Countrywide: H1 2006 trading statement

8:33 a.m. Tue 18 Jul 2006

Countrywide, the UK’s largest estate agency reported increased activity levels in the first half of 2006.

In the core estate agency business, the pipeline of sales in the hands of conveyancers rose 28.9% to £96.8m over the same period last year. The company said that demand had been firm across all areas of the UK market, which corresponds with the experience of the house builders which have issued generally positive trading updates for the half year.

In financial services (which deals primarily with products related to house purchases) a corresponding increase in activity was recorded. Mortgage related life products are said to have shown an encouraging increase and mortgage completions are said to have reached a new high in the month of June.

Countrywide Surveyors is said to be working at full capacity but work by the company’s conveyancing lawyers was constrained by a changeover in IT systems.

On the whole, the company seems to have enjoyed a good performance in the first half of the year and is reasonably confident of achieving the consensus earnings forecast. Long term prospects are less certain and are dependent on how the housing market will perform.

The share trades at 440p, on a prospective PE (2007 earnings) of 10x, with a yield of 3.2%.