LSL’s conversion of its estate agency network into a wholly franchise model last year appears to be set to pay dividends as the group reported positive results to the City this morning.

LSL is one of the largest providers of services to mortgage intermediaries and estate agent franchisees with nearly 3,000 advisers representing around 11% of the total purchase and remortgage market.

STRONG BALANCE SHEET

The Group ended 2023 with a strong balance sheet – net cash sitting at £34.9 million – and its  estate agency division performing ahead of plan for both revenue and profits, with second half operating margin of around 30%.

Group Revenue from continuing operations was £144m (2022: £217m). After adjusting for disposals, like-for-like revenue was 10% below prior year in a housing market 19% lower and in a smaller lending market.

It has 61 estate agency franchisees operating in 306 territories making it one of the biggest providers of estate agency franchise services in the UK. It is also one of the UK’s largest providers of surveying and valuation services, supplying seven out of the ten largest lenders in the UK.

“We are pleased to confirm that in January we extended our contract to supply surveying and valuation services to Lloyds Banking Group, underpinning our leading market position,” LSL said in a statement to the City. “ The contract was originally awarded in May 2018 and has been extended to September 2028.”

RETAIL FINANCIAL SERVICES

The Neg reported in September how the group, which owns estate agents Your Move and Reeds Rains as well as mortgage adviser network Primis, completed its Marsh & Parsons sale for £29 million in January last year as it moved to focus more on retail financial services.

Last August announced the acquisition of the TenetLime mortgage network and that deal is set to complete shorlty.

Meanwhile, Pivotal Growth, its joint venture with Pollen Street Capital, also continues on the acquisition trail for financial services firms.

LSL said: “The Group’s trading in January was in line with management expectations and ahead of 2023. At this early stage of the year, we remain on track to deliver a material increase in profit for 2024 compared to 2023 due mainly to the benefits of improved performance in Surveying, as well as a full year of operating the franchising model.”