'Bigger Countrywide losses to come' warns broker advising investors to sell

One of Countrywide’s former allies in the City broker community - independent corporate advisor Numis - has downgraded the troubled agency group and has given a shock prediction about possible future losses.

Until yesterday lunchtime Numis has given Countrywide a ‘hold’ rating but following a disastrous performance on the London Stock Exchange and a highly pessimistic trading statement, this has now become a ‘Sell’.

Arguably worse, Numis (which previously had a target price for Countrywide of 89p) has now set the target price at a mere 38p - that’s over 28 per cent less than yesterday’s opening price which itself following a massive near-30 per cent collapse for the share price on Monday. 

Over the past year the highest Countrywide’s share price has reached - and this was during the reign of former chief executive Alison Platt - has been 174.5p.

Now, following the Monday trading statement, the price hemorrhage has continued.

Yesterday it fell yet further, closing down almost 11 per cent at 49.0p.

Also surfacing yesterday were renewed rumours over the fate of Hamptons International, one of Countrywide's high-end brands, and the company's commercial arm, Lambert Smith Hampton.

Last February the commercial property publication Estates Gazette reported that Toscafund Asset Management was in talks with Countrywide about an acquisition of the commercial arm and possibly parts of Hamptons International. 

This speculation resurfaced yesterday. 

The share price rot appeared to set in after Countrywide revealed this week that its earnings for the first half of this year would be down by £20m on H1 2017, and that this would not be turned around in the second half of this year. 

In addition, it warned the “subdued” housing market would create additional problems

The group’s plan to fundraise to get itself out of the crisis will be revealed in a month’s time; in the interim it says US equity firm Oaktree, which owns 30 per cent of Countrywide, is backing the plan now being finalised.

You can see Monday’s statement in full here.