These guys are value investors rather than takover merchants. The market doesn't seem tobe getting excited about their stake building, presumably because of that reason. Still, it is reassuring that someone sees some undervaluation .....
Alison Platt (the £960,000 CEO despite crushing shareholder value) has pinned her colours to a retail model now. They have a very diversified business that in theory guards against fluctuations, but their high rewards were based on an overshoot in the fees generated from the London market in the boom which will not be repeated. Now there are lots of offices in prime central London that milked a gravy train which will now drop to a new level. Watch stories about John D Wood, Hamptons, Faron Sutaria, Gascoigne Pees etc They are closing offices and merging brands...there was a time that people used to talk about Mann & Co and Bairstow Eves...these are old hat now. Hamptons Int used to get a separate report to the city, especially as they had such a large new homes biz in Prime Central London, but no more. Lettings has been a big diversification which has challenges with the new fee regime after the autumn statement and is much commented on, but has caused their hedge to the sales business problems.
The real threat though is the policy to follow the retail principle which is online, going head to head with Purplebricks etc. They are piloting this at £995 + VAT which has immediately crushed the average fees those firms used to generate from probably over £4,000. Commercial suicide unless you close all your High Street branches and they are already closing their legal and sales progressing call centres which in the past produced big fees. The issue is they are inefficient and incompetent as all call centres are and destroy good will. Their reputation in the conveyancing world is utterly dire! They however have to keep their High Street shops open as they are offering a two tier service where you can upgrade to a full service with a phone call. Rest assured the clients who signed up to £995 and are still dealt with by the same office will not want the big hike in fees...human nature gets used to the price it has agreed.
"LSE:CWD:Countrywide has been the subject of rather a few emails recently. The primary cause appears to be a belief the share price has probably bottomed at two quid and that this is therefore a safe entry level. At time of writing, it closed the ..."
" COUNTRYWIDE (LSE:CWD) has been the subject of rather a few emails recently. The primary cause appears to be a belief the share price has probably bottomed at 2 quid and therefore, this is a safe entry level. At time of writing, it closed the ..."
Good looking divi ... Also share buyback has helped bouy the stock. I sold out slightly lower but feel that the market in London top end has stagnated way more than anyone expected so sitting out for now
"The UK housing market has been at the sharp end of the recession. Prices have fallen by 18% from the August 2007 peak and the number of transactions is running at half the levels seen before the financial crisis. Housebuilding has collapsed. In ..."
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