TIDMLSL
RNS Number : 1073Q
LSL Property Services PLC
24 February 2021
24 February 2021
LSL Property Services plc ("LSL" or "Group")
Update on current trading, new banking facility and revised
publication date for 2020 financial results
Current Trading
Following the confirmation of strong financial performance in
2020 as detailed in its announcement on 15 January 2021 LSL has
continued to deliver strong financial performance throughout the
first seven weeks of 2021, building on the positive trading in
2020. Each of the three principal trading Divisions reported growth
in underlying operating profits in January 2021. Highlights
include:
Financial Services:
Mortgage and Protection completions in PRIMIS have strengthened
as 2021 has progressed, with particularly strong year on year
performance in the early weeks of February.
Following 8% growth during 2020, total financial advisors
increased further in January to a total of 2,613 (31 December 2020:
2,585). The pipeline of new advisors also grew during the month of
January.
Financial Services Division profit for January was ahead of comparative periods in 2019 and 2020.
Surveying
Surveying Division profit in January was ahead of comparative
periods in 2019 and 2020, benefitting from higher income per job
and cost restructuring undertaken during H2 2019 and in early
2020.
Estate Agency
Exchange income is very strong as the record year-end pipelines
move through to completion. This trend is expected to continue
throughout the first quarter. At the end of January, LSL's
residential sales exchange pipeline remained over 50% ahead of the
prior year. T here is currently no indication of a material
increase in residential fall-through trends. Whilst instructions
have slowed across the market during the latest lockdown,
encouragingly, LSL has increased its share of instructions in the
areas in which its branches operate.
Estate Agency Division profit in January was ahead of both 2019
and 2020, benefiting from the reshaping of the branch network in
February 2019, as well as exchanges from the record pipeline.
Acquisitions of Direct Life & Pension Services and Mortgage
Gym completed
On 11 February, LSL announced the acquisition of a 60% stake in
Direct Life Quote Holdings Limited for GBP1.8m, and the acquisition
of the entire business and assets of Mortgage Gym Limited
("Mortgage Gym") for GBP2.4m, as part of its digital strategy to
drive growth in Financial Services. Integration of both businesses
is going well with immediate steps taken to leverage the
competitive advantage afforded by Mortgage Gym technology to
enhance LSL's distribution and productivity through Embrace
Financial Services.
New Revolving Credit Facility
LSL is pleased to announce a new banking facility, which will
give the Group long-term balance sheet flexibility to take
advantage of a number of attractive opportunities, particularly in
financial services. A GBP90 million committed revolving credit
facility, with a maturity date of May 2024, arranged on competitive
terms, will replace the previous GBP100m facility that was due to
mature in May 2022.
LSL is highly cash generative, converting over 100% of Group
Underlying Operating Profit to cash flow from operations. Net
Banking Debt at 31 December 2020 was a historic low of GBP1.6m
(2019: GBP41.9m). In extending the facility, the Board has taken
the opportunity to review the Group's borrowing requirements in
light of its strong cash generation, reducing the size of the
committed facility and therefore the costs associated with the new
facility.
To provide further flexibility to support growth, the facility
includes a GBP30m accordion, to be requested by LSL at any time,
subject to bank approval.
The new facility has been provided by Barclays Bank PLC and
Santander UK Plc, who are two long-standing banking partners,
alongside NatWest Bank plc who we welcome to the banking syndicate.
LSL already has a strong and long-standing relationship with
NatWest Bank plc through its Financial Services and Surveying
Divisions.
Full Year Trading Update 15 January 2021
The Board issued a Full Year Trading Update on 15 January 2021,
advising the market of stronger than anticipated trading in
December 2020, and a resultant uplift in expected 2020 Group
Underlying Operating Profit (after adjustment for Covid-19 related
net costs). A full copy of this update can be found at
https://www.lslps.co.uk/investor-relations/regulatory-news .
Highlights for 2020 include strong Underlying Operating Profit as
shown below:
2020 2019
GBPm GBPm
Group Underlying Operating
Profit (post Covid-19
costs)(1) 35.2 37.0
------ ------
Adjustments for Covid-19
related net costs 2
: 3.0 -
-On assets unused during
lockdown (premises,
vehicles etc.) 3.3 -
-Other costs & Holiday
pay accrual
------ ------
Group Underlying Operating
Profit (pre Covid-19
costs)(1,2) 41.5 37.0
------ ------
Reflecting the continued growth of its Financial Services
businesses, LSL completed GBP32.6bn of mortgages in 2020, an
increase of 3% compared to 2019, representing approximately 9% of
the total purchase and remortgage market. The Group had 2,585
financial advisers at 31 December 2020, an increase of 8% year on
year, with a strong pipeline of new advisors.
New Date for FY 2020 Results Announcement in Order to Reinstate
Guidance
The outlook for the UK economy remains difficult to predict with
confidence, as the country starts to emerge from the latest
lockdown and the impact of the extraordinary measures taken by the
Government since the initial onset of the Covid-19 virus become
clearer. Speculation continues as to whether there will be any
significant impact of the ending of the Stamp Duty Land Tax
holiday, due to end on 31 March 2021.
In light of this, the Board considers it prudent to observe a
longer period of trading prior to reinstating guidance. LSL will
release its full year results before the end of April, by which
time the Board intends to reinstate guidance and provide a more
detailed strategic update, and in particular its plans to
capitalise further on its significant opportunities in financial
services. A further announcement regarding the date of LSL's 2020
final results will be made in due course.
Notes on LSL
LSL is one of the largest providers of services to mortgage
intermediaries and mortgage & protection advice to estate
agency customers, completing GBP32.6bn of mortgages in 2020. It
represents approximately 9% of the total purchase and remortgage
market with around 2,600 financial advisers. It was named Mortgage
Network of the Year by both Moneyfacts and Mortgage Introducer in
their 2020 awards, as well as Best Network 300+ ARs by Mortgage
Strategy.
e.surv is one of the UK's largest provider of surveying and
valuation services, supplying seven out of the ten largest lenders
in the UK, employing over 500 operational surveyors, and performing
over 500,000 valuation and surveys per annum for key lender
clients. It was named Best Surveyor/Valuer at the 2020 Mortgage
Strategy awards.
LSL operates a network of 226 owned and 130 franchised estate
agency branches, with brands that include Your Move, Reeds Rains
and Marsh & Parsons.
For further information, please visit LSL's website:
lslps.co.uk
Notes to update:
1. Group Underlying Operating Profit is before exceptional
costs, contingent consideration, amortisation of intangible assets,
share-based payments and includes circa GBP16m of amounts
receivable pursuant to the Coronavirus Job Retention Scheme and
utilised to pay employee salaries for those placed on furlough.
2. Covid-19 related net costs include property and other asset
costs incurred while the lockdown was in place during 2020, and
other costs including redundancy, holiday pay accruals and are net
of property grants. This treatment was highlighted at the LSL
Interim results.
For further information, please contact:
David Stewart, Group Chief
Executive Officer
Adam Castleton, Group Chief
Financial Officer
------------------------------------
LSL Property Services plc investorrelations@lslps.co.uk
------------------------------------
Helen Tarbet
------------------------------------
Sophie Wills
------------------------------------
Buchanan 0207 466 5000 / LSL@buchanan.uk.com
------------------------------------
Forward Looking Statement
This announcement contains certain statements that are
forward-looking statements. They appear in a number of places
throughout this announcement and include statements regarding LSL's
intentions, beliefs or current expectations and those of its
officers, directors and employees concerning, amongst other things,
LSL's results of operations, financial condition, liquidity,
prospects, growth, strategies and the business it operates. By
their nature, these statements involve uncertainty since future
events and circumstances can cause results and developments to
differ materially from those anticipated. The forward-looking
statements reflect knowledge and information available at the date
of preparation of this update and, unless otherwise required by
applicable law, LSL undertakes no obligation to update or revise
these forward-looking statements. Nothing in this update should be
construed as a profit forecast. LSL and its Directors accept no
liability to third parties in respect of this update save as would
arise under English law.
Any forward-looking statements in this announcement speak only
at the date of this announcement and LSL undertakes no obligation
to update publicly or review any forward-looking statement to
reflect new information or events, circumstances or developments
after the date of this update.
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END
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