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Countrywide plunges into red amid tough market

Sky News logo Sky News 08/03/2018
Estate agents © PA Estate agents

Estate agency group Countrywide has plunged to a £212m loss and warned of a bleak year ahead in the latest sign of the difficulties facing the housing market.

Shares in the Hamptons and Bridgfords owner slumped by more than 20% on the update – the second profit warning issued by the company since Christmas.

The group also said it was axing around a third of its 450-strong central office team as part of cost-cutting efforts.

It came as separate figures showed the number of homes on the market hit a fresh record low last month and the latest data from Halifax showed house price growth slowing.

Countrywide said it had suffered "another disappointing year" for sales and lettings, pointing to a "flawed" shake-up of the business as well as challenges for the wider sector.

It said: "The internal issues were further exacerbated by the tough 2016 comparatives owing to changes in the stamp duty regime and the uncertainty in consumer confidence as a result of UK's decision to exit the European Union."

The group plunged into the red for 2017 – down from a £19.5m profit the year before – largely thanks to more than £200m written off against the value of its businesses.

But even stripping out these one-off charges, pre-tax profit still more than halved to £25m.

The results come after chief executive Alison Platt stepped down following a profit warning earlier this year.

Executive chairman Peter Long said Countrywide's business "pipeline" for 2018 was significantly below its level at the same time last year and would "take time" to recover.

He said that would result in a reduction in earnings in the first half of the year of £10m and it looked unlikely that this shortfall would be recovered.

The update came as latest figures from the Royal Institution of Chartered Surveyors (RICS) showed average property stock levels per branch on estate agents books fell to 42, a new low.

RICS added that in "another sign of the increasingly challenging market environment" the average time for a sale to complete from listing had risen from 16 and a half to 18 and a half weeks, over the past year.

On Wednesday, lender Halifax reported that annual house price growth had slowed to 1.8% in February, the slowest pace since March 2013.

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