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Countrywide reveals ‘resilient’ 2018 as back to basics plan rolls out

Company says despite much reduced profits its plan to revive the behemoth is progressing well including a 9% jump in stock.

Nigel Lewis

Countrywide’s interim trading results for 2018 are out and reveal a ‘resilient’ performance, the company says as it continues to roll out its ‘Back to Basics’ strategy.

The group achieved profits of £33 million on a turnover of £627 million, which its board says is in line with expectations, and saw its sales stock rise by 9%.

But the figures reveal the company’s ongoing problems. Profits are almost half that of the £65 million achieved during 2017 and revenues from sales dropped by £32 million to £329 million for the year.

But Countrywide says its latest results have been achieved despite an extraordinary one-off £2 million charge, a challenging market and starting 2018 with a 19% sales pipeline deficit.

Countrywide says it is making good progress implementing its Back to Basic strategy in both sales and lettings.

This includes reinstating sales and lettings expertise both at regional and branch management level, increasing its stock by 9% and the pipeline of agreed sales awaiting exchange of contract by 5%.

It has also increased the amount of money the company earns from ancillary services such as mortgages and surveying, up from 38p for every £1 of estate agency revenues to 44p.

“We are encouraged by the progress we have made in our Strategy and Turnaround plan and in the growth in the register and the pipeline in the UK,” the company says.

“Nevertheless, we remain cautious about the market outlook for 2019 and continue to closely monitor market conditions for any potential impact arising from the wider political and economic environment.”

 

 

February 13, 2019

2 comments

  1. Look at those brands….. looks as though not one of them has had any money spent on updating and rebranding. All look as though they they had an agency in the 80’s have a go and left them there.
    Even John D Wood (their premium London offer) looks dated.

  2. A 5.26% gross profit is not a sign of success, most successful one branch agencies trade on a gross profit margin of 28%. A national company should be aiming for 12% to 14%.

    If sold prices reduce nationally by 5% in 2019, then Countrywide fees will reduce in line, which is very likely.

    Also, if the government bans referral fees from mortgage finance, solicitors and survey business, this lost revenue will also impact on Countrywides bottom line, as I think solicitor referrals alone is worth a large sum each year.

    I hope that Countrywide do weather the storm, but I would advise closing branches that have never made profit or marginal profit, and put resources into the profit making offices, and perhaps, develop staff and employ great mangers at branch level.

    Put it this way, if you went to a crowdfunding site and said I have great idea, we are going to generate 627M of revenue in 2018, but only see a 5.26% gross profit, you probably would not have any takers especially if you said the brand was a mature one dating back decades. Thoughts?

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