Acquisition of Lettings Agencies

RNS Number : 1137F

Belvoir Lettings PLC

20 May 2013

 



For Immediate Release

20th May 2013

BELVOIR LETTINGS PLC

(the "Company" or "Belvoir")

Acquisition of Lettings Agencies in Basingstoke and Andover

Belvoir Lettings PLC (AIM: BLV), one of the UK's largest lettings franchises, is pleased to announce that in line with its stated strategy of expanding its geographical footprint, Belvoir has today acquired  four lettings agencies based in Basingstoke and Andover.

The acquisition is of Claygold Ltd ("Claygold"), which trades as Redwoods from one branch in Andover and three in  Basingstoke. The lettings business of Redwoods will be sold on to the two existing Belvoir franchise businesses in Basingstoke and Andover respectively and will increase the size of these two franchises substantially. The vendors who have worked in the business for over 20 years are now retiring.

The shares of Claygold were acquired for £1.535m and net assets within the companies are not expected to exceed £100k. £1.435m will be ascribed to goodwill. The consideration was paid in cash from Belvoir's bank facilities, other than retentions which will be settled when completion accounts are finalised.

These amounts will not directly appear in the accounts of Belvoir as the business will be sold on to the existing Belvoir franchises in Basingstoke and Andover within the next month when tax clearances are received. After the reorganisation, Basingstoke will become one of the largest franchisees in the Belvoir network.  Andover will also achieve substantial size, acquiring £140k of income from lettings.

The accounts of Belvoir Property Management (UK) Ltd will record the Management Service Fee on the lettings income which will be £80k initially on an annualised basis, and also interest on the loans extended to the franchises in Basingstoke and Andover at 8.95% which will be £112k initially for the first year. The estate agency business within Redwoods will continue to be operated under that separate brand. Historically the accounts of Claygold Ltd have shown a neutral profit position as the vendors were remunerated in the business. For the year ended 31^st March 2012 Claygold Limited turnover was £1,961,974 and the company recorded a post tax loss of £15,583.

The acquisition is expected to be earnings accretive before the impact of any acquisition and reorganization costs in 2013.

Dorian Gonsalves, Chief Executive Officer of Belvoir Lettings PLC commented:

"We are delighted to be announcing the acquisition of these four agencies, which have substantially increased our network turnover and addressable market. The transaction opens up opportunities in South England and the home counties, a key strategic territory in our growth plans and is a major step in our acquisition plan.

We expect the benefits of this transaction next year, and look forward to working with the franchisees of these agencies going forward. Belvoir continues to explore a number of exciting opportunities to expand our network which in the longer-term, we expect to underpin the continued growth of the Company."

For further details:

Belvoir Lettings PLC Mike Goddard, Chairman Dorian Gonsalves, Chief Executive Officer Carl Chadwick, Finance Director	01476 584900
Cantor Fitzgerald Europe Rick Thompson or Julian Erleigh, Corporate Finance Jeremy Stephenson or Katie Ratner, Corporate Broking	0207 894 7000
Buchanan Charles Ryland, Gabriella Clinkard www.buchanan.uk.com	0207 466 5000

 

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