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Countrywide confirms ‘challenging’ 2015 with estate agency and lettings down

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  • 25/02/2016
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Countrywide confirms ‘challenging’ 2015 with estate agency and lettings down
Despite strong financial services and surveying results, property giant Countrywide reported results shackled by its estate agency and lettings performances.

Results out this morning for 2015 showed group income up 4% to £733.7m, but EBITDA (Earnings Before Interest, Depreciation and Amortisation) fell 7% to £113m.

In a statement, Group CEO Alison Platt called 2016 the year of execution as the group continued to diversify its business model and capitalise on the fast start to the year.

She said: “We believe we are superbly placed to capitalise on a mortgage market that is shifting further toward an intermediary model with expectations that more than 70% of the total mortgages written in 2016 will be brokered. Our 600+ field force of mortgage consultants are targeted to deliver record performance driven by improved lead management, better data utilisation and a new front-end operating system, which is being rolled out as we enter 2016.”

She added: “We remain of the view that the drivers of demand for the private rental sector remain strong and will drive further growth. The impact of the increased tax burden for buy-to-let landlords and second home owners has yet to play out in the market, but in a low interest rate environment, yields in the buy-to-let sector, particularly outside London, remain attractive.”

Countrywide’s build-to-rent institutional investor plans to continue with its residential investment fund in partnership with Hermes Investment Management. Schemes in Manchester and Liverpool have started with a second round of fund raising underway.

Grenville Turner’s (pictured) final statement as chairman at Countrywide

“In my second and final term as chairman of the group, I am reporting following a significantly tougher year both for the market and Countrywide. 2015 was an uncertain year and we know that uncertainty does not breed confidence, a necessary factor to provide stimulus to the UK housing transaction market.

“The May general election was the most uncertain in a generation and the anticipated post-election boost never materialised. 2015 results delivered income growth of 4% to £733.7m but EBITDA fell to £113m. While lower than 2014’s performance with poorer results in sales and lettings, these figures highlight the benefits we continue to derive from our broadly based diversification strategy with 42% of Group EBITDA being delivered from lettings and commercial, our key recurring revenue streams.

“Other contributors to growth were our financial services and surveying teams, two areas of the business which outperformed the market in 2015. In 2015, we confirmed that there would be no change to underlying dividend policy which would target a payout ratio of 35-45% of the annual reported Group profits after tax but before amortisation. In recent years, the Group has paid 40% and I can confirm that the 2015 cash payment will be held at the previous year’s level.

“In February 2016, we sold 8,659,302 Zoopla shares realising £19.1m, which will be returned to shareholders by way of a share buyback programme. We continue to hold 9,234,473 Zoopla ordinary shares. The Board has the potential to re-introduce special dividends from 2017.

“As announced on 11 February 2016, I am pleased that Peter Long will take over as non-executive chairman following the company’s Annual General Meeting on 27 April 2016. I am proud of my tenure at Countrywide and it was always my intention to only remain as chairman for a period of two years. I believe the time is now right to depart with the arrival of Peter who brings a strong customer focus and a wealth of plc board experience, which will complement the Board’s expertise and add value to Countrywide as it delivers its customer centric strategy.

“As noted in our January 2016 Trading Update, the Group achieved an encouraging performance in Q4 of 2015. While it is too early to accurately predict how the residential transactions market will perform in 2016, trends are encouraging with momentum building and strong pipelines. At this stage in the year, I am confident that the group is in a good position to deliver in line with the Board’s expectations.”

Peter Long will take over as chairman on 27 April 2016.

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