7th Jul 2006 07:00
7 July 2006 Countrywide plc Trading Update In advance of the Interim Results to 30 June 2006, which will be announced onTuesday 15 August 2006, the Board of Countrywide plc is pleased to provide atrading update.Activity across all our divisions remains at encouraging levels. Although weanticipated that national interest in World Cup football would depress demandduring June, our experience has been that any reduction in activity has onlybeen marginal.Estate AgencyAt the end of June, our estate agency division had a pipeline of sales in thehands of conveyancers of ‚£ 96.8million - some 28.9% higher than at thecorresponding time last year, and a record for June. In our experience, demandhas been good across all regions of the UK, reflecting market data from theBank of England, and is very firm in the more fashionable parts of west Londonwhere average house prices are very high. As a consequence, the average priceof homes sold across the group in the first half of 2006 has increased to ‚£189,037, with each sale generating a fee in excess of ‚£3180.We continue to be very encouraged by the performance and growth beingexperienced in our London and provincial lettings and management business, andconfidently expect the division to make an enhanced contribution to groupprofits again this year.Financial ServicesSales of financial service products have been strong, with a particularlyencouraging increase in the volume of sales of mortgage related life productsfollowing the repricing exercise in 2005. In June, we achieved our highest evernumber of panel mortgage completions (5,358 cases) and have a strong pipelinecarried forward into the second half.SurveyorsCountrywide Surveyors continued to work at or close to full capacity, whilstcontinuing to invest and position the business for the introduction of HIPs inmid 2007.ConveyancingAt Countrywide Property Lawyers capacity has been constrained by the systemschangeover, but we can now report that almost 75% of all new business is beingprocessed on the new IT system. This continues to perform well and givesconfidence that it will be sufficiently robust for us to begin to increasecapacity as the year progresses. Future developments of the system planned forthe second half of the year will allow us to further investigate opportunitiesfor outsourcing some non-voice elements of the service to India. The readyavailability of qualified skilled resource in India will enable us to overcomeany capacity constraints which may arise from a shortage of qualified staff inthe UK.The number of transactions being processed by our re-mortgage unit has shownencouraging growth. However, we do not expect the business to break into profitthis year.Rightmove and TMG HoldingsBusiness at both Rightmove (which published a trading statement on 6 July 2006)and TMG Holdings is good and profitable.Cash generation during the first half has been strong. We have repaid andformally terminated the 3 year Revolving Credit Facility arranged to fund the ‚£85m return of capital in 2004, and by the end of June our cash balances hadreached ‚£34 million.July and August tend to be reasonably quiet months in our industry, as mostpeople in the UK take their major annual holidays, and we are thereforeexpecting some seasonal slowdown to occur. However, unless we see a materialand surprising adverse change in the market or in macro economic conditions, weare confident that we will comfortably achieve the current brokers' consensusview of our 2006 profit before tax. We understand this to be in the order of ‚£88 million, excluding the profit from the sale of shares in Rightmove on 15March 2006.Further information and a market update will be given in our InterimAnnouncement on Tuesday 15th August 2006.For further information please contact:Countrywide plcChristopher Sporborg, Chairman Tel: 020 7242 5300Harry Hill, Group Managing Director Tel: 01376 533 700ENDCOUNTRYWIDE PLCRelated Shares:
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