Connells Group has this morning announced increased pre-tax profits for the first six months of 2021 of £80.2m, up from £17.2m 12 months earlier, reflecting what the company describes as ‘an exceptional performance in a strong housing market’.
These results include the profits generated by Countrywide since its acquisition on 8 March 2021.
The reported pre-tax profit of £80.2m includes £29.3m of gains from the Group’s disposals of its shareholdings in TM Group and Fixflo, which generated cash proceeds of over £66m for the Group.
The half year results also include IFRS3 charges relating to amortisation of Countrywide’s intangible assets – including its sales pipeline – of £38.3m, together with acquisition costs of £2.1m.
Excluding the one-off’s above, Connells Group’s underlying EBITDA for the half year amounted to £112.6m, including Countrywide since its acquisition, up from £49.2m in H1’2020, including Countrywide on a like-for-like basis.
The Group’s performance comes against the backdrop of a strong housing market in an improving economy, aided by the stamp duty holiday, which created peaks in completions in both March and June, ahead of the final phase of the withdrawal of the concession in September.
Exchanges were 34% higher in the period compared to the first six months of 2019, a more meaningful comparative period due to the fact the housing market was effectively closed for almost two months in 2020.
Connells Groups says that confidence in the housing market is strong, with buyer registrations up 49% on H1 2019, supported by low interest rates and competitive mortgage products, buyers are driving increased sales activity.
However, the availability of stock remains a key market challenge with the number of properties available for sale 14% lower than June 2019.
Connells Group CEO David Livesey commented: “We have delivered another strong financial performance and increased the scale of the Group and our capabilities significantly with the acquisition of Countrywide.”
“Bringing together these two great businesses will enable us to provide a more integrated and enhanced suite of services to customers and clients. Countrywide’s branch network is a key asset and we will continue to maintain and enhance its current branding and service offering, while leveraging Connells’ track record of positive investment in people and technology.
“Additionally, the enlarged Connells Group will provide exciting opportunities for all colleagues and the potential for us to attract the best talent across the industry. Importantly, we have improved our combined market share of instructions in the short time since the acquisition.”
Connells Group continues to navigate the ongoing challenges of the Covid-19 pandemic, maintaining its own Covid-Secure standards in order to keep the health and safety of its colleagues, customers and the communities it serves at the heart of its response. Whilst the Government continues to ease restrictions, Connells Group is maintaining a prudent approach to how it continues to operate.
Livesey continued: “Despite the potential for distraction, our people have been resolutely focused on delivering for all our customers, and their immense contribution is the key driver in our success.
“They have adapted brilliantly to challenges, supported new ways of working together – especially those Countrywide colleagues recently welcomed into the business – and our results are testament to the professionalism and dedication of all our people. We look forward to the rest of the year.”
Disappointingly no news on whether Connells intend to repay the millions of pounds of taxpayers money. At this rate, Connells risk being tarred with the same brush as Foxtons and shareholders have made their feelings known in recent months. Taxpayers will not accept it when profitable firms like Connells keep their money and pay bonuses to management and Directors.
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I believe that Connells is repaying all of the furlough payments received in 2021 as it and others rightly should.
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I have a feeling they will do too.
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Why do you think that
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There is also, however, the argument that during furlough, Connells paid their staff 100% of their salary; so it’s not just like they took the government’s money and spent none of their own. For months they paid 20% of all furloughed staff’s salary so that nobody received reduced income. That will have cost them millions in itself and was not something they had to do (especially during the period where EA branches we’re closed entirely).
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I could not care less what Connells do – I only think about my own business
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Whereas I think it’s useful to see what they’re up to. Connells’ achievements have to be compared with those who have tried the same thing at the same scale and failed. Look at all the huge financial institutions who have not pulled off what David, David and Anthony have done, those guys really have to be respected for running a benchmark company.
You might not realise the power Connells/ CW have over the industry, they are one of the reasons Rightmove have an unwarranted grip on the industry and can charge what they like.
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As I say I do not care. Nor do I care about people who have run a corporate business and failed. As a developer I have had dealings with Connells and not found them to be particularly good.
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Who is Anthony ???
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Well done to Connells.
The big winners here are the employees of Countrywide who no doubt 12 months ago (and the last few years) have been worried if they have an office to go back to every Monday after the car crash way the business had been run.
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be intersted to see the CWD results.
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H1 for CWD brands must have been good All the provincials were banging them out Certainly a good chunk off the purchase price
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To be fair it was only circa £27 million they took in Gov/Taxpayer support so its not very fair to criticise them. They had to fund the acquisition as well.
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