Interim Management Statement

RNS Number : 8172E

LSL Property Services

16 May 2013

 



For Immediate Release

16 May 2013

LSL Property Services plc

("LSL" or "the Group")

Interim Management Statement

LSL, a leading provider of residential property services, incorporating Estate Agency and Surveying businesses, issues this Interim Management Statement for the period from 1 January 2013 to 15 May 2013.

LSL Group CEO, Simon Embley commented:

"Activity levels were constrained in line with the market during the first quarter but have since picked up considerably with underlying⁽¹⁾ Group revenue in the post Easter period up 7% year on year. The Group is well positioned to benefit from its significant operational gearing if market volumes continue to improve."

Transaction volumes in the first quarter reflect the strong prior year comparatives caused by the ending of the stamp duty holiday in March 2012 and by the timing of Easter. The number of Total Mortgage Approvals⁽²⁾for the three months to 31 March 2013 was 10.9% lower than the first quarter of 2012. House Purchase Approvals⁽²⁾ were 2.2% lower on the same comparative basis.  Market data is not yet available for April.

Against this backdrop the Group has traded well relative to the market and a strong comparative period. Turnover for the three months ended 31 March 2013 and also for the four months ended 30 April 2013 compared with the same periods in 2012 is set out below both in total and on an underlying⁽¹⁾ basis:

	Total	Total	Underlying(1)	Underlying(1)
	3 mths to 31 Mar	4 mths  to 30 Apr	3 mths to 31 Mar	4 mths to 30 Apr
Group	-9%	-6%	-5%	-1%
Estate Agency	-2%	+1%	-2%	+1%
Surveying	-27%	-21%	-12%	-5%

Estate Agency & Related Services:

The Estate Agency division has traded well against the market backdrop:

-     Strong lettings growth up 10% year on year

-     Significant increase in front end activity levels since mid April resulting in pipeline volumes up 7% year on year at 30 April

-     Good progress at Marsh & Parsons with one new branch opened in South Kensington in January and three further planned openings in 2013

-     Asset management has outperformed a difficult market where repossession volumes⁽³⁾ were down 17% year on year during the first quarter

Surveying & Valuation Services:

Surveying performance has been satisfactory relative to the market and strong comparative period:

-     Reduction in revenue year on year due to the in-sourcing of a major contract in June 2012

-     Activity levels increased after Easter, with underlying⁽¹⁾ revenue for April up 8% year on year

-     Professional Indemnity costs ran broadly in line with expectations during the period

Outlook:

Recent increases in activity levels in LSL's businesses indicate that market transaction volumes are improving. These tentative signs of recovery are supported by key lender activity and renewed consumer confidence. In addition, a further boost is expected from the Help to Buy Mortgage Guarantee Scheme in January 2014. Overall, the Board is cautiously optimistic that the recent increase in front-end activity levels will result in a sustained improvement in market volumes from the second quarter of 2013.

The Board had previously planned for a flat market in 2013 and to accelerate investment to increase market share in Estate Agency as well as increase the rate of new branch openings in Marsh & Parsons. This plan is now being augmented to incorporate further investment across both Surveying and Estate Agency to build capacity alongside market improvement. The Board is confident of delivering progress in line with our expectations for 2013, with profits being more weighted to the second half of the year.

The business is highly cash generative and has relatively low levels of financial gearing. Overall, LSL is very well placed to combine organic growth initiatives, further value-accretive acquisitions and exposure to possible market upside to increase shareholder value in the medium term.

(1)  Excluding the impact of 2012 major contract renewal

(2)  Source: Bank of England

(3)  Source: CML

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

www.buchanan.uk.com 

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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