Today Countrywide told the London Stock Exchange that the changes it has made to its business are “beginning to bear fruit”. Countrywide remains heavily debt-laden but said it had agreed a new lending package.
Reporting on the first six months of this year, it said it is continuing to rebuild market share across both sales and lettings. It said that by listings, it has an 8.4% share of the sales market, and that in lettings, it has a 7.3% share.
However, it warned of a weak market, as group income declined by 4% to £290.6m, down from £302.9m in the same period last year.
Sales and lettings brought in revenues of £157,854,000, down 4%. It reported total house sale exchanges of 21,624, down only slightly on the 22,026 in the first half of last year. Countrywide also had 126,198 properties under management, up from 124,767.
The group has cut its pre-tax losses significantly. It made a statutory loss of £37.7m, down from £206.4m, but emphasised an operating profit of £10m for the six months to the end of June.
Countrywide also expressed optimism for the rest of the year, with a pipeline £13.5m higher at the end of June than at the start of the year.
Net debt at the end of June stood at £194.3m, but Countrywide said that its lenders “remain supportive of the business”. Countrywide said it had agreed “a new covenant package with lenders provides the financial flexibility to continue to execute the turnaround plan”.
The new covenant deal enables greater debt levels through next year and 2021, and requires Countrywide to share more information with the banks.
Countrywide also confirmed this morning that it shut a number of loss making branches in the first half of this year, cutting staffing levels and reducing marketing spend, to “reset our cost structure”.
No number has been put on the closures or job losses and in a call this morning between EYE and Countrywide group managing director Paul Creffield, he would not be drawn on the subject. However, he did say that the review of branches had completed, other than for a possible “small handful”.
Creffield also dismissed speculation that he and executive chairman Peter Long – both in their sixties – could be contemplating retiring. He said: “We are both sticking around for as long as it takes.”
Yesterday, Countrywide’s shares dropped over 15%, starting the day at about 5.4p and ending at 4.5p.
Connells Group posts £26m profits
Connells Group is not a listed company, but is owned by Skipton Building Society, and also issued its results today – announcing strong profits and revenue.
Pre-tax profits of £26.2m were down from £28.9m in the same period in 2018, but total revenue increased with its lettings, mortgage services, land, new homes, conveyancing and survey and valuation divisions all producing positive results in the period.
Although the number of exchanges across Connells Group’s estate agency business was 8% below the comparative period in 2018, reflecting the significant fall away in the market this year, total income was almost exactly the same as last year at £215.0m (2018: £214.9m).
Connells Group said this morning that it is “the most successful estate agency business in the UK on a number of measures – its profitability, it sells the most houses and has the largest market share”.
Group CEO David Livesey said: “We are proud of our ability to respond to challenging market conditions and to have produced such good results showing the strength, resilience and diversification of our business.
“The immense contribution of our people has again been a key driver in our success.
“Our people remain our biggest differentiator and greatest single asset, and we continue to attract and retain the best talent in the industry.
“The vast majority of our middle and senior management have been with us for many years and have experienced all types of markets in the past which is, again, proving invaluable. Their continuity and experience provides the backbone of our business.”
The share price is still a a value that means a pick and mix 10pence sweet bag is twice the price.
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Busy day of reporting for the listed estate agents .
Countrywide reporting a £90m loss (not £194m) up from £70m in December ! Despite branch pruning there are no signs that Baxter Basics is bearing fruit
Time for regime change .Room at theTop.In contrast Connells showing a truly resilient performance.Hats off to them
Let’s not forget TPFG annoucing today Ian Wilson’s timetable for departure
Not to be outdone they report a healthy 11% increase in revenue at their subsidary Ewemove
That is no compensation to the horrendous number of failed franchisees who contributed to that revenue where there are no signs of stopping
Over 1 failure pcm this year
Still many struggling unable to make any reduction in debts due to paucity of instructions.Companies House tells the story
At least 20 trading carrying far too much debt and looking very vunerable . Hundreds of thousands of personal debt incurred by those already failed and hundreds of thousands still borne by struggling franchisees
One franchisee has been going 4 years and has just the 3 instructions One recruited last year has just the 1 unsold on his books and only 2 sales this year
There are a number carrying over £50k worth of debt without the instructions to support it
Many with less than 20 instructions
Where is the help ?
“It is the duty of a good shepherd to shear his sheep, not to skin them. ” Tiberius
“The shepherd always tries to persuade the sheep that their interests and his own are the same. “Stendhal
“The road to ruin is always in good repair, and the travellers pay the expense of it.” Josh Billings
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No duty of care, Potential franchisees need to be told about this.
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Odd update from Countrywide, would the City not be interested in how many branches they have and how many people they employ ?
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Unfortunately the City disinterested in the human cost
TPFG shares up today
Revenues at Ewemove up 11% is all they want to hear
The devil is in the detail Who is paying for it !
Here is a snapshot of those trading and the weight of debt Names of the franchisees removed .They have enough problems This is not counting the failed franchises
“After your first year, you’ll be firmly established and have a steady flow of business. !”
ndustry statistics show that EVEN A VERY POORLY PERFORMING SALES AGENT CAN COMFORTABLY SELL ONE PROPERTY PER WEEK per week and most established businesses sell at least two or three timesthat.
DEFICIT CREDITORS DUE 12 MTHS INSTRUCTIONS DATE STARTED
(58,000 ) £73.724 5 2016
Debt steadily increasing .No previous estate agency experience or running a business but worked with tenants at council.No evidence in last 12 months that she has sold sufficent to meet annual creditors
2. (£24,651) £45,579 2 2015
Former gardener ,unsustainable ,4 YEARS STRUGGLING with just 1 property to sell.DEATH ROW
3 OOP NORTH Just 2 instructions
Husband & wife team taken over an area in 2018 after a previous Ewemove franchise failure -!. The couple have no previous experience .Looks very vunerable .Must have cranked up a huge debt in 1 year and now paying £1k pcm management fee
4 (£89,222) £116,095 4 2016
Ouch !!! Another Husband and wife team on a suicide mission
5. . (59.512) £60.483 9 2016
4 of the instructions are from 2018
Cash position deteriorating and jury is out whether he has insufficent instructions to service debt.Non estate agency background
6 (£156,749) £203,276) 27 2015
3 partners ,2 FRANCHISES with seemingly adequate amount of instructions but with huge debts to service and 3 mouths to feed
7. (£54,995) £84,383 1 (4 To let) 2015
His accounts overdue !! but difficult to see that he would have made inroads to the historic debts by current instructions which are only just about satisfactory,No previous agency experience
8, (£39,471) £46,382 2 2017
Another husband and wife team selling about 1 per month although in an area with high average house price
9. (£15,893) £48.711 8 2016
Took teriitory over from a former failed franchisee EWEMOVE CHEADLE
Yet another husband and wife team .Latest accounts due shortly so await those before passing judgemnt .Insufficent instructions to keep 2 people gainfully employed
*** A DEAD GIVEAWAY WHEN A FORMER FRANCHISEE HAS FAILED IS WHEN THE FRANCHISE NAME IS ABC LTD ETC AND NOT THE LOCAL TOWN AS IT HAD ALREAEDY BEEN ASCRIBED TO A EWEMOVE COMPANY SINCE DEPARTED
10. (£26.106) £52,172 0 2016
High value area and has just sold in recent months 2 x £1m + house but selling less than 6 a year Treading water at best and maybe not meeting his annual creditors
11 ( £32,456) £21.980 2 2015
12 (£36.597) £50,891 5 2015
2 DIRECTORS-TREADING WATER
13 (£32.320) £25458 5 2015
Yet another couple treading water
14 (£35.496) £61,591 4 2016
Treading water
15 (£19,200) £45731 5 2017
Treading Water
16 (£71,365) £93,435 17 2014
Longstanding franchisee with 2 franchises now .More mouths to feed with debts increasing The liveried shop ,car the Full Monty but not enough sales/instructions selling less than 4 pcm from 2 offices with a few to rent Double jeopardy
17 (£42.098) £37.092 7 2015
Established 4 years Latest accounts submitted last week shows a substantial increase in deficit from 2017
with 2/3 sales pcm most of that wil lbe eaten up by annual creditors .
18 (£37,631) £59.360 13 2015
Established franchisee with no previous exp Taken 7 new instructions in July and looks to be selling on avergae 3-4 per months Still poor by the original yardstick but look at his accounts Still up against it!
19 Recruited 12 months ago I instruction taken in May I recent sale.No momentum why on earth is Ewemove allowing him to keep trading?
20
(£23.214) £70.914 9 2016
Debt increasing . huge amount of creditors in 1 year selling 2./3 pcm
THIS LIST IS NOT EXHAUSTIVE
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