Property sales: positive signs
Countrywide plc has reported a “promising first half trading performance” for its conveyancing division, with income up 4% and earnings 12%.
Countrywide Property Lawyers, which is an alternative business structure regulated by the Council for Licensed Conveyancers, saw income hit £12.1m in the first six months of 2013 and earnings before interest, tax, depreciation and amortisation of £3.4m.
It is the smallest division of Countrywide, which as a group had income of £259m (up 4%) and earnings of £26m, a 35% rise largely down to its estate agency business.
The company’s half-year report said the gains in the conveyancing division were driven in the main by increased volumes from its own Countrywide branch and broker networks.
“Instruction volumes generated from Countrywide were 17% higher than the prior year, assisted by the launch of a new bundling proposition rolled out to the majority of our branches in Q1 2013. This has helped to build a healthy pipeline from this channel, which is approximately 16% higher than at the same point last year,” it said.
The division continues to service HSBC’s conveyancing panel contract, “albeit with markedly different volumes to those seen in the prior year”, the company said.
In August 2012, HSBC altered the panel model following a campaign by the Law Society, leading to contract volumes falling by approximately 45%. “This is reflected in the completion volumes showing a reduction of 6% and this trend will continue into the second half of the year. The division has repositioned its cost base accordingly and the financial impact of this reduction has been largely mitigated.”
The report added: “As a remote service provider, investment in the IT platforms remains crucial for the division and we have launched a major project re-engineering the legal work flow system in order to continue to provide a market leading service for Countrywide customers.”
Countrywide chairman Bob Davies said there were positive signs in the property market: “We are pleased to announce encouraging results for the first half of the year, representing a positive start to our return as a listed company. Continuing improvements in the availability of mortgage finance, developing customer sentiment and the impact of government initiatives should help to stimulate further the level of activity in the UK housing market.”
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