Countrywide’s senior executives have set out reasons why investors should put their money into the group, despite its troubled recent years.
Yesterday Countrywide’s share price closed 12 per cent lower after the release of its trading figures which included a warning on 2019’s likely performance being damaged by Brexit uncertainty in the residential sales market.
But executive chairman Peter Long has now told Estate Agent Today there are solid reasons why the company is worth putting money into - as evidenced, he says, by the low level of churn of existing investors.
“We’re turning the picture around. It’s a three year strategy but even after one year we’re on course with most measures showing genuine progress. Our market share a year ago was about 7.3 per cent and now it’s 7.7 per cent, and we’re still the market leader.
“We’ve got scale which allows us to weather headwinds, like Brexit and the Fees Ban, in a way other companies cannot. And the underlying fundamentals of the housing market are strong once we get clarity - there’s a growing population, people are living longer, there’s a shortage of housing stock meaning demand typically outpaces supply” he adds.
Long accepts that with economic and political uncertainty hurting the housing market and the wider UK economy for the next six months or so, there are reasons why investors are sitting on their hands generally - not just for Countrywide or property-sector quoted firms - but he adds: “We’re fixing the problems we had. We’re a good long term bet.”
In yesterday’s figures, Countrywide revealed its losses widened during 2018 and both revenue and profit dipped significantly; it lost £218m, a 5.5 per cent increase on 2017’s losses of £207m.
Revenues dropped seven per cent including by nine per cent in sales and lettings, while profit halved from £65.5m in 2017 to £32.6m last year.
But the Back To Basics programme is showing signs of success, the firm insists: its skills base has improved with 300 returning employees, there had been a nine per cent rise in listed properties for sale or rent, plus a five per cent boost in sales ready to complete, in addition to its improved market share.
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So, share price 685p, at its height, now share price 8.5p down from 10p in recent weeks. Tell me again why after a multi- bailout less than 12 months ago anyone would buy shares in Countrywide?
The remaining shareholders will sell their stock, and with no buyer wanting this huge,flabby company, the best pieces will be sold off, the remainder closed, leaving a very depleted rump of an agency which will trade on, losing money hand over fist until it closes, or the thinking at the top changes.
Very sad, maybe top management might stop trying to convince everything is fine, get a plan, make the necessary cuts and sell off what is required to recapitalize, take a look around at retail, here company's are either adapting their business model or calling in the liquidators, sure things are tough, but that is when really good executives shine. That after all is their job, rain or shine - return a profit, safeguard jobs and plan for the future.
Get a piece of A4, list what is going wrong, list what is going right and list what is about to go wrong, then do a second list with a solution to things that are going wrong, and execute the plan. No deviation, keep the message simple. You would be amazed.
I would start with high fees, high levels of customer service and high levels of successful sales. The rest will sort itself out, if you have a product or service the public want it will not be google ads that make them seek you out, it will be your market share.
Andrew I don’t know you but you have some reckless comments. I am a former Countrywide franchisee and I less than have zero sympathy for their situation given how they tried to treat us. However, your comments-if anybody bothers to read them, are inaccurate and will ultimately do no good to the company or their employees. As an owner of a rarely found £1m branch I would ask you what you would do differently to save the company other than just knocking it, what exactly have you achieved to be offering to be offering ‘insight and strategy’. It’s a genuine question Andrew, all I see on here are people that knock others and can do better themselves-but don’t even run a business...
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