Pre close trading update

RNS Number : 5468N

Belvoir Lettings PLC

01 February 2016

 

For Immediate Release                                                                                                                                      1 February 2016

BELVOIR LETTINGS PLC

(the "Group" or "Belvoir") 

Pre close trading update

Belvoir Lettings PLC (AIM:BLV), one of the UK's largest property franchises, announces the following trading update ahead of its final results for the year to 31 December 2015, which will be released on 4 April 2016.

Trading in the second half of the year was in line with the Board's expectations. The Group delivered growth through enhanced network performance, franchise acquisitions and increased property sales. As a result, the underlying profit before tax for the year is expected to be in line with market expectations. 

Highlights:

·     Strategic move from the single Belvoir brand to a multi-brand franchising Group with the acquisition of the Newton Fallowell and Goodchilds networks

·     Successful integration of the acquired franchise networks

·     UK coverage expanded substantially by 51 offices to 213 (2014: 162)

·     Growth in Group Management Service Fees (MSF) was 25% with the Belvoir network growth at 12% (2014:11%)

·     Group revenue increased to £6.8m (2014: £6.5m)

·     Revenue from property sales grew by 60% to £1.4m (2014: £0.8m), primarily reflecting the increased service offering from the acquired businesses. The ratio of revenue from lettings to sales now stands at 77%:23% (2014: 84%:16%)

·     Recruitment of 11 (2014: 10) new Belvoir franchisee owners into 7 new and 4 existing territories

·     Record performance by two franchised offices which turned over more than £1.0m

·     Strong year end bank balance of £2.7m (2014: £1.5m)

The acquisitions of Newton Fallowell in July and Goodchilds in October were the first steps in our new multi-brand strategy. Both acquisitions have been successfully incorporated into the Group. Introducing these two franchised networks to the Group has also broadened our property sales and related services whilst still remaining closely aligned with the more stable lettings market which represents over three quarters of our network revenue.

Recruitment of Belvoir franchisees was stronger in the second half of the year, finishing with a total of 11 new franchises, of which 7 were new territories and 4 were resales of existing Belvoir offices.  Additionally, further progress was made in terms of the Group's financial support of franchisee led acquisitions during the year.    

By the year end, the Group's footprint within the UK had expanded by 31% to 213 (2014: 162) offices, of which 168 are branded Belvoir, 31 Newton Fallowell and 14 Goodchilds.

The Group ended the year with a strong balance sheet with bank balances totaling £2.7m (2014: £1.5m).

Sector outlook

Confidence in the future of property investment and buy to let remains high and it is likely there will be modest capital appreciation across all residential property of 4% - 5% and rental increases of 2% - 3% in 2016. Stamp duty increases will affect higher value properties, especially in parts of London and the South East, but in the areas where Belvoir operates, increased stamp duty will have little or no impact when investment landlords factor in capital gains and positive annual returns.  

With 1.5m people currently on council waiting lists, net migration at over 300,000 and targets for new build properties failing to satisfy current demand, let alone future housing needs, the private rented sector remains a stable tenure of choice for over 10m tenants in the UK. In the current rental climate, opportunities remain strong and landlords are likely to value the services of skilled lettings agencies such as Belvoir more than ever before.

Mike Goddard, Chairman and CEO of Belvoir commented:

"This has been an exciting year with the Group having taken the critical strategic step into multi-brand franchising, so as to further expand the network reach across the UK, whilst continuing to support and develop the strong organic growth of our existing Belvoir network.   I am delighted to report that our full year trading results will be in line with market expectations.

2016 promises to be another exciting and successful year for the Group.  We will see the benefit of a full year's trading from our recent acquisitions and we will be positioned to take advantage of further consolidation within the industry."

------------------------------END------------------------------

Belvoir will announce its preliminary results for the year ending 31 December 2015 on 4 April 2016.  An analyst briefing will be held at 10.00am on that day at the offices of Buchanan, 107 Cheapside, EC2V 6DN.

For further details:

Belvoir Lettings PLC Mike Goddard, Chairman and CEO Louise George, Finance Director	01476 584900 [e-mail]
Cantor Fitzgerald Europe Rick Thompson, Phil Davies, Michael Reynolds, Corporate Finance David Banks,  Tessa Sillars, Corporate Broking	0207 894 7000
Buchanan Charles Ryland, Gabriella Clinkard, Madeleine Seacombe	0207 466 5000

About Belvoir Lettings PLC

Belvoir was founded in February 1995 by Mike and Stephanie Goddard and operates from its Central Office in Grantham, Lincolnshire.  Belvoir successfully listed on the AIM market of the London Stock Exchange on 21 February 2012.

Belvoir is recognised as one of the largest specialist lettings agency franchises in the UK, with 168 outlets nationwide. The company offers a specialist service in property rental, property management, residential lettings, buy to let and now property sales, in selected locations. Each local Belvoir office is owned and personally managed by local owners, operating under licence from Belvoir Property Management (UK) Ltd.

Belvoir was officially awarded the Best Lettings Agency Franchise Gold Award at the 2015 Agency of the Year Awards in association with The Sunday Times & The Times for the 5th time in the 6 years of the awards history.

In July 2015 Belvoir acquired Newton Fallowell Ltd, a network of 30 franchised and one corporate estate and lettings agencies and in October Belvoir acquired Goodchilds Estate Agents and Lettings Limited, a network of 14 property sales and lettings branches located across the West Midlands. The Company is now committed to developing a multi-brand franchising strategy. Across the networks, the Group operates through 213 outlets.

 

END

 

 

TSTLLFIFLRILVIR