Countrywide’s long-term share price decline and turbulent branch closure programme have not prevented a relatively positive endorsement of the group’s strategy and performance being given by City investment analysts Jefferies.
In October Jefferies downgraded its estimate for Countrywide’s performance over the rest of 2016, citing a mix of Brexit uncertainty, stamp duty woes and a scaling back of the agency’s expansion plans as justification for downgrading its status from ‘Buy’ to ‘Hold’.
However, a new investment analysis produced by Jefferies just hours after the release of Friday's Countrywide figures for the final quarter of 2016 paints a less gloomy picture.
“It may not seem like the current storm clouds have a silver lining, but Countrywide's lettings business has helped offset some of the impact of lower volumes, and self help in the Financial Services and Surveying divisions has led to profit growth in both divisions” says the note to investors from Jefferies analyst Antony Codling.
“Despite the challenges Countrywide remains the UK's largest estate agent, and while much of the debate in recent months has been about the hybrids outperforming the traditional agents, we must remember that the market is tough for all estate agents whether or not they are found on the high street” he continues.
“Countrywide today and Foxtons [last] week both mentioned the strength of their lettings businesses, which have helped mitigate part of the pain inflicted on them by the market. The hybrids have yet to crack or even enter the lettings market and therefore do not have the benefit of this unrelated income stream” adds Codling.
As we reported on Friday, Countrywide’s latest figures show group income for the fourth quarter of 2016 was £179m, down from £196m in the same period of 2015. However, it anticipates that its full year income will be some £737m - very slightly above previous expectations.
The stock market - a scene of some strife for Countrywide in recent months - responded well to the group’s Q4 figures, closing on Friday up around 4.5 per cent.
* Click here to see an exclusive interview with Sam Tyrer, Countrywide group’s Managing Director, Retail & London.