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Monday 23 July 2018

Countrywide shares slump as estate agent warns over subdued market

Countrywide wants to reduce debt by at least 50% through additional equity finance.

Countrywide is tapping investors for cash (PA)
Countrywide is tapping investors for cash (PA)

By Ravender Sembhy, Press Association City Editor

Shares in Countrywide tumbled after the troubled estate agency warned over profits and said it will raise fresh funds to cut debt.

The group – Britain’s biggest listed estate agency and owner of brands including Hamptons and Bridgfords – said on Monday that the property market in the first half has continued to be “subdued” as it continues to experience longer transaction cycles.

As a result, it now expects interim earnings to come in at around £20 million lower than last year and does not expect the shortfall to be recovered in the second half.

Shares crashed 25% on the news.

Countrywide also said that it is looking to put in place a “long term capital structure” to support a turnaround plan.

Our focus remains on building back the sales pipeline and we expect to substantially close the pipeline gap by the end of the year Countrywide

The group wants to reduce debt by at least 50% through additional equity finance.

Its major shareholder, Oaktree, and the company’s lenders are supportive of the plan, the firm said.

In March, Countrywide’s shares also slumped after the company swung to an annual loss and warned over further pain to come in 2018.

At the time it said it was going “back to basics” after what it described as three years of under-performance in its main sales and lettings business.

It is axing around a third of its 450-strong central office team as part of cost-cutting efforts to help turn around its fortunes.

Countrywide said: “The market in the first half has continued to be subdued and we have experienced longer transaction cycles.

“Our focus remains on building back the sales pipeline and we expect to substantially close the pipeline gap by the end of the year.”

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