Countrywide set to go on national shopping spree of letting agents

Countrywide’s spending spree on letting agents is to continue apace this year, with £20m earmarked for acquisitions.

The money is enough to add up to 30 larger lettings businesses to the Countrywide portfolio, said expert Adam Walker.

Walker, a broker specialising in the sale of lettings and estate agency firms, said: “I would expect them to buy lettings businesses with a total turnover of £15m per annum between them.

“Countrywide’s preference is to buy larger businesses, usually with a minimum turnover of £250,000 per annum. 

“I would expect therefore that they might buy between 20 to 30 businesses in total. They are happy to buy all over the UK.”
 
As a group, Countrywide has been focusing its drive on capturing market share in lettings – a change from Countrywide’s original remit, which was to use its estate agents as a distribution and sales network for its mortgages and financial services.

As with other large corporates, Countrywide was a relatively slow latecomer into lettings.

However, it was lettings that proved the star turn in Countrywide’s financial results for last year – announced yesterday at the same time that the group revealed that it is to float on the London stock exchange after a break of six years from being publicly listed.

Last year, Countrywide’s lettings business put in a stellar performance, with revenue growth of 12% to stand at £86.5m. The figure excluded the performance of new branches.

Profits before tax and other earnings (EBITDA) soared 1% to £24.4m.

The figure for lettings put profits on the estate agency side into the shade at £15.8m, with the Hamptons brand returning profits of £15.5m.

Operating profits for lettings again outshone both the estate agency division and the Hamptons brand. Lettings turned in operating profits of £16.3m against £4.4m in estate agency, and £12.2m in Hamptons.

Last year, Countrywide acquired 13 new lettings businesses and opened 176 new starts.

Countrywide, which sells one in 11 homes in the UK, now believes it has the largest lettings agency in the UK. Brands include some let-only business such as Accord Lettings, Ashton Burkinshaw and Andrew Reeves.

Grenville Turner, group chief executive, said: “In a broadly flat housing market, albeit with some encouraging signs, we are delighted that our focus and drive in the lettings division – a key driver of our business – has continued to deliver strong momentum resulting in record financial performance in 2012.

“Buy-to-let landlords remain a rising force in the sector, as they seek to capitalise on the growing rental market as young adults and families struggle to get on the housing ladder.”