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It’s a shame that so many bulls jump in here without doing their research on the market and stock first.
If they are in for a trade -in and out- then fair enough.
Some of the wildly optimistic speculative posts do actually make me laugh !
Bulls seemingly thinking the banks will be ‘OK’ with CWD not brining down their debt pile!
For as long as I’ve been on this earth there has been consequences/penalties for not paying a loan/debt off in time. Why would the banks be any different with CWD?
They want their money!
To add to this... look at the technical analysis of the chart. A double top pattern has formed and almost completed. Downside target of 262p which nearly triggered the other day but if any bad news drops it may damage the share price further. Good news on the other hand.... well what good news could they report ?
Hypothetically speaking, the £3.5m abortive costs of the LSH sale would have to be made up of 35 branches making at least an average of £100k profit for the whole of the year. I bet CWD would love to have all of their branches each making 100k profit a year. To get that profit they will probably need revenue of 240k per branch a year give or take. 110k spread across 4 or 5 salaries plus 30k for overheads and annual subscriptions like Rightmove, Zoopla etc. Unfortunately, the subdued residential UK sales market I would hazard a guess isn’t allowing that to happen in most locations. It’s a race to the bottom on fees to compete with the onliners in most towns and cities.
If my logic is flawed, call me out on it and question it, but if you do, please add logic and reason to your posts instead of just name calling and speculating.
The problem is sain, these bulls who come and go... all they can do is speculate. They can't back up or substantiate their claims.
Lets look at a recent post.
"GentlestUncle.... you really do talk a lot of tripe" Called me out with no justification or substance
"your nonsense about RMV posing a problem for CWD is naive." Call it nonsense... I speak the truth... That is why I referred to RMV market cap to CWD just to show how big the imbalance has become... If you deduct the market cap of CWD from RMV, it would leave them of a market cap of...... wait for it...... £5,950,500,000.... I've said this before, what was supposed to be the golden child of Estate Agency has now become the monster which is bleeding the industry dry.
"Even if the sale doesn't go thru , its not terminal. Pointers are there that estate agents are starting to mend, witness, LSL And Foxt." - Speculation again.... who says? Housing transactions take at least three months to go through.... It's not even been that long since the election... And we've had Christmas inbetween that as well. Share price action is not always a true reflective of company performance. This is why you get overvalued and undervalued stocks and this is also what creates a market.
"The banks will be supportive" - Speculation
"there 's no reason not to see a return to 4 quid in the short term ." - Speculation
"I'd imagine when they release their trading statement or results shortly, the outlook will be very positive" - Speculation again
Deary me... .best to stay silent...Miti... just think of Ronan keating..... you say it best, when you say nothing at all.
Miti is looks as though you've got a case of selective hearing. You only want to hear about the bullish side of a stock but not the bearish side.
Well those who only want to listen to one side of a stock generally fail in financial markets. If you go back through mine or sains posts, the majority of the information is verified by links (such as the low stock levels sain has been recently referring to) or by ways you can research yourself.
There are of course some things that can't be proven, such as the lack of synergy between CWD brands in the same trading area but at the end of the day that is common sense. For a Dixons CWD office, Bairstow eves (also CWD) in the same trading area are seen as just another competitor and Dixons would shut them off at every opporunity to do so. Bairstow would probably do the same back to Dixons as well.
I really don't think you understand...... RMV have both both hands in CWD's pockets, they are taking money off the table every single month..... How are CWD supposed to pay down their debt whilst this is happening?. What can you not understand about that?
OK miti, define why any part of my post is tripe. Substantiate your claim please.
Nonsense about RMV? It's the truth.. as of today RMV market cap 6.03bn.... CWD ......errrrmmmm 99.6m.
There is a bit of a difference there miti mate!
I'd like you to substantiate your claim about my post being nonsense...
CWD give RMV a shed load of money every month for advertising on the portals... its a one way street.
The banks will be supportive? Why will they if they cannot even make the minimum payments to bring down the debt? Were the banks supportive of flybe? maplin? Thomas cook? toys r us? The list goes on.... wake up.... the banks are not an endless credit facility lol.
Theres only one person talking tripe and it isn't me matey!
"I understand a lot of these listings are being ' bought in ' at ridiculously low fees to increase market share in some locations"
It wouldn't surprise me if this is true. As Sain has pointed out, they have got wafer thin stock levels in some locations & I'm not sure how they can justify keeping some of their shops doors open with such little volume.
The other thing is that where there are two or more CWD brands against each other, well if say CWD brand #1 go out and quote 2%, and then CWD brand #2 go out and quote 1%, well should that customer go with CWD brand #2 over brand #1 because of the cheaper fee then it effectively means that the CWD brand as a whole is losing money.
Historically in trading locations where I've worked, if one of the brands knows the other brand is going out to the same customer for a valuation, they try to get them cancelled before their visit because 'they are all part of Countrywide/same company etc and will say the same things'. So if the customer then goes on to cancel brand 2 but then goes on with a competitor then that is another scenario where CWD have potentially lost out.
There is very little synergy between the CWD agency brands. If anything its the complete opposite in locations where there is more than one CWD office.
Back to the buying in of listings, I bet probably most agents (corporate and independent) are doing this at the moment, so it could effectively be a race to the bottom.
It wouldn't surprise me if the banks have been led up the garden path with a 'sale' just to keep the wolf from the doors a little longer. If I were the banks, I'd be wondering where on earth my money is that I was promised.
As I've said before - Putting the LSH sale to one side........ Come next results, if the debt pile is the same or up - alarm bells should be ringing in every investors ears.
If the debt pile is down, they might just have a chance of turning this around. Based on what I know of the Estate Agency business model.... I can't see it happening.
CWD of course seem to currently be fighting fires on all sides of the business.
There is of course the debt pile, LSH sale (or no sale) which you have highlighted
A subdued residential sales market
Lettings tenancy fee ban - which previously brought in a tidy sum for CWD lettings
The Rightmove demon however is one that will simply not go away. They have a hold on the market as many potential sellers see that having their property advertised on Rightmove gives them the greatest exposure.
Contrary to the above, I am a firm believer that people buy people so it is down to the Valuers who go out meeting the customers and pitch for business.
It just depends how many of the good staff are left - after having front row seats to the share price decimation over recent years which destroys any employee share incentive plan they may have in place. It also must leave a sour taste in the mouthes of any staff who mustered up the courage to buy into the fundraise which took place in August 2018.
If one invested £10,000 back then on the assurance that going 'back to basics' would be the key to bringing the company out of the doldrums - to find out their holdings have been eroded by over 50% can be enough to make a grown man cry.
Their issue with Rightmove is that even if they have a decent agreement with CWD, the BoD's at RMV will still want to continue to turn the screw and get as much revenue as possible out of them - most likely via annual price reviews, which I believe they are allowed to do providing the price increase is broadly in line with inflation and not excessive.
Some of these high street agents are paying more to Rightmove every month than that are for the rent of their high street office!
Results must be due at some stage - they will tell a story to see if the bulls are right or not.
It’s a sorry state of affairs here, unfortunately this share is pretty much done. If you wonder why I’m saying this then all you need to do is look at Rightmove market cap. They are now over 6 billion... compare that to Countrywides Mcap if less than 100m.
Up and down the country Rightmove pretty much have their hand in every single one of Countrywides sweet jars taking away their cash every single month. And unfortunately Countrywide aren’t really in a position where they can do much about it. Rightmove has turned into a monster which isn’t just biting the hand that feeds it. It’s tearing its feeder to shreds.
Blonde... If I may...... In response to your query on dwelling on actions of the past....
"History repeats itself"
"Those who do not learn history are doomed to repeat it"
Just because someone has a different opinion to you doesn't mean you should start insulting them.
Yes in some larger towns and cities CWD had two if not three brands, which from the top probably just looks like three lots of office overheads. Furthermore to that, if say, Bairstow Eves went out and quoted a potential customer a fee of say, £2000 plus VAT for their Estate Agency fee and then another one of their brands went into a valuation after and quoted £1500 plus VAT for the same job, then essentially they are doing CWD out £500 worth of revenue.
It's a double edged sword as far as I'm concerned..... in a town with three CWD brands, if they close the two weaker offices and migrate the rest of the stuff to the strongest brand then yes they will be saving 66% on office overheads in that area. The flipside to that is.... should the staff have left or been made redundant then that would be 66% less pairs of hands to go out and win business.
I get that convb and yes, long term it should be a recovery play but it may be worth checking out LSL who have been reducing their branch footprint this year and with that their reported Estate Agency revenue has fallen nearly 20%.
I don't see (short to medium term) how CWD would be any different - they are trading in the same marketplaces.
"I don't expect any changes to the SP tomorrow. 7p or 350p it is valued the same."
Correct - share splits and consolidations are pretty much smoke and mirrors. It's all about market cap.
"The real value is on the market uptick in activity and CWD soaking up all the market share in 2020. My own estimate is that it will end the year 2020 close to 600p so roughly double where we are now. But it won't be on a straight line."
Correct again, CWD's recovery if they make one won't be in a straight line. Markets don't go up or down in a straight line.
I am still bearish of the stock in the medium term, they have been closing offices up and down the country (which I must add is their core business!) in order to reduce operational costs but in reality when you start closing branches you limit your exposure to the various markets up and down the country.
With the above in mind, I expect there to be a fall in revenue within their 'core business' which is primarily selling houses followed by mortgage services. These two areas will have some correlation with whatever branch footprint they have... so if they have been closing branches.... you get the point.
Whoa whoa whoa talk about the shoe being on the other foot now! I remember only a couple of months ago when Jed was asking me that exact same question!
Jed is hung up on the consolidation which is fair enough, IMO debt consolidations are all smoke and mirrors.
All eyes need to be on the next trading update to see how much debt they have shifted - LSH sale aside of course. I estimate that they will confirm big drops in revenue where they have closed branches.
So, no response from Jargonpain from my recent query to him asking how he has arrived at his decision that this will be worth many multiples in 2020.
Sain has exposed CWD (from his post on Monday 12:26) on their poor decision making skills and their U-turn on their no-sale to sale of LSH.
Yes CWD's core business is residential sales but what if their core business is not generating any meaningful amounts of revenue?
As sain pointed out in another of his posts, LSL's revenue has reduced since closing branches.
What have CWD been doing....... oh that's right they have also been closing branches. On the back of that, what do we think is going to happen to their revenue?
The writing is on the wall. It's not hard to see what is happening here.
If and when the sale of LSH completes it will bring their debt level below their market cap..... for the time being that is...
I can’t believe what I’m reading. Jedward is turning bearish!
Jargon, how have you come to your decision that this will be worth many multiples in 2020? Except for yesterday’s sell off, they can’t pay off their debts. How is this going to multiply in value when the debt is still looming over their heads? Any profits made should/will just go straight towards paying the debt off.
Put it this way Jed if they had some healthy figures to report in their upcoming trading statement they wouldn’t have had to do what they have done today!
The banks want their money! Now! Not in x years time when the markets recovered!