LSL Property Services Interim Management Statement (8890W)
November 13 2014 - 2:00AM
UK Regulatory
TIDMLSL
RNS Number : 8890W
LSL Property Services
13 November 2014
For Immediate Release 13 November 2014
LSL Property Services plc
("LSL" or "the Group")
Interim Management Statement
LSL, a leading provider of residential property services,
incorporating Estate Agency and Surveying businesses, issues this
Interim Management Statement for the period from 1 July 2014 to 12
November 2014.
Group Performance
All parts of the Group have traded well since June despite the
lower activity levels in the market, following a particularly
strong first half to the year. Performance reflects the strength of
the Group through its broad range of businesses across the
residential property services sector.
The percentage change in turnover for the four months ended 31
October 2014 and also for the ten months ended 31 October 2014
compared with the same periods in 2013 is set out below:
4 months to 31 10 months to
Oct 31 Oct
Group 8% 14%
Estate Agency 10% 16%
Surveying 2% 6%
--------------- --------------- -------------
Market
The number of Total Mortgage Approvals(1) for the nine months to
30 September 2014 was 4.8% higher than for the same period in 2013.
House Purchase Approvals(1) were 12.2% higher on the same
comparative basis. Market data is not yet available for October.
However, as shown in the table below, market growth has slowed
significantly - particularly in Q3.
Year on year Total Approvals House Purchase
growth in Approvals
Q1 25% 35%
Q2 (1%) 7%
Q3 (5%) 1%
-------------- ---------------- ---------------
Estate Agency & Related Services:
LSL's Estate Agency division has traded well during the period
July to October 2014 and has benefitted from its geographical
exposure to the whole of the UK property market:
- Total income up 10% year on year
- Exchange income increased by 10% year on year
- Lettings income growth of 12% year on year
- Financial Services income up 19% year on year
- Pipeline volumes are in line with prior year at 31 October
Marsh & Parsons trading reflects lower activity levels in
the central London market, however lettings income growth remains
strong. Marsh & Parsons branch rollout programme is on track
with 4 new offices already opened in 2014.
Surveying & Valuation Services:
As market volumes have declined, the Surveying division has
grown between July and October 2014 with revenue increasing by 2%
year on year.
In September we are pleased to have signed a new contract with
Lloyds Banking Group (LBG). The LBG contract operates on a
non-exclusive basis for a multi-year term and the contract terms
reflect improved conditions in the mortgage valuation market.
Securing this contract diversifies the surveying business's
customer base and further strengthens this business.
Professional Indemnity (PI) costs have tracked broadly as
expected during the period. As stated in the 2014 interim results,
notification levels have remained at a high level but we are still
expecting these to reduce significantly in the near future. PI
costs remain a risk area and a key area of monitoring and
focus.
Strategy:
LSL is a leading UK integrated residential property services
group, which encompasses estate agency, surveying, financial
services and asset management - the Group's consistent focus is on
delivering growth both organically and through selective
acquisitions. Within estate agency, a key focus for the past 4
years has been and remains growing the counter cyclical lettings
income stream - lettings income has grown at an annual rate of 26%
for the 10 month period ended 31 October 2014 as compared to the 10
month period ended 31 October 2010. LSL's businesses all have a
significant national presence.
Outlook:
Although key economic indicators remain positive, the impact of
implementation of the Mortgage Market Review (MMR) and tighter
lending criteria has affected transaction levels and sentiment in
the housing market.
2014 is set to be a record year for LSL and we expect to deliver
double digit year on year growth in Group Underlying Operating
Profit(2) , albeit marginally below our previous expectations
reflecting recent lower activity levels across the market.
With the recent reduction in activity levels and the further
uncertainty around the general election next year, we are cautious
on the market outlook for 2015. However, the medium to longer term
fundamentals of the housing market remain positive.
Against this backdrop LSL will continue with its strategy of
delivering organic growth and evaluating selective acquisitions.
The business is very cash generative at the operational level and
has a strong balance sheet. The Group is extremely well positioned
to benefit from future opportunities in the market and to deliver
increased shareholder value.
(1) Source: Bank of England
(2) Underlying Operating Profit is before exceptional gains and
costs, amortisation of intangible assets and share based
payments
For further information, please contact:
Ian Crabb, Group Chief Executive Officer
Steve Cooke, Group Finance Director
LSL Property Services plc 0207 382 0360
Richard Darby, Sophie McNulty and Sophie Cowles
Buchanan 0207 466 5000
Notes to Editors:
LSL Property Services plc is a leading provider of residential
property services to its two key customer groups. Services to
consumers include: residential sales, lettings, surveying 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 our website: www.lslps.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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