Shares in Countrywide leapt by 14.38% on Friday to 5.3p after it revealed plans to sell its 40-branch commercial property sales and management business Lambert Smith Hampton for £38 million.
The deal is primarily designed to reduce its debts from £90 million to £55 million but will also be used to agree a new standing £95 million credit facility with its banks.
Lambert Smith Hampton is being sold to Monaco-based international property entrepreneur John Bengt Moeller who has fingers in several commercial property industry pies.
This includes property development firms Great Global Holdings Ltd and the Regeneration Group.
Countrywide chairman Peter Long says the sale of Lambert Smith Hampton is part of the company’s plan to focus on its core residential business.
He says too much valuable management time has been spent on Lambert Smith Hampton within a challenging commercial market and that Countrywide had no ambitions to grow the consultancy. He also says that there was minimal crossover between Lambert Smith Hampton and its residential business.
Countrywide will continue to have a strong relationship with Lambert Smith Hampton and pay it for ‘downstream’ residential referrals.
“The sale strengthens the Group,” says Long (pictured, left). “Once completed, we believe that the Group will be in a more advantageous position in our core residential market.”
The sale is not the only move by Countrywide so shore up its position. It is to reduce the number of its tradeable shares by a factory of 50, which is designed to reduce the huge number of shares in circulation (1.6 billion). This has caused the company’s share price to fluctuate wildly at times and, along with its share low share price, has given the company a bad name among investors who dislike hugely volatile stocks.
A meeting of shareholders is scheduled for 23rd December in London when they will be asked to approve the sale of Lambert Smith Hampton and the consolidation of its shares.