The pain continues at Countrywide with profits for the first six months of this year expected to be £20 million lower than the same period last year, the company’s latest trading statement has revealed. This would be a dramatic reduction in its profitability compared to last year’s results.
Business conditions will remain bleak in the coming months, the company admits, and it’s likely that the shortfall in profits won’t be recovered during the second half of the year. Trading conditions remains “subdued” and it is taking longer to sell properties, it says.
Countrywide hasn’t given details of what its exact profit figure is likely to be, but such a hefty reduction would, when compared to its results for the first six months of last year, put profits at just £8 million.
Back to basics
But there are some signs that Peter Long’s ‘back to basics’ strategy of hiring more industry expertise back into the business and building back up inventory is working.
The number of properties on its books has increased by 9% this year and is now back to 2017 levels, while referral income from its mortgages, conveyancing, surveying and other businesses has risen by 8% from 38p to 41p for every £1 earned from estate agency.
“Our focus remains on building back the Sales pipeline and we expect to substantially close the pipeline gap by the end of the year,” the company says.
Countrywide is also going to be busy paying back its lenders and reducing its debt, which it hopes to halve during 2018 through equity finance.
Rumours of the continuing pain at the company appear to have been in circulation within the city last week. Its share price tanked by 20% from Wednesday onwards from 91p a share to 79p, wiping out gains made in recent weeks.