March 8, 2018 / 7:39 AM / 3 months ago

UK's Countrywide going 'back to basics' after profit plunges

(Reuters) - Countrywide Plc (CWD.L), Britain’s largest estate agent, reported a 22.5 percent fall in core annual earnings on Thursday and scrapped its dividend, sending its shares to record lows.

It pledged to go “back to basics” to return its sales and lettings business to profitable growth after what it called a “disappointing year”.

“We have got to put our resources back in the front line and not at the head office,” said Executive Chairman Peter Long, adding that restructuring would reduce headcount to 350 from 400.

Countrywide warned that its 2018 property pipeline was “significantly lower” and that it expected a fall of about 36 percent (10 million pounds) in first-half adjusted earnings before interest, taxation and amortisation (EBITDA).

Its 2017 adjusted EBITDA fell 22.5 percent to 64.7 million pounds while group income fell almost 9 percent to 671.9 million pounds.

    Shares in Countrywide plunged to a record low of 66.64 pence before recovering some ground to stand at 77p at 1029 GMT, down 13.4 percent.

    “The next few months will be messy as new plans are put into place,” Jefferies analysts said in a note to clients. “However, banks are lending their support to the new plan and we believe those equity investors who choose to do the same will have their patience rewarded.”

    Countrywide has lost market share to other traditional competitors in a market where demand has been hit by higher property taxes and Britain’s vote to leave the European Union.

    CEO Alison Platt, who had taken personal responsibility for reviving the company’s main sales and lettings business in August, resigned in January.

    Reporting by Radhika Rukmangadhan in Bengaluru; editing by Subhranshu Sahu and Jason Neely

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