Countrywide, the letting agent and property services group, is on the acquisitions trail – and has its eye on businesses in the South East.
The company, whose estate agency and lettings brands include South East-based Mann, Gascoigne-Pees and Bairstow Eves, has opened 70 lettings offices in the past seven months and is looking to continue a similar rate of growth throughout the year, through both acquisitions and organic growth.
The lettings business has doubled in the last three years to 300 branches and John Hards, co-managing director of Countrywide’s residential lettings division, wants to double it again, in branches, turnover and profits, though he won’t put a timescale on this.
Hards told Insider he was looking in particular for lettings businesses that could fit into existing estate agency branches or that filled gaps where Countrywide had no existing agencies.
Hards is looking to increase the pipeline of active potential purchases to about £10m at any one time – in addition to informal talks and “warm leads”.
“We’re constantly buying, or looking at buying. I look at a lot of businesses, though not all of them suit us.”
He said the ideal acquisition has a turnover of more than £100,000 but added: “We wouldn’t turn away anything that’s a good proposition.”
The average deal value, he said, was £500,000 to £1m – “though the bigger, the better”.
Recent purchases have included Ashton Burkinshaw in Kent and East Sussex, Hamptons in London, Ford Property Services in Portsmouth and the Letmore Group of Essex and East London.
Hards said he sees the South East as offering good potential since Countrywide has a “fairly substantial” agency network but fewer lettings businesses there.
“Acquiring some lettings businesses would be exciting for us. The whole South East is a good location and I would take a look at anything that came along.”
There are two South East businesses currently in the pipeline, both well-known names in their areas.
But Hards said the company does not discriminate when it comes to location. "The businesses we’re looking at are scattered all over the country,” he said.
Where existing business names are well established, they continue to trade under the same name, while others assume the identity of one of Countrywide’s portfolio of brands.
Acquisitions are funded from cash reserves, which gives the company an advantage in an environment where “there are not that many people out there buying”.
And Hards says decisions are taken quickly: “We’re decisive. When we look at something we will say quite quickly if it’s not for us, and we can be quick to make an offer if it is for us.”
Countrywide said it sees local letting agencies and portfolios as attractive because they offer a regular income stream. It is not so interested in estate agencies, though. “Because of the state of the market there are not many estate agencies making good profits. I’d be reluctant to part with cash for something that’s not going to be that cash generative.”
