Losses mount at Countrywide but ‘back to basics’ is working, it claims
Profits have also halved at the troubled estate agency giant but its sales and lettings stock and pipelines are reviving, says Executive Chairman Peter Long.
Troubled estate agency giant Countrywide’s losses widened during 2018 and both revenue and profit dipped significantly, its latest results reveal. The company has also warned that the fees ban will cost it £9 million this year.
During 2018 Countrywide lost £218 million, a 5.5% increase on 2017’s losses of £207 million.
Revenues dropped by 7% across the group including by 9% within its sales and lettings operations, while profit halved from £65.5 million in 2017 to £32.6 million last year.
Revenues and profits at its B2B and financial services divisions dipped too.
Its senior team have put a brave face on the company’s performance following the results, highlighting how its ‘back to basics’ plan is working.
This includes beefing up its skills base, a 9% rise in listed properties for sale and to rent, and a 5% rise in house sales waiting to complete despite starting 2018 with a 21% deficit.
“As a Group we are in a stronger position than we have been for some considerable time with sound business fundamentals and, despite the difficult market conditions we are facing, we remain confident in delivering our turnaround,” says Executive Chairman Peter Long (left).
“We encountered market weakness in [the final quarter of the year] due to the further uncertainties surrounding Brexit which is affecting both our sector and consumer confidence as a whole,”.
“These headwinds have continued into 2019. As a result, we are experiencing further slow-down in residential and commercial property transactions particularly in London and the South.”
It’s not been a good week for the company – earlier this week it received a huge fine for non-compliance with anti money laundering rules.
With the sales pipeline down by 20%, Countrywide’s first quarter revenue will also be down by a fifth, add the loss of revenue due to the lettings ban which will start soon, and then transparency on referrals, I think that unless 30% of branches close, by this time next year there may be no Countrywide.
Also, Countrywide keep banging on about a 3-year plan, and a back to basics plan, which this sounds very confusing.
A three-year plan sounds like a communism and back to basics sounds like the conservatives. I turn clients businesses around in 6 to 8 weeks, if I said I have a 3 year plan to cut your debt and increase your profit, most of my clients would rightly tell me where to go.
I like Countrywide, because in 1986 one of their brands made me a manager after only 14 months in the business, but back then they had a structure, and a strategy and an identity, that made them unique.
Also, most importantly, they sold huge amounts of property and their fees were sometimes twice that of the competition and they loved the fact that they were the agent of choice.
Last month I personally called over 150 agents as an exercise for a client, in those calls I spoke with a number of Countrywide offices, and they seemed to have two voices, either condescending and in your face or disinterested and beaten, there were plenty of other agents who had the same voice also.
In contrast, the agents who were market leaders in their areas, either corporate agents or independents, had the same voice on the end of the telephone, professional polite, non-pushy, and interested in what I had to say. Many of those were mature agents who clearly were loving their job, or young men and women who reveled in customer care.
Maybe, the COO’s of this corporate should ring their branches, not to spy on their front-line team, but to understand that if prospective clients call and are greeted by negativity or a sales team who do not listen, then the business will not make profit.
Sure, Proptech means only 7% of business comes directly from a telephone call, but if a branch has never made profit in the last 5 years, and by profit I am saying 28% gross profit on turnover in all disciplines, then maybe the front line troops are confused, badly trained and possibly in the wrong profession and the buck for that stops right at the top.
Worryingly, when top management say we are not going to sell off part of the company, that is very similar to the PM saying I have every faith in a certain MP, which often as not is followed by the said MP resigning.
My diary is a little busy at present and I am away in sunny Barcelona on holiday until next week, but if Countrywide would like some sound advice, I can certainly impart it, and they would not need to wait another 24 months to start turning around those loss making offices. And those vulnerable offices about to go the same way with sales revenue and other revenue streams about to be cut.
As a point of balance though I was an independent agent for half of my 30- year sales career, I also did time for another corporate who recently posted profits, more than twice those of Countrywide.
It comes as no surprise that all the managers and teams I was privileged to work with, were always on it, and the management teams through to the COO’s had a strong, strategy based on customer service.
Also, though it was a corporate, each branch felt like a premier league independent agent, and had enough autonomy at branch level to make the customer feel the same way. And that is a very hard thing to accomplish.