Connells Group today announces increased pre-tax profits for the first six months of 2021 of £80.2m (H1’2020: £17.2m); reflecting an exceptional performance in a strong housing market. These results include the profits generated by Countrywide since its acquisition on 8 March 2021.
The reported pre-tax profit of £80.2m includes £29.3m of gains from the Group’s disposals of its shareholdings in TM Group and Fixflo, which generated cash proceeds of over £66m for the Group. The half year results also include IFRS3 charges relating to amortisation of Countrywide’s intangible assets (including its sales pipeline) of £38.3m, together with acquisition costs of £2.1m.
Excluding the one-off’s above, Connells Group’s underlying EBITDA for the half-year amounted to £112.6m, including Countrywide since its acquisition (H1’2020: £49.2m, including Countrywide on a like-for-like basis).
The Group’s performance comes against the backdrop of a strong housing market in an improving economy, aided by the Stamp Duty Land Tax relief. This created peaks in completions in both March and June, ahead of the final phase of the withdrawal of the concession in September. Exchanges were 34% higher in the period compared to the first six months of 2019*, a more meaningful comparative period due to the fact the housing market was effectively closed for almost two months in 2020.
Confidence in the housing market is strong, with buyer registrations up 49% on H1 2019**. Supported by low interest rates and competitive mortgage products, buyers are driving increased sales activity. However, the availability of stock remains a key market challenge with the number of properties available for sale 14% lower than June 2019*.
“We have delivered another strong financial performance and increased the scale of the Group and our capabilities significantly with the acquisition of Countrywide,” says Connells Group CEO David Livesey. “Bringing together these two great businesses will enable us to provide a more integrated and enhanced suite of services to customers and clients. Countrywide’s branch network is a key asset and we will continue to maintain and enhance its current branding and service offering, while leveraging Connells’ track record of positive investment in people and technology. Additionally, the enlarged Connells Group will provide exciting opportunities for all colleagues and the potential for us to attract the best talent across the industry. Importantly, we have improved our combined market share of instructions in the short time since the acquisition.”
Connells Group continues to navigate the ongoing challenges of the Covid-19 pandemic, maintaining its own Covid-Secure standards in order to keep the health and safety of its colleagues, customers and the communities it serves at the heart of its response. Whilst the Government continues to ease restrictions, Connells Group is maintaining a prudent approach to how it continues to operate.
“Despite the potential for distraction, our people have been resolutely focused on delivering for all our customers, and their immense contribution is the key driver in our success,” says David. “They have adapted brilliantly to challenges, supported new ways of working together – especially those Countrywide colleagues recently welcomed into the business - and our results are testament to the professionalism and dedication of all our people. We look forward to the rest of the year.”
The Group remains financially strong and continues to look for investment and acquisition opportunities.
*Stated on a like-for-like basis, taking into account Countrywide’s figures prior to acquisition and adjusted for closed branches.
** Connells Group excluding Countrywide.