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Belvoir franchise reports continued growth despite COVID-19 challenges

Lockdown makes only a small dent in letting agency chain’s performance with June breaking records for Newton Fallowell arm.

Richard Reed

Franchise property chain Belvoir has reported continued growth during the first half of 2020, despite COVID-19 and the inability to do valuations and viewings.

Trading slowed during the lockdown in the second quarter but since restrictions on the housing sector were lifted in mid-May, firm has reported a surge of activity due to pent-up demand.

This has seen group network revenue up 12% in June compared with 2019, with the lettings business up 17% – ahead of pre-COVID levels, according to a first-half trading update.

June was a record-breaking month for the group’s Newton Fallowell estate agency network in terms of instructions and sales, as well as for its financial services division.

Tenancy fees down

Management service fees from tenancies were 1% lower than the first half of 2019, though overall income from the property division was up 9%, partly due to increased revenue from the Lovelle network, acquired in January.

Financial services commission was up 7% in H1 thanks to the enlarged adviser network and the focus on re-mortgages and insurance products during the lockdown.

Belvoir has continued to generate cash from operations, with net debt at 30 June standing at £5.7m, compared with £6.9m at 31 December 2019, having deployed £2.0m of cash in January to buy Lovelle.

‘Resilience’ of franchise model

Belvoir CEO Dorian Gonsalves said: “This strong performance once again demonstrates the incredible resilience of the franchise business model in the face of both

Dorian Gonsalves, CEO Belvoir Group

changes within the sector and challenges affecting the wider economy.

“The group has benefited from the considerable momentum built up during 2019 and the start of 2020, during which time the property division had fully mitigated the impact of the June 2019 tenant fee ban through a combination of assisted acquisitions and income diversification, investing in the Lovelle network and growing our financial services division’s network of advisers by 35%.

“With a return to pre-COVID levels of activity or better since housing sector restrictions were lifted, and the positive impact of the stamp duty reductions still to take effect, we are confident that the group is well positioned to capitalise on the current market upturn and to take advantage of the opportunities arising from more challenging economic conditions.”

July 31, 2020

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