Countrywide has revealed that it will take three years to turn the business around following the departure of Alison Platt in January, and also detailed how and why she left.
During the final months of last year Countrywide Executive Chairman Peter Long carried out a review of why its sales and lettings business had lost so much market share and profitability since 2015.
He discovered that the strategy adopted by the company to treat sales and lettings as a single retail business failed to appreciate that they are really separate entities each with different characteristics and customer bases requiring separate expertise.
Long also found that the ‘one size fits all’ approach the company had adopted led to a reduction in entrepreneurial culture and that branch managers lost the autonomy to recruit and promote colleagues or develop their businesses to fit local conditions.
Reducing closure costs
Countrywide has also published how much its ongoing cost reduction and closures programme cost last year.
Its preliminary results, which come ahead of its full Annual Report later this month, show that it spent £4.4 million on redundancies and changing the leadership structure and £1.65 million on consultants to manage costs and get “strategic initiatives” off the ground.
It also spent £1.86 million on closing branches including the expense of exiting leases.
But the closures and redundancies costs for 2017 are much lower than 2016, when they totalled some £22 million, compared to approximately £6 million last year.
Countrywide also says the pain is likely to continue. Peter Long says: “We have entered 2018 with our pipeline significantly below that of 2017 [and although] we have begun to take steps to build back the pipeline, this will take time.
“Therefore, we anticipate that in the first half of the year this will result in a reduction in adjusted EBITDA of around £10 million.
“At this time, it is unlikely that the shortfall in the first half will be recovered.”