Countrywide (CWD) performed much as expected in the year to December 2018, with a continued decline in transactional volume, as economic and political uncertainty left both housebuyers and sellers sitting on their hands. Profits before exceptional items fell from £26.1m to £5.4m, but this was before taking into account impairment and other charges of £238.9m.
Adjusted cash profits from sales and letting collapsed by 96 per cent to £1.19m, with house sales exchanged down 14 per cent at 46,828. Lettings provided a more resilient performance, with properties under management down 3 per cent and lettings income just 1 per cent lower. However, a ban on tenant fees will cost £9m, while the slowdown in property transactions will trim 2019 first-half profits by £3m-£5m.
Countrywide estimates that cash profits for 2019 will be roughly the same as in 2018, but this is dependent on what is usually a stronger second-half performance – given the current climate, that can’t be relied on. On the financial side, the balance benefited from a capital-raising in August of £125m, which means that net debt fell from £212m in June 2018 to £71m.
Analysts at Peel Hunt downgraded their forecast for cash profits to £30m from £43m for the year to December 2019, compared with £35m in 2018.
COUNTRYWIDE (CWD) | ||||
ORD PRICE: | 8.98p | MARKET VALUE: | £147m | |
TOUCH: | 8.84-9p | 12-MONTH HIGH: | 67p | LOW: 8 |
DIVIDEND YIELD: | nil | PE RATIO: | na | |
NET ASSET VALUE: | 13.4p* | NET DEBT | 32% |
Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2014 | 702 | 79.6 | 30.8 | 15** |
2015 | 719 | 47.7 | 18.9 | 15 |
2016 | 724 | 19.5 | 8.0 | 5 |
2017 | 662 | -211 | -89.3 | nil |
2018 | 619 | -253 | -30.8 | nil |
% change | -7 | - | - | - |
Ex-div: | - | |||
Payment: | - | |||
*Includes intangible assets of £308m, or 18.8p a share **Excludes special dividend of 9p a share |