Countrywide Share Discussion Threads

[superslickrick10] 05/8/2018 23:02

The deposit is not the landlords money it's the tenants.
Rent is also originally the tenants.

Landlord my ass

[barnetpeter] 05/8/2018 22:53

That's what clients of Beaufort were told.....your money is protected by FCA rules and in a separate client account.



Customers of collapsed UK stockbroker Beaufort Securities clashed with administrators PwC on Thursday over its plans to use client funds to pay the insolvency bill, which could top £100m.

At a fiery meeting in London, PwC rejected a proposal from customers and creditors to cap administration and legal fees at £35m.

Client assets will be used to cover the cost of insolvency proceedings and irate investors have criticised the scale of the bill.


The case has concerned customers of UK brokers who believed their money could not be used in the event their broker collapsed. Campaigners and high-profile critics, including Lord Lee of Trafford, have railed against PwC’s plans. Lord Lee has tabled questions in parliament over the legal precedent of using customer funds in an insolvency.

[superslickrick10] 05/8/2018 22:30

If you're a landlord who's done his due diligence on what agent to use then I should not have to explain what ring fenced means in relation lettings.

Hamptons are members of ARLA....I should not have to say anything further or explain what that entails in relation to client account money.

[barnetpeter] 05/8/2018 22:17

Thank you Typo....

[barnetpeter] 05/8/2018 22:15

You mean like that bust stockbroker recently where clients money was er, "ringfenced"? Until the administrators said they would be recovering ALL their fees from client money?

There is a VERY competitive market in lettings and Countrywide are not cheap.....so no thanks from me. But I might punt on the shares should they get to 10 pence.

[typo56] 05/8/2018 22:15

Ring fenced? Is that the same as the ring fencing of client assets with Beaufort Securities? It's difficult to know anything for certain these days.

[typo56] 05/8/2018 22:11

You say £750m to £800m, but what timescale?

No guessing? I don't see how it can be anything other than guessing, since the effect of the biggest short term risk factors to the UK market can't even be agreed upon by the 'experts'. Perhaps this time next year things will be a bit clearer. At the moment all we can consider is a wide range of possibilities.

I doubt even Peter Long would stick his neck out and predict a market cap (even if he were allowed to). His job is to focus on saving the company and let the share price go where it will.

I'm not sure things went wrong on just one year's poor accounts. It looks like margin and cash flow started falling off around 2014/2105, but I'm certainly no expert at reading accounts. Even the company talk about their operations being materially adversely impacted by the Group’s prior strategy between 2015
and 2017. So not just one year.

This fund raising has the feel of a panic rescue. It's a right royal shafting for existing holders, but without it they'd probably be bust. It may buy them 18 months, by which time we should have a much better idea of the state of the market and see if their turnaround plan has been successful.

If there are signs of improvement, they may get snapped up and taken private, with PIs missing out on the best gains. If things go downhill, they may be dumped onto the unsuspecting bottom fishing PIs before going under.

At their peak CWD were valued at over £1bn. I can't see the market returning to those heady days any time soon, if ever. At market close on Friday they were valued at about £260m (if you include the new shares). I expect they'll still be quite a lot of volatility short term, up and down, but would be surprised to see them top £450m cap without a material uplift in expectations, which is what existing holders would need to get them back to where they were on Wednesday, even if they were to take up the offer shares.

I'm not denying they're worth a sniff short term trading though. Not at all, if you can find the volume.

[superslickrick10] 05/8/2018 21:56

Barnetpeter....

"Is it ring fenced"....you call yourself a landlord.and you don't even know that it's a legal requirement to have all rent and deposits ring fenced in a designated client account. The director of any company could find themselves going to prison for dipping into that money.

Jeez....does anyone on this forum actually know anything about estate agency or are you all just guessing?

[barnetpeter] 05/8/2018 21:48

hmmmm....I dont see why these should be above 10pence.

As a landlord, I checked the list of agencies owned by Countrywide to ensure they were not managing any of my property. I would have taken any away.

The problem is that if they do hit any more problems is the rent etc money ring fenced? Might it get stuck in administration for months / years?

As a punter I might dabble but I would not let them near my properties now! Just too risky and they are not cheap in term of fees either!

[superslickrick10] 05/8/2018 19:45

My answer to you (1242) was clearly tongue in cheek at the time.

But lets take only one side of the business being lettings...whent I sold my agency last year I received a multiple of 1.5% of my lettings "book" value which includes let only, renewal and property management. CWD has a total of 1000 branches with I suspect an average of around £350k income per branch or 350m per annum giving a book value of £525m.

You then have the sales pipeline. Contracts in place with probate companies. Good will. Properties owned(long lease/freehold). Uks largest mortgage company. Financial services.

I would look at a ballpark of £750m to £800m.

CWD are currently being punished for 1 years poor accounts(loss) due to a poor CEO who made some stupid decisions, which over the past 8 or so no the have been reversed.

The city knows that a bounce back is due and when it does it will be on a big scale.

Ok you're turn and no guessing now !

[typo56] 05/8/2018 16:46

Superslick, perhaps you've fogotten that I asked you the same question first (1242) and your answer was, "The market cap should be what the market dictates". Then that's my answer too. Are you saying that answer isn't good enough now?

[superslickrick10] 05/8/2018 16:24

Answer my question first and I'll answer yours.
How much do you think countrywide is worth if Purplebricks is £905m, foxtons £160m, LSL £291m and savills £1.25b?

[typo56] 05/8/2018 16:03

Going back to the same ethos and structure that appeared to work years ago probably won't be enough to deliver the same profits. The market's changed. It's like thinking Brexit will give us our Empire back!

I think it's a mistake to compare one company in a sector with another, especially when they're not directly comparable. In any case, they'll always be some companies in a sector looking 'cheaper' than others. It may be that the others are 'expensive'. I was just comparing LOK and SAFE.

How much do I think the UKs largest estate agent and mortgage company should be worth? Have you a better answer than, 'What the market dictates'?

[superslickrick10] 05/8/2018 15:34

2015 did indeed see retained profits of £305m. The problem is that in that same year they employed a new CEO (Alison Platt) who came in and wanted to change the company structure making it more retail focused. She made redundancies and offered an online package to run alongside the existing business and typical estate agency fee. The whole thing back fired massively and cost millions. So to answer youre question that is the reason why it went wrong. Everyone in the industry could see what was happening at the time and the ensuing car crash that would happen.
However, Platt was laid off last year and the company have only this year gone back to the same ethos and structure that delivered the £305m profit with many of the old staff and management returning this year, the new finance plan will reduce the debt burden that the companies had in place which has held it back.

But answer me this...if loss making companies Purplebricks(905m) and foxtons are worth more than CWD based on your estimates then how much do you think the UKs largest estate agent and mortgage company should be worth? You think 4 times less than Purplebricks who literally have no sticky customers/repeat business and show no sign whatsoever of paying any dividends for the next few years?

[typo56] 05/8/2018 14:53

What's employing 10,000 people got to do with the value of the business? In a declining market, aren't they more of a liability, costing £400m pa?

I've had a quick scan of the prospectus and the recent numbers and it doesn't look great. A cyclical business that hasn't planned for the bad times.

Someone mentioned the asset value. What value? Pre fundraising NAV is about £84m, but over £312m of that is goodwill and intangibles. In other words, negative NTAV of over £228m and probably still more than £100m in deficit post fundraising. Is it unrealistic to discount the goodwill and intangibles? Not really, they've just written off £227m in goodwill and intangibles so it's not unreasonable to expect there could be more to come.

The company says it does not intend to pay dividends in the medium term, so there's no attraction there for income investors. It made me laugh that they make it sound like a voluntary decision, but at 30 June 2018 they had retained losses of over £112m. I believe this means they wouldn't be legally permitted to declare a dividend anyway!

Goodness, how did they end up in a situation with retained losses? y/e 2015 they had retained profits of £305m. If my sums are correct (which they may not be), since listing in 2013 they've paid dividends totalling about £114m but now have a retained loss of over £112m. Hardly a successful creator of shareholder value!

I'm sure these will be good for a speculative trade, riding the inevitable ramps and deramps. As a longer term investor you need to be confident in the turnaround plan and the ability of the company to weather Brexit and a downturn in the UK housing market, without any prospect of receiving a dividend in the foreseeable future.

[superslickrick10] 04/8/2018 10:49

"Value of the business zilch"

Some people 😂

Countrywide employs 10,000 people...that's TEN THOUSAND....the main share holders have watched for the last few days but will no doubt step in shortly to protect their investment.

I'm gonna wait until 15p then double down whilst you lot rush for the door!

Greed can get the best of all of us at some point!

[andrewhbruce] 04/8/2018 10:38

1st July

This has always been a hugely cyclical business, without the stamp duty and no tenants fees larks.

I seem to remember Prudential and General Accident valued in the £1 range.

Ideal time for management buyout/gift !!

Value of business zilch.

Value still zilch!

[technowiz] 03/8/2018 23:49

thats my point. how do i know if there isn't going to be more shorting of the shares by placees who effectively buy them back with their 10p shares.. so the share price could go lower. B1 said he bought some sub 15p yesterday and the share price spiked this morning to over 21p. i think the spike was short covering.

[typo56] 03/8/2018 16:45

Not sure how you buy to 'flip for a profit' with open offer shares. Thought the idea was to sell (short) your prospective open offer shares.

Not as 'entertaining' as I'd hoped today and a bit of a distraction from the main business with IAG. Was suprised at the delayed responce there at open.

[technowiz] 03/8/2018 16:20

too risky for me to buy even at 15p as there is not chance i'll be able to flip them for a profit. as i'm not entitled to the open offer so not cheap? 10p shares..

[typo56] 03/8/2018 16:07

Previous market cap plus cash is little more than 15p per share, so it's not really slow death. Just returning to a more realistic level, for now.

[horndean eagle] 03/8/2018 15:59

I think its just a slow death at present. Large holders who really didnt want to put any more money in are dumping existing holdings and will retain their placing stock instead. At least this way they are getting a much better price than before it all went pete tong.

[superslickrick10] 03/8/2018 15:56

Fair enough!

[typo56] 03/8/2018 15:54

lol, they're exactly what I mean superslick!

Guess I'm just a cantankerous old git.

The other team will turn up as soon as they start rising.

[superslickrick10] 03/8/2018 15:43

And I was told off for coming in with 1 liners !!