Connells’ profits sink by 84% in ‘challenging year’
Connells reports sales revenue fell and registered applicants were down by 24% in 2023 but lettings revenue rose.
Connells Residential’s annual report reveals operating profits sank by as much as 84% in 2023 and revenue was down by 11% compared to the previous year at £90,329,000.
In the report it says: “2023 was a challenging year for the UK housing market, as the cost-of-living crisis, higher interest rates and generally uncertain economic conditions that impacted the market towards the end of 2022 continued into 2023.”
A buoyant rental market meant it was a mixed picture though with very strong levels of demand from tenants and a significant shortage of available properties for rent.
It meant that although commissions on sales were down by around 18% and registered applicants by 24%, rental commissions were up by 6%, which helped Connells make a £1,868,000 profit.
Revenue down
It wasn’t however a good year for financial service products, with associated revenue down by around 8%.
Acknowledging that market sentiment remains subdued, Connells says they are focusing on growing the company’s market share in 2024 in both the sales and lettings market, as well as increasing fees to counteract lower transaction levels and falling house prices.
The outlook for the UK housing market remains positive.”
The Board are expecting conditions to improve in the medium to long-term, saying: “The outlook for the UK housing market remains positive, driven partially by the ongoing imbalance between the demand for properties against the available supply and the availability of affordable mortgage finance.”
And they have ambitious plans, adding: “The Company aims to grow its operations through both new branch openings and via acquisitions, proactively exploring the acquisition of smaller regional players, who are often market leaders in their locality.
As was reported in The Neg last month, viewings and instructions are already on the rise.
