Countrywide predicts rocky 2015 for property market despite record profits

 
Joe Hall
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Completions by Countrywide's brands, which include Bairstow Eves, rose by more than 6,000 in 2014 (Source: Getty)

The figures

The UK's largest estate agent, Countrywide, whose brands include Bairstow Eves, Hamptons and John D Wood, announced a 20 per cent rise in total income to £702.2m in its first year as a publicly listed company.

Profit before tax rose 63 per cent to a record level of £102.4m, from £62.9m at the same stage last year. Exchanges rose by 6,596 to 72,405. Mortgages arranged also rose from 60,640 to 70,529, increasing in value by 24 per cent to £10.3bn.

The group's net debt more than doubled, from £48.4m to £103.1m, but Countrywide insisted the "appropriate capital structure" was in place to maximise future growth opportunities.

Adjusted earnings per share rose 50 per cent to 36.7 pence per share, while investors will be further cheered with a 200 per cent rise in total divident to 24 pence per share.

Why it's interesting

Countrywide is the latest property group to caution that the market could experience a slowdown ahead of the general election, saying potential uncertainty and negative trends in mortgage approvals are likely to pave the way for sluggishness.

Yet Countrywide said it is more than resilient enough to deal with the challenges, as demonstrated by its record results, despite the "significant demands" placed on the market in the past year including the Bank of England's stringent stress tests introduced last April, which imposed a quota on the number of a bank's customers who could borrow for a mortgage.

The measure "undoubtedly slowed demand", admitted Countrywide - but the group also embraced the measures, teaming up with a number of banks to tackle the issue. HSBC chose Countrywide as its first ever intermediary partner for mortgage distribution in the UK.

What Countrywide said

Access to credit ... remains a key driver and the introduction of the mortgage market review in April 2014 undoubtedly slowed demand in the housing sales market.

While the changes placed significant demand on the market, requiring considerable changes to the way a customer accesses mortgage credit, we welcome the change. We believe the underlying robustness of stress testing affordability...underpins a strong and more secure future for the housing market going forward. Every one of our 600 plus mortgage consultants is trained and fully qualified to the FCA'a required standard and our commitment to a robust quality and compliance framework remains resolute.

In short

An impressive debut year on the stock market for Countrywide, but repeating the trick in 2015 could be tough.

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