Countrywide Group – The Beginning of the End or the End of the Beginning?
I wonder if I am alone in my perception that over recent months it has become quite ‘fashionable’ for fellow estate agents and industry observers alike, to snipe and poke fun at the ‘comings and goings’ at Countrywide Group in the trade press and social media. Somewhat inevitable I suppose, but is such criticism fair? Or are Countrywide simply fair game?
Well, there can be no doubt that since CEO Alison Platt took the helm, many years of estate agency experience have been lost to the group through resignation and redundancy. But I suppose the real question is really whether we should be surprised, given her former commercial experience and non-property background?
I suppose what I am eluding to is simply this: for Countrywide’s owners to appoint a CEO with no estate agency experience was (with the benefit of hindsight) a clear statement of intent – as they were clearly seeking to make a calculated change in the direction of travel for the UK’s largest property group, rather than just maintain the status quo.
For the purposes of research for this article, I have read most of the very many column inches that have been written about Countrywide over the past twelve months and let me tell you, no other estate agency group comes even close to the level of scrutiny that Countrywide Group seems to receive in the trade press and media.
But that aside, what has become clear in recent months, is the sheer depth of change that continues to take place in order to re-shape this industry colossus so it can become ‘fit for purpose’ for the trading environment that lies ahead. Indeed, all of this substantive change has, and indeed is still does, take place against a raft of external criticism, a dramatically falling share price, the as yet unknown ramifications of Brexit, and a potential government ban on tenant fees – so no pressure?
So, what exactly are Countrywide up to? Well, from the outside, I would make the following observations:
- It is well known that prior to Alison Platt being appointed as CEO, Countrywide spent a great deal of money buying up letting agencies up and down the UK, leaving the incoming CEO with a plethora of smaller brands that all needed integrating into the existing branch network. In addition, further decisions needed to be made regarding the overall size of the branch network – against a backdrop of a contracting number of UK sales transactions and increased competition.
- Whilst Countrywide remains a large and diverse business, it was in great danger of losing focus on its core trading activities, so this led in turn to a major re-think about the future of its related operations such as auctioneering and commercial.
- In addition, the rise of on-line agency competition could also not be ignored, so like many of it’scompetitors, Countrywide needed to have a response. Thus, it has slowly been rolling out its own ‘hybrid’ agency offering, after trialling it through subsidiaries, Austin & Wyatt (south coast), Frank Innes (east midlands), and Spencers (Leicestershire).
- With pre-tax profits falling by well over half, to £19.5m in 2016 from £47.7m in 2015 (it would have been worse, but for a £32.8m windfall from the sale of its Zoopla Property Group shares, and solid performances from its mortgages, lettings and surveying businesses) Countrywide was forced to raise a further £37.7m, from the issuing of a further 21.5 million shares in order to fund the roll out of its digital hybrid platform and network.
So much change indeed, and clearly only time will tell whether Alison Platt and her colleagues were right to undertake such a major deviation in strategy. With Countrywide shares halving in value and good news in an uncertain economy in somewhat short supply right now, it is tempting to think that Countrywide looks doomed to fail.
But in their defence, aren’t Countrywide simply responding to the same uncomfortable challenges that most, if not all, UK estate agents face right now? Except on a much larger scale? Whether ultimately right or wrong, isn’t Alison Platt only guilty of doing what is necessary, rather than ‘wrecking’ a previously successful business – as many of her armchair critics have pronounced? I am not a betting man by nature, but is it not wishful thinking to suggest that Countrywide’s share price would not have collapsed (like many other estate agency groups post Brexit) in any event, and the same major surgery be required at some later juncture?
Well, events are yet to play themselves out, and I apologise if I sound like I am in the paid employment of the UK’s largest estate agency group – which please believe me I am certainly not! However, I have over thirty year’s personal experience of running small companies (including two estate agencies), so please believe me when I say to you that overseeing and managing major change (no matter the size of your business) is seldom as easy as it looks from the outside.
So rather than prematurely castigate Countrywide’s Management Board, I choose to reserve judgement until a) they ultimately get found out for their poor decision making by continued poor results, or b) rightfully get rewarded with a pay rise or a new job for demonstrating their sound judgement and leadership under pressure.
So, whether hero or zero, let’s all give Countrywide a break for the moment. After all, Ms Platt and her colleagues may well yet be vindicated, by appearing to lose the battle, but metaphorically going on to win the war.
The author of this article is Peter Nicholls CEO of Ideology Consulting. For more information, go to www.ideologyconsulting.co.uk
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