Countrywide, the embattled estate agency and owner of Lambert Smith Hampton, has warned earnings will fall by £20m year-on-year in the first half of 2018 despite operational improvements in the company.
In a trading statement, the firm said it expects adjusted EBITDA to be around £20m lower than in H1 last year – a fall it said it is unlikely to recover in the second half.
However, the statement added that it has made some progress in turning the company around. The register of properties available for sale is up 9% since December and broadly in line with 2017 levels.
It also said cross-referral income within the group was up 8%, while cost efficiency increased with a reduction in head office functions by a third.
Countrywide said it is looking to put in place a long-term capital structure and cut its levels of debt by 50% through additional equity finance. Although the process is at an early stage, it will update the market about these plans in its interim results at the end of July.
These announcements follow a disappointing 2017 for Countrywide. The company reported a £208.1m loss in its full year results in March, alongside an 8.8% fall in income to £671.9m, which it attributed to poor performance in its sales and lettings division.
LSH, however, had a relatively successful year with a marginal revenue increase and a 9.6% increase in adjusted EBITDA.
Earlier this year, chief executive Alison Platt resigned after a slump in shares triggered by a profit warning.
In an interview with EG, Countrywide executive chairman Peter Long said his team will bring the company back to profitability through a focus on expertise and a back-to-basics approach.
He added that the agency model is sound and it has no plans to sell off any parts of the business.
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