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Countrywide reveals cost cutting plan and admits IT systems are ‘aged’

Latest update on its three-year turnaround plan includes reducing costs across the group by 10% and growing mortgage and conveyancing businesses.

Nigel Lewis

countrywide

Countrywide has revealed a significant cost reduction plan and admitted that its IT systems are ‘aged’ and require a complete overhaul over the next three years, its latest update on the company’s revival plan has revealed.

Its detailed three-year turnaround document includes plans to reduce IT costs by 35%, contact centre expenditure by up to 20% and reduce costs across all its businesses by up to 10%.

These cost cuts will add approximately £20 million to its annual pre-tax profits by 2021, its Annual Report document claims.

Countrywide also makes some punchy predictions for growth between now and 2021 including increasing complementary service income from each transaction.

Growth plan

This will increase from its current 44p per every £1 of estate agency services to 55p; increasing the number of customers who remortgage through Countrywide; growing its B2B surveying business and becoming a larger player in the new homes market.

Revenue from complementary services – which include mortgages and  conveyancing – are already growing, increasing by 16% during 2018 compared to the year before.

The two operations are one of the few areas of growth within Countrywide at the moment. The value of mortgages arranged last year increased by 13% to £20.3 billion while the number of surveys and valuations increased by 5% to 381,893.

“We have been encouraged by the progress made during 2018 in resetting the business as part of our return to growth strategy,” says Countrywide’s Executive Chairman Peter Long (pictured, top).  “As a group we are in a stronger position that we have been for some time.”

March 25, 2019

One comment

  1. It is strange to see confusion and muddled management is still the order of the day at Countrywide, which is probably why the share price continues to flatline at well under 10p a share. They seem unable to deal effectively with their big problems..

    Problem one? The company has an obsolete unwieldy Proptech and IT infrastructure that is the backbone to their day to day business.

    The solution? Well for Countrywide’s top management it is to let 150 IT personnel go, which they have already done, and in the next two years further cut IT investment by 35%. That should fix the problem.

    Problem two? The company is not making profit.

    The solution? Reduce costs across all its businesses by 10%, which is presumably redundancies and offices closing. That should fix the problem.

    My thoughts, get the top management into a minibus and do a tour of your offices and see what estate agency, and financial services look and tastes like in 2020, then develop a core culture around this. Talk to your grass roots supporters your loyal sales teams, and then develop a plan. Otherwise you will end up like Brexit, with a forced solution without popular support – not the best way forward.

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