Agency grouping LSL has revealed the damage its branch closure programme inflicted on revenues during 2019 following its February announcement that 120 Your Move and Reeds Rains branches were to be closed, merged or transferred.
The company’s full-year trading update for 2019 reveals that, although it expects profits to be higher year-on-year, overall revenues are down 4% and 16% lower within its estate agency division.
But the closures are not the only factor – the slow sales market is also to blame and the company says revenues at its sales division would be down 4% even if it hadn’t closed so many branches.
But LSL admits the reductions in revenue are largely down to the branch closure programme, which has seen surplus-to-requirement offices up and down the UK boarded up or transferred to new franchisees.
The slow market has also impacted its upmarket London agency, Marsh & Parsons, which has been opening rather than closing branches.
Its revenues are down 3% overall including a 5% dip in sales fees and a 2% reduction in lettings.
LSL’s financial services has been hit by the closures too as referral leads have declined, but its surveying business is one of the company’s bright spots. Revenues there are up 24% year-on-year after it recently bagged a Lloyds Bank home surveying contract.
LSL is relying on 2020 being a better year and an improved sales pipeline at the beginning of this month indicates the market has begun to pick up, it says.
The cost of shutting down so many branches has also pushed it further into the red; the group’s net banking debt increased by nearly £10 million last year to £41.9 million, a figure the company’s board says it is ‘comfortable with’.