CWD.L Share News (CWD)

(ShareCast News) - First-half profits from property group Countrywide fell 22% on the same period last year and well short of analysts forecasts as a "difficult UK housing market" led to plummeting estate agency earnings.Despite soaring house prices, the volume of transactions fell 12% in the six months to 30 June, meaning the FTSE 250 group's income rose only 1% to £338.6bn.Profit before tax fell 22% to £28.9bn and adjusted earnings per share dropped 18% to 10.3p, with basic EPS down 69% to 4.6p.The interim dividend was held at 5.0p.As fewer properties were offered for sale, with instruction levels being down on the prior year, both before and after the General Election in May, the estate agency arm suffered a 14% fall in income and, despite efforts to control costs, an 84.5% decline in operating profits to £1.1m.The London & Premier division saw an 8% fall in house sales.In the letting business, properties under management rose 8% to 69,741 and EBITDA rose 7% to £68.5m.The financial services arm increased the number of mortgages arranged by 8% to £5.1bn and lifted EBITDA 4% to £34.7m, with surveying EBITDA up 13% to £31.6m and conveyancing down 6% to £12.6m.Providing an outlook for the full year, the company said the level of first half transaction volumes "probably" means full year-on-year transactions are likely to be marginally below 2014 levels."As anticipated, the first half of the year saw depressed activity in the UK residential sales market as UK consumers held back from making decisions pending the outcome of the most uncertain General Election in a generation," chief executive Alison Platt said."However, the benefits of our strategy to diversify the group's revenue streams were underlined by Countrywide's ability to ride those challenges with 50% of our profits derived from sources independent of the UK housing transaction market."Chairman Grenville Turner added that the acquisition programme was "well positioned" to take advantage of these trends for continued growth of lettings and commercial services."We are keen to look beyond 2015 to ensure we have the building blocks for real growth and value added activity in place so we can deliver a significant level of shareholder returns in coming years with significant incremental returns from 2017 onwards," he said.Broker Panmure Gordon, which already cut its full year forecasts to the consensus 39.4p of EPS in anticipation of declines, slashed its expectstions for annual transaction volumes to -5% versus +2% previously."The shares have been very volatile given their political sensitivity and rallied accordingly given the result. However visibility over earnings is lacking," wrote analyst Keith Baird."While the current price is well down on the 683p 2014 high, the current year PE of 13.8x looks high enough until there is more clarity on the housing market."