Countrywide ups its profits despite tough year

Countrywide has announced an increase in revenue last year of 7% on 2010 plus a rise in profits.

It said its earnings before interest, taxes, depreciation and amortisation were £9.4m in 2011, compared with £5.7m in 2010.

But Britain’s biggest estate agent, rumoured to be considering a return to the stock market this year, remains haunted by the fallout from the boom years.

Countrywide revealed that its surveying and valuations division last year was dealing with an ‘abnormal’ level of claims from the period 2004-2007, when properties were bought at inflated prices.

It said, however, that there had been good financial progress across all its divisions, and that the results were encouraging in a ‘declining market’.

In its report, it also spoke of its ‘relentless drive’ to reduce costs. Staff numbers have been reduced from 1,004 to 925, which includes 643 mortgage consultants, although it intends to recruit another 5%.

Like Connells and LSL, which also delivered last year’s results within the last week, Countrywide – owners of upmarket Hamptons and Sotheby’s Realty as well as scores of high street businesses – emphasised both the poor market but also its investment in the business.

Last year, Countrywide bought Blundells in Sheffield, with 13 offices.

It claimed 8.3% market share in estate agency, down from 2010’s 8.4%, and significantly down from 9.3% in 2009, which it said was a result of local estate agencies closing down.  

It put last year’s market share in estate agency at approximately double its rivals, LSL and Connells.  

However, Countrywide seems to be staking a claim in the prime market. It put its market share in estate agency in properties over £500,000 at almost 10%, well above Savills, Hamptons, Foxtons and Knight Frank – and in that order. Intriguingly, Knight Frank’s market share, according to Countrywide, is the lowest of the five.

Last year, its lettings business grew by 6% in terms of revenue, with an operating margin of 22%.

Another bright spot was its financial services division, which increased its 2011 profits by 66%. Revenue in its financial services division was up at £62.1m, compared with £57.2m in 2010.

Grenville Turner, group chief executive of Countrywide, said: “Despite challenging conditions, 2011 saw real progress continue across all areas of the Countrywide Group, with cash profits growing 10% year-on-year.

“This is a great result in a market where volumes were down on 2010. These figures are even more impressive as we also made significant investments in the business, providing £24m in 2011 for acquisitions, branch refurbishments, system developments and new office openings.

“Our growth strategy supported by significant investment saw us increase our presence in prime South-East with new branches for the UK Sotheby’s International Realty, Hamptons International and Faron Sutaria brands, identify sensible geographic acquisitions such as Blundells and also focus on growing established brands such as Bridgfords and Hetheringtons.

“These investments were supported by award-winning teams, innovative marketing campaigns and a strong online presence.”