Countrywide wants damages from mystery buyer who pulled out of deal

Countrywide says it is pursuing the businessman who failed to complete on the purchase of the troubled agency’s commercial arm, Lambert Smith Hampton.

In December Countrywide agreed the sale of LSH, despite having earlier said the division was an essential part of the company and denying it was on the market. However, the deal to sell LSH collapsed some weeks later.

In a trading statement to shareholders this morning, Countrywide says: “Following exchange of contracts and shareholder approval, the buyer, Mr John Bengt Moeller, failed to complete the transaction. The Group has terminated the sale with Mr Moeller and is pursuing him for damages and costs.” 

Moeller is a Monaco-based real estate entrepreneur about which little appears to be known. Early this year Countrywide explained that Moeller was “indisposed during January” and unable to access the funds to continue with the deal. 

There is no reference in this morning's statement to how Countrywide's due diligence process operated, but the company says it is “continuing discussions with another interested purchaser that actively expressed an interest in LSH during the delayed completion period.”

To add to the woe, today’s trading statement says LSH income in 2019 was down nine per cent to £101.9m.

Overall, Countrywide’s group income - including the residential activity that forms most of its business - was down three per cent “after absorbing £12.2m impact of the tenant fee ban.”

The company says its sales and lettings side returned to "growth in profitability with adjusted EBITDA pre-IFRS 16 of £3.8m" after a 2018 loss of £2.4m. "Sales transaction volumes were up three per cent on a like-for-like basis after adjusting for the impact of branch closures" it states.

However, total sales volumes for the year - without taking branch closures into account - were three per cent lower resulting in an income reduction of five per cent. Lettings income was down five per cent to £8m after mitigating the gross loss of tenant fee revenues of £12.2m from June. 

The statement covers the 2019 calendar year but there is also a Coronavirus period update of the first four months of 2020.

It says: "Following the government's announcement on 12 May 2020 of the re-opening of the housing market in England, the Group has undertaken a comprehensive risk assessment of our business operations to ensure the health and safety of colleagues and customers, and begun phased re-opening for business across all of our operating channels, including physical branches and valuation visits in addition to the continuation of web-chat and telephony contact.

"We have accelerated the expansion of our virtual viewing offerings, adapting to social distancing measures, and we are offering our customers online mortgage advice. This way of working is resonating well with our colleagues and customers who are appreciative of this multi-channel choice of engagement, providing support and advice whilst allowing everyone to stay safe.

"For the four months to 30 April 2020, the Group benefited from positive trading in the first quarter, and the strong pipeline build before lockdown."