Countrywide shares fell to yet another new low yesterday, finishing at around 49p.
The fall, of some 11%, followed negative press coverage with headlines suggesting that Countrywide needed to get its own house in order, and that the roof had fallen in on the UK’s largest estate agent.
With Countrywide now hoping to halve its £200m debt by tapping up investors for more money, it seems possible that the share price could go lower still. Yesterday, City firm Numis suggested the share price will fall to 38p.
The Telegraph also yesterday speculated that a plan to raise a bond to replace a revolving credit facility with Countrywide’s current lenders was unsuccessful, leaving it with no choice but to approach investors for a lifeline.
What price failure? The market has gone short on Long.The “synergy” one of Platt’s buzzwords of amalgamating a number of nonhomogeneous exemplar brands and a strategy of buying revenue with borrowed monies under the stewardship of a set of remote , inept BODS has failed spectacularly wiping off over £700m of market value in 3 years Its not edifying watching suicide in instalments
The irony of course is that they have been winning industry awards! This just goes to show the talent amongst the brands Definitely in line for Disappearing Turnover of the Year Award.
I should imagine the majority of the BODS have been sidlelined and consigned to serving the drinks whilst Oaktree’e representatives get to grips with the finances maybe a 1 for 1 rights issue with Oaktree subscribing to 30.14% to maintain its existing holding .At today’,s opening price of 49p this would raise £115m gross of expenses which is well short of the £192m debt assuming a 100% takeup! However no doubt the banks might be very happy just to reduce the exposure and offer the balance on favourable terms and/ or attach a rider that some of the brands are sold to meet the shortfall
All intriguing stuff Maybe Oaktree might make a bid and take the whole company out I wonder at what level that could succeed ?
The main problem now is controlling the main assets .the talented staff who surely can have no confidence in their lords and masters .The prospect of continuing their careers mainly to service a £192m debt incurred unnecessarily cant be inviting.Their sights must be on pastures new. I should imagine there are many posters here already trying to cherry pick the best staff
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Oaktree are aggressive investors, therefore not for the long term. This one has turned ugly, so they will try and syndicate this ‘opportunity’! Its clear has limited value if the bond issue has failed. Oaktree are nursing a few like this…they bought into Bavaria Yachts for £330m and this is now in receivers hands. Countrywide will be an investment they need to massively down value in their portfolio!! This will cause problems for the business as it is cost cutting that will drive everything from now on. In a very competitive market that is being challenged in every conceivable way, asset stripping will begin at low values!
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Oaktree specialise in “loan to own” A vulture fund and you can guarantee they will be picking the CWD carcass clean They are in their element now
They first arrived at CWD in 2008 where they were buying up bonds and quickly grew to a position of 34% in order to take control of debt restructuring They then swapped the bonds for an equity stake as things worsened and became a majority shareholder .As things improved they moved quickly to take advantage of their position in 2013 relisting at a market capitilsation of £750m where Oaktree reduced their shareholding from 51% to 38% trousering £100m They went back and drew at the well again where they cashed in a further 45 million shares in early 2017 at 230p per share .
Maybe they are looking to grind this right down negotiate a massive haircut on the debt withe worried banks take them out and the whole merry dance starts again .The highly professional teams at CWD effectively being punted around in a game of poker or The Big Short
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“The Telegraph also yesterday speculated” Did the Telegraph speculation include a caveat explaining its connection to passive intermediary disruption and how there might well be a definite bias to the article?
I think If I were anything to do with Countrywide I’d be straight on to the PCC.
If a tweet can be considered an advert. An article in a newspaper, that’s read by investors, undermining a firm that’s a competitor to a firm it has an established connection to has to be considered at the very least underhand, devious and deceitful.
Rather than “It’s the Sun wot won it” I’m guessing this will be “The Telegraph facilitated that”
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This is a warning to all agencies with high central overheads.
The model is now truly under threat.
Consumers expect a better more personal service, or on-line cheap fees. There is no middle ground anymore.
Medium and larger Agents can not compete with dedicated agency owners on service, nor can they compete with the sell it yourself mob on fees.
Countrywide needs it’s agency side dividing up and franchising off.
It also needs some energy at the helm.
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J1 I don’t agree with your assertion that the traditional model is as under threat as you suggest. W would be in survivable and significantly better shape if Platt hadn’t systematically destroyed it month by month for the unbelievable amount of time she was left to do so by the board and key investors. The investors are almost as culpable as she in presiding over the destruction of what was a great organisation.
It deserves a chance to survive and the traditional industry needs to see it do so to send a strong signal to the disrupters and the public, that proper estate agents are very much alive and well.
The heartache stress and loss of real money caused by shockingly bad support and care of clients since the arrival of the “no commission” (total bo**ocks) agents is incalculable. And it’s getting worse by the day. You cannot provide a fully supportive, interactive estate agency service on line without staff. I don’t care what any of them say it cant be done, and the cumulative effect of the trauma and loss of money the public are suffering daily, will soon boil to the surface.
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I’d go further to say CW are well placed to build a kick @r5e gency that capitalises on it’s history, staff, stalwart investors, connections and new found freedom from the legacy it had.
Coming home to find a property grounded by fire is devestating but it’s an exciting opportunity to redevelop something new and contemporary. Few businesses ever get that opportunity. Right now both Rightmove and Zoopla are handicapped by legacy; each has restrictions that deny it the freedom to do something radical.
I have to say where I’m sat I don’t like the storm clouds building on horizon for disrupters and can’t see a way out of the cul de sac RM and Zoopla have driven down so even as bleak as it looks I’d definitely lend my shoulder to giving Countrywide a bit of a push. That’s the exciting opportunity in the industry right now and at anything sub £1 its a ransom strip on acres and acres of development land within the boundaries of the local plan.
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Is it only me that can see something that Countrywide need to seriously seriously think of doing to start a radical reversal of their fortunes?
However they never will do it, because no-one in their company will ever take the time and trouble to ask me.
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