Pre-Close Trading Update & Notice of Results

RNS Number : 5916O

Belvoir Lettings PLC

31 January 2019

 

For Immediate Release                                                                                                                     31 January 2019

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

BELVOIR LETTINGS PLC

(the "Group" or "Belvoir") 

Pre-Close Trading Update

and

Notice of Full Year Results

Belvoir Lettings PLC (AIM: BLV), the UK's largest property franchise, today provides the following update on the outcome of the financial year ended 31 December 2018 and the outlook for 2019.

The Group has achieved another year of continued and encouraging growth with revenue up 21% to £13.7m* (2017: £11.3m), outperforming both the sales and lettings elements of the housing market and the financial services market.  Management service fees ('MSF') from lettings was up 7.1%, with underlying growth of 2.6% noticeably ahead of the UK rental index of 1.8% and a further 4.5% resulting from Belvoir's successful assisted acquisitions programme. On the property sales side, MSF was up 8.5% compared with the HMRC reported 2% decrease in the number of residential property transactions for 2018. 

Group income from financial services benefited from a full year of ownership of Brook Financial Services ('Brook') acquired 13 July 2017 and one month ownership of MAB (Gloucester) Limited ('MAB Glos') acquired 26 November 2018.  Within Brook, on a full year like-for-like comparison, revenue from financial services increased by 20%.  This compares to a 3.7% increase in the value of gross mortgage advances reported by the FCA for 2018 against 2017.

Consequently, following this continued good progress, the Board expects that the performance for the year, including underlying profit before tax, will be in line with market expectations and intends to maintain a progressive dividend policy.

The Belvoir Group has benefited from the resilience of the franchise network model coupled with its strong bias towards lettings, providing a reliable 'annuity-style' recurring revenue stream, against the backdrop of an underperforming property sector.  Furthermore, the Group's diversification into financial services provides an additional income stream from which its franchisees and the Group can benefit.

As previously announced, further to the Autumn 2016 budget announcement of a ban on tenant fees, it is confirmed that this legislation will come into effect on 1 June 2019. The Board has assessed that the impact from the ban on tenant fees will be less than the previously estimated 8% of gross profit. The effect is now believed to be less than 6% initially, reducing further to 3% over 9 months.  This encouraging development is the result of the Group's diversification into financial services, and our franchisees adopting additional revenue streams.

Dorian Gonsalves, CEO of Belvoir commented:

"In 2018, Belvoir delivered on its promise to support franchisee growth through its Assisted Acquisitions programme, adding network revenue of £6.9m, ahead of our £6.6m target for the year and over double that achieved in 2017.  Meanwhile, we are also pleased to see our organic lettings growth and our increase in sales transactions exceeding market performance.

The Group's diversification into financial services has also delivered growth, and our late-2018 investment in MAB Glos will provide the platform from which to offer specialist high street mortgage advice through our network of lettings and estate agents.

The Board believes that Belvoir is well-prepared to both meet the challenges and take advantage of the opportunities anticipated in 2019."

Notice of Full Year Results

The audited results for the financial year ended 31 December 2018 will be announced on Tuesday 2 April 2019.

*unaudited revenue

For further details:

Belvoir Lettings PLC Dorian Gonsalves, Chief Executive Officer Louise George, Chief Financial Officer	01476 584900 [e-mail]
Cantor Fitzgerald Europe Rick Thompson, Phil Davies, Will Goode	0207 894 7000
Buchanan Charles Ryland, Vicky Hayns, Madeleine Seacombe	0207 466 5000

Note to Editors:

About Belvoir Lettings PLC

Founded in 1995 and listed on AIM in 2012 (BLV.L), Belvoir operates a nationwide property franchise group with 364 offices across four brands specialising in residential lettings, property management, residential sales and property-related financial services. With its Central Office in Grantham, Lincolnshire, the Group manages over 62,000 properties and reported revenue of £11.3m in 2017 making Belvoir the largest property franchise group in the UK.

 

END

 

 

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