
What happens next ?
The only way this momentum by Alchemy can be derailed is a formal bid . Every chance that Alchemy taking control so as to parcel off the brands and break up and take a quick buck.
Maybe Catalist might offer 200p and an underwrite of a capital raise of £15m at say 150-160p a share as a counter
It’s ironic shareholders here have seen the value of their holdings sliced and diced on several occasions all seemingly for the greater good .Now the sun has appeared from behind the clouds all that seems to have done is put them in line for another good kicking
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How much would the fees been for the raise last week? that is money that has been spent but which wont do anything to win a single sales or letting instruction
You’ll probably have some idea of the fixed costs, are you able to put the Nomad fees in the context of days to run the operation? How many days, weeks or months would that fee buy?
Its only when you put hidden spend like that in the context of people’s wages does the futility really hit home.
Independent agents don’t have the luxury of spending money they don’t have to [from what I can make out] borrow money they don’t need. They ceratinly wouldn’t agree to paying the sort of fees that come with this territory. I guess Countrywide need to decide if they are an estate agency buiness or in the business of financing someone else’s business
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Well if events go to plan the underwriters creaming the maj of the fees in the introduction of Alchemy which equates to about £13k per branch !
The negotiaters at Dixons Acocks Green who are beavering away clearing the decks at £2k a pop seeing all their hardwork disappear down a black hole with greedy hands in the bran tub
An arrangement fee which works out at just under 9 % of the £90m almost equivalent to a current annual interest charges for the whole Group
Factor in all the abortive costs incurred by the BODS in both the failed sale of LSH and merger with LSL its remarkable they turned in a decent profit
Announced this morning that Hoskings have raised their holdings a tadge from 12.13% to 13.02%
reminding everyone they have a say here
Plenty of action still to come
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9 nines is 81, add the noughts. £8m for half a day’s work? In context that’s nearly 4 good completions for every branch!
I’m sure the operational side of the business are deligted. If it was a necessity I can understand it but this seems like it’s not.
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Never ceases to amaze me how some statistics can be used to support a position particularly in the midst of a takeover scenario and are either believed or remain unchallenged.
Take for example the headline statement of ” nearly a quarter of Branches closed since 2016 ” confirming that 791 Branches were trading at year end which was factually correct. HOWEVER a quick reference to their annual report for 2019 (page 27) confirms that at the end of 2018 CWD had actually increased that number to 857 Branches and this then subsequently fell to 731 by the end of 2019. So if you take the 2018 figure that’s a darn sight more than 23% and confirmation also that so far this year CWD have closed an eye watering 121 Branches alone and I suspect that may soon drop below 600 by the year end as I understand some still remain mothballed.
Thought I should put the record straight for what it’s worth.
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whatdoinkow58
Statistics ,damn statistics
Yes many branch closures many a result of the failure of adding any synergy to brands under the CWD umbrella and some no doubt prudent cost cutting of under performers
However LSL for example have culled many branches and loss of jobs at Reed Rains and Yourmove too over the same period but CWD have been singled out this week in a clear PR exercise spun negatively .
To enable Alchemy to appear as some form of white knight to the rescue where every likelihood this will continue
Jeremy Hoskings a battle hardend investor is an interesting player .In an interview he laid out his investment philosphy
“The best time to invest in a company is when it’s out of fashion and starved of capital”
“Hosking points out you can buy cheaply near a cyclical low and put yourself in a position to benefit further as sentiment improves. The time to avoid companies is when they are highly priced, attracting a flood of capital and riding for a fall!
“It is a good idea to back companies where managements are incentivised to do the right thing by owning a decent chunk of equity.!
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It angers me and saddens me at the same time to see what was a powerful business slaughtered slowly while corporate hangers on fiddle.
I joined Black Horse many years ago and worked amongst Gascoigne pees and it was a money making machine 1990s
B&B took it over and then passed it to Countrywide. Many of its branches are in a high net fee area and its branding as mid market was very well established.
There is only one way that this business closed branches and that it down to local MDs who successively recruit losers until the branch hits rock bottom and then you will hear all the clap trap of we are on the wrong side of the road or its because you stopped us advertising in this that or the other.
This Company needs a cull of it local MDs who have presided over this debacle and a little more cut throat attitude.
Its a sales environment, its not digital or marketing or any other gumph, its sales.
Stop MD,s calling people marketing manager or whatever that disguises what they are there for.
As for the Financiers, well don’t be surprised. I tried to buy a chunk of Cornerstone that 2 of us ran. Making over 1 million profit back in 94 and despite all of our best efforts we could not raise cash for an overdraft facility (not a Loan). PWC who were backing us made 1 phone call and it was sorted and the irony was that it was one of the Banks we had courted.
It still amazes me that many so called Agency “names” celebrities almost, watched and presided over this and now work for a competitor, some of them are still I/C and the most you get from them is a well done on linkedin…OOOhhh look at me
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Hodge The irony is not lost is that Gascoigne-Pees have been going great guns with as you say farming a good patch and a good reputation.
All you really need to have managers who are competent and turn up like shooting fish in a barrel it looks like sales there were around 70 sales per month in July increasing to over 100 in October.
That’s a pretty healthy increase for the banks to appreciate .
Alchemy throwing their weight around with some financial muscle with some spin about the banks are likely to become a problem.
Banks are going to have much bigger problems to contend with than a company like CWD which is turning a profit and meeting their obligations.
All is required is some covenant stress testing improvement which can be easily remedied by a small injection of capital
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The banks will back CWD because the Banks keep closing branches and CWD provide them with Mortgages.
CWD should look at the Bank closures over the last 5 years and start knocking on the door for increased proc fees. They have the banks over a barrel if only they used it and stopped talking about football on linkedin.
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Any successful estate agency needs an estate agent at the helm. Ian McKenzie would sort CW out. I managed one of his branches MD of the shouth. Top guy.
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It’s been said before, I concur.
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Yes it has been said before but I guess Iain wouldn’t fit the way they work – it’s all happening at a much higher level
This problem is not new – it goes back to probably 1998 when they demerged with the financial services arm, remembering that they were originally Hambro Financial Services that took on EA branches as from 1986 – then growth became greed taking over all sorts like Nation, Friends Provident – the list is almost endless but then that £1 Billion money from US hedge fund – wasn’t that to bail them out of £80M debt? I seem to remember 120M surfaced to open new branches buy out as many Independents as possible with a view to taking over thE in the UK – I know Terramedia were in it at that time. Perhaps this is where the money is made , at top level and where it’s lost, a level just beneath
What do you think – should be blame Harry who is distraught at seeing this demise but watching takeovers of all sorts so many sadly end up this way!
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And I know several of his appointees and they were useless.
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Lets see 93 branches of Hamptons International, 24 branches of John D Wood, Gordon Gekko would be happy to have them in a nice little carpet bag. The choice on the table asset strip or go with Robin, rectify and build. Or just do nothing and drift as CW has been seen before the last CEO Platt managed to take charge and head straight for the rocks/purplebricks in disguise model. By mid November I foresee some new shiny faces around the board room table.
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