AGM Statement

RNS Number : 7648L

LSL Property Services

30 April 2015

 

For Immediate Release

30 April 2015

LSL Property Services plc

("LSL" or "the Group")

AGM Statement

LSL is holding its Annual General Meeting (AGM) today in London, where the following comments will be made regarding current trading, financial performance and the outlook for the financial year, which covers the period from 1 January 2015 to today.

Market backdrop:

Market volumes, as measured by Bank of England Total Mortgage and Total House Purchase Approvals, declined in the first two months of 2015 compared to the first two months of 2014 reflecting the tightening which we saw at the end of 2014 combined with the very strong comparable market growth seen in the first two months of 2014.  Market volumes are not yet available for March 2015. Whilst the upcoming general election is causing some uncertainty in the market place, positive underlying UK economic indicators support the prospect of a second half recovery.

The number of Total Mortgage Approvals⁽¹⁾ for the two months to 28 February 2015 was 16% lower than for the same period in 2014. House Purchase Approvals⁽¹⁾ were 17% lower on the same comparative basis.  Prime London volumes are down by circa 25% in the first quarter against the comparative period in 2014⁽²⁾.

Group performance:

The Group has traded well relative to the contraction in the market and in line with our expectations. The percentage change in turnover for the two and three months ended 28 February and 31 March 2015 respectively is set out below:

	2 months to 28 February	3 months to 31 March
Group	(7.3)%	(4.4)%
Estate Agency	(6.5)%	(4.0)%
Surveying	(11.3)%	(5.7)%

Estate Agency and Related Services:

The Estate Agency Division has traded well relative to the weak market conditions during the first three months of 2015 with the growth in lettings income and financial services income demonstrating the benefits of LSL's Estate Agency strategy:

-  Exchange income decreased by 15.2% year on year

-  Lettings income growth of 8% year on year

-  Financial Services income up 11% year on year

-  Marsh & Parsons total revenue down 14% year on year with two new branch openings to date in 2015 in Shoreditch and

Queens Park

-  Continued success targeting selective smaller acquisitions with the purchase of Thomas Morris, a multi award winning seven branch estate agency business trading in Cambridgeshire, Bedfordshire and Hertfordshire

-  Ongoing focus on lettings book acquisitions - LSL acquired nine lettings books for a total consideration of £2.3m; in the same quarter in 2014 LSL acquired one lettings book for a total consideration of £0.2m.

Surveying and Valuation Services:

The Surveying Division has traded as follows during the first three months of 2015:

-     Revenue decreased by 6% year on year

-    The Santander surveying contract was renewed from 1 January 2015 on a multi-year basis with e-surv as the lead valuer

-     On-going capacity management to manage demand from clients

-     Professional Indemnity costs ran in line with expectations during the period.

Outlook:

The outlook for 2015 continues to be in line with the Board's expectations.  LSL remains committed to its Estate Agency strategy of increasing operating profit per branch; expanding the number of Marsh & Parsons branches; growing recurring revenue streams; evaluating selective acquisitions and to its Surveying strategy of maximising revenue generation from B2B customers and optimising capacity management.

The Group has a strong balance sheet, is extremely cash generative and is well placed to increase shareholder value in a changing market with potential additional benefit from selective acquisitions.

(1)  Source: Bank of England

(2)  Source: Marsh & Parsons estimate

For further information, please contact:
Andrew Burchall, Interim Group Finance Director
LSL Property Services plc	0207 382 0360
Richard Darby, Sophie McNulty, Sophie Cowles
Buchanan	0207 466 5000

Notes to Editors:

LSL Property Services plc is a leading provider of residential property services to its two key customer groups. Services to consumers include: residential sales, lettings, surveying and advice on mortgages and non-investment insurance products. Services to mortgage lenders include: valuations and panel management services, asset management and property management services.  For further information, please visit our website: www.lslps.co.uk.

 

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