TIDMLSL
RNS Number : 0537N
LSL Property Services PLC
27 May 2022
27 May 2022
LSL Property Services plc ("LSL" or "Group")
AGM Update
Ahead of its Annual General Meeting at 12:15pm today, LSL issues
the following trading update.
Group Revenue over the first four months of 2022 was GBP104.5m,
which is in line with that achieved in buoyant markets in the same
period in 2021. The Board is particularly pleased with the strong
performance of our Surveying Division where revenue was up 11% year
on year.
We can also report 5% revenue growth in the Financial Services
Network business, which was a solid performance in a smaller
market. Over the first four months of the year, purchase and
re-mortgage lending totalled GBP10bn, an increase of 9% over 2021.
We would expect this to represent a market share of around 10%. We
were very pleased that earlier this week, our Financial Services
Network business, PRIMIS, was recognised as the "Best Network, 300+
appointed representatives" at the 2022 Mortgage Strategy
Awards.
The Estate Agency Division consolidated the market share gains
made during 2021, maintaining our share of instructions in the
locations we trade, and growing our market share of housing
transactions on a national level.
Our Estate Agency and our Direct-to-Consumer Financial Services
businesses were naturally affected by residential pipeline
conversion rates which remained extremely slow across the market
principally due to the continuing industry-wide capacity issues in
conveyancing. This resulted in a 9% reduction in Estate Agency
Division revenue largely driven by a fall of 16% in residential
exchange income. Fall-through rates remain at normal levels,
meaning that the residential sales exchange pipeline now stands at
nearly record levels, having increased by over GBP4m since the
beginning of the year.
Geopolitical uncertainties remain which have added to
inflationary cost pressures, particularly in relation to energy and
employee costs. We continue to focus on proactive management of our
cost base, to limit the impact of these pressures, and consequently
expect these pressures to have only a modest impact on
profitability.
Following investment in 2021, we have continued to invest in
capability and technology, in particular, across the Financial
Services Division. We plan to continue to do so during the second
half of the year.
Our Net Cash balance on 30 April 2022 was GBP30.4m, compared to
Net Debt of GBP7.8m at the same date last year.
We were pleased to recently announce the third acquisition by
Pivotal Growth. Whilst there is a good pipeline of deals, and we
remain confident of the medium-term prospects for value creation,
completion of acquisitions has been slower than expected, and as a
result Pivotal Growth has remained in an investment phase for
longer than previously anticipated.
At the start of the year, we expected to deliver full year
profits at broadly the same level as our record results in 2021, in
markets with reduced levels of activity. Recent market estimates
indicate that residential pipeline conversion rates should improve
resulting in full year 2022 house purchases not being materially
behind previous expectations. Assuming activity is in line with
these estimates, overall profit is expected to be slightly behind
the record profits posted in 2021, principally reflecting slower
than anticipated deal flow in Pivotal Growth, and the limited
impact of cost inflation noted above.
We have yet to see clear evidence of a sustained improvement in
residential pipeline conversion and should the current slow
conversion rates across the market persist or fall throughs
increase, then more significant pressure would be placed on profits
in our Estate Agency Division and to a lesser extent in our
Financial Services businesses.
Whilst uncertainty over the pace of housing transactions may
impact the second half of the year, we are encouraged by continued
progress we are making in the execution of our strategy. This
year's performance demonstrates the benefits of both our growth
strategy in Financial Services and the significant progress made in
our Surveying Division, and we expect that the impact of housing
market cycles will continue to have a reducing impact on the
Group's results.
As previously reported, the split of H1:H2 profit in 2022 is
expected to revert to a more typical profile with a skew to H2,
after record housing transactions in H1 2021.
The Board places a high priority on LSL's Living Responsibly
strategy to make sure that LSL is a responsible business and one
that has a positive impact on the communities in which we operate.
We have established colleague forums which variously focus on the
environment, inclusion and diversity, and communities and these
have been instrumental in taking forward our activities in these
areas. Further information can be found in our Living Responsibly
Report 2022 which we published on 29 April 2022.
For further information, please contact:
David Stewart, Group CEO
Adam Castleton, Group CFO
LSL Property Services plc investorrelations@lslps.co.uk
Helen Tarbet
Sophie Wills
Buchanan 0207 466 5000 / LSL@buchanan.uk.com
Notes on LSL
LSL is one of the largest providers of services to mortgage
intermediaries and mortgage and protection advice to estate agency
customers, completing around GBP41bn of mortgages in 2021. It
represents around 10% of the total purchase and re-mortgage market
with around 2,900 financial advisers. PRIMIS was named Best Network
by Money Marketing in their 2021 awards and Best Network, 300+
appointed representatives at the 2022 Mortgage Strategy Awards.
LSL is one of the UK's largest providers of surveying and
valuation services, supplying seven out of the ten largest lenders
in the UK, employing around 500 operational surveyors, and
performing over 500,000 valuations and surveys per annum for key
lender clients. It was named Mortgage Surveyor of the Year at the
2021 Mortgage Awards with Money Age.
LSL also operates a network of 225 owned and 128 franchised
estate agency branches.
For further information please visit LSL's website:
lslps.co.uk
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END
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