Executive Summary
-Encouraging financial performance
-Investment in key areas continues
-No change to overall focus / strategy
-Consumer confidence remains fragile
-Mortgage lending conditions tightening
-Lack of cohesive Government strategy to support recovery
Key Financials
-Revenue up by five percent in Q2 and ten percent YTD to £257 million
-EBITDA £15 million in Q2 and increased by 17 percent to £20 million YTD
-Positive financial progress across the Group led by continued growth in Lettings with H1
EBITDA up 35 percent to £10 million
Grenville Turner, Chief Executive of Countrywide, the UK's largest property services Group said;
"While we have seen steady progress in Q2 2012, results were impacted by the end of stamp duty holiday in March 2012, which accelerated transactions from Q2 into Q1. Despite this acceleration, our underlying Q2 performance (EBITDA) has increased by ten percent.
However, overall expectations remain for a relatively flat market in terms of volumes as conditions tighten and lending for the year is predicted to be lower than 2011 figures. In terms of house price trends, a marginal drop in house prices is expected in 2012 but with significant regional variations. It must be acknowledged that euro-zone issues remain a negative influence on consumer sentiment.
Despite external factors, growth continues with the group securing new high profile contracts which include beating all the major players to win the valuation panel management work for the Co-operative Bank, Britannia and Platform.
"Our areas of focus in 2012 are clear as we concentrate on differentiating ourselves from the competition, with client-focussed initiatives which include hosting the largest and best ever National Property Showcase in May 2012.
We continue to invest in Land and New Homes through new senior roles, leveraging the Group's capability and our joint venture partnerships. Land and New Homes is a key area for us and the UK housing market generally given that 270,000 new homes are required annually to 2026, vs. current production of c.130, 000.
Our lettings division continues to grow with eight acquisitions in Q2 2012 which includes expansion in Leeds, a key area identified to allow us scope the student let sector.
We take our role as a significant player in the UK housing market seriously, given we sell almost one in ten houses, handle 30% of all residential mortgage valuations and are the UK's largest mortgage broker. We are acutely aware that UK Housing plc needs a plan and have produced a report on
‘Addressing Challenges in the UK Housing Market' urging Government to consider six solutions to help boost the ailing housing market. Decisive action is needed to get our nation's housing market in order and help home buyers and tenants by enabling developers, investors, homeowners and landlords, thereby fuelling economic growth in the UK.
While there is no clear visibility in terms of the timing of a significant market recovery, our approach is to maximise our share of the market, whatever its size. We will continue to invest and lay the foundations to capitalise on future valuable opportunities. supported as always by award-winning teams, innovative marketing campaigns and a strong online presence."
