It’s been Spring Cleaning time in the property agency market as the larger groups take action to maintain profits.
LSL sold its ZPG shares for £32.9 million to “protect its balance sheet” during a difficult 2016 in which its profits and margins tumbled.
LSL is the parent company of 12 estate agency brands including YourMove, Reeds Rains and Marsh Parsons. It also employs 4,990 people in the UK across its three key areas, surveying, estate agency and mortgages.
Countrywide sold 21.5m shares to raise £37.8million, while LSL sold all its shares in ZPG.
The group’s profits during 2016 dropped by 19 per cent on revenue that edged up from £300.6 to £307.8 million. But its balance sheet looks better following the sale of its entire stock of Zoopla shares. Operating margin also decreased, from 14.3 per cent to 11.3 per cent.
“After a strong overall first half performance in the Estate Agency Division we reacted decisively to the changing market conditions in the second half of the year with selective cost reduction measures,” says Chairman Simon Embley. “[This included] branch closures and [we] protected the balance sheet by disposing of the Group’s shareholding in Zoopla and pausing acquisition activity.”
Countrywide has quietly closed a number of branches within its various brands and merged Faron Sutaria into John D Wood and sold 21.5 million shares, raising a further £37.8 million pounds from the City to fund the roll out of its fast-expanding digital hybrid platform and network.
With a share price of £1.75, Countrywide says it was over -subscribed as many of the company’s big institutional backers swung behind CEO Alison Platt’s plan to extricate the company from its current woes. The shares represented just under 10 per cent of the company’s total share capital.
Belvoir has sold the first of its HQ-owned offices following an announcement in January that it would try and dispose of “most of [our] remaining six corporate-owned offices to enable the group to further focus its resources on its franchise business.”
The Burton upon Trent office was snapped up by a franchisee with existing branches in Hinkley and Tamworth. The six corporate offices targeted for sale are the remaining branches of the business originally set up by founders Mike and Stephanie Goddard during the 1990s as a traditional letting agency, before the company began offering franchises.
Belvoir plans to sell three of the remaining Belvoir corporate offices but retain two – both in its home town of Grantham – for system development purposes. It says a further corporate sale is imminent, and will be announced next month.
“We are delighted that we are making progress on both our strategy to support franchisee-led acquisitions and to divest the Group of its corporately owned offices,” said Mike Goddard.