The group, which is behind Hamptons, Bairstow Eves, Taylors and Gascoigne-Pees, has now called on shareholders to raise fresh funds to cut its debt.
The beleaguered estate agent has been hit by the rise of online firms like Purplebricks, a downturn in the housing market and a failed attempt to revamp its business.
“The market in the first half has continued to be subdued and we have experienced longer transaction cycles,” the group said. “As previously announced, the group entered 2018 with our sales pipeline significantly below that of 2017.”
Countrywide said adjusted profits in the first half would be about £20 million lower than a year ago and the shortfall would not be made up in the second half of the year.
The firm is forecasting adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of just £44.7 million for the full year – below City forecasts of £51.4 million.
In 2017, it made profits of £67.4 million, down from £83.5 million in 2016.
Countrywide wants to cut its debts of £192 million by at least half by raising extra capital.
Anthony Codling, an analyst at Jefferies, was quoted in the Guardian as saying Countrywide may seek to raise about £125 million from investors to cut debt and fund a turnaround plan.
“The underlying second-hand housing market is dreadful,” Codling said. “Even the online challengers are finding that they cannot outperform the current market conditions, and there is little to be done when homeowners stop moving.”
Peter Long has been leading the company as executive chairman ever since the chief executive, Alison Platt, who had run the firm since 2014, resigned days after the January profit warning. Countrywide said there was no update in its search for a new chief executive.
Long, who has been criticised for the number of boardroom positions he holds, announced a “back to basics” recovery plan in March, which included cutting head office staff numbers by a third – the equivalent of 150 jobs.
Long has called for senior branch staff who left during Platt’s leadership to come back.
The register of properties available for sale is broadly back to 2017 levels, up 9% since the start of the year.
DealMakerz thinks Countrywide’s future is looking bleaker than ever before.
Trying to win back senior branch staff – who lost the autonomy to recruit, price and market locally under Platt – will be an incredibly difficult task given the competition the company is facing.
On top of falling house prices in London and the South East – Countrywide’s core markets – there is also a lack of confidence in the current boss.
The fact that the company is struggling to find a CEO perhaps indicates there are few people willing to undertake the seemingly impossible task of turning the business around.
Harry Hill, founder and former chairman of Countrywide, told DMZ earlier this year that an aggressive break-up of the company could be on the cards. The agent’s latest woes suggest this prediction could be about to come true.