Case study
Countrywide IPO,
share plans, risk audit
and investor relations
Background
Existing partnership
Countrywide is the UK’s leading provider of integrated
property services, employing approximately 11,500 people
nationwide. They are the UK’s largest estate agency and
lettings network, with around 1,300 estate agency and lettings
offices operating under 46 local high street brands.
Capita was Countrywide’s registrar before their period
of private ownership and was re-appointed to undertake
their IPO (initial public offering) largely thanks to the
success of their previous relationship. Already-established
connections with Countrywide’s broker and advisor meant
the partnership seamlessly picked up where it left off.
On 25 March 2013 Countrywide returned to the London Stock
Exchange (LSE), becoming Countrywide plc. This decision
followed a six year period of private ownership, during which
Countrywide strengthened their presence, products and strategy
in the UK and selected overseas locations through acquisitions.
These connections were invaluable due to the tight timescales
of the IPO. Further pressure was added due to Countrywide’s
re-organisation just before their offer, which affected the
structure of their discretionary Long Term Incentive Plan
(LTIP). These challenges were overcome through Capita
Asset Services’ involvement in each step of the IPO and
share plans, ensuring all key milestones were met.
Dedicated implementation team
SIP and LTIP plans
Capita Asset Services supported Countrywide pre- and postIPO with a dedicated implementation team. Our team worked
closely with Slaughter & May, Goldman Sachs, Jefferies
International and other members of the IPO syndicate,
coordinating meetings and actions. As a result, stakeholder
contribution to the IPO process was extremely efficient.
Capita Asset Services consulted with Countrywide on the design
of their Share Incentive Plan (SIP), launched in September 2013.
IPO success and press reaction
Emerging in a relatively quiet period for IPOs, Countrywide’s offer
generated excitement in the industry as a sign of an improving
market and received widespread coverage. Their return to
market was oversubscribed and included strong interest from
the US. Countrywide raised approximately £200 million.
We were impressed with the
support that we received from
Capita Asset Services. Their strong
working relationship with our advisors
and industry knowledge, as well as the
implementation team’s joined up approach,
meant that the IPO process ran smoothly.
Gareth Williams, Head of Legal, Countrywide
Employee focus
Countrywide attribute their success to the recruitment, support
and development of their employees. So it wasn’t a surprise that
their employees were allotted a portion of shares at IPO which
they could sell or pass on to their spouse. As a result, staff from
across Countrywide were involved in the IPO planning stages.
Capita Asset Services ensured processes around the sale of
shares were administered in accordance with market practice
and worked with the company and employees so that they were
fully engaged and completed the necessary paperwork in time.
The HMRC-approved plan offered Countrywide staff the
opportunity to invest between £10 and £150 per month through
salary deductions to purchase ‘Partnership Shares’. On top of
these, Countrywide gave their employees further advantage
by awarding them a matching share for every two ‘Partnership
Shares’. Additionally, if shares are invested for at least five years,
no PAYE tax or NIC will be dedicated when employees sell them.
Employees were required to have worked for Countrywide for 18
months in order to be eligible for the SIP. This meant that 6,500
employees were eligible for the plan, of this number around
30% took up the offer – exceeding expectations. This was an
attribute to the plan’s attractive design and internal promotions.
We appreciated Capita Asset Services’
valuable experience whilst deciding
on our share plans proposition.
Its success was a true attribute to the plan’s
design and communication programme.
Marie Jay, Group Head of HR, Countrywide
Countrywide also kept in place their £20m discretionary
LTIP. The board annually invites Executive Directors and
other senior employees to take part, giving them the
opportunity to acquire a number of shares over three years.
The SIP had an online application process via the share
portal, allowing Countrywide to track the take up of
their offering through daily automatic reports.
Capita Asset Services also provided a share option valuation
service for the LTIP. This was one of the larger valuations of
its kind, comparing market based options against all of the
FTSE 100, as opposed to two or three companies. Countrywide
gained a comprehensive report in order for them to make
well-informed decisions about their employee offer.
On-going relationship
Risk audit
Bespoke investor relations service
Following their IPO, Countrywide came to Capita Asset Services
with further requirements for advice on risk identification
and measurement; and a bespoke risk register database.
Their in-house internal audit resource and Legal Counsel
needed assistance so they looked to Capita Asset Services.
We used our extensive experience of risk management and
financial audits to advise and to create a bespoke solution
for Countrywide and as a result they were pleased to be able
to continue the partnership and stay with one supplier.
As Countrywide’s registrar, Capita Asset Services were in an
ideal position to track their investor activity from the launch
of their IPO. Before the launch, we offered to report on share
movements at monthly intervals, as from experience we knew
this information would be invaluable to Countrywide post IPO.
Capita Asset Services researched and advised on Countrywide’s
risks. We led weekly meetings with their in-house counsel and
internal audit team to discuss progress, and ultimately identified
24 key risks facing the group. We subsequently advised on the
impact and likelihood of these risks across Countrywide in order to
ensure they were appropriately mitigated within the tolerance of
their risk appetite. A tool was designed to store their internal risk
register and was rolled out at a workshop with senior employees
where Capita Asset Services ensured the system’s continued use.
We were very pleased with the
assistance provided by Capita
Asset Services in developing
our bespoke Group Risk Register. They
were most helpful in building on our
previous risk management system and
have provided us with a very valuable tool
for the future management and audit of a
comprehensive set of risk and controls.
Jonathan Davies, Head of Internal Audit, Countrywide
One month after the launch, Capita Asset Services produced
the first monthly share analysis report showing all buying and
selling activity since flotation. The format of this report was
tailored to Countrywide’s senior management’s requirements.
In addition, given the volume, interest and liquidity of
Countrywide’s IPO they wanted to undertake monthly
shareholder identification in order to understand who was
buying and selling shares at a beneficial level. Direct access to
their share register meant Capita Asset Services were able to
provide monthly reports that identified the ultimate owners.
Our team are continuing to monitor beneficial
shareholder movements and consult with Countrywide
on shareholder activity between monthly reporting. We
are also maintaining strong working relationships with
Countrywide’s advisors and brokers, sharing information
on shareholder movements to boost share activity.
Working with Capita Asset Services
gives us the unique opportunity
to have our share register and IR
analysis under one roof, allowing a faster
and more complete way to access our
shareholders. This has helped us to create a
well-informed investor relations strategy.
Gareth Williams, Head of Legal, Countrywide
SS13701