Profits jump by 61% at LSL Property Services

Profits at corporate giant LSL Property Services jumped by 61% during the first six months of the year to £14.3m from £8.9M, the company has reported.

Unlike many of its PLC rivals including Countrywide and Foxtons, the company maintained turnover at last year’s levels bringing in £151.5m, helped by its lettings business, which increased turnover by 4%.

This was boosted by its London prime agency brand Marsh & Parsons which grew its lettings revenue by 8%, although this was offset to by a drop in sales of 4%.

But although sales revenues were flat overall, profits within its sales division increased by 37% helped largely by lower marketing costs at Your Move and the sale of a Marsh & Parsons-owned property.

The struggling property sales landscape was offset by LSL’s financial services division which grew by 16%, helped by the acquisition of mortgage firm Group First last year.

The detail of the report also reveal the changing shape of the estate agency business as the sales market slows down across the UK.

LSL’s sales performance is better than most give the uncertainty over Brexit, but LSL is now as much a mortgage broker as it is a sales or letting agent – each of these parts of the business make up a third of revenues. Surveying services and other revenue streams generate the rest of its revenues.

Strong perforamance

“The Group has delivered a strong first half performance against a challenging residential sales exchange market and as announced in our pre-interim results trading update issued on 17th July 2017 these results are ahead of the Board’s original expectations,” says Chairman Simon Embley (pictured, below).

“I am particularly pleased with the profit growth in both Estate Agency and Surveying Divisions, as well as the positive Lettings income and Financial Services income growth.

“Whilst we expect Residential Sales volumes to remain suppressed in the second half, trends in other parts of our business are expected to be more resilient.
Our Lettings business continues to perform well, now representing 30% of total Estate Agency Division income.

“Mortgage cost and availability remain positive for the UK housing market with increasing distribution of products through intermediary channels which will support our growing Financial Services businesses which now represents 29% of total Estate Agency Division income.

LSL also cut its bank debt by 50% to £31.7 million and will issue an interim dividend to shareholders of 4p a share.