TIDMLSL
RNS Number : 4633D
LSL Property Services
27 April 2017
For Immediate Release 27(th) April 2017
LSL Property Services plc ("LSL" or "The Group")
AGM Statement
LSL Property Services plc, a leading provider of residential
property services incorporating both estate agency and surveying
businesses, is holding its Annual General Meeting (AGM) today in
London, where the following comments will be made regarding current
trading, financial performance and outlook for the current
financial year.
Market Backdrop:
The number of House Purchase Approvals(1) for the two months to
28(th) February 2017 were down by 5.4% compared to the same period
in 2016 when market volumes accelerated sharply ahead of the Stamp
Duty increases on 1(st) April 2016. Although market volumes from
the Bank of England are not yet available for March 2017, market
estimates indicate that Bank of England House Purchase Approvals
for March 2017 will be down against March 2016 when volumes
continued to reflect the immediate run up to the changes in Stamp
Duty.
Remortgage(1) volumes were up by 7.8% for the two months to
28(th) February 2017 against the same comparative period last year
reflecting favorable mortgage costs and availability. The number of
Total Mortgage Approvals(1) for the two months to 28(th) February
2017, were up 0.8% relative to the corresponding period last
year.
Group Performance:
The Group has traded slightly ahead of the Board's expectations
in Q1 2017. Group revenues for the three months ended 31(st) March
2017 have decreased by 3.3% year on year with the Estate Agency
Division impacted by very strong market volumes in Q1 2016 compared
to the same period in 2017. The strong volumes in Q1 2016 were the
result of a sharp acceleration ahead of the Stamp Duty increases on
1(st) April 2016. The Surveying Division delivered robust growth in
Q1 2017.
The percentage changes in revenue for each of the two and three
month periods ended 28(th) February 2017 and 31(st) March 2017
respectively are set out below:
2 months 3 months
to 28 to 31
February March
--------------- ---------- ---------
Revenue
Group 1.3% -3.3%
Estate Agency 0.6% -5.5%
Surveying 3.7% 4.8%
--------------- ---------- ---------
Estate Agency and Related Services:
The Estate Agency Division has traded slightly ahead of the
Board's expectations during the first three months of 2017. The
continued growth in Lettings income and Financial Services income
demonstrated the benefits of LSL's Estate Agency strategy. Exchange
income was impacted by Q1 market conditions.
-- Total Estate Agency revenue decreased by 5.5% year on year
-- Exchange income decreased by 24.8% year on year reflecting
the spike in transactions in Q1 2016 ahead of the Stamp Duty
changes on 1(st) April 2016
-- Lettings delivered income growth of 4.6% year on year (organic growth 3.2%)
-- Financial Services income growth of 20.0% year on year (organic growth 9.6%)
-- Marsh & Parsons revenue decreased by 15.8% year on year reflecting reduced exchange volumes
-- Marsh & Parsons Lettings income growth was strong at 8.2% year-on-year
-- Marsh & Parsons opened a new branch in Brixton during the
period to date in 2017 which is trading well
Surveying and Valuation Services:
The Surveying Division has traded positively during the first
three months of 2017:
-- Surveying income increased by 4.8% year on year
-- Continued focus on capacity utilisation and optimising
contract performance and revenue generation from B2B customers
-- Professional indemnity costs were in-line with the Board's expectations during the period
-- Phase 2 implementation of LSL's Surveying IT system is on track
Strategy:
We remain committed to delivering on our stated strategy. LSL's
continuing Estate Agency strategy is to increase operating profit
per branch; expand the number of Marsh & Parsons branches; grow
recurring and where market conditions permit counter-cyclical
income streams and evaluate selective acquisitions. LSL's
continuing Surveying strategy is to optimise contract performance
and revenue generation from B2B customers, achieve further
improvement in efficiency and capacity utilisation, use technology
to target further improvements in customer satisfaction and
performance and continue the graduate training programme.
In addition to delivering on our stated strategy, as
communicated at the 2016 Preliminary Results announcement and in
the 2016 Annual Report and Accounts, we are also exploring options
to capitalise on digital opportunities created by the growth in
consumer acceptance of online and hybrid estate agency business
models. We have made positive progress in Q1 2017. A further update
will be provided during 2017.
Outlook:
2017 is expected to see a reduced volume of house purchase
transactions compared to the prior year, with modest house price
inflation outside prime Central London. However, mortgage costs and
availability remain positive and the medium to longer-term
fundamentals of the UK housing market remain robust.
It is too early to judge if the triggering of Article 50 on
29(th) March 2017 or the recent announcement of a UK General
Election on 8(th) June 2017 will impact consumer sentiment. To date
we have not seen any change in market trends.
Trading in Estate Agency and Surveying is performing well and
the Group outlook for the year as a whole is slightly ahead of
expectations. We are positive regarding the outlook for the
business, committed to driving profitable organic growth,
continuing to evaluate selective acquisitions and progressing our
digital plans.
The Group has a robust balance sheet with relatively low levels
of gearing and is very cash generative at an operational level. The
business is well placed to capitalise on market conditions to
increase shareholder value.
1. Source: Bank of England for "House Purchase Approvals ",
"Total Mortgage Approvals" and "Remortgage levels" 2016 &
2017
For further information, please contact:
Ian Crabb, Group Chief Executive
Officer
Adam Castleton, Group Chief
Financial Officer
LSL Property Services plc 0207 382 0360
Richard Darby, Gemma Mostyn-Owen
Buchanan 0207 466 5000
Notes on LSL:
LSL is a leading provider of residential property services to
its key customer groups. Services to consumers include: residential
sales, lettings, surveying, conveyancing and mortgage, pure
protection and general insurance brokerage services. 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
This information is provided by RNS
The company news service from the London Stock Exchange
END
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