E-conveyancing giant warns of 'restructuring' and 'right-sizing'
MDA – the e-conveyancing systems group whose UK business includes the NLIS search channels Searchflow and Transaction Online – has issued a warning warned that its Q3 earnings will be below expectations given on-going weakness in the UK housing and lending market. The group is in the process of restructuring and right-sizing its UK products business.
Investment analysts Scotia Capital comment “We believe that MDA's management is being proactive in dealing with a deteriorating UK housing market. Our view is that the key catalyst to stabilizing the UK property market and positioning MDA's operations for improved trading conditions is improved liquidity in the UK mortgage market.
“We are now forecasting housing sales in the UK of ~600,000 (previously 770,000) for 2008 as housing and mortgage markets continue to deteriorate. We will revisit our financial forecasts when the firm reports Q3 on October 29. We continue to be cautious regarding MDA's shares in the near term, as the firm faces significant pressure from sharp cyclical declines in the UK and US mortgage and housing markets.”