Countrywide shares soar after announcing sale of commercial property arm – as lenders agree new credit facility

Countrywide shares soared 14% on Friday after it announced selling its commercial arm, Lambert Smith Hampton, for £38m.

The group had owned the firm for six years but, said Countrywide managing director Paul Creffield, had never been fully integrated with the rest of the group – for example, retaining its own HR function.

Countrywide said the sale would significantly improve its financial position.

In the six months to June 30, Countrywide’s debts stood at £90m.

Countrywide now expects its debt to fall to around £55m by the end of this year.

At the end of 2018 the debts stood at £70.7m, down from almost £200m (£196.4m) at the end of 2017.

Countrywide also announced an amended credit arrangement with its lenders, with provisions for a minimum credit facility of £95m to September 2022.

In an analysts’ call on Friday after the announcement, executive chairman Peter Long said: “The banks are supporting us heavily by easing our covenants as we continue our turnaround and trade in a challenging market.

“This will enable us to focus on our core residential services where we see huge opportunities.”

In addition, Countrywide told the stock market that it is simplifying its share capital, proposing to consolidate 50 existing shares into one.

Countrywide bought Lambert Smith Hampton in a pre-pack administration in 2013 for £34.1m – meaning that it paid some £4m less than it is selling the business for.

The buyer is Monaco-based Bengt Moeller, who owns Great Global Holdings, a retail-focused commercial property firm.

In the first six months of this year Lambert Smith Hampton reported a 20% drop in revenue due to an “extremely challenging” commercial property market.

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6 Comments

  1. Hillofwad71

    “Countrywide bought Lambert Smith Hampton in a pre-pack administration in 2013 for £34.1m – meaning that it paid some £4m less than it is selling the business for.”
     
    What of course they convenientally fail to mention  that since the acquistion they  aggressively expanded LSH  by chequebook  buying in 6 additional business expensively bought  including . BTW  Shiells in Belfast , the nationwide ES Group.  Manchester based  retail specialists Tushingham Moore   and Douglas Gordon
      These acquisitions alone will have added an additional cost North of £25m to the £34.1m so the loss is even greater  in addition the  £38m nets down to £34.5m after costs acording to the RNS
     
      The investment agents at LSH can only be grateful that the BODS were not part  of their negotiating team  Selling LSH at a price reflecting  a lowball 6 YP   capitalised  against  the profit for the worst year of trading  the BODS buying in the additional businesses at  8-10+ YP against the best  years .
     
      Staff morale must be low as the Sword of Damocles hovering over even the star performers. Wondering who they might  be answering too next  LSH being  bandied about the market like a sack of spuds .
    Should have taken what was  achievable  in 2016 Strutt &Parker who have some comparability dished out at £75m+     Shareholders holding £100k of shares in June 2015  those are worth less than £1k today.
     
      Retirements ruined and the BODS still have the neck  to blame past management .
    You really couldn’t make it up  

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  2. brokerofexcellence

    It shows the level of desperation the business has when they are selling their most profitable business and one of their most (pre-CW) long standing brands just to raise some capital. What’s next? FS? Lettings book? One of the big brands (Taylors/Bairstows/Dixons/Abbotts)?

    Self fulfilling prophecy – “We aren’t making money, so lets sell the bits of the business that actually make us some money……”

    Makes sense!

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  3. whatdoiknow58

    Next trading update to the City scheduled for 23rd December. Probably considered the 25th to stop even more awkward questions but even this bunch of inept BODS couldn’t have got away with that one!

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  4. Hillofwad71

    How times change so quickly !

     

    Creffield  interviewed in May 2018 discussing Lambert Smith Hampton

    “That’s absolutely off the agenda, now and for the long-term. LSH is significant in its own right, a respected brand and a successful one, so we’re not selling it” says Creffield.

     

     

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    1. SLF

      He’d make a good politician.

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  5. TOZ4

    This company is ~*=ked. They’re consolidating their losses. Maybe the investors know something I dont.

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