The estate agent’s share price this morning plunged to as low as 16.5p, from around 50p yesterday, as investors rushed to dump holdings in the struggling group.
To ease its £211m debt burden, Countrywide aims to raise cash through a discounted share sale of just 10p a share.
The group’s income fell by 9% year-on-year to £303.6m, which Britain’s largest estate agent blamed on a deficit of sales.
The number of house sales exchanged has fallen to 22,026 from 27,100 in the same period last year.
Losses worsened to £205m, from £500,000.
Hopes for turnaround
Britain’s largest estate agent said it is building back “industry expertise” and staffing levels in its sales and lettings arms, as well as its financial services businesses.
This has been funded by cutting people in central functions headcount by a third, Countrywide said.
Mortgages arranged in the six months to the end of June were worth £9.5bn, up from £7.9bn a year earlier.
The group plans to have more mortgage consultants in branch in the second half of the year, as well as increased levels of referrals in branch to help boost its financial services arm.
The group said it aims for further operational progress in the second half of the year, with the investor cash call hoped to fund its “turnaround plan”.
Shareholders will be asked to give approval to the share sale at a general meeting on August 28.
Oaktree Capital Management approval
Countrywide said investor Oaktree Capital Management will vote in favour of the plan.
It comes after a torrid year for the group, with four profits warnings and the loss of its former chief executive Alison Platt, who resigned in January.
Peter Long, executive chairman, said: “The capital refinancing announced today is a significant milestone for the group.
“It will enable us to build upon the progress we have made to date on our three-year recovery plan as we deliver our return to growth strategy.
“Although it is still very early in the turnaround, we are encouraged by the operational improvements that we are making and the tangible results that are being achieved.
“With well-known and trusted brands, together with our able and dedicated colleagues we have laid down a strong foundation to build upon and I am confident that we will return Countrywide to profitable growth and long-term success.”
