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Monday 21 May 2018

Countrywide shares flop on ‘disappointing’ fourth quarter

Fourth-quarter income is forecast to fall to £164 million from £179 million.

Lennon’s first home sells for £480,000
Lennon’s first home sells for £480,000

By Ravender Sembhy, Press Association City Editor

Shares in Countrywide tanked on Thursday after Britain’s biggest listed estate agency warned that a poor end to 2017 would see profits knocked.

In a trading update covering the year to December 31 the group flagged a “disappointing” fourth-quarter performance, which will result in full-year income coming in at around £672 million, down from £737 million last year.

Fourth-quarter income is forecast to fall to £164 million from £179 million and full-year earnings are also set to come in lower at £65 million versus £83.5 million.

The decline was driven by its UK business, in particular London, Countrywide said.

Sales and letting income is expected to be around £205 million, down 17% year on year, and in London is forecast to be 10% down at £155 million.

Shares plunged over 15% to 114.5p in morning trading.

The housing market has experienced a marked slowdown since the Brexit vote, and Countrywide said last year that the EU referendum had a “sustained impact on sentiment”, with fewer buyers and sellers coming to the market.

Anthony Codling, equity analyst at Jefferies, said: “The compounding of changes in external market conditions and the internal operations have taken their toll on Countrywide.

“The residential markets were more challenging in 2017 than Countrywide originally anticipated. As a result, the group made some significant changes to the leadership team last year as it sought to address underperformance.”

“Countrywide remains the UK’s largest estate agency group, and although it is by no means firing on all cylinders, we would rather tune the existing infrastructure than build one from scratch.”

Press Association

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