TIDMLSL
RNS Number : 8486Y
LSL Property Services
28 February 2013
For immediate release 28 February 2013
LSL Property Services plc ("LSL")
PRELIMINARY ANNOUNCEMENT
LSL Property Services plc, a leading provider of residential
property services incorporating both estate agency and surveying
businesses, announces preliminary results for the year ended 31(st)
December 2012.
Highlights 2012 2011 % Change
------------------------------------------------------------ ------ ------ ---------
Group Revenue GBPm 243.8 218.4 +12
Group Underlying Operating Profit(1) GBPm 35.1 31.1 +13
Overall operating margin % 14.4 14.2 +0.4
------------------------------------------------------------ ------ ------ ---------
Like-for-like Group revenue (2) GBPm 216.6 215.7 +0
Like-for-like Group Underlying Operating Profit (1,2) GBPm 27.9 30.5 -9
Like-for-like operating profit margin % 12.9 14.2 -1.3
------------------------------------------------------------ ------ ------ ---------
Profit before tax GBPm 6.7 17.6 -62
Underlying Profit before tax GBPm 32.5 29.3 +11
Basic Earnings per share - pence 6.8 12.9 -47
Adjusted Basic Earnings per share - pence 23.8 21.0 +14
Cash inflow from operations GBPm 32.6 24.3 +34
Net Bank Debt GBPm 26.6 35.7 -25
Final proposed dividend per share - pence 6.4 5.9 +8
Full year dividend per share - pence 9.5 8.7 +9
------------------------------------------------------------ ------ ------ ---------
-- Impressive growth in the Estate Agency Division
-- Investment in lettings, financial services and
counter-cyclical income streams yielding strong returns
-- Solid first full year performance from Marsh & Parsons -
major platform for growth
-- Surveying division constrained by impact of contract renewals
and declining lender market share
-- Costs for professional indemnity (PI) claims have tracked as
expected since June 2012
-- Extremely cash generative. Cash inflow from operations up 34%
to GBP32.6m and GBP6.3m generated from disposal of freehold
properties
-- Net Bank Debt(3) reduced by 25% to GBP26.6m at 31(st)
December 2012 (31(st) December 2011: GBP35.7m)
-- Full year dividend up 9% to 9.5 pence per share
______________________________
(1) Underlying Operating Profit is before exceptional costs,
contingent costs, amortisation of intangible assets and share-based
payments
(2) Excluding Marsh & Parsons which was acquired in November
2011
(3) Refer to note 7 for the calculation
Commenting on today's announcement, Roger Matthews, Chairman,
said:
"LSL has made strong progress in 2012 despite continued
challenging market conditions. The Group reported double digit
revenue growth in 2012 and is in a stronger position than a year
ago with the Estate Agency Division demonstrating significant
organic growth potential. We remain committed to our strategy of
driving organic growth in all parts of the business and plan to
invest further in Lettings and to focus on growing market share in
the Estate Agency division to maintain our excellent progress. We
will also continue to invest in our Financial Services division and
expand the provision of Surveying services to private buyers.
The Group continues to be extremely cash generative and
maintains a strong balance sheet, having reduced the level of net
debt by 25% to GBP26.6m. We remain confident that pursuing a
strategy of investment in organic growth initiatives combined with
acquisitions will deliver increased shareholder value into the
medium term even without a recovery in market conditions."
For further information, please contact:
Simon Embley, Group Chief Executive Officer
Steve Cooke, Group Finance Director
LSL Property Services plc 0207 382 0360
Richard Darby, Sophie McNulty, Helen Greenwood
Buchanan 0207 466 5000
Notes to Editors:
LSL is a leading provider of residential property services to
its key customer groups. Services to consumers include: residential
sales, lettings, surveying, conveyancing and advice on mortgages
and non investment insurance products. Services to mortgage lenders
include: valuations and panel management services, asset management
and property management services. For further information, please
visit LSL's website: www.lslps.co.uk
Chairman's Statement
Introduction
I am pleased to report that the Group made strong progress
during 2012 with revenue up by 12%, Group Underlying Operating
Profit up by 13% and adjusted Basic Earnings per share up 14%,
despite there being no improvement in market transaction levels.
The Estate Agency Division had an excellent year as strong
like-for-like growth combined with a first full year contribution
from Marsh & Parsons more than offset a difficult year in the
Surveying Division due to the impact of major contract renewals.
Since the exceptional provision for PI claims of GBP17.3m was
reported in the 2012 half year accounts, the rate and average cost
of claims have run in line with expectations.
The business is extremely cash generative and net bank debt at
31(st) December 2012 has been reduced by 25% to GBP26.6m (2011:
GBP35.7m). Investment to drive organic growth within the Estate
Agency Division has continued during the year, particularly in
Lettings, and two bolt-on acquisitions have been made in the South
East.
I am delighted to report an increase in our proposed final
dividend of 8% to 6.4 pence per share (2011: 5.9 pence). This
increases the total dividend for the year by 9% to 9.5 pence per
share (2011: 8.7 pence).
The quality of the Group's earnings has been transformed since
the sharp decline in the housing market in 2007. This is evidenced
by the extent to which profits are now driven by counter-cyclical
and non-cyclical income from lettings and asset management.
Increasing income from these activities remains a key strategic
priority as well as increasing the Group's exposure to the prime
Central London market.
In addition, the business is in a stronger position than a year
ago. The Estate Agency division has demonstrated its significant
organic growth potential, which we will exploit through further
investment. We will continue to strengthen our position in the
prime central London market, where it is planned to open a number
of new Marsh & Parsons branches during the year.
Financial Results
Group revenue increased by 12% to GBP243.8m (2011: GBP218.4m)
and Group Underlying Operating Profit increased by 13% to GBP35.1m
(2011: GBP31.1m). Group Underlying Operating Margin increased from
14.2% to 14.4%. On a like-for-like basis, excluding Marsh &
Parsons, Group revenue increased slightly to GBP216.6m (2011:
GBP215.7m). On the same basis, Group Underlying Operating Profit
decreased by 9% to GBP27.9m (2011: GBP30.5m) due to contract
renewals and the impact of a challenging market in the Surveying
Division.
The Estate Agency Division delivered a 138% increase in
Underlying Operating Profit to GBP24.4m (2011: GBP10.3m). On a
like-for-like basis, excluding Marsh & Parsons, Underlying
Operating Profit increased by 78% to GBP17.2m (2011: GBP9.7m). This
performance was delivered despite no significant improvement in
transaction levels. House purchase approvals increased by 7% in the
first half of the year and then decreased by 1% in the second half,
resulting in a full year increase of 3% to 610,000 (2011: 593,000).
Repossession volumes fell by 5% to 33,900 in the year (2011:
35,800). The Estate Agency Division benefitted from a strong full
year contribution from Marsh & Parsons, excellent growth in
Lettings and Financial Services, exchange income fee growth and
increased market share in Asset Management.
The Surveying Division revenue was impacted, as expected, by key
contract renewals and also by continued decline in market
transaction levels, compounded by further reductions in market
shares of certain key lender clients. Total mortgage approvals
decreased by 6% to 1.16m (2011: 1.23m), including a 12% decrease in
remortgages to 340,000 (2011: 387,000). Surveying Division revenue
decreased by 19% and Underlying Operating Profit was GBP13.9m
(2011: GBP23.7m) with Underlying Operating Margin of 22.4% (2011:
31.0%). However, the Surveying Division continues to provide
industry leading service levels to clients which together with
excellent growth in revenue from the provision of surveying
services to private buyers, provide a sound platform for
growth.
Since making the additional PI provision of GBP17.3m at the 2012
half year, PI costs have tracked in line with expectations for the
period since 1(st) July 2012. The run rates of new claims and costs
per claim have been consistent with the assumptions made in setting
the 'Incurred But Not Reported' (IBNR) element of the total
provision which relates to costs estimated to be received in the
future relating to valuations undertaken during the 2004 to 2008
high risk lending period. Setting the correct level of IBNR
provision is highly subjective as it is extremely sensitive to
small changes in assumptions relating to run rates of new claims
and costs per claim.
Profit before tax, amortisation and exceptional costs increased
by 13% to GBP35.1m (2011: GBP31.1m). Total exceptional costs of
GBP17.7m (2011: GBP2.0m) included PI costs of GBP17.3m. In
addition, a non-cash charge of GBP4.2m (2011: GBP0.2m) was made
relating to employment related contingent consideration in
acquisitions. Amortisation of intangible assets during the year
reduced to GBP3.5m (2011: GBP8.5m) following the ending of the
C&G contract for valuation and associated panel management
services. Profit before tax was GBP6.7m (2011: GBP17.6m) and profit
after tax was GBP7.0m (2011: GBP13.2m). On an adjusted basis,
earnings per share increased by 14% to 23.8p (2011: 21.0p).
Cash generated from operations increased by 28% to GBP26.9m
(2011: GBP21.3m) after capital expenditure of GBP5.7m (2011:
GBP3.2m). Operating cashflow included PI payments made in the year
of GBP7.7m (2011: GBP2.9m). The increase in PI cash costs was
partly driven by the overall increase in PI claims during 2012 and
also by an acceleration in the rate of negotiated settlements with
some lender claimants.
Net Bank Debt at 31(st) December 2012 reduced by 25% to GBP26.6m
compared to GBP35.7m at 31(st) December 2011 having invested
GBP3.9m in acquisitions and making a further investment in Zoopla.
Offsetting these investments were proceeds of GBP6.3m from the
successful freehold disposal programme which generated an
exceptional profit of GBP1.4m. The current level of debt is almost
identical to that in December 2009 (GBP25.8m) and despite market
volumes being 12% lower in 2012 compared to 2009, LSL operating
profit has increased by 24% over the same period.
Net assets increased to GBP76.1m at 31(st) December 2012 (2011:
GBP72.4m) including a GBP10.7m valuation uplift following a review
of the fair value of the investment in Zoopla.
Dividend
As a result of the improved operating performance of the Group,
the reduction in Net Bank Debt and the Board's positive view of
future prospects for the business, an increased final dividend of
6.4p per share (2011: 5.9p) will be proposed to shareholders at the
forthcoming AGM, increasing the total dividend for 2012 by 9% to
9.5p per share (2011: 8.7p per share). The ex dividend date for the
final dividend is 10(th) April 2013 with a record date of 12(th)
April 2013 and a payment date of 10(th) May 2013. Shareholders have
the opportunity to elect to reinvest their cash dividend and
purchase existing shares in LSL through a dividend reinvestment
plan.
Developments
The Estate Agency Division performed exceptionally well with all
key income lines advancing strongly on a like-for-like basis
against a broadly flat market backdrop. The business is making very
good progress towards the medium term profit per owned branch
target of GBP30k-GBP50k which we set in 2011. In 2012, profit per
owned branch, excluding Marsh & Parsons, increased to GBP21k
from GBP6k in 2011.
We have made significant investment in our Lettings business
over the last two years, adding a total of 101 new colleagues, and
this helped to deliver a revenue increase in the year of 23% to
GBP35.8m (2011: GBP29.1m) excluding Marsh & Parsons.
Residential Sales income, excluding Marsh & Parsons, increased
by 6% to GBP58.1m (2011: GBP54.7m) mainly due to an increase in the
average fee.
Total Financial Services income delivered through our Estate
Agency Division branches and Financial Services intermediary
networks increased by 15% during 2012 and has now increased by over
150% over the last three years as a result of the successful roll
out of Financial Services to the ex Halifax Estate Agency Limited
branches and the acquisition of new intermediary networks in 2010.
In total the Group arranged mortgage lending of GBP7.1bn during
2012 (2011: GBP6.8bn) out of a total intermediary lending market
estimated at GBP72bn.
Marsh & Parsons delivered a good result with instructions
increasing by 2% and revenue by 2% to GBP27.3m (2011: GBP26.6m).
Operating profit increased by 6% to GBP7.2m (2011: GBP6.8m). The
new Earls Court office has performed well and a second opening in
Kensington that had originally been planned for the fourth quarter
opened in January 2013. The Group is targeting four new branch
openings in 2013, including Kensington.
Our Asset Management business also suffered from a challenging
market as repossession volumes fell by 5% to 33,900 (2011: 35,800).
Despite this the business once again increased market share and
revenue increased by 3% to GBP15.6m (2011: GBP15.2m). A new
property management contract was won and came on stream during the
year and investment is committed in 2013 to win further similar
contracts.
As reported in July 2012, we have continued to make selective
acquisitions and have added to our Estate Agency Division portfolio
in the South East with the purchase of Davis Tate and Lauristons
during 2012. Both businesses are performing well and have
significant growth potential which is one of our key acquisition
criteria. We will continue to search for similar acquisitions
funded from our strong cashflows.
We increased our shareholding in Zoopla in advance of the merger
with Digital Property Group and LSL now owns 4.8% of the new group.
Operating performance has been extremely strong since the merger in
the second half of 2012 and against this positive background the
Board has reviewed the fair value of the shareholding in Zoopla and
attributed a value equal to the price paid per share when LSL
acquired an additional stake in Zoopla in April 2012. The exercise
concluded that a fair value of the Zoopla group was GBP245m at
31(st) December 2012 and as a result we have increased the
valuation of our holding by GBP10.7m to GBP11.8m. We are excited
that LSL has a strategic stake in a group which has such strong
future prospects.
As expected, the Surveying Division has been impacted by the
effect of key contract renewals. In addition, certain key lender
clients have reduced their market share. However, we have continued
to invest in the provision of industry leading service levels and
have secured a number of contract renewals. We have now worked
through the renewal of all legacy contracts and margins are
expected to stabilise around current levels in the short term.
The main source of growth in the Surveying Division has been
through the provision of surveying services for private buyers.
This key strategic initiative which was started in December 2010
delivered an increase in revenue of 46% to GBP4.0m (2011: GBP2.8m)
in the year. The fourth quarter revenue run rate was GBP5.0m per
annum. The number of distribution channels has been expanded during
2012 and will be developed further in 2013.
Corporate Governance and Board
The Board is committed to high levels of corporate governance as
defined by the UK Corporate Governance Code.
In respect of 2012, the Board has conducted an annual review of
its effectiveness and that of its Committees, taking into account
the balance of skills, experience, independence and knowledge of
our businesses and we concluded that the Board and its Committees
are effective and are able to discharge their respective duties and
responsibilities effectively.
In addition, whilst no significant issues arose from the annual
evaluation, a number of recommendations were made to further
improve the effectiveness of the Board and these are being
implemented.
During the year, the Nominations Committee considered at length
the composition of the Board and I am delighted that Adrian Gill
was appointed to the Board as an additional independent Non
Executive Director with effect from 10th September 2012. Adrian
brings very relevant experience to the Board having been on the
Board of Connells Limited, one of the largest and most successful
estate agency businesses in the UK.
Amongst our Non Executive Directors, we now have experience in
strategy, estate agency, surveying, financial services, the
residential housing sector, retail and marketing, operations,
business services, entrepreneurial private and public companies,
finance, customer and employee matters and corporate
governance.
Other Board changes during the year included the retirement of
Paul Latham, Non Executive Director on 1(st) October 2012 and
Alison Traversoni, Executive Director for Surveying who stepped
down with effect from 31(st) December 2012, for family reasons.
We recognise the benefits of gender diversity and the current
Board composition includes one female Director, Helen Buck, who is
an independent Non Executive Director. Whilst we remain of the view
that the setting of targets for the number of female directors on
the Board is not necessary and that we will continue to appoint on
merit, I will ensure that our searches take into account diversity,
including gender.
LSL has also in 2012 continued to review gender diversity across
the Group building on the gender diversity survey undertaken and
reported on in 2011. Further detail of this study and its
conclusions are set out in our Corporate Social Responsibility
Report.
As Chairman, with the responsibility for leadership of the Board
I personally review its effectiveness on all aspects of its role
and encourage feedback. This is in addition to regular evaluations
of each Director to ensure that all Board members receive regular
and relevant updates to assist them in their roles ensuring the
continual refreshment of skills and knowledge.
People
The number of Group employees decreased slightly by 2% to 4,754
(2011: 4,831) due principally to the expiry of the C&G
contract. We did however welcome a large number of new colleagues
to the Group as a direct result of the success of our strategy of
pursuing both organic and acquisitive growth. I would like to
welcome to all new colleagues to the Group and to wish them every
success in their careers with LSL.
The delivery of our strong financial results in 2012 was based
on the commitment of all of our colleagues to providing the best
possible service to all of our customers, invariably against
challenging market conditions. I would like to thank all of our
employees for their hard work and commitment during the year.
Current trading and outlook
Market conditions remained challenging during 2012 with
transaction levels at less than half of historic norms. It is still
too early to judge whether there will be a significant positive
impact on the market from the Government's 'Funding for Lending'
scheme. Overall the group retains a cautious view of the
market.
LSL is committed to its strategy of driving organic growth in
all parts of the business, which will more than offset the
remaining first half year impact of the C&G contract in the
Surveying Division. We intend to invest further to maintain our
excellent progress in lettings but also to increase market share in
estate agency, to maximise the new branch opening programme in
Marsh & Parsons and to win new business in Corporate Lettings
and Asset Management. We will also continue to grow Financial
Services revenue and to expand the provision of Surveying services
to private buyers. Trading to the end of February 2013 has been in
line with expectations. Progress on all key initiatives has been
running to plan.
The Group's balance sheet is strong with relatively low levels
of gearing underpinned by strong cash generation. We will continue
with a prudent approach to leverage but we still have considerable
scope to pursue a strategy of further organic investment
initiatives and selective acquisitions. The Board is confident that
this strategy will deliver increased shareholder value into the
medium term, even without a recovery in market conditions.
Roger Matthews
Chairman
28(th) February 2013
Estate Agency and Related Services
The Estate Agency Division performed exceptionally well with all
key income lines advancing strongly against a broadly flat market
backdrop.
Actual - including Like for Like - excluding
Marsh & Parsons Marsh & Parsons
2012 2011 % 2012 2011 %
Financial GBPm GBPm change GBPm GBPm change
------------------------ ------- ------- ------- --------- -------- --------
Exchange fees 72.0 56.7 27 58.1 54.8 6
Lettings income 48.0 29.5 63 35.8 29.1 23
Asset Management
income 14.3 13.9 2 14.3 13.9 2
Financial Services
income 31.8 27.6 15 31.8 27.6 15
Other income(1) 15.5 14.1 10 14.4 13.8 4
Total income 181.6 141.8 28 154.4 139.2 11
Operating expenditure (157.2) (131.5) 20 (137.2) (129.5) 6
Underlying Operating
Profit 24.4 10.3 138 17.2 9.7 78
------------------------ ------- ------- ------- --------- -------- --------
KPIs
------------------------ ------- ------- ------- --------- -------- --------
Exchange units 27,762 27,398 1 26,966 27,297 (1)
Market Share (%) 4.55 4.62 (1) 4.42 4.60 (4)
Underlying Operating
Margin (%) 13.5 7.2 86 11.1 7.0 60
Fee per unit 2,596 2,070 25 2,154 2,005 7
------------------------ ------- ------- ------- --------- -------- --------
1 'Other income' includes franchising income, conveyancing
services, EPCs, Home Reports, utilities and other products and
services to clients of the branch network.
Estate Agency Performance
It has been a year of transformation for LSL with the
profitability of the Estate Agency Division, excluding Marsh &
Parsons, growing to a level 31% higher than that delivered at the
peak of the market in 2006 when transaction volumes were more than
twice the volume of 2012. Furthermore the quality of the Estate
Agency Division's earnings has also significantly improved over the
period since 2007, given the extent to which profits are now driven
by counter-cyclical and non cyclical income from Lettings, Asset
Management and exposure to the prime Central London market through
Marsh & Parsons.
The Estate Agency Division delivered a strong performance in
2012 with excellent growth in Lettings and Financial Services
income streams. The number of mortgage approvals for house
purchases increased by 7% in the first half of the year and then
decreased by 1% in the second half, resulting in a full year
increase of 3% to 610,000 (2011: 593,000) which compares to
historic normalised levels of 1.2m.
Against this background, total Estate Agency Division income
increased by 28% to GBP181.6m (2011: GBP141.8m) and on a
like-for-like basis by 11% to GBP154.4 m (2011: GBP139.2m).
Underlying Operating Profit increased by 138% to GBP24.4m (2011:
GBP10.3m) and on a like for like basis by 78% to GBP17.2m (2011:
9.7m).
Estate Agency Division Branches
Your Move, Reeds Rains and the LSLi brands all continued to
perform well during the year despite no significant improvement in
transaction levels. Residential Sales income increased by 6% to
GBP58.1m (2011: 54.8m) on a like-for-like basis due mainly to an
increase in the average fee. Average fees increased by 7% on a
like-for-like basis to GBP2,154 (2011: GBP2,005).
The Estate Agency Division has identified a number of key
initiatives including investment in additional staff into the
branches to continue to drive both market share growth as well as
average fee during 2013. We will continue to increase our market
share of higher value properties, which is challenging in the
prevailing market conditions. LSL has had some success in this area
already and it remains a major opportunity for the future.
Counter-Cyclical Income
The counter cyclical income streams of Lettings and Asset
Management are particularly important to LSL in current market
conditions. In 2012 LSL has continued to focus on growing Lettings
income and additional 101 employees have been recruited over the
last 2 years to help drive a 23.4% increase in like-for-like
Lettings to GBP35.8m (2011: GBP29.1m). Excluding Marsh &
Parsons, Lettings income was 61.7% of the level of Residential
Sales in 2012 and LSL's objective is to raise Lettings income to a
similar level to Residential Sales income, as has been achieved in
Marsh & Parsons where the ratio is 87.4%.
Additional Lettings consultants will continue to be recruited in
2013 to further drive Lettings income. In addition, LSL's call
centre 'The Bridge' which was launched in January 2011 to drive
Residential Sales instructions, will be expanded in 2013 to also
drive Lettings instructions.
Despite the uncertain economic conditions impacting the housing
market, repossession volumes fell by 5.3% to 33,900 in 2012 (2011:
35,800). We are pleased that LSL's market share in Asset Management
has increased during the year with revenue up by 2.3% to GBP14.3m
(2011: GBP13.9m) in a declining market. LSL's Asset Management
business is well positioned to capitalise on an increase in
repossession volumes when they eventually occur.
The Group now benefits from total counter-cyclical income from
Lettings and Asset Management of GBP62.3m compared to GBP43.5m in
2011 and only GBP12.8m in 2007 before the launch of LSL's Asset
Management businesses.
Financial Services
Total Financial Services income delivered through to the Estate
Agency Division's branches and intermediary networks increased by
15% during 2012 to GBP31.8m (2011:GBP27.6m). It has now increased
by over 150% in the last three years as a result of the successful
roll out of Financial Services to the ex HEAL(1) branches and the
acquisition of new intermediary networks in 2010. In total the
Group arranged mortgage lending of GBP7.1bn during 2012 (2011:
GBP6.8bn) out of a total intermediary lending market estimated at
GBP72bn.
(1) Halifax Estate Agency Limited
Marsh & Parsons
Marsh & Parsons delivered a good first full year
contribution with revenue increasing by 2% to GBP27.3m (2011:
GBP26.6m(2) ) and operating profit increasing by 6% to GBP7.2m
(2011: GBP6.8m(2) ).
During 2012, a new office was opened in Earls Court which is
performing well. A second opening in Kensington, which was
originally planned for the fourth quarter of 2012, actually opened
in January 2013. The Group is targeting a further three new branch
openings in 2013.
(2) Includes the results prior to the acquisition in November
2011
Developments
The main Estate Agency developments during 2012 were continued
investment in Lettings, consolidating the success of 'The Bridge'
call centre in driving new instructions to branches and securing a
strong first year performance from Marsh & Parsons while
continuing the branch roll out programme.
We have also invested significantly in Asset Management to win
new property management contracts and successfully brought the
first of these on stream during 2012.
In addition we have grown Financial Services income across our
intermediary networks, trading as Pink, First Complete and Linear.
We are in the process of rolling out a new common platform across
these businesses which will improve customer service and increase
operational efficiency.
During 2012, the Group has continued to make selective
acquisitions and have added to our Estate Agency Division in the
South East through the acquisitions of Davis Tate and
Lauristons.
Looking forward to 2013 we will continue with the same strategy
focusing in particular on investment in lettings and residential
sales, rolling out new branches in Marsh & Parsons and
investment in Asset Management. We will continue to identify
selective acquisitions funded from our strong cashflows.
Regulation
First Complete and Advance Mortgage Funding are both directly
authorised by the Financial Services Authority in relation to the
sale of mortgage, pure protection and general insurance products.
Your Move, Reeds Rains Financial Services and Reeds Rains along
with the LSLi subsidiaries are all appointed representatives of
First Complete, while Linear Mortgage Network is an appointed
representative of Advance Mortgage Funding for mortgage and
insurance business and also an appointed representative of Openwork
Limited (Openwork) (for investment business). Reeds Rains is also
an appointed representative of Letsure Limited for the sale of rent
indemnity insurance.
As a result of Linear Mortgage Network's appointment by
Openwork, LSL has a small indirect shareholding of Openwork.
Awards 2012 & 2013
The Estate Agency Division businesses, achieved the following
industry awards demonstrating LSL's continued commitment to
customer services.
LSL Land & New Homes
Estate Agency of the Year Awards 2012, sponsored by the Sunday
Times:
- Best New Homes - Silver Award
The Bridge
South West Contact Centre Awards:
- Team Leader of the Year Award 2012
- Finalist in the Training Category
LSL Corporate Client Department
Mortgage Finance Gazette Awards 2013:
- Best Debt and Arrears Strategy (non-lenders) - Highly Commended
The Negotiator Awards 2012:
- Property Manager of the Year - Highly Commended
Mortgage Finance Gazette 2012:
- Excellence in Treating Customers Fairly (non lender) Award.
Your Move
Estate Agency of the Year Awards 2012, sponsored by the Sunday
Times:
- Best Financial Services - Silver Award
- Prestige Agency - Bronze Award
Negotiator Awards 2012:
- Winner - Franchise of the Year
- Highly Commended - National Estate Agency of the Year
- Highly Commended - Residential Mortgage Broker of the Year
Lettings Agency of the Year Awards 2012, sponsored by the Sunday
Times:
- Silver - Best Lettings Agency Franchise
- Silver - Best Student Lettings Agency
- Bronze - Best UK Large Lettings Agency
Reeds Rains
Estate Agency of the Year Awards 2012, sponsored by the Sunday
Times:
- Best Financial Services - Silver Award
Lettings Agency of the Year Awards 2012, sponsored by the Sunday
Times:
- Best Lettings Agency in Northern Ireland - Gold Award
Marsh & Parsons
Estate Agency of the Year Awards 2012, sponsored by the Sunday
Times:
- Best Customer Service - Gold Award
- Best London Estate Agency (Medium) - Gold Award
- Best Website - Silver Award
The Negotiator Awards 2012:
- National Estate Agency of the Year - Winner
Lettings Agency of the Year Awards 2012, sponsored by the Sunday
Times:
- Best Medium Lettings Agency in London - Gold Award
LSLi - Jon Cooke, MD
Estate Agency of the Year 2012 as Sponsored by the Sunday Times
- Outstanding Contribution to Estate Agency:
Jon Cooke, LSLi MD received the Award in acknowledgement of his
long term commitment to the estate agency industry. This includes
his passion for ensuring a high standard of service to the public,
his talent for providing diverse opportunities and advice to fellow
estate agents and his philanthropic contribution to the community
as demonstrated by his creation of the Zoopla British property
Cycle event.
Intercounty
Estate Agency of the Year Awards 2012, as sponsored by the
Sunday Times:
- South East Lettings Agency of the Year - Silver Award
Pink Home Loans
Financial Advisor 5 Star Awards - 2012 - winner of Mortgage
category
Financial Advisor 5 Star Awards - 2011 - winner of Mortgage
category
Mortgage Strategy Awards - 2012 - runner up in the Best Mortgage
Network Category
Mortgage Strategy Awards - 2011 - finalist in the Best Mortgage
Network Category
Linear Mortgage Network
Mortgage Strategy Awards 2012:
- Winner - Best Broker for Protection
- Finalist - Best Broker for General Insurance
Mortgage Strategy Awards 2011
- Winner - Best Broker for Protection
First Complete
Mortgage Strategy Awards 2012:
- Winner - Best Mortgage Network
- Finalist - Best Network
Mortgage Strategy Awards 2011:
- Finalist - Best Mortgage Network
Surveying and Valuation Services
The Surveying Division revenue was impacted, as expected, by key
contract renewals and continued decline in market transaction
levels.
2012 2011 %
Financial GBPm GBPm Change
------------------------------- ------ ------ -------
Revenue 62.2 76.6 -19
Operating expenditure (48.3) (52.9) -9
Underlying Operating Profit 13.9 23.7 -41
------------------------------- ------ ------ -------
KPIs
------------------------------- ------ ------ -------
Profit margin (%) 22.4% 31.0%
Jobs performed (000s) 408 500 (18%)
Revenue from private surveys
(GBPm) 4.0 2.8 46.%
Income per job (GBP) 152 153 (1%)
PI insurance (Balance Sheet)
provision at 31 Dec (GBPm) 24.2 9.6 151%
Number of surveyors 378 425 (11%)
------------------------------- ------ ------ -------
Surveying Division Performance
Turnover fell by 19% to GBP62.2m (2011: GBP76.6m) with the total
numbers of jobs performed reducing by 18% to 408,000 (2011:
500,000). This was driven by a decline in total mortgage approvals
during 2012 which decreased by 6% to 1.16m, further adverse changes
in lender market share and the impact of key contract renewals
including the ending of a key contract in June 2012, due to a
decision by the lender client to transfer their valuations and
associated panel management instructions back in-house. Turnover
from this contract declined by GBP7.0m to GBP5.5m (2011:
GBP12.5m).
Against this difficult backdrop the Surveying Division has
traded well. It has continued to provide industry leading service
levels to clients and has made excellent progress in developing
surveying services for private buyers which has delivered
exceptional revenue growth of 46% to GBP4.0m in the year (2011:
GBP2.8m). This provides us with a strong platform for future growth
in this area.
Underlying Operating Profit was GBP13.9m (2011: GBP23.7m) and
the Underlying Operating Profit Margin was 22.4% (2011: 31.0%)
which reflected both the overall revenue decline and further
investment in provision of high service levels for all lender
clients. LSL has now successfully managed a difficult year of
legacy contract renewals. As part of the investment in the business
there was a switch towards the use of employed surveyors rather
than contractors though the total number of employed surveyors
decreased to 378 (2011: 425) as result of the expiry of the C&G
contract.
Since making the additional PI provision of GBP17.3m at the 2012
half year, PI costs have tracked in line with expectations. The run
rates of new claims and costs per claim have been consistent with
the assumptions made in setting the 'Incurred But Not Reported'
(IBNR) element of the total provision which relates to costs
estimated to be received in the future relating to valuations done
during the 2004 to 2008 high risk lending period. Setting the
correct level of IBNR provision is highly subjective as it is
extremely sensitive to small changes in assumptions relating to run
rates of new claims and costs per claim.
Surveying Division Developments
The major growth initiative in the Surveying Division has been
the expansion of provision of surveying services for private
buyers. This key strategic programme was only started in December
2010 and delivered an increase in revenue of 46.0% to GBP4.0m
(2011: GBP2.8m) in the year. The fourth quarter revenue run rate
was GBP5.0m. The number of distribution channels has been expanded
during 2012 and will be developed further in 2013.
e.surv Chartered Surveyors successfully renewed the Barclays
Bank plc surveying and valuation services contract for a 30 month
term commencing from 1(st) January 2012. Following Lloyds Banking
Group's decision to take the C&G contract in house, LSL has now
worked through the renewal of all legacy contracts and the Board
expects margins to stabilise around current levels in the short
term. The Surveying Division serves key lender clients through both
exclusive contracts and through panel management arrangements. LSL
is continuing to invest in the Surveying business in order to
maintain high service levels for all clients. During 2012 we have
successfully trialled a new tablet computer for surveyors to use
when performing valuations on site and this is now being rolled out
across all of our surveyors. Feedback from both key lender clients
and private customers has been consistently positive during 2012
and we are focused on meeting demanding key service measures. These
include turnaround time for valuations reflecting LSL's use of
innovative technology, including the new tablets, the flexibility
of the panel management arrangements and assisting lenders in the
management of the risk of mortgage fraud.
e.surv Chartered Surveyors Achievements/Awards 2012 &
2013
e.surv Chartered Surveyors, LSL's largest surveying business,
has achieved a number of awards and accreditations:
Equity Release Awards 2012 - Best Surveyor.
Mortgage Strategy Awards 2012 - the Best Surveyor/Valuer.
Sunday Times - Best Companies 2012 - one to watch. e.surv
Chartered Surveyors received this award in February 2012, having
come extremely close to being in the top 100 in 2011.
IIP Accreditation - The Investors in People accreditation was
once again achieved at the Head Office location in Kettering.
Managing Partners and European Leadership Awards 2012- Best
Innovation in Client Service or Relationship Management
Nominee:
Having been listed as a finalist at the MPF European Practice
Management Awards for Risk Management in 2011, e.surv Chartered
Surveyors has once again received a nomination in 2012. This time
the nomination for the Managing Partners and European Leadership
Awards relates to client services and relationship management.
These awards recognise the integrated and embedded approach and
active involvement to relationship management promoted by e.surv
Chartered Surveyors.
BSi ISO 9001 Accreditation:
e.surv Chartered Surveyors once again secured an extension to
its ISO 9001:2008, which was originally achieved in 1996. e.surv
Chartered Surveyors again conformed 100% to the requirements of the
internationally recognised standard, when independently reviewed by
the leading global provider of standards and certification body,
British Standards Institution (BSi). This also covers quality
management systems, maintained by the International Organisation
for Standardisation.
Financial Review
The key drivers of the financial performance of LSL in 2012 are
summarised below:
Income statement
Revenue
Revenue increased by 12% to GBP243.8m in the year ended 31(st)
December 2012 (2011: GBP218.4m). On a like-for-like basis,
excluding Marsh and Parsons, revenue increased slightly to
GBP216.6m (2011: GBP215.7m).
Operating Expenses Excluding Exceptional Costs, Amortisation and
Share Based Payment
Operating expenses increased by 12% to GBP211.1m (2011:
GBP189.0m). This was mainly due to investment in the Estate Agency
Division to support higher revenue. The average number of full time
equivalent employees during the year was 4,113 (2011: 3,930).
Underlying Operating Profit
Group Underlying Operating Profit increased by 13% to GBP35.1m
(2011: GBP31.1m) with the Underlying Operating Profit margin of
14.4% (2011: 14.2%).
Exceptional Items
Total net exceptional costs in 2012 were GBP21.4m (2011:
GBP2.4m). The main exceptional costs in 2012 were PI costs of
GBP17.3m; movements in the provision for contingent consideration
on acquisitions which were expensed through the P&L of GBP4.2m;
and redundancy and other associated branch closure costs including
onerous lease provisions of GBP1.9m. These costs were offset by a
gain on the sale of the freehold properties totalling GBP1.4m. In
2011, the main exceptional costs were acquisition costs of GBP1.6m
associated with the purchase of Marsh & Parsons.
Provision for PI claims/notifications
During 2012 the Group has seen a deterioration in claims
experienced relating to the 2004 to 2008 period, which was a period
of relatively high risk lending characterised by higher house
prices, high loan-to-value ratios and considerable levels of
buy-to-let and sub-prime lending. As a result the provision for PI
costs have been increased.
The PI provision was made up of a Specific Provision and
'Incurred But Not Reported' (IBNR). The Specific Provision was
based on the Group's review of any notifications or claims which
had been made against the Group as at 31 December 2012. The main
factors considered in quantifying the specific provision were the
likelihood that a claim would be successful, an assessment of the
likely cost for each claim, including any associated legal costs,
and whether any reduction in the claim is considered likely due to
contributory negligence of the lender.
The IBNR provision, was based on management's estimates on the
number of claims which would be received in the future with regard
to work completed before 31 December 2012. The Directors have then
applied an average cost per case, based on historical averages, to
estimate the IBNR provision.
The increase in the PI provision was partly driven by lenders,
most of whom are no longer active in the market, pursuing
notifications and claims previously considered dormant. It has also
been necessary to make additional provisions for existing claims
which are being aggressively pursued by lenders who often use
solicitors engaged on a no win, no fee basis. This trend has
increased recently in advance of April 2013 when it is expected
that the legislation governing civil litigation will change.
Both these factors have had a significant impact on the IBNR
provision required for notifications and claims estimated to be
received in the future for the 2004 to 2008 period. It should be
noted this was the Directors' best estimate of future claims and
the conclusions on the appropriate level of IBNR provision are
sensitive to small changes in assumptions and are therefore highly
subjective. The additional charge relating to the 2004 to 2008 risk
years has been included as an exceptional item.
Further, we have however continued to build a provision for
estimated PI costs relating to valuations completed since 2009, and
an Income Statement charge has been made in these results and the
charge has been considered as an operating expense rather than as
an exceptional cost.
Contingent consideration
The revised version of IFRS 3 Business Combinations which is in
place for acquisitions which occurred post 1(st) January 2010, has
tightened the criteria linking contingent consideration to service.
In acquisitions in 2011 and 2012, contingent consideration
arrangements have been accounted for as remuneration as the
arrangements involved the vendors forfeiting amounts otherwise due
if services were not provided.
The acquisition of Marsh & Parsons in November 2011 has
resulted in an exceptional expense of GBP1.8m (2011: GBP0.1m) in
2012. Assuming the level of profits and new branch openings remain
on forecast, this charge is expected to continue at this level
until 31(st) December 2015. The acquisitions of Davis Tate and
Lauristons in 2012 resulted in an exceptional expense of GBP2.3m
(2011: GBPnil), but the impact of these acquisitions on future
years will be far smaller unless there are significant changes in
the forecast profitability of these acquisitions.
Net Financial Costs
Net financial costs (excluding exceptional finance costs)
amounted to GBP2.9m (2011: GBP1.8m). The finance costs related
principally to interest and fees on the revolving credit facility,
however, GBP0.8m (2011: GBP0.4m) of the costs relates to the
unwinding of discounts on provisions.
Taxation
The effective rate of corporation tax for the year was 19.0%
(2011: 26.3%) excluding prior year adjustments. The effective tax
rate for 2012 and 2011 was impacted by non taxable income for joint
ventures, the impact of a rate change on the deferred tax
liability, contingent consideration recognised as an expense and
the impact of temporary differences on certain non-qualifying
properties no longer being recognised. Excluding these impacts the
effective tax rate is 28.6% (2011: 31.7%).
Adjusted Basic Earnings Per Share
The Adjusted Basic Earnings Per Share(3) was 23.8p (2011:
21.0p). The Directors consider this provides a better and more
consistent indicator of the Group's underlying performance.
(3) "Adjusted Basic Earnings Per Share" is defined at note 3 of
the Financial Statements
Balance Sheet
Capital Expenditure
Total capital expenditure in the year amounted to GBP5.7m (2011:
GBP3.2m). Most of the increase in capital expenditure was due to
expenditure by Marsh & Parsons which was acquired in November
2011. The majority of this spend was associated with new office
openings.
Financial Structure
As at 31(st) December 2012 net bank debt was GBP26.6m (2011:
GBP35.7m). LSL has a GBP75.0m revolving credit facility in place
until March 2014 (2011: GBP75.0m). The net debt decrease followed
the payment of GBP3.7m for various new acquisitions by the Estate
Agency Divisions, GBP0.9m to increase the Group's stake in Zoopla,
GBP2.2m repayment of other loans and in increase in dividend paid
in the year of GBP0.3m.
The revolving credit facility expires in March 2014, the
Directors have initiated discussions with a number of lenders to
refinance the facility. The refinance request has been received
positively by all lenders and the Directors do not believe that
there will be any issues in extending the facility and will look to
finalise negotiations in the first half of 2013.
Cash Flow
The Group produced GBP26.9m (2011: GBP21.1m) of operating
cashflow after capital expenditure of GBP5.7m (2011: GBP3.2m).
Cashflow was higher compared to the previous year due to the
increase in GroupUnderlying Operating Profit. During the year the
Group sold a number of freehold properties acquired as part of the
Halifax Estate Agency acquisition. Net proceeds of GBP6.2m (2011:
nil) were received generating an exceptional profit of GBP1.4m
Zoopla
In April 2012, the Group acquired a further 1.38% of Zoopla for
GBP0.9m. In August 2012, Zoopla merged with Digital Property Group
(DPG), owner of Findaproperty.com and Primelocation.com. As part of
the merger, any warrants held in Zoopla were exercised so that the
Group owned 4.81% of the post-merger entity. At 31(st) December
2012, the Board reviewed the fair value of Zoopla and assessed the
fair value to be GBP6.03 per share , in line with the price paid in
April 2012. This valued the Zoopla Group at GBP245m, with the
Group's share being GBP11.8m. This resulted in a GBP10.7m valuation
uplift being recorded through the fair value reserve.
Net Assets
The net assets as at 31(st) December 2012 were GBP76.1m (2011:
GBP72.4m).
Treasury & Risk Management
LSL has an active debt management policy and due to the cash
generative nature of the business, the Group's net bank debt
position at 31(st) December 2012 is GBP26.6m (2011: GBP35.7m). The
Group has an interest rate swap in place which fixes the interest
on borrowings up to GBP25.0m at an average LIBOR rate of 2.93%,
which provides a degree of predictability on finance costs. LSL
does not hold or issue derivatives or other financial instruments
for trading purposes.
International Financial Reporting Standards (IFRS)
The Financial Statements have been prepared under IFRS as
adopted by the European Union. LSL commenced reporting under IFRS
from 1(st) January 2005.
Principal Risks & Uncertainties
LSL's risk management arrangements form an integral part to its
overall framework for the management of risks and maintaining
internal controls. Through the framework, the Board continually
identifies, evaluates and manages the principal risks and
uncertainties faced by LSL and which could adversely affect its
business, operating results and financial condition.
This risk management and internal controls framework
includes:
a. Ownership of the risk management and internal controls
framework by the Board, supported by the Company Secretary, Head of
Risk & Audit and the Group Financial Controller;
b. A network of Risk Owners in each of LSL's businesses with
specific responsibilities relating to risk management and internal
controls;
c. The documentation and monitoring of risks are recorded and
managed through standardised risk registers which undergo regular
reviews and scrutiny by local boards and the Head of Risk &
Audit;
d. The Board regularly reviews a consolidated risk register as
part of the planning and reporting cycle to ensure that risks which
impact the Group are identified, monitored and mitigated; and
e. Reporting by the Chairman of the Audit Committee to the Board
on any matters which have arisen from the Audit Committee's review
of the way in which the risk management and internal control
framework has been applied together with any breakdowns in, or
exceptions to, these procedures.
Listed below are the risks which the Board has identified as
being significant, and therefore the principal risks and
uncertainties faced by LSL, together with details of key mitigation
initiatives, which are subject to regular review.
Principal Risk & Uncertainty Mitigation
------------------------------------------------------------- ----------------------------------------
The Board regularly focuses on
* The continued volatility and economic uncertainty counter-cyclical income streams
within the UK. In particular, within the UK housing to ensure that the growth in
market, transaction volumes (both house purchase and income in lettings and asset
remortgage) and house prices may adversely affect the management set off the impact
profitability and cash flow of all our key brands and of reduced transaction numbers.
businesses.
------------------------------------------------------------- ----------------------------------------
The Board regularly reviews trends
* The current economic uncertainty especially in the in market volumes and decides
financial sector (both within the Eurozone and the whether any actions such as cost
UK) could also impact on lender behaviour and the base reductions measures are
availability of mortgage credit which will have a required.
consequential impact on the housing market by
impacting mortgage availability.
------------------------------------------------------------- ----------------------------------------
Marsh & Parsons is a well managed
* LSL has an exposure to the Central London property business with a diversified strategy.
market via Marsh & Parsons. While historically the It operates in all key segments
London market has been more robust compared to the of the London market. The Board
rest of the UK, there is a risk that the London closely monitors the company's
market fails to grow or that LSL fails to maximise performance. Further, regular
the potential growth. reviews of trends in market volumes
are undertaken and decisions
made on any cost base reductions
measures.
------------------------------------------------------------- ----------------------------------------
There has been an increased investment
* Loss of key surveying or corporate services clients in customer services to retain
or contracts at their renewal date or significant existing clients and attract
reduction in volumes combined with pressure on fees, new ones. In addition, we are
either as a result of adverse market conditions, continuing to develop our private
market consolidation, competition or inadequate survey proposition to provide
service delivery. an alternative income stream.
------------------------------------------------------------- ----------------------------------------
Monitoring arrangements include
* Liability for inaccurate professional services advice oversight by the Board (including
to clients (e.g. inaccurate valuations) together with regular review of the PI provision)
the risk that LSL fails to maintain appropriate risk and appropriate quality controls
management arrangements. and Internal Audit reviews of
services provided on a sample
basis. There are also specific
operational controls implemented
within the Surveying Division
which include a risk based criteria
for the identification of transactions
to be reviewed by on-site specialists.
------------------------------------------------------------- ----------------------------------------
Regular monitoring by the Board
* Failure to effectively deliver and manage the market is undertaken on the Division's
share and fee growth initiatives for Estate Agency. progress.
------------------------------------------------------------- ----------------------------------------
LSL business units are supported
* Failure to comply with existing legislation/ by the Compliance and Legal Services
regulation or changes to legislation/regulation teams who closely monitor existing
and/or Government policy which may impact on business business practices and any reform
results or the UK housing market in general. proposals. Where appropriate
Government departments and/or
trade bodies are engaged in a
dialogue.
------------------------------------------------------------- ----------------------------------------
The Board is monitoring the impacts
* In response to the financial crisis, significant of these changes and assessing
changes to financial services regulations, including what changes to business practices
the mortgage market review and retail distribution may be required to ensure compliance
review are underway. with new legislation.
------------------------------------------------------------- ----------------------------------------
Dedicated in-house IT departments
* Failure or interruptions of Information technology with specialist staffing. Maintenance
services on which the Group is reliant for of a formalised business continuity
operational performance and financial information infrastructure and contingency
plans in the event of system
failure. Regular monitoring by
subsidiary management, external
specialists and Internal audit,
with any system issues highlighted
to the Board.
------------------------------------------------------------- ----------------------------------------
The Remuneration Committee reviews
* Loss of senior management who are key to delivering the remuneration policies of
the future growth strategy of the Group. the Group on an annual basis
to ensure staff are appropriately
incentivised. In addition, the
Nomination Committee considers
succession planning for key staff
on a regular basis.
------------------------------------------------------------- ----------------------------------------
LSL also faces other risks which, although important and subject
to regular review, have been assessed as less significant and are
not listed here. This includes some risks which were reported in
previous years' Annual Report & Accounts and which through
changes in external factors and careful management are no longer
material to the Group as a whole.
However, many risk factors remain beyond the direct control of
LSL and the risk management framework and procedures can only
provide reasonable but not absolute assurance that the principal
risks and uncertainties are managed to an acceptable level.
Further information relating to the management of these risks
and uncertainties is set out in the Corporate Governance Review
(Internal Controls) of the Annual Report & Accounts 2012.
Relationships
The Corporate Social Responsibility (CSR) statement in the
Annual Report details the arrangements for all LSL companies in
relation to:
-- Employment (including Equal Opportunities);
-- Health, Safety & Welfare;
-- Environmental; and
-- Social and Community Interests (including social and ethical issues).
Other than our shareholders, LSL's performance and value are
influenced by other stakeholders, principally our customers,
suppliers, employees, Government and our strategic partners. LSL's
approach with all these parties is founded on the principles of
open and honest dialogue based on a mutual understanding of needs
and objectives.
For example:
-- Lenders' relationships are managed via dedicated account
managers.
-- Employees are managed and consulted both on an individual
basis and via representative groups with LSL recognising Unite as
an employee representative body.
-- Group companies participate in relevant trade associations
and industry groups, such as Royal Institute of Chartered Surveyors
(RICS), the Association of Mortgage Intermediaries (AMI), the
National Association of Estate Agents (NAEA), the Association of
Residential Lettings Agents (ARLA), National Federation of Property
Professionals (NFoPP) and The Property Ombudsman (TPO), because
these give us genuine access to customer views and decision makers
in Government and other regulatory bodies.
-- Further, the Group aims to build partnerships with the
communities in which it operates and to offer support in addition
to providing employment and training, using local services and
suppliers where possible and paying taxes.
Environmental Matters
LSL recognises that the environment has an intrinsic value,
central to the quality of life and underpins economic development.
LSL understands that its stakeholders are interested in how LSL
manages its impact on the environment and how it is performing.
Further, stakeholders may also provide LSL with views and opinions
which can strengthen LSL's approach to environmental management.
Accordingly, LSL is committed to communicating on environmental
matters with all interested parties .Appropriate guidance and
training is also provided to all employees to ensure they have an
awareness of their impact on the environment and the role that they
play in managing the impact. During 2012, LSL began to prepare for
Mandatory Emission Reporting and in relation to which LSL will
commence reporting in 2014.
Group Income Statement
for the year ended 31(st) December 2012
2012 2011
Note GBP'000 GBP'000
--------- ---------
Revenue 2 243,845 218,381
Operating expenses:
Employee and subcontractor costs (142,224) (124,786)
Establishment costs (18,459) (15,886)
Depreciation on property, plant and equipment (3,499) (2,581)
Other (46,926) (45,734)
--------- ---------
(211,108) (188,987)
Rental income 1,120 1,044
Group's share of profit after tax in
joint ventures 1,283 679
Group operating profit before contingent
consideration, exceptional costs, amortisation
and share-based payments 35,140 31,117
Share-based payments (647) (787)
Amortisation of intangible assets (3,472) (8,472)
Exceptional (cost)/profit 4 (17,684) (2,048)
Contingent consideration 4 (4,152) (166)
Group operating profit 9,185 19,644
--------- ---------
Finance income 10 4
Finance costs (2,891) (1,874)
Exceptional finance costs 4 429 (182)
Net financial costs (2,452) (2,052)
Profit before tax 6,733 17,592
Taxation
- related to exceptional costs and contingent
consideration 5,288 570
- others (5,004) (4,927)
6 284 (4,357)
--------- ---------
Profit for the year 7,017 13,235
--------- ---------
Attributable to
- Owners of the parent 7,001 13,217
- Non-controlling interest 16 18
Earnings per share expressed in pence
per share:
Basic 3 6.8 12.9
Diluted 3 6.8 12.9
Adjusted - basic 3 23.8 21.0
Adjusted - diluted 3 23.8 21.0
Group Statement of Comprehensive Income
for the year ended 31(st) December 2012
2012 2011
GBP'000 GBP'000
------- -------
Profit for the year 7,017 13,235
------- -------
Revaluation of financial assets 10,677 -
Income tax effect (2,456) -
------- -------
Other comprehensive income for the year,
net of tax 8,221 -
Total comprehensive income for the year,
net of tax 15,238 13,235
------- -------
Attributable to
- Owners of the parent 15,222 13,217
- Non-controlling interest 16 18
------- -------
Group Balance Sheet
as at 31(st) December 2012
2012 2011
Note GBP'000 GBP'000
---------- ----------
Non-current assets
Goodwill 8 119,749 116,452
Other intangible assets 18,509 21,042
Property, plant and equipment 13,501 17,491
Financial assets 11,921 347
Investments in joint ventures 2,313 1,768
Total non-current assets 165,993 157,100
Current assets
Trade and other receivables 29,552 28,681
Current tax receivables 2,242 -
Cash and cash equivalents 7 225 435
---------- ----------
Total current assets 32,019 29,116
---------- ----------
Assets held for sale 1,097 -
---------- ----------
Total assets 199,109 186,216
---------- ----------
Current liabilities
Financial liabilities 7 (2,396) (2,246)
Trade and other payables (47,805) (46,603)
Current tax liabilities - (3,372)
Provisions for liabilities (2,305) (706)
---------- ----------
Total current liabilities (52,506) (52,927)
---------- ----------
Non-current liabilities
Financial liabilities 7 (42,165) (46,782)
Deferred tax liability (5,464) (4,772)
Provisions for liabilities (22,895) (9,352)
---------- ----------
Total non-current liabilities (70,524) (60,906)
---------- ----------
Total Liabilities (123,030) (113,833)
Net assets 76,079 72,383
---------- ----------
Equity
Share capital 208 208
Share premium account 5,629 5,629
Share-based payment reserve 1,526 912
Treasury shares (2,691) (2,747)
Fair value reserve 8,221 -
Retained earnings 63,117 68,328
---------- ----------
Equity attributable to owners of parent 76,010 72,330
Non-controlling interests 69 53
Total equity 76,079 72,383
---------- ----------
Group Cash Flow Statement
for the year ended 31(st) December 2012
31 December
2012 31 December 2011
GBP'000 GBP'000 GBP'000 GBP'000
Cash generated from operating activities
Profit before tax 6,733 17,592
Adjustments to reconcile profit
before tax to net cash from
operating activities
Exceptional operating costs
and contingent consideration
(excluding and gain on sale
of assets) 23,262 2,214
Amortisation of intangible assets 3,472 8,472
Finance income (10) (4)
Finance costs 2,891 1,874
Exceptional finance costs (429) 182
Share-based payments 647 787
--------- --------
29,833 13,525
-------- ----------
Group operating profit before
amortisation and share-based
payments 36, 566 31,117
Depreciation 3,499 2,581
Share of results of joint ventures (1,283) (679)
(Gain)//loss on sale of property,
plant
and equipment (1,426) 8
--------- --------
790 1,910
(Increase)/decrease in trade
and other receivables 12 (2,054)
Decrease in trade and other
payables (2,078) (4,491)
Decrease in provisions (2,699) (2,183)
--------- --------
(4,765) (8,728)
-------- ----------
Cash generated from operations 32,591 24,299
Interest paid (2,084) (1,422)
Tax paid (7,252) (3,235)
---------
(9,336) (4,657)
-------- ----------
Net cash generated from operating
activities 23,255 19,642
31 December 2012 31 December 2011
GBP'000 GBP'000 GBP'000 GBP'000
Cash flows from investing activities
Cash acquired on purchase of
subsidiary undertaking 223 5,707
Acquisition of subsidiaries
and other businesses (3,926) (46,826)
Investment in joint venture (10) (671)
Investment in financial assets (897) -
Dividends received from joint
venture 748 332
Interest received 10 4
Purchase of property, plant
and
equipment and intangible assets (5,680) (3,243)
Proceeds from sale of property,
plant and equipment 6, 290 -
Proceeds from sale of available-for-sale
financial asset - 1,962
---------- ----------
Net cash expended on investing
activities (3,242) (42,735)
Cash flows from financing activities
Proceeds/ (repayment) of loans (10,962) 32,939
Purchase of treasury shares
(net of consideration received
on reissue of treasury shares) - (804)
Dividends paid (9,261) (8,945)
---------- ----------
Net cash generated from/(used
in) financing activities (20,223) 23,190
------------ ----------
Net increase/(decrease) in cash
and cash equivalents (210) 97
Cash and cash equivalents at
the beginning of the year 435 338
------------ ----------
Cash and cash equivalents at
the end of the year 225 435
------------ ----------
Group Statement of changes in equity
for the year ended 31(st) December 2012
Year ended 31(st) December 2012
Share-
Share based Non-controlling
Share premium payment Treasury Fair Retained Total interest
capital account reserve shares value earnings equity Total
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1(st) January
2012 208 5,629 912 (2,747) - 68,328 72,330 53 72,383
Profit for the
year - - - - - 7,001 7,001 16 7,017
Other
comprehensive
income - - - - 8,221 - 8,221 - 8,221
Total
comprehensive
income for the
year - - - - 8,221 7,001 15,222 16 15,238
Put option over
non-controlling
interests - - - - - (2,928) (2,928) - (2,928)
Reissuance of
treasury shares - - (33) 56 - (23) - - -
Share-based
payments - - 647 - - - 647 - 647
Dividend payment - - - - - (9,261) (9,261) - (9,261)
At 31(st)
December 2012 208 5,629 1,526 (2,691) 8,221 63,117 76,010 69 78,079
--------- --------- --------- ---------- --------- ---------- -------- ----------------- --------
Year ended 31(st) December 2011
Share-
Share based Non-controlling
Share premium payment Treasury Fair Retained Total interest
capital account reserve shares value earnings equity Total
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1(st)
January 2011 208 5,629 1,014 (3,139) - 64,363 68,075 35 68,110
Profit for the
year - - - - - 13,217 13,217 18 13,235
Other - - - - - - - - -
comprehensive
income
Total
comprehensive
income for
the year - - - - - 13,217 13,217 18 13,235
Purchase of
treasury
shares - - - (1,762) - - (1,762) - (1,762)
Reissuance of
treasury
shares - - (889) 2,154 - (307) 958 - 958
Share-based
payments - - 787 - - - 787 - 787
Dividend
payment - - - - - (8,945) (8,945) - (8,945)
At 31(st)
December 2011 208 5,629 912 (2,747) - 68,328 72,330 53 72,383
--------- --------- --------- ---------- --------- ---------- -------- ----------------- --------
Notes to the Preliminary Results
The financial information in this preliminary announcement does
not constitute LSL's statutory financial statements for the year
ended 31(st) December 2012 but has been extracted from the
Financial Statements, and as such, does not contain all information
required to be disclosed in the financial statements prepared in
accordance with IFRS.
Statutory financial statements for this year will be filed
following the AGM. The auditors have reported on these financial
statements. Their report was unqualified and did not contain a
statement under section 498 (2) or (3) of the Companies Act
2006
1. Basis of preparation
The accounting policies adopted are consistent with those of the
previous financial year except for the adoption of new Standards
and Interpretations as of 1(st) January 2012 which are applicable
to the Group, as noted below:
The amendments to the following standards below did not have any
impact on the accounting policies, financial position or
performance of the Group:
-- Amendments to IFRS 7 - Disclosures - Transfers of financial assets
-- Amendments to IAS 12 - Deferred Tax: Recovery of Underlying Assets
2. Segment analysis of revenue and operating profit
For management purposes, the Group is organised into business
units based on their products and services and has two reportable
operating segments as follows:
-- The Estate Agency and Related Services segment provides
services related to the sale and letting of housing. It operates a
network of high street branches. As part of this process, the
Estate Agency Division also provides marketing and arranges
conveyancing services. In addition, it provides repossession asset
management services to a range of lenders. It also arranges
mortgages for a number of lenders and arranges pure protection
policies such as life assurance and critical illness cover from a
panel of insurance providers via the Estate Agency branch, First
Complete, Pink and Linear networks. It also operates a Financial
Services segment as a separate mortgage and insurance distribution
business providing products and services to financial
intermediaries. The results of this Financial Services segment,
which does not meet the quantitative criteria for separate
reporting under IFRS have been aggregated with those of Estate
Agency and Related Services.
-- The Surveying and Valuation Services segment provides a
professional valuations and associated panel management service of
housing to various lending corporations and surveying services to
individual customers.
Each segment has various products and services and the revenue
from these products and services are disclosed in the Annual Report
& Accounts 2012 under the Business Review.
The Directors monitor the operating results of its business
units separately for the purpose of making decisions about resource
allocation and performance assessment. Segment performance is
evaluated based on operating profit or loss which in certain
respects, as explained in the table below, is measured differently
from operating profit or loss in the Group Financial Statements.
Head office costs, Group financing (including finance costs and
finance incomes) and income taxes are managed on a Group basis and
are not allocated to operating segments.
2. Segment analysis of revenue and operating profit (continued)
Operating segments
The following table presents revenue and profit information
regarding the Group's operating segments for the financial year
ended 31(st) December 2012 and financial year ended 31(st) December
2011 respectively.
Year ended 31(st) December 2012
Estate agency Surveying
and related and valuation
services services
GBP'000 GBP'000 Unallocated Total
Income statement information GBP'000 GBP'000
-------------- -------------- ------------- ---------
Segmental revenue 181,627 62,218 - 243,845
-------------- -------------- ------------- ---------
Segmental result:
- before exceptional costs,
contingent
consideration amortisation
and
share-based payments 24,430 13,910 (3,200) 35,140
- after exceptional costs,
contingent
consideration amortisation
and
share-based payments 20,168 (6,070) (4,913) 9,185
-------------- -------------- ------------- ---------
Finance income 10
Finance costs (2,891)
Exceptional finance costs 429
---------
Profit before tax 6,733
Taxation 284
Profit for the year 7,017
---------
Year ended 31(st) December 2011
Estate agency Surveying
and related and valuation
services services
GBP'000 GBP'000 Unallocated Total
Income statement information GBP'000 GBP'000
-------------- -------------- ------------- ---------
Segmental revenue 141,811 76,570 - 218,381
-------------- -------------- ------------- ---------
Segmental result:
- before exceptional costs,
contingent
consideration amortisation
and
share-based payments 10,280 23,722 (2,885) 31,117
- after exceptional costs,
contingent
consideration amortisation
and
share-based payments 6,049 16,753 (3,158) 19,644
-------------- -------------- ------------- ---------
Finance income 4
Finance costs (1,874)
Exceptional finance costs (182)
---------
Profit before tax 17,592
Taxation (4,357)
Profit for the year 13,235
---------
3. Earnings Per Share (EPS)
Basic Earnings Per Share amounts are calculated by dividing net
profit for the period attributable to ordinary equity holders of
the parent by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the period plus the weighted average number of
ordinary shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares.
Profit Weighted 2012 Weighted 2011
after average Per share Profit average Per share
tax number of amount after number of amount
shares Pence tax shares Pence
GBP'000
GBP'000
Basic EPS 7,017 102,912,662 6.8 13,217 102,889,561 12.9
Effect of dilutive - - - - 1,829 -
share options
Diluted EPS 7,017 102,912,662 6.8 13,217 102,891,390 12.9
--------- ------------ ----------- ---------- ------------ -----------
There have been no other transactions involving ordinary shares
or potential ordinary shares between the reporting date and the
date of completion of these financial statements.
Adjusted basic and diluted EPS
The Directors consider that the adjusted earnings shown below
give a better and more consistent indication of the Group's
underlying performance:
2012 2011
GBP'000 GBP'000
--------- ---------
Group operating profit before contingent
consideration in acquisitions linked to
employment, exceptional costs, share-based
payments and amortisation (excluding non-controlling
interest): 35,124 31,099
Net finance costs (excluding exceptional
costs and unwinding of discount on contingent
consideration) (2,623) (1,766)
Normalised taxation (7,963) (7,773)
Adjusted profit after tax(1) before exceptional
costs, share-based payments and amortisation 24,538 21,560
--------- ---------
Adjusted basic and diluted EPS
Adjusted Weighted 2012 Adjusted Weighted 2011
profit average Per share profit average Per share
after number of amount after number of amount
tax(1) shares tax(1) shares
GBP'000 Pence GBP'000 Pence
Adjusted Basic
EPS 24,538 102,912,662 23.8 21,560 102,889,561 21.0
Effect of dilutive - - - - 1,829 -
share options
Adjusted Diluted
EPS 24,538 102,912,662 23.8 21,560 102,891,390 21.0
--------- ------------ ----------- --------- ------------ -----------
(1) This represents adjusted profit after tax attributable to
equity holders of the parent. Tax has been adjusted to exclude the
prior year tax adjustments, and the tax impact of exceptional
items, amortisation and share-based payments. Effective tax rate
considered to calculate normalised taxation in 2012 is 24.5% (2011:
26.5%) to equity holders of the parent.
4. Exceptional items
2012 2011
Exceptional costs: GBP'000 GBP'000
----------- ----------
Employee costs
Redundancy costs due to business reorganisation 955 266
Other
Acquisition related costs (98) 1,629
Branch closure costs 245 -
Gain on disposal of freehold properties (1,426) -
Onerous leases 675 -
Impairment of brand - 153
Provision for professional indemnity claims/notifications 17,333 -
----------- ----------
Total operating exceptional costs 17,684 2,048
Contingent consideration on acquisitions
linked to employment 4,152 166
----------- ----------
4,152 166
----------- ----------
Finance costs
Movement in fair value of interest rate
swap (429) 182
----------- ----------
(429) 182
----------- ----------
Net exceptional cost 21,407 2,396
----------- ----------
5. Dividends paid and proposed
2012 2011
GBP'000 GBP'000
----------- -----------
Declared and paid during the year:
Equity dividends on ordinary shares:
2010 Final: 5.9p - 6,065
2011 Interim: 2.8p - 2,880
2011 Final: 5.9p 6,070 -
2012 Interim: 3.1p 3,191 -
----------- -----------
9,261 8,945
----------- -----------
Dividends on Ordinary Shares proposed (not
recognised as a liability as at 31(st)
December):
Equity dividends on Ordinary Shares:
Dividend: 6.4p per share (2011: 5.9p) 6,666 6,070
----------- -----------
6. Taxation
The major components of income tax charge in the Group income
statements are:
2012 2011
GBP'000 GBP'000
------- -------
UK corporation
tax - current year 2,997 5,383
- adjustment in respect of prior
years (1,407) 160
-------
1,590 5,543
Deferred tax:
Origination and reversal of temporary differences (1,718) (764)
Adjustment in respect of prior year (156) (422)
------- -------
Total deferred tax credit (1,874) (1,186)
------- -------
Total tax (benefit)/charge in the income
statement (284) 4,357
------- -------
6. Taxation (continued)
Income tax charged directly to equity is GBP2,456,000 (2011:
GBPnil) and relates to the revaluation of financial assets.
In March 2011 the UK Government announced proposals to reduce
the main rate of corporation tax to 23% over 3 years with effect
from 1(st) April 2011. In March 2012, the UK government announced
additional proposals to reduce the main rate of corporation tax to
22% from 1(st) April 2014. As of 31(st) December 2012 only the
reductions to 23% had been enacted. Accordingly this is the rate at
which deferred tax has been provided. If the subsequent reductions
in the tax rate to 22% had been substantively enacted at 31(st)
December 2012 the deferred tax liability would have reduced by
GBP239,000.
Factors affecting tax charge for the year
The tax assessed in the profit and loss account is lower (2011:
lower) than the standard UK corporation tax rate, because of the
following factors:
2012 2011
GBP'000 GBP'000
Profit on ordinary activities before tax 6,733 17,592
Tax calculated at UK standard rate of corporation
tax rate of 24.5% (2011 - 26.5%) 1,650 4,662
Non taxable negative goodwill on acquisition - (24)
Non taxable income from joint ventures (314) (180)
Benefit of deferred tax asset not previously
recognised (49) 75
Disallowable expenses 295 622
Impact of movement in contingent consideration 1,017 -
charge to Income Statement
Share-based payment relief 29 141
Temporary differences on non-qualifying properties
no longer recognised (1,060) (380)
Impact of rate change on deferred tax (289) (390)
Others - 94
-------- --------
1,279 4,620
Prior period adjustments - current tax (1,407) 159
Prior period adjustment - deferred tax (156) (422)
-------- --------
Total taxation (benefit)/charge (284) 4,357
-------- --------
7. Analysis of net bank debt
2012 2011
GBP'000 GBP'000
-------- --------
Interest bearing loans and borrowings
* Current 2,396 2,246
* Non-current 42,165 46,782
-------- --------
44,561 49,028
Less: 2% unsecured loan notes - (1,496)
Less: 12% unsecured loan notes (8,660) (8,660)
Less: other loan notes - (750)
Add: cash and short-term deposits (225) (435)
Less: deferred and contingent consideration (9,028) (1,939)
-------- --------
Net bank debt at the end of the year 26,648 35,748
-------- --------
During the year, the Group has repaid GBP10.4m (2011: borrowed
GBP33.4m) of the revolving credit facility. The utilisation of this
revolving credit facility may vary each month as long as this does
not exceed the maximum
GBP75m facility (2011: GBP75m). In 2010 the banking facility was
renewed and is repayable when funds permit or by March 2014.
8. Acquisitions during the year
The Group acquired the following businesses during the year
a. Davis Tate
In January 2012 the Group acquired 51% of Davis Tate, a 11
branch estate agency chain operating in 14 locations within the
Thames Valley region for a cash consideration GBP1.6m. The
remaining 49% is subject to put and call options which are
exercisable in two tranches in 2013 and 2016 dependant on profit
performance and in part continued employment of the vendors. Due to
the nature of the payment terms, the deferred consideration is
considered to be an employee expense and not a capital payment for
accounting purposes.
The fair value of the identifiable assets, except for cash and
cash equivalents, and liabilities of Davis Tate as at the date of
acquisition have been determined as below:
Fair value
recognised
on acquisition
GBP'000
----------------
Intangible assets 236
Property, plant and equipment 39
Trade and other receivables 139
Cash and cash equivalents 239
Trade and other payables (827)
Current tax liabilities (159)
Total identifiable net liabilities acquired (333)
Purchase consideration 1,633
Goodwill 1,966
================
Purchase consideration discharged by:
Cash 1,633
Deferred consideration -
------
1,633
------
Analysis of cash flow on acquisition GBP'000
-------------
Transaction costs (included in cash flows
from operating activities) -
Net cash acquired with the subsidiary (included
in cash flows from investing activities) 239
Purchase consideration discharged in cash
(included in cash flows from investing activities) (1,633)
Net cash outflow on acquisition 1,394
===========
Transaction costs have been expensed and are included under
exceptional costs.
The goodwill of Davis Tate comprises certain intangible assets
that cannot be individually separated and reliably measured from
the acquiree due to their nature. These items include the high
quality, dynamic and experienced management team with an
outstanding record of delivering strong and profitable growth
against the backdrop of challenging market conditions, the expected
value of synergies and the potential to significantly grow the
business.
8. Acquisitions during the year (continued)
b. Lauristons
In July 2012, the Group also acquired 85% of Lauristons, a 5
branch estate agency chain in South West London for a cash
consideration of GBP1.8m. The remaining 15% is subject to put and
call options exercisable in 2016 dependant on profit performance
and in part continued employment of the vendors. Due to the nature
of the payment terms, the deferred consideration is considered to
be an employee expense and not a capital payment for accounting
purposes.
The fair value of the identifiable assets, except for cash and
cash equivalents, and liabilities of Lauristons as at the date of
acquisition have been determined as below:
Fair value
recognised
on acquisition
GBP'000
----------------
Intangible assets 212
Property, plant and equipment 84
Trade and other receivables 744
Cash and cash equivalents (16)
Trade and other payables (376)
Total identifiable net assets acquired 648
Purchase consideration 1,802
Goodwill 1,154
================
Purchase consideration discharged by: 1,802
Cash -
------
Deferred consideration 1,802
------
Analysis of cash flow on acquisition GBP'000
--------
Transaction costs (included in cash flows
from operating activities) -
Net cash acquired with the subsidiary (included
in cash flows from investing activities) (16)
Purchase consideration discharged in cash
(included in cash flows from investing activities) (1,802)
Net cash outflow on acquisition (1,818)
========
Transaction costs have been expensed and are included under
exceptional costs (see note 7).
The goodwill of Lauristons comprises certain intangible assets
that cannot be individually separated and reliably measured from
the acquiree due to their nature. These items include the high
quality, dynamic and experienced management team with an
outstanding record of delivering strong and profitable growth
against the backdrop of challenging market conditions, the expected
value of synergies and the potential to significantly grow the
business.
8. Acquisitions during the year (continued)
c. Lettings acquisition by LSLi
During the year LSLi (through its subsidiaries) acquired the
following lettings business:
-- Assets of the lettings business of Reynolds(Wimbledon)
Limited on 1(st) March 2011 - additional consideration
GBP17,000
-- Assets of the lettings business of Goddard Management Ltd
trading as A120 Lettings acquired on 30(th) September 2011-
additional consideration GBP47,000
-- Assets of the Withers letting business on 4(th) May 2012 for GBP79,000
-- Assets of Appletons lettings business on 13(th) August 2012 for GBP180,000;
The combined fair values of the indentifiable assets and
liabilities as at the date of acquisition of the above acquisitions
were:
Fair value recognised
on acquisition
GBP'000
----------------------
Property, plant and equipment -
----------------------
Total identifiable net assets acquired -
Purchase consideration (discharged by cash) 323
----------------------
Goodwill arising on acquisition 323
======================
The goodwill of GBP0.3m for the above acquisitions comprises
certain intangible assets that cannot be individually separated and
reliably measured from the acquiree due to their nature. These
items include the expected value of synergies and the potential to
grow the business.
d. Acquisition by Linear Mortgage Networks
During the year, Linear Mortgage Networks acquired the assets of
Mortgage Options Limited for GBP100,000 and the assets of Hoath
Independent Financial Planning Limited for GBP46,000 as well as
other miscellaneous customer contracts for GBP15,000. Apart from
the customer contracts acquired there were no other separately
identifiable intangible assets and so all of the consideration was
allocated to customer contract intangible asset.
e. Lettings acquisition by Your Move
During the year, Your Move completed the acquisition of the NSK
lettings business for a total cash consideration of GBP10,000.
There were no separately identifiable net assets and all the
consideration was towards goodwill.
From the date of acquisition to 31(st) December 2012, the
acquisitions in aggregate have contributed to GBP4.8m of revenue
and GBP1.2m profit before tax of the Group. If all of these
combinations had taken place at the beginning of the year, the
consolidated revenue would have been higher by GBP6.5m and the
consolidated profit before tax would have been higher by
GBP1.4m.
Of the total goodwill arising on all acquisitions, an amount of
GBPnil is expected to be deductible for tax purposes.
9. Annual General Meeting (AGM)
The AGM will be held at the London offices of LSL, 1 Sun Street,
London EC2A 2EP on 2(nd) May 2013 starting at 2.30pm.
Definitions
"Adjusted Basic Earnings Per Share" - defined at note 3 of the
Preliminary Financial Statements
"Advance Mortgage Funding"- trading name of Advance Mortgage
Funding Limited
"AGM" - Annual General Meeting
"Asset Management" - refers to LSL's repossessions asset
management and property management for multi property landlords
services
"ARLA" - Association of Residential Lettings Agents
"AMI" - Association of Mortgage Intermediaries
"Audit Committee" - LSL's audit committee
"Basic Earnings Per Share"- is defined at note 3 of the
Preliminary Financial Statements
"Board" - the Board of Directors of LSL
"C&G" - trading style of Cheltenham & Gloucester plc
"Chairman" - Roger Matthews
"Chairman of the Audit Committee"- Mark Morris
"Code" - UK Code of C orporate Governance by the Financial
Reporting Council (2010 and 2012)
"Company Secretary" - Sapna B FitzGerald
"Corporate Lettings" - refers to LSL's property management for
corporate and multi property landlords
"Davis Tate" - trading name of Davis Tate Limited
"Director" - Executive Director or Non Executive of LSL
"EPS" - earnings per share is defined at note 3 of the
Preliminary Financial Statements
"e.surv or e.surv Chartered Surveyors"- trading names of e.surv
Limited
"Estate Agency or Estate Agency Division" - includes LSL's
Residential Sales, Lettings, Financial Services, LPA fixed charge
receiver and Asset Management businesses
"Estate Agency and Related Services"- refers to LSL's Estate
Agency Division
"Executive Director "- refers to Steve Cooke, Simon Embley and
David Newnes
"Executive Director for Estate Agency"- refers to David
Newnes
"Financial Services" - refers to LSL's financial services
(including mortgage and protection brokerage and the operation of
intermediary networks
"First Complete" - trading name of First Complete Limited
"Group" - LSL Property Services plc and its subsidiaries
"Group CEO" - Simon Embley
"Group Finance Director"- Steve Cooke
"HEAL or Halifax Estate Agency" - refers to Halifax Estate
Agencies Limited
"IBNR" - Incurred But Not Reported
"IFRS" - International Financial Reporting Standards
"Intercounty" - trading name of ICIEA Limited
"Lauristons" - trading name of Lauristons Limited
"Lettings" - refers to LSL's residential property lettings and
property management services
"Linear or Linear Mortgage Network"- trading names of Linear
Mortgage Network Limited
"LSL" - LSL Property Services plc
"LSL Corporate Client Department"- trading name of LSL Corporate
Client Services Limited
"LSL Land & New Homes"- trading style used by members of the
Estate Agency Division
"LSLi" - trading name of LSLi Limited
"Marsh & Parsons"- trading name of Marsh & Parsons
Limited
"NAEA" - National Association of Estate Agents
"Net Bank Debt" - see note 7 for calculation
"NFoPP" - National Federation of Property Professional
"Nominations Committee"- Nominations Committee of LSL
"Non Executive Director"- refers to Helen Buck, Adrian Gill,
Roger Matthews, Mark Morris and Mark Pain
"Openwork" -trading name of Openwork Limited
"PI" - professional indemnity
"Pink or Pink Home Loans"-trading names of Advance Mortgage
Funding Limited
"Reeds Rains" - trading name of Reeds Rains Limited
"Reeds Rains Financial Services"- trading name of Reeds Rains
Financial Services Limited
"Remuneration Committee"- Remuneration Committee of LSL
"Residential Sales" - refers to LSL's services for residential
property sales
"RICS" - Royal Institution of Chartered Surveyors
"Surveying or Surveying Division" - includes LSL's surveying and
valuation services businesses
"Surveying and Valuation Services" -refers to LSL's surveying
division
"The Bridge" - LSL's call centre operation based in
Southampton
"TPO" - The Property Ombudsman
"Underlying Operating Margin" - Group Operating Profit before
exceptional costs, amortisation and share based payments shown as a
percentage of turnover
"Underlying Operating Profit"- before exceptional costs,
amortisation of intangible assets and share-based payments
"Your Move" - trading name of your-move.co.uk Limited
"Zoopla or Zoopla Group"- trading styles of Zoopla Property
Group Limited
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LFFFFFSIDFIV
Lsl Property Services (LSE:LSL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Lsl Property Services (LSE:LSL)
Historical Stock Chart
From Jul 2023 to Jul 2024
