Speculation is growing over whether figures to be released by Countrywide on Thursday may prompt another fall in the troubled company’s share price.
Commercial property magazine Property Week has discovered that Countrywide is being targetted by ‘short sellers’ in anticipation that its share price will drop.
Short selling is the sale of a stock not owned by the seller or that the seller has borrowed - it usually happens when there is a belief that that share price will drop, enabling it to be bought back at a lower price to make a profit.
Property Week says the percentage of Countrywide’s stock out on loan - seen as a sign of short selling activity - has risen from under three per cent a year ago to almost nine per cent now, according to data from Markit.
Estate Agent Today has chronicled the long-term decline in Countrywide’s share price, which in March 2014 was at a high of 686.50. After falling from that high in 2015 it then dropped over 50 per cent last year, and is now slightly down in 2017 as well.
It closed last night at 170.25.
Anthony Codling of Jefferies has already warned that Countrywide’s figures for the first half of 2017 - out on Thursday - may prove discouraging to investors.
Countrywide’s EBITDA - City jargon for its earnings, a crucial measure of corporate performance - will be around £25m to £30m, he predicts, thanks to the General Election hiatus, reduced buy to let purchasing, and the London market’s continuing problems triggered by high stamp duty on many more expensive properties.
However he predicts the second half of 2017 should be better.
Thursday’s update from Countrywide is also expected to give the latest state of play on its digital roll out and possible further closure of high street branches, and its strategic review of its commercial arm, Lambert Smith Hampton, which began at the end of 2016 and was at one time widely expected to end in a sale.