The Spicerhaart Group has reported a pre-tax profit of £100,000 but a post-tax loss of £52,000 as it continues to expand through acquisitions.
Its after-tax loss for 2017 compared with £1.8m the previous year. It described the market last year as “challenging”.
The group ended last year with cash reserves of £13.1m. Group turnover in 2017 was £113.4m, up £0.3m on the previous year.
Last year, Spicerhaart bought the 17-branch Butters John Bee group in the north, and in February this year it acquired Brian Holt, with three branches in Coventry. In its accounts, Spicerhaart says it will continue to expand geographically, to lessen its reliance on weaker areas in the south.
The accounts, available at Companies House, say that the directors “continue to explore opportunities to expand further in 2018”.
The accounts report that trading this year started in line with expectations.
CEO Paul Smith says in the report that although market activity remains low in estate agency, costs are being contained, and there is growth in lettings, financial services, land and new homes, and surveying.
The group also reported charitable donations of £36,696 last year.
Most agents are struggling out there. It could of been a much larger loss considering the market conditions.
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A difficult market for most, although IMHO now is not the time to be expanding through acquisition. It seems to me that whilst the hope of achieving greater economies of scale by some firms who are currently on the acquisition ‘trail’, they are only serving to compound minimal profit levels/losses and giving themselves greater debts to service. If ever there was a time to take a cautious and consolidatory approach, it is now. There is nothing to suggest that the market (either residential Lettings or Sales) will improve within the next 18 months, so I can’t the see the situation easing for some time- I hope that not too many get ‘burnt’ due to miscalculated acquisition and increasing costs to service.
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Better deals to be struck as a buyer when it’s tough, just need the dosh to ride it out.
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Undoubtedly, but like buying a used Bentley (”what a deal?!” they shout!)…during a time where the market is flooded with second hand units- A lot of car, but you’ll need a lot of ‘dosh’ to run the ol’ gal and ”she ain’t paying out”!
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Challenging times means businesses can be acquired at reasonable prices (in theory).
Economies of scale are real when integrated properly.
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PaulC, in theory yes- but taking into account the market IMHO has considerably further to decline/’fall’ (in terms of many key indicators) this would logically mean that ‘reasonable’ prices may not be reasonable enough to see a worthwhile return (or any return), yet; Compounded by the fact that revenue levels will continue to decrease over the coming period. With certainty, there will be good deals to be had in terms of agencies heading for the exit, I just don’t believe that portfolio/business prices are attractive enough to take on additional risk, at this time. Again, this is my opinion, but if you are acquisition trail…I wish you (and anyone else) the best of luck!
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Based on the PB method of valuation that means they are worth £1.1bn or if you prefer their bargain model of buying the Canadian company it is worth £158m. Either way they are both in cloud cuckoo land but perhaps they should become an online agent and float quickly whilst there seems to be plenty of nutters who want to give their money away.
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Just goes to show how ill advised Countrywide were to pay well over the odds ( easy with hindsight ) for the Lettings businesses they acquired a while back what a disaster that turned out to be. Can’t help but think that just showed how out of her depth the former CEO was in understanding the whole business. I also thought the job of a good CEO was to try to second guess the market and draw up/agree a strategy to move forwards or am i wrong? p.s Acquiring Hamptons and John D Wood for what now appeared modest sums maybe speaks more about the previous BODS than the current crop.
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