With its interim H2 financial report out today, speaking to Mortgage Solutions, Countrywide CEO Grenville Turner (pictured) said: “We recruited a lot of mortgage advisers in 2012 on the back of promises of increased lending that never materialised, so we were forced to right-size our adviser numbers over H2 2012 and Q1 2013.”
New homes, remortgages and buy-to-let drove the growth in the firm’s financial services division, but second hand house transaction levels remain disappointing, said Countrywide.
Turner said the Stamp Duty changes in March 2012 continued to pull down the figures, but momentum is starting to build again in second-homes.
“Shortage of housing stock is becoming the biggest issue this industry faces. People are still thinking about moving, but just haven’t galvanised to do so yet. It also takes time to move from a buyer’s to a seller’s market. It’s a gear change and the market will lose a little power for a while,” said Turner.
The firm said following a ‘challenging’ 2012, lenders are now focused on increased lending and Bank of England figures show applications grew by 20% in both May and June.
Overall, the Group reported a 4% increase in profits in the six months to 30 June 2013, alongside a 35% increase in Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of £26.4m. Operating profits also rose +47% to £22m with adjusted earnings per share of 5.3p.
On the surveying side, Countrywide reported business volumes rose +2%, giving it a market share of 33% and reported an average fee per job of £160. However, the income for the division rose 7% to £1m in H1, with EBITDA up 15% to £0.7m with Nationwide renewing its panel management contract to 2016.
On the lettings and management side, the group has seen the highest income and profits figures in its history with a total income of £53,460,000 in H1, against £45,341,000 the previous year.
However, the estate agency division reports sales marginally down on 2012, with profits up following consolidation of 22 regional administration centres to a single national office. Hamptons was a success story for the group, reporting a record pipeline of over £12m in H1, although the group admitted converting residential pipeline into income is still tough and exchange numbers continue to fall.
Looking forward, Turner said: “The government initiatives will apply to our core market from the start of January 2014 and are expected to lead to increased activity although it is too early to judge the exact impact at this stage.”
The share price had fallen by 10p on the London Stock Exchange by mid-day following the results, after the group returned to Plc status in March this year.
