Profits plunge at Countrywide as CEO admits "tough year so far"

Countrywide has revealed a massive plunge in its profits for the first six months of 2017.

Pre-tax profit for the six months to June were £447,000 - that’s over a 90 per cent drop - while operating profit fell almost as much, down 77 per cent to £6.5m.

Revenue is down from £370.3m this time last year to £333m now.

Other figures released by Countrywide this morning are:

- operating profit of £28.3m in the first half of 2016 now down to £6.5m, while revenue down from £370.3m to £333m;

- overall market for housing transactions in the UK was down seven per cent in the six month period, with Countrywide’s sales share dropping further from 5.1 per cent a year ago to 4.9 per cent now;

- ‘cost transformation’ delivering to plan with £19m cost reduction and total costs down £27m year on year;

- net debt at 30 June 2017 £217 million (£248 million at 31 December 2016) as a result of placing in March 2017 and operating cash flow. The Group remains committed to reducing leverage.

Chief executive Alison Platt says: “As anticipated, the first half of 2017 was tough for the group compared to the same period last year given the high levels of housing transactions brought forward in time as a result of the stamp duty changes and the EU referendum. 

“We continue to serve our customers better, and this manifests strongly in our ability to win repeat business in lettings. Our digital proposition in sales is also proving to be an important element in bringing choice and attracting more applicants and vendors to our brands. 

“At the same time our investment in a telephony sales channel in Financial Services is helping to grow our share of the mortgage market. Our Surveying business has grown its profitability and increased the amount of mortgage valuations it has undertaken for its lender clients this year. 

“We are continuing to reshape our cost base, with total costs down £27 million from the six month period to 30 June 2016; we will continue to drive down cost and improve our productivity across the group. 

“We are building a stronger business for our future and remain on track with our goals to broaden our digital capability, reduce our operating cost base and strengthen our balance sheet. Based on our current performance and the outlook for housing transactions in the UK, we expect our results and our leverage for the full year to be within the range of market expectations.” 

This morning respected City analyst Anthony Codling, from Jefferies, gave one of the few upbeat analyses of the figures, saying: “We continue to believe that Countrywide is doing the right things: taking out costs, offering complimentary digital services and growing the financial services division. However the costs of this strategy are being felt before the benefits and whilst it is difficult to see Countrywide receiving any help from the underlying housing market, we do see silver linings amid the clouds.”