January 18, 2018 / 8:40 AM / a year ago

UPDATE 1-UK's Countrywide sees 8.8 pct drop in FY profit, shares tumble

(Adds analyst comment, share price, background)

Jan 18 (Reuters) - UK’s largest estate agency Countrywide Plc said it expects an 8.8 percent decline in full-year group income after a disappointing fourth quarter, sending its shares down 18 percent on Thursday.

The company warned in November the market for housing transactions was challenging and would be down from 2016.

Jefferies analysts said residential markets were more challenging in 2017 than Countrywide originally anticipated.

“The compounding of changes in external market conditions and the internal operations have taken their toll on Countrywide... Changes will take time to flow through to results,” Jefferies said.

Shares of Countrywide lost about 32 percent of their value in 2017. The shares on Thursday were on track for their worst single day since Britain’s vote to leave the European Union in June 2016.

Countrywide expects full-year EBITDA to be around 65 million pounds ($89.98 million), 10 percent below Jefferies’ estimate, prompting the brokerage to cut its price target on the stock to 125 pence from 145 pence.

Income in the UK business is expected to fall 17 percent to about 205 million pounds for the year ended Dec. 31, with profit from London expected to drop 10 percent, the company said.

Total income in the sales and lettings business is expected to decline 14 percent for the full year, reflecting a weak fourth quarter.

Countrywide now expects total group income for the full year to fall to 672 million pounds from 737 million pounds a year earlier.

In August, the company said its Chief Executive Officer Alison Platt would take on more responsibilities as it executes a new organisational structure

$1 = 0.7224 pounds Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Amrutha Gayathri, Bernard Orr

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