Countrywide of the mark: City investors spurn beleaguered estate agent as share wounds deepen
It seems there is no end in sight for Countrywide’s bloodbath on the stock market.
The embattled estate agent has suffered a collapse in its share price since unveiling a £140m emergency fundraiser earlier this month, reflecting just how uncertain City investors feel about the firm’s future.
Shares have fallen a further three per cent so far today, dropping to 12.52p – a sharp decline from its 130p share price a year ago.
While Countrywide’s value has been sliding steadily over the last 12 months amid profit warnings and resignations, it was only after announcing its rescue bid several weeks ago that share prices dived 60 per cent, wiping £74m off the company’s market capitalisation in one day.
The UK’s largest independent estate agent, which owns brands such as Gascoigne-Pees and Bairstow Eves, has struggled with the emergence of online rivals such as Zoopla and Purple Bricks, which have disrupted the success of property market heavyweights over the last decade.
Read more: Estate agent giant gets green light for rescue bid as share prices tumble
Property expert Henry Pryor told Morning Wire: "The demise of the UK’s largest estate agency group is both a tragedy and a scandal – one that should embarrass the shareholders and shame the management. They have some of the best staff, some superb brands, own the country's largest mortgage broker and yet the business appears to have been driven over a cliff."
"Harry Hill and the late Christopher Sporborg left a legacy that included a significant share in Rightmove and that appears to have been squandered by people with less knowledge of how to run a business than a group of GCSE business students. One can only hope that this will be their last opportunity to run anything bigger than a lemonade stand."
The firm has also been faced pressure over a pay row for its top executives, rowing back on a bonus plan last week amid threats of a shareholder rebellion.
Read more: Shareholder anger forces Countrywide to abandon pay plan
House Network founder and boss Mark Readings, whose £100m company was one of the very first online estate agents to spring up nearly two decades ago, told Morning Wire: "I can remember in the early days it was really difficult to get accepted as the industry didn’t take notice of our type of online model – we always felt there were people with heads in the sand who couldn’t see it as a big threat."
Readings added: "Countrywide was one of them. Its ultimate problem is that it hasn’t adapted to the threat of online estate agents quickly enough. It had the wrong model, launching its own online system that confused people. It’s now trying to recover the business by going back to basics…but the problem with that is that by going back to what it did 15 years ag, it is just continuing to ignore the problems that it faces now."
Earlier this week Hargreaves Lansdown senior analyst Laith Khalaf said: "Looking forward, it’s a long road to recovery for Countrywide…it now has to retrace some of its steps and rebuild its business. Shareholders will be hoping the housing market doesn’t throw the estate agent a curveball while it’s climbing back off its knees."