Shares in the UK’s biggest estate agency Countrywide tumbled four per cent yesterday after posting a sharp fall in profits, blaming a “difficult housing market” and the uncertainty in the run-up to the General Election.
The company, which owns estate agencies including Hamptons, Blundells and John D Wood, said profit before tax decreased by 22 per cent to £28.9m in the six months to 30 June compared with £37m the same time last year and below analyst expectations.
The number of house transactions it advised on fell by 12 per cent 30,440. The figure includes its London and the premier market segment, which declined by eight per cent in the half year to 2,861 transactions.
UK house prices and sales have risen sharply over the last two years, partly due to government measures to help Britons get onto the housing ladder such as the Help to Buy scheme. But the growth has slowed this year as a result of uncertainty ahead of the election, the July Budget and concerns over a Greek exit from the Eurozone.
“As anticipated, the first half of the year saw depressed activity in the UK residential sales market as UK consumers held back from making decisions pending the outcome of the most uncertain General Election in a generation,” chief executive Alison Platt said.
“However, the benefits of our strategy to diversify the group’s revenue streams were underlined by Countrywide’s ability to ride those challenges with 50 per cent of our profits derived from sources independent of the UK housing transaction market,” she added.
Properties under management rose by eight per cent to 69,741 and mortgages arranged increased by eight per cent to £5.1bn.
Countrywide invested £41.1m on acquisitions in the period, which it said would help diversify the business, including Ikon Consultancy and John Curtis Estate Agents. It said it has a strong pipeline of acquisitions for the second half.
Shares closed down at 531p last night, despite Countrywide promising to make “significant incremental returns” to shareholders from 2017.