June 25, 2018 / 6:50 AM / 3 months ago

UPDATE 3-Countrywide warns again on profit, plans big share sale

* Company plans to cut debt with share sale

* Warns again on profits

* Shares have lost half their value this year (Adds details, background)

By Arathy S Nair

June 25 (Reuters) - British estate agent Countrywide Plc issued its fourth profit warning in eight months and said it planned to halve its debt with an equity sale, sending its shares to a record low.

Britain’s largest estate-agency group, whose network of high street branches is suffering from online competition as well as tepid demand since Britain voted to leave the European union, is doubling down on a “back to basics” plan and aims to cut debt.

Its shares fell by more than a quarter to as little as 57.5 pence on Monday after it said first-half adjusted core earnings (EBITDA) would fall by about 20 million pounds from 28 million in the year-earlier period.

It said this was due to transactions taking longer to complete as well as a “subdued” market, and added that it did not expect to recover the shortfall in the second half.

Previously, Countrywide had forecast a 10 million-pound EBITDA (earnings before interest, tax, depreciation and amortisation) drop for the first half of the year.

Countrywide said it would use the proceeds from the share sale, which it said was supported by major shareholder Oaktree and its lender group, to cut debt by at least 50 percent.

Brokerages Jefferies and Peel Hunt estimated the equity raise could be about 125 million pounds. Countrywide said it would give a detailed recovery plan in July.

Countrywide’s net debt was 192 million pounds as of Dec. 31, about 2.97 times its adjusted core earnings.

Its shares traded 24 percent lower at 60 pence at 1015 GMT and have lost half their value this year. They were priced at 350 pence per share when the company joined the stock market in 2013.

Countrywide is being run by Executive Chairman Peter Long since Alison Platt stepped down as chief executive after the January profit warning, and is trying to push its core sales and lettings business back to profitable growth.

A 2015 restructuring of the company’s sales and lettings business had led to the loss of experienced employees. The failed restructuring atop a cooling property market resulted in Countrywide losing substantial market share and profits.

On Monday, Countrywide said: “The group has made substantial progress in re-establishing industry expertise and the right level of staffing and capability in its sales and lettings businesses.”

Countrywide began 2018 with a sales pipeline significantly below a year earlier, but said it aimed to “substantially” close the gap by the end of this year. ($1 = 0.7558 pounds)

Reporting by Arathy S Nair in Bengaluru; Editing by Amrutha Gayathri, Georgina Prodhan and Keith Weir

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