Countrywide PLC gave a trading update at the end of last week, highlighting the impacts of lockdown and the tenant fee ban.
For the five months to May, group income was down 29% to £143m.
The adjusted EBITDA stood at £7.4m (2019: £10m) after absorbing £8.1m gross impact of the tenant fee ban.
Since easing of lockdown instructions are back to 60% of 2019 levels with third week of June running at 94% of 2019 levels and 86% of the average in the first 12 weeks of the year, pre-lockdown.
Exchanges were back to 71% of 2019 levels with the third week of June at 64% of 2019 and 85% of the average in the 12 weeks of the year.
Countrywide say their pipeline has remained resilient with a return to growth in agreed sales in the last month as the market returned and a closing pipeline down 12% year-on-year, at £47m.
Demand for let properties continued, with the number of applicants per week 3% higher than the pre-lockdown average and at 88% of 2019 levels.
The lettings register is at 93% of 2019 levels and 20% higher than the average pre-lockdown.
The Group has converted the majority of its existing instructions on Rightmove and Zoopla to showcase properties through virtual online viewings and video tours, while all new instructions offer these viewing media.
There have been accelerated moves to centralised lead handling, enabling a faster response to customers through telephony, web-chat and video for buyers or sellers.
In Financial Services, total income was £24.9 million (2019: £33.0 million) with adjusted EBITDA for the five months to May 2020 at £5.2 million, in line with last year and underpinned by continued remortgage activity and the general insurance back book.
Total income for B2B services (conveyancing, surveying etc) was £22.6 million (2019: £35.9 million) with adjusted EBITDA for the five months to May 2020 at £1.0 million (2019: £6.6 million) a decline of 85% attributable to the lockdown which prohibited physical valuations in surveying for all lenders and providers.
The group outlook says that:
“Early trading indicators in England are encouraging and we expect a similar bounce back in Wales and Scotland, now re-opening.
“However, it is still too early to assess the long-term impact on housing transactions and, as a result the Group is unable to provide guidance for FY 2020”.
As at the end of May the net bank debt was £55 million and the liquidity headroom was £64 million, benefitting from the deferral of VAT, PAYE and NI.
The Group has a revolving credit facility of £125 million committed until September 2022, with an additional facility of £10 million from May 2020 and a further £10 million from April 2021; both committed until October 2021.
The Group continues to explore the availability of funding to large businesses under the Coronavirus Large Business Interruption Loan Scheme.
This paragraph from the update says it all about the BODS at CWD
“Following exchange of contracts and shareholder approval, the buyer, Mr John Bengt Moeller, failed to complete the transaction. The Group has terminated the sale with Mr Moeller and is pursuing him for damages and costs. Meanwhile, the Group is continuing discussions with another interested purchaser that actively expressed an interest in LSH during the delayed completion period.”
Under pressure from the banks last year to reduce debt ,LSH became the fall guys
Only a year before Creffield said
“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.
You would have thought then they would be very careful in choosing their buyer. Not so, not only choosing some chancer with 1 failed UK company behind him no money and no skin in the game ,they rearranged their finance on the strength of it
6 months later cranking up more abortive fees chasing monies from a dry well
Furthermore trying to sell an important element of the business today likely to benefit from easing of lockdown at a vastly reduced price which will do little towards reducing the overall debt
Both Long & Creffield are of retirement age. Time to move on gracefully
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I have to say I enjoy reading your posts about CWD, it appears you are one of only a few people who knows what’s really going in the company.
The comments regarding Mr Moeller are 100% correct (failed company, no money etc). I have a real estate contact from many years ago who has had dealings with him in the past. He informs me that Moeller does in fact live in London, the Monaco connection is questionable at best – I believe his wife has a PO Box there. While the alleged deal was going through the narrative being spun to the press was entertaining, anyone with half a brain would have been able to find him to be a conman by doing a little digging.
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