There was limited evidence of the much-hyped housing recovery in Countrywide (CWD)’s first results as a public company since 2007. It sold just 2 per cent more houses in the first six months of 2013 than in 2012, maintaining its market share at about 8 per cent. The only division to post substantial top-line growth was lettings - a counter-cyclical sector in which Countrywide has been investing heavily.
Yet indications of an upturn emerged in the closing months of the period. Estate-agency revenues were up 6 per cent in the second quarter, and the closing pipeline of agreed sales was up 8 per cent on June 2012. Loan volumes in the mortgage business were ahead by 18 per cent in the second quarter after a poor start to the year.
Most divisions posted double-digit earnings growth as cost-cutting measures compensated for the flat market. Around 22 regional estate-agency administration centres were consolidated into one national centre, boosting cash profits in the division from £176,000 to £3.7m. With deal-flow in the housing market still thin, however, lettings remained the profit engine of the group, accounting for almost half of all cash profits.
The statutory results reflect all sorts of costs relating to the legacy of private-equity ownership and the flotation in March. Strip these out and operating profits rose 47 per cent to £22m. Brokerage Peel Hunt expects adjusted pre-tax profits of £55.6m for the full year, giving EPS of 21p, up from £26.1m and 14.5p in 2012.
COUNTRYWIDE (CWD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 603p | MARKET VALUE: | £1.32bn | |
| TOUCH: | 596-602p | 12-MONTH HIGH: | 618p | 350p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | na | |
| NET ASSET VALUE: | 208p** | NET DEBT: | 5% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 249 | -2.39 | -1.70 | n.a.* |
| 2013 | 259 | -1.42 | -0.10 | 2.00 |
| % change | +4 | - | - | - |
Ex-div: 7 Aug Payment: 6 Sep *Countrywide floated on 20 March 2013, at 350p a share **Including intangibles of £557m, or 254p per share | ||||
