Countrywide’s senior staff earning over £45,000 per year have had their pay cut by a fifth while some 78 per cent of the workforce have been furloughed according to an announcement by the company this morning.
An unscheduled trading statement issued this morning at around 8am revealed that the chairman and non-executive directors have volunteered to take a 33 per cent cut in their remuneration, backdated to March 1, while the senior staff who have not been furloughed and who receive in excess of £45,000 pa have their pay cut of 20 per cent, backdated to April 1.
The company says it has 78 per cent of its people on furlough under the government's Coronavirus Job Retention Scheme.
The announcement also reveals indirectly that the company’s High Street branch network - once promoted as being some 900 strong - is now 731; all of these are now closed in line with government guidelines and staff are working from home.
The statement says: “It is gratifying that at this difficult time, we have been able to continue to support our customers; exchanged income during the lockdown period is running at an average of 33 per cent per week compared with the average for the first 12 weeks of the year. Equally, our mortgage and protection consultants continue to be able to work remotely, with exchanged mortgages during lockdown running at 68 per cent of the average for the first 12 weeks of the year, with a mix towards remortgages rather than new purchases.”
Countrywide - which manages some 86,000 properties - says its property management centres remain operating; rental renewals and new lettings together are running at 48 per cent per week compared with the average for the first 12 weeks of the year.
In a bid to shore up the company during the pandemic, Countrywide says it is “materially reducing” all discretionary expenditure, including marketing, and is curtailing all capital expenditure, including investment in new IT.
“In line with many others in the property services industry, we are moving mostly to monthly rent payments, and carefully balancing our payment obligations between smaller and larger suppliers to manage the working capital cycle. The majority of our landlords have been supportive of the change to monthly payments” it adds.
Countrywide today has available cash resources of approximately £30m - and from tomorrow its available liquidity will be £40m.
In line with many companies Countrywide says it has run a series of stress tests to assess different possible scenarios of how the Coronavirus crisis will play out.
One scenario envisaged a 73 per cent reduction in income in the second quarter of 2020; another assumed that on the outgoings side, the company could further defer tax liabilities.
After meeting existing creditor payments of approximately £10m, the results of our stress testing show that the Group still has a sustainable liquidity of around £20m to £30m “to support the business through our reasonable worst case scenario.”
This may be helped if the company accesses the Coronavirus Large Business Interruption Loan Scheme - it says it is exploring this possibility.
**An earlier version of this story made a reference to the Countryside company, instead of Countrywide; this was an error for which we apologise.**