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.