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By Justin George Varghese
March 9 Countrywide Plc's profit more
than halved in 2016 as the largest estate agency by revenue in
Britain saw a slump in demand due to higher property tax and the
country's vote to leave the European Union last year.
Shares in the company fell 13 percent to a record low of
162.75 pence in morning trade in London.
Countrywide's pretax profit fell 59 percent to 19.5 million
pounds ($23.7 million) from a year earlier.
The company had forecast income for the full year to be
broadly flat at 737 million pounds, after issuing two warnings
on results since July. Total income for 2016 rose 0.4 percent to
737 million pounds.
Countrywide warned in January that the volume of house sales
in London in the final quarter continued to be below 2015
levels, resulting in a 6 percent drop in the number of deals for
The sales market volatility is likely to continue in 2017,
Countrywide also expects headwinds from tenants' fees
regulation and pressured landlord environment in 2017.
Britain has said it would ban one-off tenant fees to try to
bring down the cost of renting and cool the market already hit
by a property tax increase in April on houses bought by
London-focused estate agent Foxtons Group was also
hit by a slump in demand due to the property tax hike and
Britain's vote to leave the European Union last year and
predicted on Wednesday that 2017 would be tough for sales.
Annual British house price growth cooled in February to its
weakest since July 2013, hurt by increasingly squeezed consumer
finances, mortgage lender Halifax said on Tuesday.
Property dealers, including Countrywide, are forced to
invest in digital expansion, close branches and slash headcount
to fight against the growing threat from online agencies that
are luring customers by charging lower fees.
"We intend to focus on share gain through digital rollout
... in 50 percent of branches by June 2017," the company said.
While no final dividend was proposed for 2016, the company
rolled out a new dividend policy that will pay out between 30
and 35 percent of earnings.
($1 = 0.8224 pounds)
(Reporting by Justin George Varghese and Esha Vaish in
Bengaluru; Editing by Sunil Nair and Gopakumar Warrier)