Spicerhaart Group has reported a loss before tax of £5.5 million as higher operating costs including returning to work post pandemic and surging energy costs take their toll, it’s latest company accounts reveal.

Group turnover was sustained at £139.3 million compared to £139.6 million the previous year despite the marked change in macro-economic conditions and a 16% reduction in residential property transaction volumes.

OUTPERFORMED

Estate agency outperformed the wider sales market decline and mitigated the turnover reduction to 5%.

The Spicerhaart Group continues to grow the financial services businesses which delivered a 9% increase in turnover while turnover in residential lettings increased by 4%, driven by a 3% growth in properties under management and stronger average rental prices.

Land and new homes turnover reduced by 13%, reflecting the wider sales market conditions. Surveying income decreased by 21%, impacted heavily by the significant and unexpected market disruption in Q4 2022 experienced across the surveying industry.

Costs increased £11 million as the Group diverted resources into financial services and increased recruitment across its divisions.

PANDEMIC

Travel costs also increased having significantly reduced during the pandemic and subsequent lockdowns while rising energy costs and spiralling inflation also hit the business.

The group repaid all debt drawn under its revolving credit facility in May 2021 and remains debt free with cash reserves of £19.8 million, down from £24.5 million the previous year and says it is available to fund its continued growth in key strategic areas of the business.

In its strategic report Group Executive Chairman Paul Smith (main picture) says market conditions remained challenging in the first half of 2023 as new buyer activity calmed following the September mini-budget.

That, he added, reduced the value of the sales pipeline entering this year and that high inflation and interest rates remained a focus for many customers.

STRATEGIC PRIORITY

He says in the report: “Continued investment and growth in non-cyclical, and recurring revenue streams in both Financial Services and Lettings remains a strategic priority.

“Operational improvements to drive performance are gaining momentum and are expected to deliver results in H2 2023.”

Based on current forecasts, the group is expected to end 2023 with strong cash reserves and for these to build further during 2024.

The Neg reported last month how Smith was taking on the role of Executive Chairman with National Operations Director John Phillips and Group Managing Director Antony Lark taking the position of joint Chief Executive.