The City did not appear to like yesterday’s rubber-stamping of the £140m rescue package of Countrywide.
Shares ended the day 10% down at 13.4p, giving a market capitalisation of £78m, according to the London Stock Exchange.
Over 98% of shareholders voted to approve the Capital Refinancing Resolution which will raise the cash from the company’s existing investors and reduce, but not eliminate, its £200m-plus debts.
It has also been pointed out that the share offering was approved largely because there were only two investors voting – Oaktree Capital Management and Brandes Investment Management, which own most of Countrywide’s shares.
In the deal, Oaktree Capital will buy shares worth £24m. The private equity group’s stake will fall from 30% to 19% as a result.
The new shares created by the vote are due to start trading tomorrow, Thursday.
Countrywide will also be under pressure to give more detail as to its three-year turnaround ‘back to basics’ plan, after a profits warning in June said results for the first half of this year were likely to be some £20m lower than for the same period last year.
City analyst Laith Khalaf, at Hargreaves Lansdown, said: “Countrywide is back from the brink though it is still fighting an uphill battle on a rather slippery slope.
“The injection of cash will keep the wheels turning for now, but that money is being used to pay down debt rather than to fund growth.”
What must be gut wrenching for the private investor,CWD pensioner etc ,staff member is that with the knowledge that yesterday’s approval was a shoe-in over the last few weeks Brandes has been selling down their shareholding .Divesting themselves in advance of the shares they allocated which will be picked up for 10p sold for 13 p / 14p /15p Nice little instant profit !
Private invitation to gorge at the 10p table .Existing small shareholders offered just a minor % of their existing shareholdings at 10p a share token mitigation of their losses .Many probably already skinted to take up the offer .
Tomorrow after opening bell will see a floodgate of shares being traded .Where the share price will end up at close of play is anyone’s guess .
The fate of the company is now effectively in the hands of Oaktree/ Brandes who have their own addendas which might not be fully aligned with shareholders or staff. Unless wholesale changes are undertaken at board level bringing in some heavyweights you can take it as read that they are looking to cash in their chips and break it up and not paying the long game
One of the posters said yesterday said its all a share gamble but unfortunately one with peoples careers and jobs at risk thrown into the pot,pawns in somebody’s chess game .Loaded dice!
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Looks like “The City” could not wait for Mr.C at Jefferies to advise on: Buy, Hold or Sell.
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Might not be that daft a move to help them out. Virtually every type of agent is going through the ringer at present and CW’s woes are probably as much to do with market conditions as anything else. If this bail out can get them past the Brexit fiasco in March, and if we get a deal, the market could look a much better place?
Just a thought, though I probably won’t be investing myself right now………….
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In my opinion, the current market conditions at the moment are more to do with stamp duty, section 24 and tight lending criteria.
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Okay so 200 odd million in debt.
BUT have 140 million cash injection to help restructure the debt.
I hear what everyone is saying about branches losing market share, BUT do not forget CW are also the biggest introducers of mortgages in the UK, They have a massive surveying and conveyancing side to the business.
Lettings is also massively profitable, although i am sure the tenant fee ban will hit them hard.
I still think CW is a great business, however i think on the EA side on a local level you are going to see a radical change. Ironically the vision Alison Platt envisaged could come to fruition, not through shrewd planning but through survival and reduction of costs.
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The CW asset strip will start very soon.
Would like to see the back to school plan.
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On the high street this seems to be a company without an identity, without a brand that stands for anything and one that the public don’t understand or care about.
As an EA it needs a complete overhaul; it has completely lost its way and does not have a board that is skilled enough to make the correct strategic decisions.
Who cares about countrywide? Who cares about any large organisation?
Woolworths, House of Fraser, BHS – they all forgot what they stood for and so has CW.
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Shocked to see this make the ITV News last night, Some lovely images of poor tired looking Taylors offices and I just could not believe how damaging the report was to the brand, to the point Taylors OM stock is our target today, but sadly it’s all overpriced !!!!
Really disappointing though to see ITV play this massive downfall on ……………Online Agent!!! h, and then Mr Quirky gets interviewed with a advertorial on emoov….come on, this is not good journalism, it completely missed the fact that CW was disastrously managed and racked up debt to purchase overpriced letting firms, plus various market changes and a lack of real clear direction…..
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When I started out back in 1988 at Bairstow Eaves, we shared the High Street with Abbotts – they were next door and the public had no idea they were the same company! Surely the easiest way forward would be to drop all the old brands, maybe call the company Countrywide? Then close duplicate offices that still exist?
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And that would have the advantage of being able to advertise Nationally on TV, sponsorship of events etc etc rather than fragmenting their marketing budget on umpteen different brands
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The problem is there is no real brand presence in the name Countrywide In fact it’s a kiss of death
https://www.fwi.co.uk/business/countrywide-farmers-calls-administrators
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