LSL spends £7 million buying back stock off shareholders
Announcement is made as group reports profit 74% lower than the year before, but it was was still way ahead of analyst forecasts.
LSL Property Services, the owner of Your Move and Reeds Rains estate agencies continued its strong start to 2024, as it announced a £7 million share buyback plan.
Announcing full year results for the 12 months ended 31 December 2023 the group told the City yesterday that net cash was £35 million at the year end with the final dividend maintained at 7.4p per share.
PROFIT
The results followed last month’s trading update when it reported profit over the first two months of the year around £1 million compared to losses of £1.5 million and £2 million for the same period in 2023 and 2022.
The group reported underlying operating profit 74% lower than the year before at £9.3 million but this was still way ahead of analyst forecasts.
David Stewart, Group Chief Executive of LSL Property Services, says: “2023 marked a period of significant progress in our transformation to a higher margin, less capital-intensive business that will perform more consistently through market cycles.
“Against the backdrop of very challenging market conditions, we have simplified and restructured our financial services and estate agency businesses. Both are now focused on business-to-business services with a significantly lower cost base and the potential for higher free cash flow generation.
“LSL is now a more streamlined, agile Group comprising three market leading businesses with high return and organic growth opportunities that are well positioned to capitalise from the recent recovery in the housing and mortgage markets. Our focus is on maximising the performance of these businesses to deliver value to shareholders.”
PIVITOL GROWTH
As part of the Group’s restructure Simon Embley will be stepping down as a non-executive from the Group’s Board to focus on Pivitol Growth, LSL’s joint venture with Pollen Street Capital.
Stewart adds: “I would also like to take the opportunity to give both my personal thanks and those of the rest of my colleagues to Simon Embley, who has decided to step down from the Board on 1 May.
“Simon’s contribution to LSL has been extraordinary, from its beginning in 2004 to the present day.
“I am delighted that we will continue to work closely with him as he focuses on the growth plans of our joint venture, Pivotal Growth, which has made substantial progress over the past year.”
The Neg reported earlier this month how Pivitol Growth had acquired broker John Charcol as it seeks to become the largest mortgage and protection broker in the UK.
It now has over 400 advisers serving the estate agency, new build and general insurance markets and is expected to become profitable later this year.
IMPROVED TRADING
Stewart adds: “At the end of Q1 2024, Group Underlying Operating Profit was materially ahead of the same period in 2023. This improved trading reflects better market conditions as well as the benefits of the new Estate Agency franchise model, improved lender contracts, and our decision to retain surplus capacity throughout the second half of 2023 in our Surveying & Valuation business.
“Although we retain a degree of caution, inflation data still suggests that interest rates will reduce in 2024, which would help support our markets.
“This, together with the strong performance since our recent trading update on 6 March, reinforces the Board’s confidence, and our expectations for full year Underlying Operating Profit have increased further.”
