Countrywide has successfully placed 21.6m shares to institutional investors at the competitive price of 175p per share - allowing it to raise around £37.8m, most of which will go into its hybrid digital service which may become a rival to Purplebricks as a result.
The share placing, which took place yesterday morning, represents around 10 per cent of the company's market capitalisation; these new shares will be admitted to the London Stock Exchange on Monday. Countrywide's share price closed down slightly on the day yesterday, at 183p.
While the company says some of the share placing proceeds many be used to provide "financial flexibility" in the light of a challenging housing market forecast for 2017, most of the new funding will be used to expand Countrywide's digital roll-out.
In its report to the City and shareholders yesterday, based on the Countrywide group's 2016 performance, chief executive Alison Platt said the digital roll out is on target to reach some 25 per cent of the agency's branches - which now number 800 in total following a round of closures as part of the 'Retail' restructuring process - by June of this year.
The company says the phased roll out to date - starting last spring and then most recently involving the Entwistle Green brand on Merseyside and in Lancashire - has been highly successful; the Entwistle pilot was "the most successful yet" Platt says.
Countrywide says the online service - charging customers from £695 to £995 for a primarily online service and then allowing them to 'upgrade' to a full-service traditional offer if they wish - has produced more leads, more valuations, more instructions and more sales, the firm insists.
Meanwhile the former managing director of Countrywide, Lee Wainwright - who left the firm at the end of 2016 after over 25 years of service - has this month become operations director at Purplebricks.
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The plan is flawed as I believe all that will happen is that 'Peter robs Paul'. A vendor will see that the brand in question becomes synonymous with its offering. This is nothing other than attempt by CWD management to deflect from their lack of performance and structural damage being perpetrated. The 'emporers new clothes' are still there and King Canute is in 'denial'.
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