TIDMCWD
RNS Number : 5486N
Countrywide PLC
21 May 2020
21 May 2020
Countrywide plc (LSE: CWD)
Countrywide plc
A nnual results for the year ended 31 December 2019 and COVID-19
update
2019 performance - Group returned to profitable growth
The Group's continuing business (1) made significant financial
and operational progress in 2019, benefitting from its 'Back to
basics' turnaround plan . This saw the Group return to profitable
growth, with adjusted EBITDA pre-IFRS 16 (2) up 16% year-on-year
and, most importantly, our Sales and Lettings business returned to
profit.
2019 results highlights
As outlined in the full 2019 Annual Report on Countrywide's
investor relations website (
https://www.countrywide.co.uk/corporate/investor-relations ):
Year ended 31 December
2019 2018(3) Increase/
Continuing operations (1) (decrease)
GBP'000 GBP'000
Total income 498.1 515.1 (3)%
Adjusted EBITDA(4) 54.5 n/a n/a
Adjusted EBITDA pre-IFRS16(2) 24.4 21.1 16%
Operating profit before exceptional
items 35.8 3.6 GBP32.2m
Exceptional items (57.7) (237.2) GBP179.5m
Loss for the year from continuing
operations (37.5) (224.4) GBP186.9m
(Loss)/profit for the year from discontinued
operations (4.2) 6.3 GBP(10.5)m
Net debt pre-IFRS 16(6) 82.9 70.7 GBP(12.2)m
Continuing operations (1)
-- Group income for the full year was GBP498.1 million, down 3%
after absorbing GBP12.2 million impact of the tenant fee ban
-- Adjusted EBITDA pre-IFRS 16(2) of GBP24.4 million was up 16%
year-on-year and ahead of the Board's expectations
-- Adjusted EBITDA(4) of GBP54.5 million
-- Operating profit of GBP35.8 million(5) (2018: GBP3.6 million)
before GBP57.7 million of exceptional costs (principally non-cash
exceptional charges for goodwill and other non-current asset
impairments (2018: GBP237.2 million) with a net loss for the period
of GBP37.5 million (2018: GBP224.4 million)
-- Net debt pre-IFRS 16(6) GBP82.9 million (2018: GBP70.7
million) with net debt/adjusted EBITDA pre-IFRS 16(2) 3.4x (2018:
2.2x)
Sales and Lettings
-- Returned to growth in profitability with adjusted EBITDA
pre-IFRS 16 (2) of GBP3.8 million (2018: loss GBP2.4 million)
-- Sales transaction volumes were up 3% on a like-for-like basis
after adjusting for the impact of branch closures
-- Total Sales volumes for the year were 3% lower resulting in an income reduction of 5%
-- Lettings income was down 5% (GBP8 million) after mitigating
the gross loss of tenant fee revenues of GBP12.2 million from 1
June 2019
Financial Services
-- A resilient performance with adjusted EBITDA pre-IFRS 16(2)
in line with the prior year at GBP16.5 million
-- Income was down 2% to GBP82 million, lower as a result of
transactional volumes from estate agency sales and fewer mortgage
consultants, in line with a reduced branch network
-- Gross mortgage distribution for the Group increased by 3% to GBP20.9 billion
B2B
-- A good performance in each of our surveying, conveyancing and
asset management businesses with income up 2% year-on-year
-- Adjusted EBITDA pre-IFRS 16(2) of GBP17.7 million was down
11% (2018 included one-off benefits in relation to professional
indemnity; on like-for-like basis adjusted EBITDA pre-IFRS 16(2)
would be 7% higher in 2019)
Discontinued operations(1) - LSH
-- In December 2019, the Group agreed the sale of our non-core
commercial business, Lambert Smith Hampton (LSH). Following
exchange of contracts and shareholder approval, the buyer, Mr John
Bengt Moeller, failed to complete the transaction. The Group has
terminated the sale with Mr Moeller and is pursuing him for damages
and costs. Meanwhile, the Group is continuing discussions with
another interested purchaser that actively expressed an interest in
LSH during the delayed completion period.
-- LSH income was down 9% to GBP101.9 million and adjusted
EBITDA pre-IFRS 16 down by 64% year-on-year to GBP4.2 million
COVID-19 update
As noted in the update provided on 30 April 2020, the Group saw
a positive start through the end of February in agreed sales which
continued during March, with the pipeline of agreed sales 9% ahead
year-on-year through the first 12 weeks of the year. The pipeline
remained resilient and stood at approximately GBP50 million, ahead
year-on-year. Equally, we continued to see the benefits of the
recurring income from approximately 86,000 properties we manage
across the UK on behalf of private and investor landlords and our
book of general insurance policies.
Following the Government's announcement on 12 May 2020 of the
re-opening of the housing market in England, the Group has
undertaken a comprehensive risk assessment of our business
operations to ensure the health and safety of colleagues and
customers, and begun phased re-opening for business across all of
our operating channels, including physical branches and valuation
visits in addition to the continuation of web-chat and telephony
contact.
We have accelerated the expansion of our virtual viewing
offerings, adapting to social distancing measures, and we are
offering our customers online mortgage advice. This way of working
is resonating well with our colleagues and customers who are
appreciative of this multi-channel choice of engagement, providing
support and advice whilst allowing everyone to stay safe.
For the four months to 30 April 2020, the Group benefited from
positive trading in the first quarter, and the strong pipeline
build before lockdown. Adjusted EBITDA (4) to 30 April 2020 was
significantly ahead of prior year for continuing operations (1) ,
and the Group's cash position remains strong, with liquidity at 20
May 2020 of GBP60 million. In order to provide additional
liquidity, the Group continues to explore the availability of
funding available to large businesses under the Coronavirus Large
Business Interruption Loan Scheme.
Outlook
We continue to actively monitor the effect of the COVID-19
situation. The Board's priority remains the safety of our
colleagues and customers; to provide essential services to our
customers; to preserve and protect the future of the business for
our people; and to conserve cash and to manage the Group through
the coronavirus pandemic.
Whilst the housing market in England was re-opened on 13 May, it
is too early to assess the impact on housing transactions, and the
Group is therefore unable to provide guidance on future
profitability.
Annual General Meeting
A hard copy version of the 2019 Annual Report and the Notice of
Annual General Meeting 2020 ('AGM Notice') will be sent to those
shareholders who have elected to receive paper communications on or
about 29 May 2020. The AGM Notice will be made available to
shareholders who have not elected to receive paper communications
on the same date.
(1) The Group's continuing business comprises the continuing operations
under IFRS 5 of the residential sales and lettings business,
financial services and B2B businesses including surveying, conveyancing
and asset management. Lambert Smith Hampton is reported as a
discontinued business in our 2019 Annual Report
(2) Earnings determined using pre-IFRS 16 lease accounting principles
(see note 2(c) of our 2019 Annual Report for further details
of the impact of IFRS 16) before interest, tax, depreciation,
amortisation, exceptional items, employment-linked contingent
consideration, share-based payments and share of profits from
joint venture, referred to hereafter as adjusted EBITDA pre-IFRS
16
(3) Restated from prior year following the reallocation of Countrywide
Residential Development Solutions (CRDS) and Auctions business
units from B2B into Sales and Lettings (see note 4 of our 2019
Annual Report)
As reported in our 2019 interim results, we transferred our
Countrywide Residential Development Solutions (New Homes) and
Auctions businesses from B2B to Sales and Lettings. A summary
of the restatement for the 2018 results, along with the exclusion
of the LSH discontinued operations for the comparative period,
can be found below: As stated Revised following
Restatement of the 2018 Income, in 2018 financial restatement
Adjusted EBITDA and KPIs statements: and classification
Income, Adjusted of discontinued
EBITDA and operations
KPIs
================================== ===================== ======================
GBPm Income Adjusted Income Adjusted
EBITDA EBITDA
================================== ========== ========= =========== =========
Sales and Lettings 329.2 1.2 343.0 (2.4)
---------- --------- ----------- ---------
B2B 213.3 27.9 87.5 20.0
---------- --------- ----------- ---------
Financial Services 83.9 16.6 83.9 16.6
---------- --------- ----------- ---------
Central costs 0.7 (13.1) 0.7 (13.1)
================================== ========== ========= =========== =========
Total continuing operations 627.1 32.7 515.1 21.1
================================== ========== ========= =========== =========
Discontinued operations 112.0 11.6
================================== ========== ========= =========== =========
Total Group 627.1 32.7
================================== ========== ========= =========== =========
KPIs Sales B2B Sales B2B
and and
Lettings Lettings
================================== ========== ========= =========== =========
House exchanges 43,769 3,059 46,828 -
---------- --------- ----------- ---------
Properties under management 86,415 38,599 87,033 -
---------- --------- ----------- ---------
FTE (average across the period) 5,467 2,540 5,670 1,034
================================== ========== ========= =========== =========
(4) Earnings before interest, tax, depreciation, amortisation, exceptional
items, employment-linked contingent consideration, share-based
payments and share of profits from joint venture, referred to
hereafter as adjusted EBITDA (see note 4 of our 2019 Annual
Report)
(5) Operating profit before exceptional items, amortisation of acquired
intangibles, employment-linked contingent consideration, share-based
payments and share of profits from joint venture
(6) Net debt calculated before the effect of IFRS 16 and leverage
calculated on the basis of net debt to adjusted EBITDA pre-IFRS
16 on a rolling 12 month basis
Enquiries:
Analysts and investors
Himanshu Raja, Chief investor@countrywide.co.uk
Financial Officer
Media
Natalie Gunson press.office@countrywide.co.uk Tel: +44 (0)7721
439043
Michael Sandler/Dan de Tel: +44 (0)207
Belder, Hudson Sandler 796 4133
This document contains certain statements that are
forward-looking statements. They appear in a number of places
throughout this document and include statements regarding our
intentions, beliefs or current expectations and those of our
officers, directors and employees concerning, amongst other things,
our results of operations, financial condition, liquidity,
prospects, growth, strategies and the business we operate. By their
nature, these statements involve uncertainty since future events
and circumstances can cause results and developments to differ
materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of
preparation of this document and, unless otherwise required by
applicable law, the Company undertakes no obligation to update or
revise these forward-looking statements. Nothing in this document
should be construed as a profit forecast. The Company and its
directors accept no liability to third parties in respect of this
document save as would arise under English law.
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END
FR PPUCCAUPUGRU
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