Upmarket estate agent Chesterton loses £6.5m

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The Independent Online

Chesterton, the upmarket estate agent, yesterday capped a series of profit warnings with the news that it had fallen deeply into the red in the second half last year.

The company, which has delivered four earnings alerts since June last year, revealed that the 100 redundancies it made at the end of last year had cost it £1.5m. Together with other restructuring charges, total exceptionals of £3.6m dragged the total loss to £6.5m for the six months to 31 December. The company saw its first trading loss since 1997, with the operating business losing £2.9m during the period. There is no interim dividend and it breached a banking covenant – though Chesterton said its bank was being supportive.

Chesterton ditched its chief executive, Michael Holmes, in September, replacing him with Lorraine Baldry from the start of this year. Mr Holmes shocked the market in June last year by warning that the bottom had fallen out of the residential property market at a time when other estate agents were still positive.

Industry experts said Mr Holmes steered the company towards providing outsourced property services and fancy structured finance products for real estate owners instead.

Ms Baldry is expected to take the company back to basics, after it over-invested in its non-agency business.The residential division was now seeing more buoyant conditions, while commercial agency work was patchy, she said.