After its November profit warning Management was hoping for a stronger Q4. This wasn't to be.
Companies: Countrywide PLC
Countrywide(LON: CWD), has seen its share price plummet this morning after it warned on profits due to a "disappointing" Q4.
Management of the UK's second-largest estate agent said Revenues for the full-year were expected to be c. £672m, well down on the £737m reported the year prior. Q4 income is also down from £179m in 2016 to £164m in Q4 17.
The decline in Revenues was driven largely by the 17% decline in its UK sales business, while lettings income in the UK fell by 8%.
Therefore, EBITDA is expected to be...
"... circa £26m, down 45%, principally as a result of the changes in the sales and lettings structure made over the last 12-24 months."
A range of external factors has likely hindered Countrywide's 2017 performance including the first interest rate hike in over 10 years, as well as the rise of hybrid estate agents such as Purplebricks (LON: PURP).
PURP, on the other hand, saw Revenues grow by more than 150% in FY17 and its share price grow from 145p in January 2017 to a 2017 closing price of 416p.
Other online estate agents challenging the traditional business model include Emoov and House Simple.
The Group had already warned on full-year profits in its November '17 trading update which noted:
"As in previous years, the final quarter remains important and we currently expect our results for the full year to be towards the lower end of the range of market expectations."
Shares in CWD had been slashed by 16% to 112p at the time of writing, trading close to its all-time low of 108p in September '17.