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Countrywide announces strong start to year

Countrywide PLC has reported a strong start to the year with activity across all major parts of its business contimuing to grow.

During the first six months of 2004 Countrywide says its the estate agency division has benefited from an increase in the number of sales being arranged compared to last year and at increased house prices which feeds through into increased revenues per home sold. Consequently the value of the pipeline of commissions for contracts in the hands of conveyancers awaiting exchange stands at a record high level of £15m (25%) higher than at the corresponding time last year.

Retail financial products continue to be arranged for a high proportion of home buyers, although Countrywide says it has seen some reduction in the number of mortgage related life products being taken up as buyers focus more on the level of their mortgage repayments.

It adds that its Countrywide Surveyors and Countrywide Property Lawyers both continue to enjoy growth, receiving more instructions than their current capacity can accommodate and as a consequence has had to panel excess work to third parties whilst working at full capacity.

Cash generation during the first half has also been strong, allowing Countrywide to return the £100m capital dividend to shareholders a few days ago with only modest recourse to borrowing from the £100m bank facility that it has in place. It envisages that the board will comfortably contemplate dividend payments within the 2.5 to 3 x cover range indicated in the published listing particulars. It will announce its half-year results, which will include one-off costs associated with the demerger of Chesnara/return of capital of approximately £9m and dividend payment on August 12.

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