Estate agent group Countrywide's shares dive as profits fall
Shares in Countrywide, the UK's largest estate agent group, lost 20% after it warned of tough times in the market.
Countrywide, whose brands include Bairstow Eves and Gascoigne Pees, made a £208.1m after-tax loss in 2017, versus a £17.5m profit in 2016. said about 150 head office jobs would go.
The firm has been hit by a slowdown in the housing market as well as the rise of online agents such as Purplebricks.
But by the close, the shares had pulled back to stand 1.6% down.
The profit figures were also dragged lower by one-off costs as Countrywide continued to restructure the business.
But even with these are stripped out, pre-tax profits more than halved to £25.2m, from £52.7m in 2016.
Countrywide, which called 2017 "a disappointing year", said trading had remained under pressure since the start of 2018 with a pipeline of work "significantly" below a year earlier.
Its previous chief executive, Alison Platt, left last month after a profit warning and announcement of a further restructuring of the business which included investment in digital operations to compete with online rivals.
Countrywide said on Thursday that it was shedding about 150 of its 450-strong head office team as part of a cost-cutting drive. The firm employs about 8,000 nationwide.
The results announcement laid bare the problems in its core sales and lettings arm, where earnings sank 47% to £14.9m.
Across sales and lettings in London, earnings fell 44% to £11.5m.
Executive chairman Peter Long admitted that the patience of investors had been "sorely tested". The company will not be paying a dividend to shareholders.
He said the group was working to resolve poor performance in sales and lettings, but admitted it would "take time".
"We believe these business units are fixable, know what we have to do to restore them and the steps to take that should result in a return to profitable growth."
Some of the problems facing the housing sector were underlined on Thursday with news that the number of homes on estate agents' books had dwindled to a new low.
The Royal Institution of Chartered Surveyors said average property stock levels per branch on agents' books fell to a new record low of just under 42, as inquiries from new buyers, new instructions from sellers and newly-agreed sales continued to drift lower in February.
New buyer inquiries fell for the 11th month in a row, while sales trends have remained similar over the past six months, Rics said.
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