Interim Management Statement

RNS Number : 5857V

LSL Property Services

04 November 2010

 



For immediate release

4 November 2010

LSL Property Services plc

("LSL" or "the Group")

Interim Management Statement

LSL, a leading provider of residential property services, incorporating estate agency and surveying businesses, issues this Interim Management Statement for the period 1 July 2010 to 31 October 2010.

Since 1 July 2010 the housing market has weakened with House Purchase Mortgage Approvals for quarter 3 down 12% compared to quarter 3 2009 and Total Mortgage Approvals down 10%⁽¹⁾. The annualised run rate of House Purchase Mortgage Approvals for quarter 3 2010 suggests that full year approvals will be c.575,000 compared to 593,000 for 2009.

However, despite this backdrop the Group has performed well and made good progress. The Group's current performance underpins the Board's confidence in meeting expectations for the 2010 full year outturn.

Turnover for the 10 months ended 31 October 2010 compared with the same period in 2009 was as follows:

·         Group turnover for the period was up by 33%, like-for-like ⁽²⁾ up by 17%

·         Surveying turnover was up by 18%

·         Estate Agency and Financial Services turnover was up by 45%, like-for-like⁽²⁾ up by 17%

Cash generation remains strong and net debt at the end of October 2010 was £13.7m (October 2009 £33.7m).

Surveying Division

Surveying has continued to make solid progress and recent market share gains have resulted in significant growth in turnover and continued robust operating margins.

Estate Agency

Estate Agency has performed well and benefitted from further market share gains in all brands during the year. The performance of the HEAL business has significantly improved since acquisition and is expected to be profitable in the second half of the year.

Estate Agency has continued to build on its market leading positions in Asset Management and Lettings. These counter cyclical income streams are increasingly important profit drivers for the Group.

A key development in 2010 has been the Group's major expansion in mortgage and insurance distribution capacity. Home of Choice was acquired earlier in the year and has now been restructured with a lower cost base.  In October, Estate Agency agreed to acquire Advance Mortgage Funding Limited and its subsidiary business BDS Mortgage Group Limited. Together these acquisitions create one of the largest intermediary networks in the UK and the opportunity to significantly leverage the Group's financial services business.

Outlook

LSL has a cautious view of 2011 and with the continued and well documented market uncertainty, expects no improvement on current market run rates.

However, the Group benefits from strong market positions in all areas of business together with well established counter cyclical income streams and transformed capacity of the financial services distribution network. In addition, within both Estate Agency and Surveying, the Group has a programme of initiatives that can deliver organic growth even in these challenging trading conditions. LSL remains profitable and extremely cash generative at market levels which have been at, or around half historic levels for some time.

The Group has a strong balance sheet and is on track to have minimal net debt at the year end. Overall, LSL is extremely well placed to deliver progress in 2011 and beyond.

 (1) Source : Bank of England

(2) Excluding the Halifax Estate Agencies Ltd ("HEAL") branches acquired in January 2010

For further information, please contact:

Simon Embley, Group Chief Executive Officer Steve Cooke, Group Finance Director LSL Property Services plc	0203 215 1015
Richard Darby, James Strong Buchanan Communications	0207 466 5000

Notes to Editors:

LSL Property Services plc is one of the leading residential property services companies in the UK and provides a broad range of services to its clients who are principally mortgage lenders, as well as buyers and sellers of residential properties. For further information, please visit our website: www.lslps.co.uk.

 

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