Connells hits profits as 1,000 jobs disappear

Remarkable cost-cutting lies behind Connells’ half-year profits of £20.8m.

Group chairman Stephen Shipperley has revealed that during the first six months of this year, while profits exactly doubled over the first half of last year, revenue actually slipped.

“The real driver has been cost cuts,” he said. “We have shut just under 30 branches, shed 1,000 jobs and taken an axe to local newspaper advertising. We had been spending £15m a year on it, but now it is less than £4m.”

He said branch closures were “the last resort” and most of the job losses were through natural wastage, although there had been some redundancies.

But Shipperley stressed that the £20.8m profit made by the estate agency group in the first six months – compared with £10.4m for the same period in 2008 – also showed a steadily improving market.

“The problem as we started this year was a very low pipeline of sales,” he said. “December, and indeed the last six months of last year, had just been awful. However, our pipeline is now double what it was, so we think the best is yet to come. Of course, the market could still have some very nasty surprises in store, but we feel that the second half of the year will be much better than the last.”

He added: “We are now selling around 1,000 properties a week. This time a year ago it was 550–600. It is still an historic low, since we were selling 1,400 a week at the market peak, but it is a big improvement.”

He said that at peak, Connells employed 4,500 people – now down to 3,500, and added: “One of the things about a tough market is that it makes you shape up your entire business.”

Connells is owned by the Skipton Building Society.