(Alliance News) - Countrywide PLC shareholder Catalist Partners on Wednesday published a letter addressed to the company's chair, calling for major changes including the consolidation of branches and brands.
Shares in Countrywide were down 0.1% at 144.82 pence in London on Thursday morning.
Robin Paterson, co-founder & partner of 10% Countrywide shareholder Catalist, said he first contacted Executive Chair Peter Long to discuss its strategy on July 28. However, with the chair's decision not to engage with Catalist or commit to doing to, Paterson said he had no option other than to shares Catalist's views "in a broader forum".
The three pillars of Catalist's strategy are: a focus on estate agency; harnessing technology and content; and monetising unrecognised value.
An estate agency focus would involve consolidating over 50 brands and around 700 branches to core brands located on "key high streets" as well as "regional super-hubs".
As part of this focus, Catalist has also called for Countrywide to appoint a chief executive from within the industry to oversee rationalisation, as well as a chief operations officer with turnaround experience and a chief marketing officer to sell the Countrywide brand and use it to help drive business.
At present, Countrywide has no chief executive, with Long serving as executive chair. It also has no chief operations officer and no chief marketing officer.
Additionally, Calatist said Countrywide needs to put a "meritocratic incentivisation plan" in place.
The technology and content aspect would involve Countrywide developing an in-house digital ecosystem to support its agents and an end to Countrywide's reliance on third party software.
As part of this, Catalist has called for the appointment of a chief technology officer.
Finally, the monetising of unrecognised value would come from deleveraging and funding investment through the release of capital from Countrywide's non-core businesses, which Catalist said represents over GBP300 million of unrecognised value.
This would involve appointing advisors to consider sale alternatives and seeking lender support for "significant repayment of outstanding debt and revised facility terms".
"Countrywide has the resources needed to deleverage, re-focus and grow. Three bold steps would put the company on a path to realising its outstanding potential. The priority now must be in attracting a CEO, with relevant industry expertise, who can rally employees and work with the board to execute the strategic objectives outlined above," said Paterson.
In response, a spokesperson for Countrywide said: "We are in regular and constructive dialogue with all our main shareholders and will be updating the market in due course when we publish our half-year results."
By Anna Farley; annafarley@alliancenews.com
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