LSL is the latest large estate agency group to report extraordinary results for the first six months of the year, although it warns that activity has slowed significantly since the full stamp duty holiday deadline passed.
Nevertheless, the once-in-a-lifetime property market that unfolded after the New Year helped produce record revenues for its various estate agency brands including Reeds Rains, Your Move and Marsh & Parsons in London.
Group revenue increased by 45% year-on-year to £166.5 million while profits jumped from £9.7 million to £27.3 million although these figures have been skewed by the market closure last year.
The surge in market activity, revenue and profits has helped LSL clear its debt, too. For the first time since it launched on the stock market in 2006 the company has a positive net cash position of £17 million compared to a net debt last year of £12.7 million.
The company’s mortgage arm also enjoyed an extraordinary six months; its lending increased to £19.3bn or 9% of market.
Profits at both its mortgage business and surveying divisions jumped – by 68% and 179% respectively.
Despite a significant slowdown in the market since the stamp duty ended, LSL says its sales exchange pipeline is 20% higher than in August last year and that fall-throughs are at normal levels.
“LSL performed strongly in the first half of 2021, as we took advantage of favourable market conditions whilst making significant progress in executing our strategy, which places Financial Services at the forefront,” says David Stewart, LSL Group Chief Executive (pictured).
“The investments we are making in technology and financial services will deliver tangible benefits from 2022 and we are confident they will generate substantial value for shareholders in the medium term.
“The opportunities for new value-add services in Surveying and Valuation Services further underpin our future growth, while we continue to perform well and take market share in Estate Agency.”
Shot in the arm
LSL’s results clearly demonstrate that the stamp duty holiday provided a powerful shot in the arm for the UK housing market, helping LSL deliver record revenues, record operating profits and bolster its Balance Sheet,” says Anthony Codling of Twindig.
“However, while the housebuilders are confident about life after the stamp duty holiday, LSL sounds a note of caution suggesting that the party will not continue in 2022 and that performance improvements in 2022 will be driven by self-help rather than stamp duty booster jabs.”