Both Foxtons and Countrywide are forecast to announce sharp falls in profits this week as they announce their annual results for last year, according to a report in the Mail on Sunday.
Foxtons is tipped to reveal a fall in profits from £43m in 2015 to £25m last year.
According to broker Peel Hunt, Countrywide will say profits fell from £86m to £56m.
LSL is also due to announce its results this week.
All three have previously delivered warnings on profits.
The worrying thing for CW is this is after they have sold a good amount of family silverware.
I think the zoopla share sale alone was circa 20 million. Deuduct that from their “profit” and it is a very worrying picture.
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I’ve been looking in some detail at what’s going on, having an understanding of the landscape means the terrain of the battlefield is understood too. Foxtons and Countrywide have different problems; one is struggling against an ebbing tide of a relatively confined contracting market the other is simply suffering from change management issues and an understandable amount of group-think.
Countrywide has relatively straightforward matters to attend to, once they are understood by the senior management team, Foxtons simply need to wait for the tide to turn.
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The “group think” Robert is the disastrous women who heads up country wide. It’s her philosophy that has seen pretty much all of the good management depart because they told her “it will not work”. Country wide will be broken up I am sure, as it’s totally broken now. Did this women not learn anything in the eighties and nineties?
Countrywide could be broken up I am sure, as it’s totally broken now. Did this women not learn anything in the eighties and nineties?
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I have a reputation for seeing things differently and last week posted that once the effects of disruption are understood Countrywide are well placed to lead defence against that.
I was there in the 80’s and 90’s so know that experience isn’t relevant to the challenges Alison and the industry faces. She has the same competitive pressure as the smallest independent firm, that of fee erosion due to disruption and compound transaction level drop.
It is easy to blame a single person for all the ills of a firm but once you sit back and look at it all it becomes fairly obvious what is going on and what has to be done about it.
Be nice to Alison, you ALL need her! but she needs a bit of support to do it.
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“They are well placed to lead a defence”
Not sure they are. From our chats Robert you know their list to sale ratio (that’s full service!), why are individuals going to part with 1k plus VAT to do this?
Also the roll out (as with everything CW do) is abysmal.
I have seen on linkedin inexperienced negs thinking this online option is amazing. What they do not say is they do not get paid on the instruction!!!! – I know for a fact there are experienced BM’s looking to play down the online option.
Also in my area PB are listing a few but not selling them. Local agents are offering to sell the properties for 1.5% and rebate the commission they need to give to PB.
Why would any vendor want to upgrade from £1,200 to 1.5% with an agent that has not sold the property? – they would go to another agent that will cover the costs.
In time reputations will get round that this online / hybrid offering is a joke. And believe me when i say this is a BBC Watchdog expose waiting to happen. It cannot be ignored forever.
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From what I understand there are very few left that are sufficiently equipped in experience and ability to mount a defence. In the event of some of those able and willing to return, it may well be as many believe; too much damage done. The amount of investment in quality personnel will be considerable and a market that is reduced. A perfect storm that Mrs Platt and Ms Tyrer could have avoided if only they had used the two ears, one mouth principle as opposed to shouting time after time that we (agents) have got it all wrong and it’s retail!
Unlike the CWD ladies I have, for a very long time now, subscribed to the idea that ‘best to keep your mouth shut and be thought a fool than to open it and remove any doubt’!
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‘best to keep your mouth shut and be thought a fool than to open it and remove any doubt’
I am going to keep that in mind so much in the future. In the words of Kevin Keegan ‘love it’!!
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‘Also in my area PB are listing a few but not selling them’……. smile please
I did 18 viewings at a property we have for sale on Saturday morning. Everyone of those people will have seen a PB board up for a similar property down the road, and most of the people I showed round might very well have been interested in viewing that one as well (why wouldn’t they be?).
The board has been up for a few days but I couldn’t find it online when I looked to see how it compared to ours. One of our viewers rang PB and was told by the call center that although the board was up, they didn’t yet know anything about it (including what price it was being sold for) because it wasn’t yet online!
If that is how most of their marketing of properties is conducted I am not in the least surprised by your comments. They must have ‘put off’ a shed load of enquirers, as boards are very powerful in the area concerned!
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SmileP.
£29,000,000.00 I believe was the sum for the Zoopla shares. Once the accounts are published,
it will be interesting to we where it appears.
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Leave an operating profit of just 27 million from 86 million.
Just the small difference of 59 million year on year …..
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If that is the case then things are well and truly ?????
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I wonder how much time Platt will be given by unforgiving investors to implement her new strategy at CWD It was last summer when she slammed the brakes on expansion and put the car firmly into reverse shedding staff and offices . Certainly a Road To Damascus conversion .
The ink still wet on the cheques buying turnover expensively with borrowed monies whilst shutting the offices down Enthused by customer reaction to he piloting the new “hybrid” offer epitomised by Urban spaces this is being rolled out No news yet of any repsonse to her hawking Lambert Smith Hampton around the market . Jury definitely still out
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Over 43 million shares loaned recently together with the accompanying voting rights; March 9th is the day for announcement of the results I believe?
If it’s as poor as it appears it may be, I wonder if there could be another announcement shortly after? Allow the numbers to be announced and then ‘vote of no confidence’ perhaps? A fall in the realms of that mooted and the share price at less than half when floated is, really not very impressive!
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Platt,s Quotes
“Part of the issue is that it’s a very transactional business. Many people in our industry hold the view that customers are happy if we sell their house, unhappy if we don’t. This isn’t true, if we look at our research. ”
” Our customers don’t look at us and compare us to other estate agents, they compare us to other retailers. We’re in retailing, the same as Tesco.”
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lol!!!!!
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Tesco yes, unfortunately your name is not Cohen and you cannot stack it high and sell it cheap in this industry!
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‘stack it high and sell it cheap in this industry’
Isn’t that what online listers try to do?
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That’s directed at Platts delusion HOW, not your comment!
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If it was Alison Platt who was behind the whole disruptor group-think trend it would be reasonable to single her out for criticism. The investor world has got itself in a feeding frenzy over the disruptor model and are obviously eyeing up the claims, share-price and crowdfunding disruption has attracted.
When the figures come out it will be the board job to assess if things are working, if disruption is the way forward. It sounds like the numbers are going to pull the rug from under the notion of disruption and at that point you will be able to judge Mx Platt on her leadership.
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The ‘disruptor’ model is after the main CWD problem. It is however a good excuse for them to us. Their problem is forcing a business down a route it can’t go. From what I understand there are very few left that are sufficiently equipped in experience and ability to mount any defence. In the event of some of those able and willing to return, it may well be as many believe; too much damage done. The amount of investment in quality personnel will be considerable and a market that is reduced. A perfect storm that Mrs Platt and Ms Tyrer could have avoided if only they had used the two ears, one mouth principle as opposed to shouting time after time that we (agents) have got it all wrong and it’s retail!
CWD’s ladies should subscribe to the idea that ‘best to keep your mouth shut and be thought a fool than to open it and remove any doubt’!
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They are doing the bidding of the board and the investors. If collectively the strategy is wrong it is for all the stakeholders to share the responsibility.
Not sure if it’s intentional but repeatedly raising gender is starting to undermine the points you are raising.
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I do not think that they are RM. I think they think they are. The difference being that the Board want to ‘evolve’ the business as do the investors. However; evolve it in a manner to grow the revenue and keep pace with the times. Their attempt at evolve is a ‘knee jerk’ PB copy using existing brands that are then tainted as ‘cheap’ agency light and, apart from that, perpetuate this nonsense that agency is retail. Vendors by and large don’t know who the hell Countrywide are. They know the brand that performs locally and who they may be using or are. It’s a ‘cottage industry’ as one of best friends has said for the 30 plus years he’s been doing it and very successfully. If you do not possess entrepreneurial spirit in the ‘game’ you will not thrive and there is reducing volume to enable you to survive by being average; in my opinion, of course.
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Good news that they have someone that really understands the business we are in. Why on earth would they be compared to Tesco, by “their customers”….Cant see many vendors debating where to go for milk and bread….Hmm shall we try that Mann and Co place for bread this morning love?
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For some companies a fall in profit is temporary and ‘part & parcel’ of the market it trades in. In the case of CWD the fall is partly because of these things but more to do with the structural meddling by people trying to make it what it isn’t and will never likely be. Has it gone too far? Is recovery possible in these changing times? Those still there and waiting on an escape route are the best to judge I suspect.
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Retail has and will never work in agency. Even the onlinext agents steer clear of it.
Remember insurance companies buying up agents? That was to push mortgages and insurance. That did not end well!
The closest I can remember that went full retail (never go full retail!) Was Halifax. Just going in to registered you were pushed credit cards!
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I think that there is a huge difference between retail and estate agency, based on emotion. When you go and buy a washing machine you don’t engage emotionally with the touch, the feel the look, the change its going to make to your lifestyle…..its about what’s the cost, how much does it wash and how cheap is it to run? And you don’t have three to four months after you have committed to change your mind and find another one instead.
They are two very very different animals and need to be respected as such.
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You clearly haven’t bought a washing machine lately. I found it very emotional.
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Well on the few times I have bought a washing machine there is usually a long line of them in Currys maybe like a High Street full of esatte agents I tend to head right for the middle maybe look at those just to the higher of centre on the basis I dont want to be a cheapskate and assume if you pay less you get less
I normaly then get accosted by the salesman looking baffled trying to make an” informed” choice They all look the same without any go faster stripes I then ask what I percieve to be a a very vaild question ” If I pay another £ 30 for the one next door what do I get for my extra money Does it do the ironing? They look at me as if I am a nutter .
At which point I take the manufacturers number from the back on 3 2ikley candidates knowing taht they change the numbers on the front so you cant go on th net and find them cheaper I then go home and find the cheapest model of the 3 from the net gloating that i knocked£ 30 off only to find it comes late or wrong model or its scratched and vowing never to do it again to save af ew quid
A good agent of course when asked the question what do I get for the extra money he /she will be abe to “sell”those valuable extra servcies that they provide rather than get a free valuation then go and engage Purplebricks wishful thinking!
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any danger of some positive stories about CW on property eye so my shares increase in value and I can sell them and move on with my life?!
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How about rallying support amongst shareholders to put an experienced independent agent with good ideas in control of the company. I think that would do the trick!
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i think they need to start tackling the cultural problems within the business. A lot is written about the senior management – Platt etc – but I think a lot of them are fundamentally deluded by what is actually going on. In central london where they make a lot of money there is no leadership from the directors. The branches are all lost on what do to when properties are not selling. But their directors just leave them to it as they get carried anyway getting involved in the operational side of the business and swanning around the head office. They have forgotten to get their hands dirty and help their branches manage prices down and get properties sold. This has led to people just reacting all day rather than taking a proactive approach and giving them a chance to out perform the market. I personally therefore think they will struggle until the buyers come back out and monkeys are buying cages that are going up in value. Foxtons will bounce back before them though as they are more focused on actually being agents
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To be fair Henry,
The board dismissed the vast majority of the M.D’s and regional s.
The staff are doing their best but they are not getting the support they need.
Also if you are an experienced neg / manager, why would you want to join CW at this time? – They have basically come out and said they want to do away with agency and move it onto a click and collect online operation with a call center. Hardly offering long term stability or the chance to make a decent wage.
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I have more idea of what is going on in central london which is really why their profit is so significantly down. The branches are run by directors who report to the MD’s in central london. The MD’s have mostly gone who gained the jobs in the restructure – but my point is the directors spend their whole time messing about at head office / on their mobiles outside offices – rather than mucking in and helping run the offices properly. They do little if any on the job coaching and just love the fact that they dont have to be proper agents anymore. This is the reality that Alison Platt doesnt realise. Smile Please I agree there are many good people there – but even the best people need perspective and help. And all that matters is generating instructions/offers/deals/viewings – and I think the CW senior staff have forgotten that. And when the market comes back they will do ok but the proactive agents like foxtons will post more impressive results
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I think we are on the same line of thought.
FYI regionals are hardly ever at head office, they also have much larger patches to deal with. They have been cut from circa 180 country wide (no pun intended) to just 40.
No offence i do not think you have spent much time in a regional role, in an ideal world yes they would be helping out but believe me when i say it there day is taken up by
1. Recruitment
2. Complaint Handling
3. Sales Calls (As in checking up on branches)
4. Reporting
5. Disciplinary
6. Training
7. Reporting their own figures
8. Implementing roll out
That’s the main job of a regional, and also bear in mind the offices they cover is around 30 – 50 now you can see the task they have.
(Oh and not to mention the day to day issues with staffs concerns and issues in branch)
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Sorry H. Genuinely can’t think of anything positive and genuinely sad for the employees who, all they want to do is a decent job. Take what you can and be happy.
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