Pre-Close Trading Update Strong Growth Continues
For Immediate Release 30 January 2020
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE MARKET ABUSE REGULATION NO. 596/2014 ("MAR")
BELVOIR!
BELVOIR GROUP PLC
(the "Group", "Company" or "Belvoir")
Pre-Close Trading Update
Strong Growth Continues
Belvoir Group PLC (AIM: BLV), the UK's largest property franchise, today provides the following positive update on the outcome of the financial year ended 31 December 2019, which marks the 23rd year of uninterrupted profit growth for the Belvoir Group.
The Group has achieved a year of outstanding growth with revenue up 43% to £19.5m* (2018: £13.7m) and consequently the Board expects that the performance for the year, including profit before tax, will be comfortably ahead of management's expectations.
The property division achieved 6% growth, more than overcoming the twin challenges of the tenant fee ban and a sales market subdued by the political and economic uncertainty around Brexit. Management Service Fees ("MSF"), the Company's core income from franchisees, increased by 4% to £8.8m* (2018: £8.5m) with our networks having fully mitigated the impact of the tenant fee ban by December 2019, ahead of management's expectations. Part of the mitigation arose from the ongoing success of the assisted acquisitions programme which supported 24 franchisees to make a local portfolio acquisition, adding 4,500 managed properties. At the year end Belvoir's portfolio of managed properties was up 7% to 67,000, a record level.
The Group's diversification into financial services delivered significant revenue growth of 148% in 2019 following the acquisition of MAB (Gloucester) in November 2018, and a 35% increase in the Group's financial services network. Belvoir now has 166 (2018: 123) financial advisers offering specialist high street mortgage advice both to our Group franchisees and to independent agents. Additionally, towards the end of 2019 the Group announced an eight-year exclusivity agreement with Dacres, a 20 office estate agency network based in Yorkshire, to deliver financial services to their extensive client base. This is expected to contribute around £0.1m to the Group's operating profit in its first full year.
The Group continues to operate from a sound financial platform and is highly cash generative. Net debt as at 31 December 2019 had reduced significantly to £6.9m* (2018: 9.6m).
Subsequent to the year end, Belvoir completed on the acquisition of Lovelle, a 19 office estate agency network with operating profit of £0.5m, for a consideration of £2.0m satisfied in cash.
Dorian Gonsalves, CEO of Belvoir commented:
"2019 was another very strong year for the Group and is testament to the resilience of the Belvoir franchise business model with our franchisees achieving growth in a year when they were expected to lose 10% of their lettings revenue from 1 June, and yet by Q4 2019 franchise network revenue was noticeably higher than it was in Q4 2018.
We could not be more delighted by our strategy to invest in financial services in 2017. At that time our number of advisers was just 13 servicing 20 of our Newton Fallowell offices, and now we have 166 financial advisers across the UK, all operating under the Mortgage Advice Bureau brand. Financial Services has been, and continues to be, a considerable success for Belvoir.
The recent acquisition of Lovelle extends our franchise network and, as primarily a sales-focused estate agency, offers the opportunity to increase revenue streams from both lettings and financial services.
The Board remains committed to its growth strategy of capitalising on further consolidation within the property sector and through diversification into other property-related services. With January 2020 signalling a marked improvement in both sales and mortgage transaction numbers, I am optimistic about the growth opportunities for Belvoir in the year ahead."
Notice of Full Year Results
The audited results for the financial year ended 31 December 2019 will be announced on Monday 30 March 2020.
*unaudited
For further details:
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Belvoir Group PLC Dorian Gonsalves, Chief Executive Officer Louise George, Chief Financial Officer
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01476 584900 investorrelations@belvoirgroup.com |
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finnCap Julian Blunt, Teddy Whiley (Corporate Finance) Tim Redfern, Manasa Patil (ECM)
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+44 (0) 20 7220 0500 |
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Buchanan Charles Ryland, Victoria Hayns & Tilly Abraham
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+44 (0) 20 7466 5000 |
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Notes:
About Belvoir Group PLC
Founded in 1995 and listed on AIM in 2012 (BLV.L), Belvoir operates a nationwide property franchise group with 396 offices across five brands specialising in residential lettings, property management, residential sales and property-related financial services. With its Central Office in Grantham, Lincolnshire, the Group manages 67,000 properties and reported record revenues of £13.7m in 2018 making Belvoir the largest property franchise group in the UK.
For further information, please visit: www.belvoirgroup.com
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