Getting in at the bottom

As interested observers of the carnage at Humberts we applaud the choice of the former finance director of Countrywide to be the new CEO (Mr Michael Nower). Following the ill-considered spending spree of the previous management team, he inherits a top heavy business full of high street agents with legacy cash payments still owing on many of the purchases. So Mr Nower clearly has his work cut out.

But we must not forget that Mr Nower was part of the team that sold Countrywide to the private equity firm Apollo right at the top of the marketin March 2007 for the princely sum of £1 billion. Given that Savills stockprice has fallen by more than 55 per cent between then and now, Mr Nower andhis colleagues probably saved at least £500 million for their shareholders at Apollo's expense. Respect due, although don’t forget that the Countrywide management team did also try an MBO before the sale which was (fortunately for them) rejected by shareholders.

Having demonstrated his ability to sell at the top, Mr Nower clearly believes he is getting into Humberts at the bottom - as he is reportedly being paid only in Humberts shares (which is pretty much all that is left right now. But whilst flipping Countrywide at a fat price to a US private equity fund presumably ignorant of the brutality of British property cycles is one thing, turning around a company with a fundamentally flawed business model is something very different.

We will monitor the patient with great interest.