Countrywide’s share price plunged this morning after it announced that it is expecting major falls in revenue and profits, with its sales and lettings business particularly badly hit.
It is expecting group EBITDA for 2017 to be 22% down on the previous year.
The announcement resulted in a drop of nearly 17% in Countrywide’s share price in early trading. Having closed at 135.2p yesterday, it fell as low as 110p and as of 9am this morning it was at 112.4p.
The company issued a trading update this morning ahead of its preliminary results on March 8.
It said total group income is expected to be £672m, down 8.8% on 2016′s total of £737m.
Meanwhile EBITDA (earnings before other costs) for 2017 is expected to be around £65m, down 22% on the £83.5m it posted in 2016.
Total income in the sales and lettings business for the full year is expected to be circa £360m, down 14% on 2016, which Countrywide said reflected a disappointing fourth quarter performance.
Income in the UK business is expected to be circa £205m, down 17% year on year, and in London is expected to be circa £155m, down 10% year on year. Lettings income is expected to be down 4% at circa £169m, driven by an 8% decline in the UK, with London lettings revenue flat year on year.
EBITDA in sales and lettings is expected to be circa £26m, down 45% “principally as a result of the changes in the sales and lettings structure made over the last 12-24 months”.
Countrywide said: “We have begun to take a range of actions over the last quarter that we believe can restore the business back to profitable growth.”
Strikingly, there is no mention in this morning’s update of Countrywide’s online agency offering.
The B2B business, including Lambert Smith Hampton, is expected to deliver “strong” EBITDA growth of 14% to circa £36m (2016: £31.5m).
In its financial services division, lower transactional volumes from estate agency was offset by double-digit income growth across the combined Buy-to-Let business, Mortgage Bureau and Mortgage Intelligence channels. Countrywide said the division delivered “resilient performance” with EBITDA expected to be £20m (2016: £22.6m).