LONDON (Alliance News) - Countrywide PLC on Thursday announced a restructuring plan and GBP140 million fundraising after it swung to loss in the first half of 2018 driven by the opening pipeline deficit in sales.
The estate agent said it swung to GBP242.8 million loss in the six months to the end of June compared to GBP192,000 profit reported a year earlier. Revenue declined to GBP298.6 million from GBP326.7 million.
The company said its results were hurt by significant impairment charges and strategic, restructuring and financing costs. Exceptional costs incurred in the period amounted to GBP230.0 million, up from GBP2.7 million the year before.
The board considers the business to be split into three main divisions: Sales & Lettings, Financial Services and Business to Business. Countrywide said central head office functions will be reported separately under 'all other segments' section.
Meanwhile, in the UK, the company's income from estate agency reduced by 24% year-on-year due to the weaker opening pipeline, while the Lettings revenue decreased by 5% with properties under management down 5.7% at 65,378 from 69,308 in the first half of 2017.
During the period, the overall number of completed mortgages grew by 18% to GBP9.5 billion from GBP7.9 billion, Countrywide said. For the second-half, it expects to hire more mortgage consultants to improve the group's performance in the financial services sector.
The B2B unit delivered a resilient performance in the first-half, with total income of GBP103.7 million being 4.5% below GBP108.6 million reported a year earlier, reflecting a delayed stock releases, longer transaction cycles and land deals taking longer to mature.
Looking ahead, the company said it expects to make continued operational progress in the second-half of the year to achieve its annual guidance.
In order to deliver its new strategy and turnaround plan, Countrywide proposed a GBP111.4 million firm placing and GBP28.6 million placing & open offer. The company said it expects to secure GBP129 million after expenses.
Countrywide will issue 1.11 billion shares at a price of 10 pence each as a part of firm placing and 285.6 million shares at the same price as a part of placing & open offer. The stock was trading 66% lower on Thursday at 16.95 pence per share.
The company said it intends to use proceeds to repay about 60% of its debt.
"The capital refinancing announced today is a significant milestone for the group," said Executive Chairman Peter Long. "It will enable us to build upon the progress we have made to date on our three-year recovery plan as we deliver our return to growth strategy."
Long continued: "With well-known and trusted brands, together with our able and dedicated colleagues we have laid down a strong foundation to build upon and I am confident that we will return Countrywide to profitable growth and long-term success."
