Countrywide plunged deeply into the red last year, making a statutory loss of over £208m compared with a profit of £17.5m the year before.
Its earnings fell 23% last year, while profit in its sales and lettings division plummeted 45%, according to its full-year annual results published this morning.
The group’s after tax loss of £208.1m last year principally reflected write-offs, and costs of restructuring including redundancies.
Countrywide said that there had been £225.9m worth of exceptional charges for goodwill, intangible and other “asset impairments”. Redundancies cost up to £7.9m.
Group income fell to £671.9m for the year, down from £737m in the year before, and the company will be paying no dividend.
It also announced that it has scrapped its digital offering, while there will be staff cuts at head office. About one-third of the 450 employees face losing their jobs.
In early trading today, the share price slumped 16%, and shortly before 9am, stood at about 75p.
Adjusted EBITDA was 23% lower at £64.7m (2016: £83.5m), which was driven by poor performance in its sales and lettings actitivies.
Countrywide said this was the “third consecutive year of under-performance in this core area” and warned of more pain to come.
Adjusted EBITDA in its financial services division in 2017 also fell, down to £19.7m from £22.7m the year before.
Countrywide said that while the poor performance in traditional high street sales impacted financial services as a result of less referred business, it had picked up growth in “alternative channels”, resulting in the value of total mortgages arranged rising by £2bn to £17.7bn.
It also hailed a “strong” performance across its B2B arm, with a 13% increase in adjusted EBITDA to £35.6m (2016: £31.5m) driven by surveying and its commercial business, Lambert Smith Hampton.
Meanwhile, executive chairman Peter Long added that the business has entered 2018 with its pipeline “significantly below that of 2017” and that the first half of the year this will result in a reduction in adjusted EBITDA of around £10m.
He said: “At this time, it is unlikely that the shortfall in the first half will be recovered.”
Speaking about the company’s performance in 2017, he added: “The under-performance of our business over the last three years has resulted in us making significant management change in the group.
“Industry expertise in all areas of our business is key.
“Within sales and lettings, the previous strategy resulted in us losing a lot of that expertise.
“In the group, we are fortunate in that we have an industry veteran, Paul Creffield, who has been promoted to the role of group operations director.
“His deep understanding of the market and operations means that we have quickly been able to identify what we need to do to begin addressing our under-performance.
“I am greatly encouraged by the number of high calibre industry business leaders that we already have within our sales and lettings business and a number of similarly experienced and high calibre industry people who previously left us and want to rejoin now that Paul is in this role.
“Fundamentally, Countrywide has a unique market position given its breadth within the property services industry.
“We have established and trusted brands that resonate with customers, together with dedicated and committed colleagues who are the cornerstone of our business.
“The strong areas in the group, financial services and B2B, have unfortunately been overshadowed by the poor performance in our core sales and lettings business units.
“We believe these business units are fixable, know what we have to do to restore them and the steps to take that should result in a return to profitable growth.
“This will take time but ultimately there will be much upside for our group and our shareholders, whose patience has been sorely tested recently.”
Intriguingly, the results issued this morning refer to the departure of its chief executive on January 24 this year – but does not refer to Alison Platt by name.
The report essentially, however, rips apart what the previous management did, with criticism of the “retail model”, which meant the group had moved to a “one size fits all” model, when “it was, and should be, an entrepreneurial culture and business.
There is also criticism of “our foray into digital”.
The report says this “hybrid fixed fee offering served only to dilute our full service proposition.
“We have withdrawn the hybrid digital, fixed fee offering. We need to define what digital means for us as an organisation and this will be determined as we build the detailed recovery plan.”
Today’s results also say that “good people” who left under the previous management now want to go back and work at Countrywide, under Creffield.