Countrywide chief executive Alison Platt has said the acquisition of best-in-class urban-based lettings agencies will be a major plank of her organisation’s expansion strategy for the next five years.
In a presentation to investors, Platt said Countrywide Group’s existing ambitious lettings acquisition record has made the company the largest residential lettings agent in the UK, albeit spread amongst what she called “a house of brands.“
With 50 per cent of the UK’s population living in major urban centres by 2020 - up from 40 per cent today, according to research presented to the investors - Platt believes consolidating Countrywide’s big city lettings offer is a key element of the group’s ambitions to double in size in a short time.
She said the group’s lettings succeses in Manchester, Birmingham and Glasgow - where Countrywide was a dominant player in mid-market and high-end lettings - were examples she wanted to see repeated elsewhere.
As a result, Countrywide is looking for “great niche businesses” already operating.
She outlined to investors the benefits to the Countrywide group of acquiring established companies, citing the purchase of the 12-office Kent and East Sussex agency Ashton Burkinshaw for £3.1m in July 2007.
A slide presented to investors said by leveraging Countrywide’s back-office economies of scale, people costs at Ashton Burkinshaw were reduced from 50 per cent of revenue pre-acquisition to 38 per cent; marketing costs were reduced from 11 per cent of revenue pre-acquisition to four per cent.
Platt also said it was key for the future of the group’s lettings operations to have strong relationships with landlords, limiting churn as much as possible.
She said that by 2020 residential lettings - currently accounting for about 35 per cent of Countrywide’s earnings - would rise to 37 per cent. Allied with the group’s growing commercial activities, residential lettings would also offer stability and sustainable growth to the organisation as a counter-balance to any volatility that may occur in the sale sector.