Countrywide’s former management seriously damaged the company’s share value and status by adopting a flawed business plan - and then executing it badly.
That’s the view of one of the company’s major shareholders, Catalist Partners, an investment platform operated by senior industry figure Robin Paterson, who also owns the UK Sotheby’s International Realty franchise.
On New Year’s Eve it was revealed that Connells had won the unanimous support of Countrywide’s board for a takeover. Under the terms of the acquisition, each Countrywide shareholder will be entitled to receive 395 pence in cash for each share. This means Connells' initial £82m offer has been increased to around £140m.
Catalist - an early opponent of previous offers for Countrywide - is backing the Connells move and says: “This improved offer from Connells is circa 3x the price at which the Board of Countrywide previously recommend selling control at, a transaction which Catalist strongly opposed, and also brings the specific industry expertise Catalist thinks necessary to restore the core sales and lettings business, along with a track record of successful integration.”
But the statement from Catalist also contains a stinging rebuke for the past Countrywide senior management - former executive chairman Peter Long and former chief executive Paul Creffield, and their immediate predecessor at the helm of the company, Alison Platt.
“Opaque financial reporting, a flawed business plan poorly executed and a failure to urgently repay debt, all contributed to an exceptional decline in the Countrywide share price over the past three years” says Catalist.
Back in August, Paterson’s team issued an open letter that was fiercely critical of Long and Creffield and their strategy.
It said: “We believe it paramount that Countrywide’s stakeholders – employees, shareholders, lenders and customers – receive immediate clarity on the company’s plans to address the significant fall in the share price; adapt to current trading conditions; address emerging customer needs; respond to evolving competitor models and; critically, explain how this will be achieved, over what time frame and who will implement such change.
“The decline in Countrywide’s financial performance over the past four years has been disappointing. The company’s competitors have outperformed on several key metrics and now command far higher valuations, despite generating lower revenues.”
Over recent years the Countrywide share price has rattled along the bottom, little above junk status. More recently it moved up to around 390p as the Connells deal was revealed.
In April 2016 it was around 7,300p.
You can read more about the Connells acquisition of Countrywide here.
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Let us see what the end of year figures look like, and the cost base. If you pick through the multi-million pound write offs hidden in the detail. The consultancy reports commissioned at eye watering levels and never instigated, it is a true work of art, how to fritter hard cash, better aligned to front end profit making, hopefully if there is a change of guard this nonsense will at least stop.
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