Interim Management Statement

RNS Number : 1547R

LSL Property Services

15 November 2012

 



For Immediate Release

15 November 2012

LSL Property Services plc

("LSL" or "the Group")

Interim Management Statement

LSL, a leading provider of residential property services, incorporating Estate Agency and Related Services and Surveying and Valuation Services businesses, issues this Interim Management Statement for the period from 1 July 2012 to 14 November 2012.

Housing market transaction levels have deteriorated in the period with Total Mortgage Approvals⁽¹⁾ for the third quarter of 2012 14.5% lower than the third quarter of 2011 and House Purchase Approvals⁽¹⁾ 6.7% lower on the same comparative basis. Total Mortgage Approvals for the 9 months from January to September 2012 were down 6.5% year on year while House Purchase Approvals were 2.1% higher for the same period. Market data is not yet available for October, although the anticipated improvement in mortgage lending volumes for the fourth quarter has not yet materialised.

Against this backdrop trading has been satisfactory during the period. Turnover for the 10 months ended 31 October 2012 compared with the same period in 2011 is set out below both in total and on a like-for-like basis (excluding Marsh & Parsons):

	Total	LFL
	10 mths to 31 Oct	10 mths to 31 Oct
Group	+14%	+1%
Estate Agency	+31%	+11%
Surveying	-16%	-16%

Activity levels were subdued over the Summer and these conditions persisted longer than expected into September. October transaction run rates were in line with expected levels and this momentum has been maintained up to 14 November.

Estate Agency & Related Services:

Estate Agency has performed well with continued strong growth in lettings and financial services. Excluding Marsh & Parsons, lettings income for January to October increased by 25% and financial services income increased by 13%. Residential sales income grew by 7% including the benefit of significant fee improvement.

Despite a more challenging London housing market where stock levels have been impacted by stamp duty increases and ongoing concerns over possible future property taxes, Marsh & Parsons has continued to make good progress and to benefit from its strong lettings income stream.

Asset management has outperformed the market with a year on year revenue increase of 4% for January to October compared to a decline in repossession volumes of 8% for the period January to September.

Surveying & Valuation Services:

Surveying performance has been satisfactory relative to the market. Revenue has been reduced by the impact of key contractual changes during 2012, which had been expected, and by the reduction in market share of certain lenders. There has been continued growth in the provision of private survey services where the annual income run rate is now £5.0m.

Professional Indemnity costs have been in line with expectations for the period since 1 July. The run rates of new notifications, new claims and costs per claim have been consistent with the assumptions made when the exceptional charge was made at the half year.

Outlook:

Market volumes have recently been declining at a worsening rate as the constraints on available mortgage finance have not improved and this has been compounded by continued general economic uncertainty. Despite this, the business is currently trading robustly and in line with management's expectations. However the Board retains its very cautious view of the market for 2013.

Against this difficult market backdrop, the Group will continue to build on this year's strong growth in lettings and financial services and to further develop the provision of surveying services to private buyers. LSL will also accelerate investment in initiatives to drive growth in corporate lettings and asset management, to increase market share in estate agency and to increase the pace of new branch openings in Marsh & Parsons.

The Group is extremely cash generative and has relatively low levels of gearing. LSL is well placed to combine its organic growth initiatives with further selective acquisitions to increase shareholder value in the medium term.

(1) Source: Bank of England

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, Sophie McNulty and Helen Greenwood

Buchanan                                                                                                        0207 466 5000

Notes to Editors:

LSL Property Services plc is a leading provider of residential property services to its two key customer groups. Services to consumers include: residential sales, lettings, surveying and advice on mortgages and non-investment insurance products. Services to mortgage lenders include: valuations and panel management services, asset management and property management services.  For further information, please visit our website: www.lslps.co.uk.

 

 

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