Countrywide could be back on the brink as shares fall below 6p

Countrywide shares fell to under 6p yesterday, a new low, bringing the market capitalisation to just over £100m.

The valuation is less than the £120m market capitalisation some eight months ago when Countrywide went to shareholders for an emergency capital raise.

Yesterday’s valuation is also less than the money raised at that time – a total of £140m.

After costs and other allocations, the cash call last August raised £129m to keep Countrywide’s wheels turning, with most of the money – £115m – used to pay down part of Countrywide’s then £200m debt.

Yesterday the shares fell to around 5.9p, prompting speculation that Countrywide may now have little option but to sell off parts of its business.

It is closing some of its branches, according to readers who have contacted EYE and have told us that some staff are in consultation. The possible branch closures include the Frinton-on-sea branch in Essex.

However, Countrywide has already openly stated as part of its recovery plan that it expects to have an average of over 600 branches in the near future, which implies potential closures of about 200.

Purplebricks shares settled yesterday at about 107p, after two consecutive days of falls.

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39 Comments

  1. smile please

    Do I dump my shares and obviously lose a fair sum or stick with it for the long term?

    Given up trying to work out with these shares the best thing to do

     

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    1. Adam Day

      Cut your losses and buy some dominoes pizzas and wine for your staff – you’ll get way more enjoyment out of it

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      1. ArthurHouse02

        Good Morning to Adam Day who has a secret new project on the go

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        1. Adam Day

          Good morning to you too 🙂

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    2. JonnyBanana43

      Keep them. They can only go one way!!! (Sort of!)

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      1. Bigbee73

        Sell them and buy back at 3.5p!?

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    3. Ric

      Who knows, but I think… (for what it is not worth)

      If you genuinely have them… I would keep em.

      I personally think at 6p its worth buying a few! (although you may have paid more so harder to say… but rise they will)

      I just feel the right person could give CW some life… if they look at the business as lots of independent businesses under one umbrella. Rather than one method fits all…

      6p could easily become 18p or some big players turning £10k into £20k hoping to see 12p a share is more the feasible. (12p for a CW share surely will return)

      Jeez… PURP etc… one tiny bit of bull **** and the investors go crazy!

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      1. Hillofwad71

        Ric “I personally think at 6p its worth buying a few! (although you may have paid more so harder to say… but rise they will)”
        Well a confident vote! Have you digested the numbers to support that or is it wishful thinking? Despite going cap in hand to the market to raise capital to reduce debt last summer it is still hefty.
        The banks very much on CWD’s case with limited confidence in the BODS .
        Not only that current revenue looks very much like they will be testing their  rivets this summer .
        At best £25m EBITDA this year  Pushing loan covenants with the banks to the limits
        This could easily dissasemble  very quickly .
        You also have to ask the question if you are the big  fee earners amongst the CWD  brands would you be sweating conkers happy driving home the fees just to pay legacy debt issues?

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        1. Ric

          Not wishful thinking as I have not invested, nor have I digested the stats as I don’t care that much – just an opinion!

          Let’s be fair… it is just a bet at the end of the day and I reckon £1k could get you £2k back easy over the next few years.

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      2. smile please

        Sadly i do i have the shares (whats left of the value).

         

        And my thinking was what yours is now when they were at a higher price. I am just glad i am a better business owner / estate agent than share trader!

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        1. Ostrich17

          I am tempted to buy – do you know if CWD are mainly getting rid of duplicated offices(e.g. where they have say Bridgfords/Entwhistle Green in the same high street)?

          My logic is based on the fact they have a 3 year plan which gives the beancounter scope to write-off all the iffy stuff in year 1(done), whack some accruals into the p&l in year 2(tbc) and treat everyone to a big bonus in year 3.

           

          Note: The above  should not be considered  financial advice. DYOR.

           

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  2. AgentQ73

    They shut Bridgfords in Bolton a good few months ago.

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    1. Samba

      Suggest they scrap their minimum rental management fee of 13%, their no appointment Thursday policy (it’s all about business generation you know……..) and loose the number counters each staff member has to have to record their calls and go out and be an estate agent!

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      1. Pinky and The Brain

        Have you made your 200 calls a week ?

        No boss! Then your on capability!

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  3. Jonathan.Welford

    Countrywide is in need of hospice care to passage the journey towards their end of life.

    The manager of a local branch to me has to clean the office (as part of her job role) as there’s not enough money to pay for a cleaner!

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    1. Bigbee73

      When the cleaners gone, you know you’re up for sale!

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    2. Homerjsimpson1979

      They are not allowed to even buy tea or coffee now. ha

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  4. Hillofwad71

    Disheartening for all those former and existing employees.pensioners who showed willing believed in the BODSwho have taken one for the team by investing in their company .Life changing losses for some
    It really is difficult to understand why today this set of BODS are still on the premises having overseen the loss of hundreds of millions of shareholders money. Writing off goodwill before the ink was dry on the cheques purchasing it expensively on borrowed money
    A competiton with Purplebricks in a race to the bottom
    Pity old Conrad Pascal now a Realtor in Bricks New York Office with the Sword of Damocles hovering over his head
    https://www.linkedin.com/in/conrad-n-pascal-3a61889b/
     
    Came to UK  from the States  former DJ and Air Force , and then a Tractor Boy becoming a Countrywide  Branch Manager in Bury St.Edmunds  moved back over to the States in May last year and joined Bricks. Out of the frying pan into the fire but best of luck to him
    With just the 2 sales and a handfull of instructions he is going to need it !
    https://www.zillow.com/profile/conrad-pascal/      

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  5. Mrlondon52

    This should be about share price vulnerability but actually its about cash.

    We should be talking about how a low share price makes you vulnerable to a takeover. But in this case, who would want to buy the whole company? It has quite a few very successful parts (Hamptons, Slater Hogg, surveying, etc) but it also has parts which don’t work and the synergies are, lets be honest, mythical.

    So any predators will want to buy bits of the company not the whole thing, so there is less risk of a takeover.

    Unless….. a brave LSL / Connells / Nick Dunning / Spicers etc bought the whole thing, sold off the bits they don’t want, kept the bits they did and hoped to be quids in at the end of it. The risk with this is who would be their buyer? I guess the 800+ branch network makes no money at the moment in this era of low sales transactions and that’s a huge liability to take on (redundancy costs and leaseholds).

    Back to cash – we thought the problem was cash to run the business but in fact it was cash to pay off the loans. I don’t know the burn rate (of both daily ops and loans) but if CWD can service the business and loans then they can trade forever, regardless of the share price and what the trade press writes.

    What next? If cash is a problem then CWD may have to start selling off the crown jewels. It has conspicuously avoided that so far and good for them for sticking with it.

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  6. Lettingsagent3

    Meanwhile staff in their back offices are being greeted with 14 days consultation periods. And left in silence.

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  7. dave_d

    Entwistle Green in Chorley closed a few weeks ago

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  8. Homerjsimpson1979

    I remember the happy times of £6.50 a share.

    Broke me when i left and had to sell them for under £1 so god knows what the poor folk that are left are feeling now when they are 6p.

     

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  9. Sdaltaf101

    Unfortunately the business in its current form is no longer viable, the lifeline was the recent £140 million to support the management but in reality the money was used to pay the ever increasing charges implemented by the banks, this will continue when the management will be forced to sell-off the jewels to maintain the borrowings. The good staff have already left and those who remain are looking for pastures new and there will be those who will continue to support the management both financially and emotionally who will be aggrieved when the administrators are appointed. The current liability will be their contractual obligations to the employees salaries and pensions, leased premises, business rates but before these will be the banks who will be paid first, once the banks have taken as much as they can without increasing their exposure they will be replaced by the administrator to pick over the carcass.

    The fist administrators report will make interesting reading.

     

     

    Very sad when the business was and is still potentially viable but is hampered by an inept Board who are dancing to the tune of the banks by reducing costs when the they should be implementing a radical business strategy as a counter offence but alas they continue to retreated, the employees deserve more.

     

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    1. Hillofwad71

      Sdat

       

      Clearly you haven’t followed the story of CWD

      The wounds CWD are suffering from today are all self-inflicted

      Not increasing charges but disappearing revenue to service the debt

       

      They borrowed monies from the banks purely to expand . Paying silly money for disappearing turnover.They even used the banks money to buy back their own shares as the share  price was freefalling It;s not the banks fault they spent their money unwisely

       

      The banks are quite naturally worried as they are very aware it’s a people’s businessThose who choose to leave.clients will follow

      The banks will be as supportive as they can otherwise they will be left with just the debt 5p is very much on the horizon

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      1. Sdaltaf101

         

         

        We will see how supportive the banks have been, the details will be made available within the administrators report.

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        1. Hillofwad71

          I agree  still plenty more equity to evaporate and 5p looks the next destination and it could run right down close to the wire A decent set of BODS should be able to sell LSH  or some other profitable spur  off to keep the banks sweet but you never know   Don’t blame the banks for the inept BODS though

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          1. Sdaltaf101

            I will blame the banks and the board, it was clear when the board put together the rescue package they were feathering their own nests which is why the original proposal was rejected, they preferred to focuses on their huge financial rewards for rescuing a company which they collectively destroyed, that’s when they lost the real support from the Banks. They then retuned to the table after removing their remuneration clauses and have done nothing other than jump to the tune of the banks, CWD is a superb business or was in the past but they do still have potential but not with this board, they have failed miserably and refuse to go. You will see a spate of closures and the quality assets will be sold over the next 3-4 months and the administrators will be called in later in the year. There is no cohesive or strategic strategy at play other than an accountant removing liabilities, reducing costs and sacrificing assets, whereas a businessman would recognise the companies first asset is the staff and without the staff there is no business. All businesses rely on reputation and this is only achieved by the hard working employees, and when they are demotivated their loyalty, enthusiasm and passion is diminished and then the business fails. 
             
            They need someone with the ability to unite the troops and inject passion and enthusiasm along with a cohesive strategy and Quirk would be perfect for the job, a little controversial but if Quirk was on the front line you would know there is going to be a fight, with the current board there is no fight only failure as the company retreats to the administrators.
             
            Heart breaking for the remaining employees and the shareholders.
             

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            1. Hillofwad71

              Well the only blame you can lay at the bank’s door is falling for the BODS’ spiel that they could add value to the businesses they were buying and adopting a new strategy a la Platt

              You cant blame them for wanting their money back after all that failed. What is surprising  is that they haven’t enforced some regime change amongst the BODS

               

              I agree that CWD will ultimately unravel but there won’t be financial blood on the streets apart from further deterioration  of shareholder value

               

              You really can’t be seriously suggesting the failed business manager Quirk  steps up to the plate. Is that some kind of sick joke? Somebody more interested in self-publicity than  keeping his hands on  the wheel.

              He managed to make shareholder value at Emoov disappear quicker than the CWD BODS.That takes some doing .

              He blamed others ,recruited badly and took no personal responsibiity for its misfortune A captain who let the ship hit a reef . Even when the company was falling off a cliff he was desperately trying to get on radio toast pearls amongst swine and had already started up his new business,Talked a good game and the banks unlikley to fall for that spin  His sole achievement apart from a huge cash burn was to make Emoov look bigger than what they are and look how it  turned out !

               

              You have made no comment about the flatlining  of new instructions at Bricks?

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              1. Sdaltaf101

                It would be unlikely Quirk would want the job, why would he?,  but what they need is a leader who will fight  on the front line and unite the remaining employees and attract quality from within the industry and Quirk would fight regardless of what you think of him as a person. What they currently have is a failed board with no vision or cohesive strategy who are ignoring their employees with the banks leaching on the back of the model, we will debate this further when the first administrators report is published.
                 
                 
                I’m glad you mentioned Purple Bricks, I’m a little surprised the shares have stuck at £1.08 i thought they would have bounce at £1.00 so that in itself demonstrates what a fantastic business model they have, pay now and we will pass on the messages for £1k or give a percentage of your property to the pipe and slippers brigade to do the same, why wouldn’t you?
                 
                 It also demonstrates the huge level of financial support they have from the City.
                 
                No business can maintain growth month on month so the level of instructions don’t concern me particularly with the recent publicity, the sooner they pull the plug on Australia and the US and focus on the UK high street with their Hub model the share price will rocket north, there is plenty of low lying fruit on the high street.
                 
                 
                 
                 
                 
                Long live the Purple Brick…..
                 

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                1. Hillofwad71

                    “No business can maintain growth month on month so the level of instructions don’t concern me particularly ”  
                  The problem is they have “sold” themselves to the City that the beanstalk will keep on growing til 100k instructions pa before it stutters .In order to achieve that target  they flagged up they would need to spend heavily on promotion which they have !
                  They have continued that excessive spend but the problem is that it  isn’t translating into increased growth.
                  Flatlining in 2019 wasn’t part  of the story Now having to heavily spend just to tread water .History tells us that the  city  punishes that badly !

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            2. Woodentop

              They need someone with the ability to unite the troops and inject passion and enthusiasm along with a cohesive strategy and Quirk would be perfect for the job

               

              You certainly have no intelligence!

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              1. Sdaltaf101

                Woodentop
                 
                You think YOPA is on the high street.
                 
                And the Muppet award goes too?
                 
                Congratulations and don’t forget to shut the door behind you, and will you empty the bins before you catch your bus.
                 
                Muppet……

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                1. Woodentop

                  LOL. You still haven’t the brains to work it out what I said, same old misleading rant and insults for everyone to see what  a sad person you are.

                   

                  SAVILLS, LSL (YOUR MOVE & REID RAINS) are major investors of YOPA, who are on the High Street. Now who looks like a Muppet.

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  10. Malcolm Egerton

    Why is CW not addressing concerns on here? Surely they should be using every industry forum available to reinforce whatever recovery strategy they may have?

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  11. smile please

    CW are still operating without a CEO (18 months and counting) surely just appointing a figure heard would boost SP?

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  12. The Future Is Tech

    A slump for Countrywide, ripping off customers for years and ‘it’s so sad, hope they will recover’ BS and any mention of Purplebricks who have saved customers millions and you lot literally throw bricks at them. They will build that wall, fixed fees are the future.

    Makes me think, how many posters on here are just bitter higu street agents who are feeling the pinch now they have to work a bit hardet for yheir bread and butter? Wow.

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    1. Woodentop

      Makes me think, how many posters on here are just bitter about high street agents.  
       
      You know nothing about estate agency as demonstarted by your woefully idiotic postings, believe the future is Tech and blinkered to the fact that the on-liners are not High Tech, they are failing or failed portal listers. Now who else uses high tech long, long time before PB and are a sucess and used TODAY by 95% of consumers ….. the High Street agents.  
       
      As to your continued support of PB and savings, how much multi £m’s have they now lost …. now very near to £200m’s
       
      Yesterday: PB share price is jumping up and down faster than  a yoyo with no gains, below its opening price this morning. Oh dear it looks like no-one is wanting to play    ….. confidence has been lost ….. no longer in favour with the city …. a liability to pump anymore money in when the way ahead is looking grimmer by the day, senior management abandoning ship, the housing market in decline (the gravey train is in decline), Brexit fiasco (PB customer service claim this is why they are not selling listed properties!!!), escalating number of LPE’s leaving, still no declaration of a dividend ….. oh dear not looking good for the share price to climb, all the liabilities about to arrive from OZ and the USA and the major international investment banks now saying sell and down valuing share price to £1.00 to 80p. Shareholders demanding answers!   Will its cash reserve be wiped out in a blink … it will if it continues to spend as it is. Has all the signs of an earlier end.

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    2. Property Pundit

      PIE really should have a spell checker.

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  13. Your choice 995

    Further branch closures next week Potters Bar, New Barnet and Perivale!

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