TIDMLSL
RNS Number : 1267M
LSL Property Services
26 April 2018
For Immediate Release 26(th) April 2018
LSL Property Services plc ("LSL" or "Group")
AGM Statement
LSL Property Services plc, a leading provider of residential
property services incorporating both estate agency and surveying
businesses, will hold 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.
Overview:
Market conditions in Q1 2018 have been softer than the Board's
expectations and the equivalent period in 2017. Despite this
backdrop, Group revenue for the three months ended 31(st) March
2018 has increased by 0.4% year on year. Based on the current
trading outlook of the business, LSL remains confident of
delivering a full year 2018 result in-line with the Board's
expectations.
Market Backdrop:
The number of House Purchase Approvals(1) for the two months to
28(th) February 2018 were down by 3.0% compared to the same period
in 2017. Although market volumes from the Bank of England are not
yet available for March 2018, market estimates indicate that Bank
of England House Purchase Approvals for March 2018 will be down
against March 2017.
Remortgage(1) volumes were up by 6.8% for the two months to
28(th) February 2018 against the same comparative period last year
reflecting continued low mortgage costs and availability. The
number of Total Mortgage Approvals(1) for the two months to 28(th)
February 2018, were up 1.0% relative to the corresponding period
last year.
Group Performance:
The percentage changes in revenue for each of the two and three
month periods ended 28(th) February 2018 and 31(st) March 2018
respectively are set out below:
2 months 3 months
to to
28 February 31
March
----------- ------------- ---------
Revenue
Group +2.6% +0.4%
Estate
Agency +3.5% +2.4%
Surveying -0.6% -6.9%
----------- ------------- ---------
Estate Agency and Related Services:
The Estate Agency Division has traded broadly in line with the
Board's expectations during the first three months of 2018. The
continued growth in Lettings income and Financial Services income
more than offset the impact on exchange income from reduced
exchange unit volumes:
-- Total Estate Agency revenue increased by 2.4% year on year
-- Exchange income decreased by 15.3% year on year reflecting
the softer market conditions, the closure of eight owned branches
in Q4 2017, the timing of national bank holidays in Q1 2018
compared to Q1 2017 and the weather conditions in March 2018
-- Lettings delivered income growth of 4.2% year on year (organic growth 4.2%)
-- Financial Services income growth of 20.1% year on year (organic growth 10.3%)
-- Marsh & Parsons revenue decreased by 1.4% year on year reflecting reduced exchange volumes
-- Marsh & Parsons Lettings income performance was strong
delivering growth of 5.9% year-on-year
-- In line with our strategy Marsh & Parsons opened a new branch in Chiswick during April 2018
Surveying and Valuation Services:
Trading in the Surveying Division for the first two months of
2018 was broadly flat against 2017 which was a robust performance
against the softer market. March 2018 was impacted by the timing of
national bank holidays in 2018 compared to 2017 and the weather
conditions in March 2018, contributing to the Q1 2018 performance
being below the comparative period in Q1 2017:
-- Surveying income reduced by 6.9% year on year
-- Continued focus on capacity utilisation together with the
successful roll-out of the new technology platform partly offset
lower mortgage volumes
-- Professional indemnity costs continued to be well managed during the period
-- The technology roll-out continues during 2018 with further
functionality releases designed to further enhance quality and
drive efficiencies
Outlook:
Market conditions in 2018 have been softer than the Board's
expectations and the equivalent period in 2017. LSL's financial
performance in Q1 2018 has tracked slightly below the Board's
expectations.
LSL expects to see a reduction in the volume of house purchase
transactions compared to the prior year, with the rate of House
Price Inflation inside and outside London continuing to soften.
Mortgage costs continue to be low by historic standards and
mortgage availability remains good. The medium to longer term
fundamentals of the UK housing market remain solid.
Based on the current trading outlook of the business and the
potential for self-help measures, LSL remains confident of
delivering a full year 2018 result in-line with the Board's
expectations. The self-help measures include initiatives to drive
organic growth in Estate Agency, in both Financial Services income
and Lettings income and the recommencement of LSL's letting book
acquisition programme. We expect the financial performance to be
slightly more weighted to H2 in 2018 compared to the same period in
2017.
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" 2017 &
2018
For further information, please contact:
Ian Crabb, Group Chief Executive Officer
Adam Castleton, Group Chief Financial Officer
LSL Property Services plc 0207 382 0360
David Rydell
Sophie Wills
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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