Hambro back in the red

THE housing market recovery juddered to a halt in the second quarter, according to Hambro Countrywide, pushing the estate agent and financial services group back into the red in the first six months to June, writes Tom Stevenson.

The shares, half of which are owned by the merchant bank Hambros and 20 per cent by Guardian, the insurer, closed 6p lower at 48.5p after the dividend was cut to zero against 0.5p last year.

Christopher Sporborg, chairman, said the recession had brought misery to many and shaken the confidence of even more. Because of that the housing market was lagging other economic indicators.

The estate agency operation sold 23,341 houses from 447 offices, about 1,700 below the break- even level, according to one analyst. The agency loss grew from pounds 1.74m to pounds 2.18m.

Because much of the profit from each sale is made through life assurance and mortgage sales, he said 375 more sales would have been needed to eliminate the pounds 700,000 loss made at group level.

That compared with a pounds 13.3m profit last year, when the interim result was boosted by the sale of Hambro Legal Protection, for a gain of pounds 11.4m.

The figures were also hit by a pounds 1.8m provision against the company's gilt investments following the sharp fall in bond markets earlier this year. New regulatory guidelines have also increased administrative expenses.

Analysts took the red pen to forecasts again yesterday with expectations reined back to pounds 3.5m for the full year, compared with earlier forecasts of pounds 19m.