Home » News » Agencies & People » Countrywide share price crashes as £129m debt refinancing deal is revealed
Agencies & People

Countrywide share price crashes as £129m debt refinancing deal is revealed

The beleaguered company's shares dropped to 14p today, down from over £1.50 a year ago and over half yesterday's price.

Nigel Lewis

Countrywide’s share price has crashed to an all-time low after it revealed plans earlier today of a multi-million-pound share issue to refinance its debt, and despite signs of improving business performance.

Earlier this morning its share price dropped to 14p after opening this morning at 25p. Only three weeks ago it was trading at 55p a share and a year ago, £1.56p. The share collapse follows details of its plans to raise £129 million via two share offers, one for £111.4 million and a second for £28.6 million.

This share placing must be approved by shareholders at a special meeting on the 28th August before it can proceed. But the company says if approved the cash raised will be used to reduce its current debts by 60%.

The Capital Refinancing Plan is in part designed to improve its results by clearing its considerable loan interest payments off the balance sheet.

Business turnaround?

The announcement was accompanied by an upbeat summary of Countrywide’s ‘turnaround plan’.

This reveals an improving sales pipeline which, although still down 9% year-on-year, is an improvement on six months ago when the pipeline was down by a quarter.

Countrywide also says the number of properties it’s marketing at the moment has increased by 3% year-on-year, again a huge difference compared to 12 months’ ago when its book was down by 24%.

The company is also selling more add-on services for each sale and now makes 43p extra on top of every £1 of sales revenue, up from 38p a year ago.

Peter Long, Countrywide, image“The capital refinancing announced today is a significant milestone for the Group,” says Executive Chairman Peter Long (pictured, left).

“It will enable us to build upon the progress we have made to date on our three-year recovery plan as we deliver our return to growth strategy.

“Although it is still very early in the turnaround, we are encouraged by the operational improvements that we are making and the tangible results that are being achieved.”

Countrywide has also promoted Paul Creffield to Group Managing Director following a six-month stint as Group Operations Director. He joins the firm’s board.

August 2, 2018

What's your opinion?

Please note: This is a site for professional discussion. Comments will carry your full name and company.

This site uses Akismet to reduce spam. Learn how your comment data is processed.