AGM Statement

RNS Number : 5826W

LSL Property Services

28 April 2016

 

For immediate release

28 April 2016

LSL Property Services plc ("LSL" or "Group")

AGM Statement

LSL Property Services plc, a leading provider of residential property services incorporating both estate agency and surveying businesses, is holding its Annual General Meeting (AGM) today in London, where the following comments will be made regarding current trading, financial performance and outlook for the current financial year.

Market Backdrop:

Market volumes, as measured by Bank of England Total Mortgage¹ and Total House Purchase Approvals¹, have increased significantly in the first two months of 2016 compared to the same period in 2015. This reflected accelerating Buy-to-Let market activity ahead of the 1 April changes in Stamp Duty, compared to the same period in 2015.

The number of Total Mortgage Approvals¹ for the two months to 29 February were up 25.1% relative to the corresponding period last year, whilst the number of House Purchase Approvals¹ were up 21.0% on the same comparative basis. Although market volumes from the Bank of England are not yet available for March 2016, market estimates indicate very strong volumes in March as completions accelerated still further ahead of the Stamp Duty changes.

We expect that the acceleration of market activity in quarter one caused by the changes in Stamp Duty will soften in quarter two and we have already seen this trend in our April trading.

Group Performance:

The Group has traded well year to date. Group revenues for the three months ended 31 March 2016 increased by 16.9% year on year as we benefited from the pre-Stamp Duty acceleration in market activity.  The percentage increase in revenue for each of the two and three month periods ended 29 February 2016 and 31 March 2016 respectively is set out below:

	2 months to 29 February	3 months to 31 March
Revenue
Group	12.6%	16.9%
Estate Agency	14.2%	19.9%
Surveying	7.0%	6.3%

Estate Agency and Related Services:

The Estate Agency Division has traded well during the first three months of 2016 with the growth in exchange income, lettings income and financial services income demonstrating the benefits of LSL's Estate Agency strategy.

·      Total Estate Agency revenue increased by 19.9% year on year

·      Exchange income increased by 30.4% year on year

·      Lettings income growth of 13.0% year on year

·      Financial Services income growth of 27.9% year on year

·      Acquisition of a 65.0% interest in Group First Limited in February 2016, which provides mortgage and protection brokerage services to the purchasers of new homes through its subsidiaries, Mortgages First Limited and Insurance First Brokers Limited

·      Marsh & Parsons revenue growth of 36.3%

·      Marsh & Parsons opened a branch  in Tooting during the period to date in 2016

·      Continued focus on investment in letting book acquisitions with seven letting books acquired during the period to date in 2016 for a total consideration of £3.3m (2015: £2.7m)

Surveying and Valuation Services:

The Surveying Division has traded well during the first three months of 2016:

·      Surveying income increased by 6.3% year on year

·      Continued focus on capacity utilisation and optimising contract performance and revenue generation from B2B customers

·      Professional indemnity costs were in-line with expectations during the period

·      Technology refresh in progress

Strategy:

LSL's continuing Estate Agency strategy is to increase operating profit per branch; expand the number of Marsh & Parsons branches; grow recurring revenue streams and evaluate selective acquisitions. LSL's continuing Surveying strategy is to maximise revenue generation from B2B customers and optimise capacity management.

Outlook:

We expect that the strong market activity in quarter one will soften in quarter two, caused in part by some caution among both buyers and sellers in the run up to the EU Referendum on 23 June. The outlook for the year as a whole continues to be in-line with the Board's expectations.

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 for "House Purchase Approvals" and "Total Mortgage Approvals" 2015 & 2016

For further information, please contact:

Ian Crabb, Group Chief Executive Officer
Adam Castleton, Group Chief Financial Officer
LSL Property Services plc	0207 382 0360
Richard Darby, Sophie McNulty, Sophie Cowles
Buchanan	0207 466 5000

Notes on LSL:

LSL is a leading provider of residential property services to its key customer groups.  Services to consumers include: residential sales, lettings, surveying, conveyancing 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 LSL's website: www.lslps.co.uk

 

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