LONDON (Alliance News) - Estate agent Countrywide PLC on Thursday reported a widened loss and reduced income for 2018, regarded as a "year of reset" by the group as it continues to restructure its operations.
Countrywide also guided for a reduction in its earnings for the first half of 2019 on challenging market conditions.
Shares in Countrywide were 8.5% lower at 9.60 pence each on Thursday.
For 2018, Countrywide reported a pretax loss of GBP252.7 million versus a loss of GBP211.6 million the year before, on revenue that dropped 7.0% to GBP619.1 million from GBP662.2 million.
The widened loss was due to a rise in operating costs and GBP237.9 million in exceptional charges for the year, slightly higher than GBP237.2 million in 2017.
During the year, Countrywide took a GBP218.0 million total impairment charge for goodwill, brand names and customer contracts associated with its UK, London and commercial cash generating units.
Increased operating costs arose from a strategic restructuring process, including redundancies, third party consultancy expenses and property closures.
Revenue, meanwhile, was lowered by a 21% pipeline deficit at the start of 2018 in its UK Sales & Lettings business.
However, at the end of the year, the pipeline of agreed sales awaiting exchange of contracts was up by 5.0%.
Countrywide is currently in the middle of a three-year turnaround plan, which is focused on bringing its Sales and Lettings business "back to basics" to restore its profitability, while reducing costs, increasing the sales of its complementary services, and expanding its Financial Services segment.
Looking ahead, Countrywide said that continued market weakness arising from Brexit uncertainty has led to a further slowdown in property transactions in London and the South.
As a result, earnings before interest, taxes, amortisation and deprecation for the first half of 2019 is set to reduce by between GBP3.0 million to GBP5.0 million.
Although Ebitda for 2019 is expected to be broadly in line with that achieved in 2018, which stood at GBP32.7 million, Countrywide said this is dependent on an improvement in the second half of the year.
"We have been encouraged by the progress made in 2018 in resetting the business as part of our return to growth strategy. The principles within "back to basics" in Sales and Lettings resulted in growth in the register and the sales pipeline in the UK, coupled with an increase in market share of listings," said Executive Chair Peter Long.
"As a group we are in a stronger position than we have been for some considerable time with sound business fundamentals and, despite the difficult market conditions we are facing, we remain confident in delivering our turnaround," Long added.
