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The comments on this page are some of the thoughts that I had when considering this company and not a recommendation to take an action or to refrain from taking an action.

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Is This Just Pump And Dump?
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Commentaries tend to be created when I look at a share and decide if it is one that I want to buy either now or when I next have an unallocated pot.
As companies often report numbers in slightly different ways there are a number of entries to cover this and as these are rough notes there will usually be empty items.

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Commentary On Countrywide plc

Title: Countrywide – Broke A Golden Rule Of Mine
Company: CWD - Countrywide plc
Share Price Then: 338p
Author: Ian Smith
Date: Mon 06 Jan 2020
Comments: I have a rule that says whenever a company does a share consolidation for the sole reason that the share price has sunk so low that it is embarrassing pretty much give up hope in the current management.

Countrywide have just done such a thing, a 50 for 1 swap bringing the price up from around 7p to 350p, yes the share price now looks respectable except when you consider that adjusted it is down from around 13,500p a couple of years ago.

What I usually take from this type of activity is that the management are trying to hide the fact that the business really fouled up and left its shareholders nursing massive losses.

The downside is that everyone knows this anyway and instead of people buying in, the new higher price can encourage sales before the new higher price drops taking even more value away.

Given Countrywide’s losses, massive share issue and the growth of debt I would have thought that recovering the business and recovering the markets confidence was more important than a low share price that truly reflected a failing business.

At the same time as the share consolidation they announced the sale of Lambert Smith Hampton for £38m which will go towards reducing debt from around £90m to £55m. The stated reason is that the commercial property division was requiring too much management time, as a cynic I wonder if selling a profitable division was simply a way of hiding the fact that debt was growing again.

Net debt had crept up to £90.0 million from £70.7 million in December 2018. This is after a massive £140 million fund raising in August 2018 had brought debt down from over £200m.

For all the talk of a recovery and improved expertise within the branches things are not getting better, so I wonder if the consolidation is to allow another large share issue which may have been laughed at when the shares were trading in the 3p-7p zone.
ItemCurrent PeriodPrevious Period
Period6 Months6 Months
Adjusted Earnings
Adjusted EBITDA£33m£66m
Statutory Profit(£38m)(£206m)
Adjusted Profit
Total Debt
Net Debt£90m£212m
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