Interim Management Statement

RNS Number : 5265G

LSL Property Services

08 May 2014

 



For Immediate Release

8 May 2014

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 2014 to 7 May 2014.

The number of Total Mortgage Approvals⁽¹⁾ for the three months to 31 March 2014 was 25% higher than for the same period in 2013. House Purchase Approvals⁽¹⁾ were 35% higher on the same comparative basis. Market data is not yet available for April.

The Group has traded very strongly during the period driven by good pipeline conversion. The percentage change in turnover for the three months ended 31 March 2014 and also for the four months ended 30 April 2014 compared with the same periods in 2013 is set out below:

	3 months to 31 March	4 months to 30 April
Group	25%	22%
Estate Agency	26%	24%
Surveying	21%	14%

The market began to improve from April 2013 onwards and while comparatives will be more challenging for the rest of the year, it is still expected that there will be significant growth in market transaction volumes in 2014.

Estate Agency and Related Services:

The Estate Agency Division has traded very strongly in the four months to 30 April 2014:

-     Total income up 24% year on year

-     Exchange income increased by 34% year on year

-     Lettings income growth of 12% year on year

-     Financial Services income up 33% year on year

-     Marsh & Parsons total revenue up 23% year on year with one new branch opening to date in 2014 with further openings planned

-     Continued success targeting selective smaller acquisitions with the purchase of Hawes and Co, a six branch estate agency chain trading in South London

-     Asset management revenue down 10% year on year in a challenging market

Surveying and Valuation Services:

The Surveying Division has traded well during the four months to 30 April 2014:

-     Revenue increased by 14% year on year

-     Some impact on April revenue as a result of the implementation of changes to mortgage application processing by lenders following the Mortgage Market Review (MMR)

-     On-going investment in recruitment to build capacity for clients

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

Outlook:

Market volumes have now grown year on year for each of the last twelve months. On-going improvement in key economic indicators support the Board's continued positive view of the market for 2014 despite some early evidence of slowdown in the rate of mortgage applications and approvals following the implementation of changes from MMR. It remains to be seen how full year transaction levels will be impacted.

LSL remains committed to its strategy of driving organic growth and evaluating selective acquisitions during a period of market growth. The investments made last year in the Estate Agency Division have driven strong performance during the first quarter of 2014 and the Division will continue to selectively invest in order to optimise future returns. The Surveying Division will continue to invest in additional capacity in a market where supply remains constrained.

The Group has a strong balance sheet and is extremely cash generative. The business is well placed to increase shareholder value by driving benefit from operational gearing in the growing market with potential additional benefit from selective acquisitions.

(1)  Source: Bank of England

For further information, please contact:

Ian Crabb, Group Chief Executive Officer

Steve Cooke, Group Finance Director

LSL Property Services plc                                                                             0207 382 0360

Richard Darby and Sophie McNulty

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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