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TODAY'S OTHER NEWS

Countrywide share price slips to lowest-ever level

Countrywide’s share price fell to its lowest-ever level yesterday - evidence that it’s not just online estate agencies that are having a torrid time on the stock market and elsewhere.

Countrywide opened down yesterday to 8.75p before sinking mid-morning to a new low of 8.50p. It eventually recovered and closed up slightly, at 9.26p. 

Its performance in recent days means it has lost over 98 per cent of its value over the past five years, and around 90 per cent of its value since the announcement introducing the Back To Basics initiative.

However, sentiment surrounding Countrywide appears to have improved in recent months.

The Hargreaves Lansdowne investment service runs an online barometer based on a basket of the most recent City broker announcements about companies; three months ago the consensus for Countrywide was ‘sell’ whereas now it has at least moved to ‘neutral’.

It is thought that Countrywide may issue a brief trading statement before the end of this year with a more extensive announcement on 2018 trading before the end of January.

  • Andrew Stanton Estate Agency Insights And Strategies

    Countrywide’s share price is not the only concern, last year it made losses of over 220M, having made a marginal profit the year before of over 15M. It has raised 120M a few months ago by offering shares at an all time low, but this recapitalisation exercise will only sustain them for 8 months.

    I started with Countrywide in 1985, and so have fond memories, but the basic principle of the company then was: – high fees, high level of service and dominant market share, which attracted top flight well paid staff.

    We are now in 2019, well almost and Countrywide should have pruned back all offices that have never made profit, and of course not tried to re-invent itself as a low upfront model. They failed to do this over the last 3 years.

    The basic cost of selling a property and getting it exchanged is about £2,300, if you factor in marketing costs and sales progression. If you charge less than this your business will make a loss, obviously there are bolt on’s, financial services, solicitors introductions.

    But you can only charge a higher fee if your offices perform, and the public wants to use your brand, the recent woes of John Lewis illustrate that just because you have always done well historically, in 12 months that can all be wiped out.

    I wonder two things, has the present CFO ever been an estate agent? Has Himanshu Raja spent anytime in any of the 'back to basic branches' to see how despondent and beaten the sales teams are?

    I ask this question as not so long ago, most people on the Countrywide board including Aliso Platt had never done agency, and actually looked down on those who had.

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