The latest trading update from £400m estate agency giant LSL reveals how much the group is counting on its new financial services operation to drive growth in the coming years.
This follows its announcement in April last year that the 12-brand property industry giant is co-investing in new venture Pivotal Growth with Pollen Street Capital to ‘buy and build’ a leading national mortgage broker built partially on the success of its existing PRIMIS mortgages operation.
Its full-year trading update for 2021 reveals an overall 23% rise in revenues to £327 million (from £277 in 2020), helped largely by the booming housing market and increased market share within its core markets.
Profits are also up from £41.5 million in 2020 to £50 million last year.
Financial muscle
But, while its pipeline of property sales is slowing now that the boom has subsided, its financial services division is catching up fast with the group’s surveying and estate agency counterparts, rising from revenues of £51 million in 2020 to £80 million last year.
This compares with a turnover of £150 million from estate agency and £95 million from surveying during 2021.
Hidden in the detail of the results, it’s also clear that LSL’s cost-cutting exercise two years ago is also bearing fruit – its estate agency margin, an important bellwether of any firm’s performance – increased from 15% to 20% last year compared to 2020.
LSL also has a very healthy bank account after selling two ‘non-core’ businesses – LMS conveyancing in May 2021 and TM Group (tech firm that operates MIO) in July 2021 for a combined £41.3m.
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