LSL Property Services PLC Sale of new build assets to Pivotal Growth (6592M)
January 13 2023 - 2:00AM
UK Regulatory
TIDMLSL
RNS Number : 6592M
LSL Property Services PLC
13 January 2023
13 January 2023
LSL Property Services plc ("LSL" or "Group")
Sale of LSL's new build assets to further simplify the Group and
build scale in Pivotal Growth
LSL announces the sale of its new build mortgage and protection
brokerage firms Group First Limited ("Group First") and RSC New
Homes Limited ("RSC") to Pivotal Growth Limited ("Pivotal Growth"),
its joint venture with Pollen Street Capital, established in 2021
to "buy and build" a leading national mortgage broker.
The consideration payable is 7x the combined Group First and RSC
EBITDA in calendar year 2024, subject to agreed working capital
adjustments, capped at a maximum of GBP20m. The consideration is
payable in cash to LSL during H1 2025, at which time LSL will
consider the most effective use of the funds.
Going forward, LSL will continue to account for its 47.8% equity
share of Pivotal Growth profits after tax, which will include the
profits generated by Group First and RSC. LSL will also benefit
from the incremental profits of Group First and RSC in any future
Pivotal Growth exit event.
These disposals are in line with LSL's strategy to simplify the
Group, and to focus on developing further its leading Financial
Services Network business. We also believe that Pivotal Growth is
better placed to increase the value of Group First and RSC, and
these acquisitions mark a significant step in building critical
mass in the new build brokerage sector, that has been targeted by
Pivotal, as it becomes a leading player in this space.
For the 2021 financial year, the value of Group First's gross
assets was GBP15.2m and profit for the year was GBP1.4m. The value
of RSC's gross assets at 31 December 2021 was GBP3.7m and profit
for the year was GBP0.7m. Combined profit for the 2022 financial
year is expected to be GBP0.7m, and the impact of the disposals
will, therefore, not be material to the Group.
David Stewart, Chief Executive, commented:
"The transfer of Group First and RSC represents an important
step in the execution of our strategy and in the development of
Pivotal Growth. Financial Services is at the heart of the Group's
growth strategy where we have identified significant opportunities
to develop LSL's position as the leading provider of services to
independent mortgage brokers.
"These transactions help to simplify the Group structure to
allow us to focus on maximising these business-to-business
opportunities, whilst also reducing exposure to housing market
cycles. Pivotal Growth was established in 2021 to exploit the
opportunities we had identified in the direct-to-consumer mortgage
broking market, and growth in the new build sector is a strategic
focus for Pivotal Growth."
For further information, please contact:
David Stewart, Group CEO
Adam Castleton, Group CFO
LSL Property Services plc investorrelations@lslps.co.uk
Helen Tarbet
Simon Compton
George Beale
Buchanan 0207 466 5000 LSL@buchanan.uk.com
This announcement contains inside information.
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 Best Surveying Firm at the 2022
Mortgage Finance Gazette Awards and Best Surveyor at the 2022
Equity Release Awards with Mortgage Solutions.
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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