A new report into Countrywide by analysts at Berenberg bank has issued a damning verdict on the UK’s largest agent’s digital strategy.
Berenberg said that 30% of Countrywide’s branches “have no digital strategy at all” and that the firm last week had paused the roll-out of its online offering, despite raising nearly £40m last March expressly for that purpose.
However, Berenberg says the offering has failed to attract new business, that sales listings at Countrywide have dropped 20%, and that management now judge it as a cost.
The Berenberg report says: “Nobody pauses a successful growth initiative.”
It goes on: “Management tells us it is considering continued roll-out as part of the 2018 spending plans, but if we are correct that it is failing, the highly geared balance sheet means management is unlikely to continue.”
Berenberg says: “While we think general management has improved with the arrival of Himanshu Raja as CFO, until the group comes up with clear growth initiatives that address the digital threat and the increased competition as overall transactions decline, we consider the shares uninvestable.”
The report says that Countrywide currently has £14.5bn worth of property listed for sale, down from £15bn a month ago. All of its largest 12 brands which offer the digital service have seen a reduction in listings and total value.
The report says Countrywide’s digital offering is not competing with Purplebricks, but is more likely to be competing with the traditional service that Countrywide itself offers.
It says that Countrywide markets its digital offering as inferior to its own traditional service, and that its marketing is defensive and uninspiring.
Shares in Countrywide yesterday edged down slightly, to finish the day at around 120p.
Purplebricks shares had a volatile day, bobbing around between 318p and 290p, but ending little changed at 308p.