LSL blames 25% reduction in turnover on Covid, branch cull and fees ban
Results from the company for the first six months of the year reveal dramatically reduced turnover but modest increases in profits.
Turnover at LSL, the parent company of Your Move and Reeds Rains, nosedived by 25% to £114.9 million during the first six months of the year, caused almost entirely by a significant drop in sales at its estate agency division.
LSL has pinned this dramatic reduction in turnover on its closure of 164 branches last year, the tenants fees ban and the effects of the Covid lockdown.
The company has also revealed that it furloughed 3,300 staff in total at a cost to HM Treasury of £13.8 million, although only 500 staff remain within the scheme.
LSL’s other business performance indicators for the period are encouraging, given the financial ravages of the lockdown.
From January until 30th June it made an underlying operating profit of £12.5 million, although after the costs of Covid (£2.8 million) and other exceptions costs, operating profit was £3.6 million.
Profits at its estate agency division increased by £100,000 to £4.1 million.
Looking to the future, LSL says trading conditions are ‘extremely encouraging’ and that the Stamp Duty holiday for homes sold under £500,000 is expected to provider further support to the housing market.
“I am pleased to confirm that LSL has performed extremely well, during a period of unprecedented uncertainty and disruption,” says LSL Group Chairman Simon Embley (left).
“After a strong first quarter, we reacted decisively to the emergence of the Covid-19 virus, managing our operations and cash position to secure the position of the Group, even in the event of the lockdown continuing throughout the year.
“This same agility served us well as restrictions eased, as we rebuilt our capability quickly to trade strongly throughout June.”
Industry analysis
Anthony Codling, CEO of Twindig, says: “LSL is not out of the woods yet; around 15% of staff remain on furlough and wisely the Group is not willing to provide full-year guidance due to the high level of uncertainty, the Group’s Balance Sheet is not as strong as some of its peers but given the circumstances, LSL appears to be in good health.”
