REG - LSL Property Svcs. - FULL YEAR RESULTS TO 31 DECEMBER 2024
26/03/2025 07:15
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RNS Number : 1554C LSL Property Services PLC 26 March 2025
26 March
2025
LSL Property Services plc ("LSL" or "Group")
FULL YEAR RESULTS TO 31 DECEMBER 2024
A YEAR OF POSITIVE PROGRESS AND SIGNIFICANT PROFIT GROWTH
LSL reports its results for the 12 months ended 31 December 2024 with Group
Underlying Operating Profit(1,2) of £27.7m (2023: £10.3m). On a statutory
basis Group Operating Profit was £21.9m (2023: £3.7m).
These results demonstrate the benefits of the strategic transformation of the
Group over the last two years and are just above consensus expectations and
materially ahead of prior year. We have made a positive start to the year with
trading in line with our expectations in markets operating broadly in line
with our assumptions. We continue to expect that in 2025 we will increase
profits further over 2024 and the Board's expectations for the full year
remain unchanged.
David Stewart, Group Chief Executive commented:
"2024 was a year of positive progress, as we built successfully on the
restructuring work completed in 2023. We were able to grow profits materially,
and at a faster rate than we had anticipated at the start of the year. Trading
in the early months of the new year is in line with expectations, indicating
we will be able to improve performance again in 2025. I believe the Group is
now well positioned to build on solid foundations and I am sure that under the
leadership of Adam Castleton, who will take over as Group CEO on 1 May, the
Group will go from strength to strength."
STRATEGIC AND OPERATIONAL HIGHLIGHTS
2024 performance demonstrates the benefits of the successful completion of our
significant restructuring and transformation programmes in 2023, as a result
of which LSL is now a much simpler Group, well positioned to deliver higher
operating margins, and more consistent earnings through market cycles.
This helped the Group to deliver a substantial profit increase in markets that
remained supressed in 2024 compared to the long-term average, with new lending
6% below the 10-year average(3) and housing transactions(4) 9% below. Economic
and geo-political uncertainty, sticky inflation and delays to interest rate
reductions continued to impact consumer confidence during H2.
· Significant recovery in profitability with Group Underlying Operating
Profit increasing by £17.4m to £27.7m. All divisions reported increases in
profitability
· Investment to support future growth. During 2024, the Group invested
£1m, £0.7m in H2, to develop new products in Surveying & Valuation and
announced a major programme to upgrade its Financial Services technology
offering, that will commence in 2025
· Estate Agency Franchising continues to support the growth of
franchisees, to facilitate territory expansion and by supporting three
lettings book acquisitions completed in H2 2024
· Acquisition during 2024 of eight businesses by our Pivotal Growth JV,
with advisers increasing to over 500
· Purchase of TenetLime mortgage network completed in February with
integration programme on track and financial performance and adviser retention
in line with expectations
· In January 2025, LSL announced the appointment of Adam Castleton,
previously Group CFO, as CEO Designate, formally taking up the CEO position on
1 May 2025, following David Stewart's notification to the Board of his
intention to retire from his Executive role and the LSL Board
· Strengthened management bench strength with a number of senior
Divisional appointments
· Adrian Collins appointed as Chair and Michael Stoop as Non-Executive
Director, strengthening the Group's Board
· Full year dividend of 11.4p (2023: 11.4p), with final dividend
maintained at 7.4p per share, reflecting strong balance sheet and Board's
confidence in prospects
FINANCIAL HIGHLIGHTS
Full year financial metrics(1) 2024 Var
2023
Revenue (£m) 173.2 144.4 20%
Group Underlying Operating Profit(2) (£m) 27.7 10.3 169%
Group Underlying Operating margin (%) 16% 7% +890bps
Group Underlying Operating Profit from total operations(2) (£m) 27.3 9.3 192%
Exceptional Gains (£m) 1.7 9.3 (81)%
Exceptional Costs (£m) (4.1) (13.8)
70%
Group operating profit (£m) 21.9 3.7 484%
Profit before tax (£m) 23.0 4.9 373%
Loss from discontinued operations(5) (£m) (0.4) (46.1) 99%
Basic Earnings per Share (pence) 17.3 7.9 119%
Adjusted Basic Earnings per Share(6) (pence) 21.1 7.6 178%
Net Cash(7) at 31 December (£m) 32.4 35.0 (7)%
Final dividend per share (pence) 7.4 7.4 -
Full year dividend per share (pence) 11.4 11.4 -
· Group Revenue was £173.2m (2023: £144.4m). Revenue was 20% above
prior year in a total mortgage lending market that was broadly flat and
housing market that increased by 7%
· Group Underlying Operating Profit was £27.7m (2023: £10.3m from
continuing operations(1,2), £9.3m from total operations(1,2)), significantly
ahead of the prior year, with particularly strong recovery in the Surveying
& Valuation Division
· Material improvement in Group Underlying Operating margin to 16%
(2023: 7%), representing the highest margin reported in over 15 years
· Group operating profit was £21.9m (2023: £3.7m)
· Net Cash(7) of £32.4m at 31 December 2024 (31 December 2023: £35.0m),
with adjusted cash flow from operations of £31.1m (2023: £(0.2)m) and cash
flow conversion rate(8) of 114% (2023: (2)%) reflecting a return to more
normalised profit levels in the period
· Net Exceptional costs(8) of £2.4m (2024: £4.4m) primarily relating to
costs incurred in the exit of a large protection only firm and costs
associated with the administration of the company from which TenetLime was
purchased (the latter of which we expect to be recovered against deferred
consideration)
DIVISIONAL PERFORMANCE
Surveying & Valuation Division
· Surveying & Valuation performance was strong reflecting the
benefit of contract extensions with improved terms as well as a recovery in
market conditions following the significant reduction experienced in 2023
· Surveying & Valuation revenue increased significantly to £97.8m, an
increase of 36% on 2023 (£71.9m), reflecting a 26% increase in jobs performed
and 8% increase in income per job on the comparative period
· Mortgage approvals(9) were 21% above 2023, driven by higher purchase
approvals (up 31%) with remortgage and other approvals 8% higher
· We estimate that our market share of physical and remote valuation
instructions(7) was around 38%, representing a small increase over 2023
(c.37%)
· Long-term contract extension with Lloyds Banking Group, underpinning
the Group's leading market position. We also secured a substantial improvement
in terms and allocation with another major lender
· Retained contracts with all lending customers with no loss in
allocations
· Underlying Operating Profit(2) increased to £22.5m (2023: £6.7m)
· Good progress continues against strategic objectives to develop new
survey and valuation income from the end customer: B2C revenue increased by
87% to £6.8m (2023: £3.6m), having grown from £1.1m in 2020
· Substantial investment made throughout 2024, increasing in H2, to
support data and model development initiatives to diversify future revenue
streams and meet lender client needs
Financial Services Division
· Our Financial Services Network business increased its focus on its
core market, serving the needs of smaller, mortgage-led financial services
businesses, reflecting the strategic decision to reduce its focus on larger,
pure protection brokerages
· Successfully integrated 145 TenetLime firms with both profit
contribution and adviser retention in line with expectations
· Increased market share of the UK purchase and remortgage market(3) of
11.8% (2023: 10.6%)
· Total advisers increased by 75 to 2,736 as at 31 December 2024 (2023:
2,661) including 247 TenetLime advisers
· The number of advisers that sell both mortgages and protection
increased by 214 to 2,282. The number of protection only advisers was reduced
by 137, following the decision to exit some firms whose business model was not
in line with our risk appetite and strategic focus
· LSL advisers continue to adapt effectively to changes in the mortgage
market, increasing product transfer mortgage lending by 2%, resulting in a
further increase in share of the product transfer market to 6.9% (2023: 6.1%)
· Financial Services Network business traded resiliently, reporting
Underlying Operating Profit(2) of £8.7m (2023: £7.4m)
· The weighting of margin dilutive product transfers in the refinancing
market remained above the long-term average
· Network protection revenue remained broadly flat at £12.9m after
adjusting for disposals
· Total revenue of £48.4m was down 6% on the prior year as reported
(2023: £51.7m), reflecting the net impact of the disposal of businesses in
2023 and the purchase of TenetLime in 2024
· The number of Network firms increased to 1,108 as at 31 December 2024
(2023: 1,000), including 145 TenetLime firms
Estate Agency Franchising Division
· Continued support of the growth of franchisees, including the first
loans granted to support lettings book acquisitions, adding c.700 properties
to the franchisee lettings portfolios
· Benefits of new business model are reflected in a substantial increase
in Underlying Operating Profit(2) to £7.6m (2023: £4.3m) with an underlying
operating margin of 28%
· Scope remains for further cost efficiency gains within Estate Agency
business as the operating model approaches target state
· The number of properties under franchisees management remained stable
at 37,462 (31 December 2023: 37,502)
Pivotal Growth Joint Venture
· Acquisition during 2024 of eight businesses, including John Charcol
with 150 mortgage and protection advisers
· Pivotal Growth now has over 500 advisers, making it one of the
largest mortgage and protection brokers in the UK, giving it critical mass to
leverage its scale to attract deals and drive revenue synergies and
profitability
· Pivotal Growth's financial performance has steadily improved (in
trading EBITDA before transaction costs) as it has increased in scale and
moved out of its establishment phase
· Following material growth in trading EBITDA (before transaction
costs) in 2024 compared to prior year, our share of Pivotal profit after tax
is expected to continue to improve in future periods
CURRENT TRADING AND OUTLOOK
We have made a positive start to the year with trading in line with
expectations. Our end markets have been operating broadly in line with our
assumptions.
We continue to expect the Group to deliver a further increase in profits in
2025. The Board remain positive about the Group's short and medium-term
prospects and fully supports the programme of investment across each of its
businesses to take advantage of the value accretive growth opportunities
ahead.
For further information, please contact:
David Stewart, Group Chief Executive Officer
Adam Castleton, Group Chief Executive Officer Designate
LSL Property Services plc investorrelations@lslps.co.uk (mailto:investorrelations@lslps.co.uk)
Helen Tarbet
Sophie Wills
Burson Buchanan 0207 466 5000 / LSL@buchanan.uk.com (mailto:LSL@buchanan.uk.com)
Notes:
1 Stated on basis of continuing operations unless otherwise
stated. Following the conversion of the entire owned estate agency network to
franchises in H1 2023, the previously owned network was classified as a
discontinued operation and is presented as such in the Financial Statements.
Refer to note 6 to the Financial Statements
2 Group (and Divisional) Underlying Operating Profit is
stated before exceptional items, contingent consideration assets &
liabilities, amortisation of intangible assets and share-based payments. Refer
to note 5 to the Financial Statements for reconciliation of Group and
Divisional Underlying Operating Profit to statutory operating profit/(loss)
for continuing, discontinued and total operations
3 Mortgage lending excluding product transfers - New
mortgage lending by purpose of loan, UK Finance (Bank of England) - Table MM23
(30 January 2025)
4 Number of residential property transaction completions
with value £40,000 or above, HMRC (31 January 2025)
5 Following the conversion of the entire owned estate agency
network to franchises in H1 2023, the previously owned network was classified
as a discontinued operation and is presented as such in the Financial
Statements. Refer to note 6 to the Financial Statements
6 Refer to note 12 to the Financial Statements for the
calculation
7 Refer to note 34 to the Financial Statements
8 Refer to note 9 to the Financial Statements
9 Approvals for lending secured on dwellings, Bank of
England - Table A5.4 (30 January 2025)
Notes on LSL
LSL is one of the largest providers of services to mortgage intermediaries and
estate agent franchisees.
Over 2,700 advisers representing over 11% of the total purchase and remortgage
market.
Its 62 estate agency franchisees operate in 310 territories.
LSL is also one of the UK's largest providers of surveying and valuation
services, supplying five out of the six largest lenders in the UK.
For further information please visit LSL's website: lslps.co.uk
(http://www.lslps.co.uk/)
LEI: 213800T4VM5VR3C7S706
GROUP CHIEF EXECUTIVE'S REVIEW
We have made positive progress through 2024, delivering a substantial increase
in profits, with our full year results being just ahead of market
expectations, while continuing to reshape the Group to deliver attractive,
long-term returns in line with our prudent risk appetite.
Each of our principal markets improved against the difficult conditions
experienced in 2023, although they remained muted with headwinds persisting
and activity levels below long-term averages. Against this background, I am
pleased to report that each of our principal businesses increased or retained
their strong market shares and advanced key strategic initiatives that will
help support future growth.
We have seen a clear step-up in the regulatory focus across many financial
services sectors, including some of the markets in which we operate. As a
Group, we have always taken regulatory compliance extremely seriously and over
the last three years have added over 20 in additional headcount across our
regulatory and compliance functions. Furthermore, in 2024 we recruited a new
Group Chief Risk Officer and put in place an experienced Financial Services
Division board, including three independent non-executive directors to provide
further governance and regulatory oversight for this Division. The Group will
continue to monitor regulatory developments and is committed to taking the
steps needed to deliver against emerging requirements.
Subsequent to the year end, we have made further enhancements to our overall
governance model, appointing two of the Group's Non-Executive Directors as
chairs of the Surveying & Valuation and Estate Agency Franchising
Divisions. Darrell Evans will chair our Surveying Division and Michael Stoop
our Estate Agency Division. The Financial Services Division already had in
place an independent chair, John Lowe.
We retain a very strong balance sheet and are well placed to take advantage of
any further market improvements while developing a broader set of products and
services designed to deliver more consistent returns in all market conditions.
Management continue to focus on maximising the operational potential in each
of our businesses and on ensuring that this potential is fairly reflected in
the wider perceptions of our Group.
We are fortunate to have the support of highly committed colleagues and I
would like to place on record my appreciation for their support and hard work
throughout 2024.
Review of 2024 performance
The Group's performance benefited from a recovery in demand and further
contract wins in our Surveying & Valuation business, as well as the
structural benefit afforded by the transformation programme undertaken in
2023, transitioning to a franchise operating model in our Estate Agency
Franchising Division and focusing our activities on business-to-business
services in Financial Services. All three Divisions have maintained or
improved market share.
We have made a number of targeted investments during 2024, both organic and
inorganic. Our organic investments will develop new revenue opportunities,
notably in Surveying & Valuation, while taking pro-active steps to reshape
and focus our Financial Services Division on its core business of providing
services to smaller mortgage-led adviser businesses. This continues in 2025.
Our inorganic investments have focused on supporting bolt-on acquisitions by
our franchisees within our Estate Agency Franchising Division, creating
increased scale for our lettings business, and completing the purchase of the
TenetLime mortgage network in Financial Services.
Group Revenue increased 20% to £173.2m (2023: £144.4m) above prior year in a
total lending market that was broadly flat and housing market that increased
by 8%.
Group Underlying Operating Profit(1) recovered strongly to £27.7m (2023:
£10.3m), with a year-on-year increase in each Division. Group Underlying
Operating margin of 16% was its highest point in over 15 years, reflecting the
return to high utilisation in Surveying and the benefits of the franchising
model in Estate Agency for the whole period. On a statutory basis, Group
Operating Profit was £21.9m (2023: £3.7m).
Surveying & Valuation Division
Our Surveying & Valuation business has performed very well in recent
years, receiving increased allocations from existing customers and winning new
contracts. This continued in 2024, with notable developments including the
commencement of our renewed, long-term, exclusive deal with Lloyds Banking
Group and the renewal of other contracts with major lenders.
These contract wins reinforced our leading market position and helped drive a
significant increase in activity as the market recovered, resulting in an
increase of more than three-fold in Underlying Operating Profit(1) to £22.5m
(2023: £6.7m). Underlying operating margin also recovered strongly to 23.0%
(2023: 9.4%), reflecting the efficient use of surveyor time. Average jobs per
surveyor was 1,040, very substantially ahead of 2023 (782), when we decided to
retain excess capacity in anticipation of a market recovery and in line with
the strong utilisation achieved in 2021 and 2022. On a statutory basis,
Operating Profit was £22.1m (2023: £3.4m).
Surveying & Valuation Revenue increased by 36% to £97.8m. During 2024, we
continued our work to develop new revenue streams, for example from the
provision of automated valuation and data services to lenders, and increasing
the number of valuation and surveying jobs undertaken for the end customer. As
mortgage lenders increasingly make use of data and automated valuation
services, we see further opportunities to provide more services to the end
customer.
Throughout 2024, and in particular in the second half of the year, we invested
significantly to develop these emerging revenue streams. This investment
included around £1m to support our data and valuation work, including adding
senior headcount in our data and valuation modelling teams, whilst increasing
our consumer and marketing spend by £0.5m. This spend helped support an
increase of 87% in our direct-to-consumer revenue, which reached £6.8m. This
represents a 500% increase in 4 years since 2020, when it stood at £1.1m.
Financial Services Division
We have reinforced the leading position of our PRIMIS network in the provision
of services to independent mortgage brokers, aided by the completion in
February 2024 of the purchase of the TenetLime network. At the end of the
year, PRIMIS members totalled 2,282 advisers who sell mortgage and protection
(2023: 2,068) and 421 advisers selling only protection and general insurance
products (2023: 558), bringing the total number of advisers to 2,736 (2023:
2,661).
We were pleased with the contribution made by TenetLime advisers, with the
integration being completed on schedule and with both financial performance
and adviser retention in line with expectations. This was despite the
challenges that resulted from the placing into administration of TenetLime's
seller, Tenet Group Limited, which had contracted with us to provide
transitional support services as part of the terms of the transaction. As a
result of this administration, we had to take on additional work earlier than
expected and incurred additional costs to date of £0.5m as a result, which
have been treated as an exceptional cost. We expect to recover these, and any
future amounts, in 2025 from the deferred consideration balance of £3.3m.
The change in the split between mortgage and protection only advisers reflects
the work we have undertaken to develop a clear focus for our future target
market, as well as an assessment of the relative risks of providing services
in these segments. We incurred exceptional costs of £1.9m associated with the
exit of a large protection only firm.
Total UK new mortgage lending increased slightly, by 7% to £242bn. LSL
advisers total mortgage lending grew by 12% to £46.7bn, reflecting an
increase in market share in all key segments. We increased our share of the
purchase and remortgage and of the product transfer markets, with a record
share of purchase and remortgage(2) (11.8%, up from 10.6%) and of product
transfers (6.9%, up from 6.1%). After adjusting for disposals, protection
revenue remained broadly flat.
The year also saw significant further steps taken to drive forward our
strategy focused on the mortgage-led adviser market. We welcomed a number of
senior appointments to the Divisional management team, including experienced
industry leaders as Managing Director and Chief Distribution Officer, and in
the early part of 2025 will supplement the team further with the appointment
of a Chief Operating Officer. We have also completed the absorption of our
DLPS and Mortgage Gym technology businesses to focus on supporting the growth
of our Network business. Against this background, we were pleased to report an
increase in Underlying Operating Profit(1) to £8.7m (2023: £7.4m). On a
statutory basis, Operating Profit was £4.7m (2023: £5.0m).
In December, we also announced a major programme of investment to enhance the
technology solutions provided to PRIMIS advisers to improve efficiency and
sales performance and underpin our leading market position. We expect to spend
around £3m by way of revenue and capital expenditure in 2025 to support this
programme.
Estate Agency Franchising Division
With the completion of the conversion of our Estate Agency business to a
franchise model during 2023, we are now focused on further enhancing our
franchising expertise to bring on new partners and develop our services for
franchisees.
The Group supported franchisees in the acquisition of three lettings books in
2024, providing total loan funding of £0.7m and adding c.700 properties to
the portfolio which now stands at over 37,000. These deals will deliver
returns in excess of the Group's cost of capital. We see scope for further
similar support in the future.
During 2024 the Estate Agency Franchising Division has invested in
strengthening leadership capability with key senior appointments within
propositions and operations, with these roles funded from its cost reduction
programme.
The strength of our new operating model in Estate Agency Franchising was
demonstrated by the strong financial performance achieved in 2024. Divisional
revenue was up 29% to £27.0m, with Underlying Operating Profit(1) of £7.6m,
an increase of 77% over the prior year (2023: £4.3m), achieved at an
underlying operating margin of over 28% (2023: 21%). We are significantly
ahead of the plans we set in 2023 for reducing costs and increasing margin. On
a statutory basis, Operating Profit was £6.5m (2023: £3.0m).
Pivotal Growth joint venture
Pivotal Growth, our joint venture with Pollen Street Capital (PSC),
established to execute a buy-and-build strategy in the mortgage and protection
intermediary markets, was launched in 2021. Our joint aim is to build the
business together with a view to an exit event over a three-to-six-year period
after launch.
After a slow start, Pivotal has gained substantial momentum and has now
acquired 17 businesses, including eight acquisitions made in 2024. With over
500 advisers, Pivotal is now one of the UK's largest mortgage and protection
brokers.
We have invested just over £20m in Pivotal since 2021 via equity and loan
notes, and we continue to closely monitor Pivotal's performance to maximise
returns for Shareholders. Pivotal remains on track to deliver returns ahead of
the Group's cost of capital.
Dividend
The improvement in performance in 2024 underpins the Board's confidence in the
underlying fundamentals and prospects of the Group's businesses. Therefore,
the Board has declared a final dividend of 7.4 pence per share (2023: 7.4
pence), making a total dividend of 11.4 pence per share (2023: 11.4 pence).
The Group's dividend policy continues to be a pay-out of 30% of Group
Underlying Operating Profit after finance and normalised tax charges(3).
The ex-dividend date for the final dividend is 8 May 2025, with a record date
of 9 May 2025 and a payment date of 27 June 2025. Shareholders can elect to
reinvest their cash dividend and purchase additional shares in LSL through a
dividend reinvestment plan. The election date is 23 May 2025.
Share buyback
The Board's approach to capital allocation remains unchanged. We will continue
to deploy share buybacks in a measured way and there are no plans to allocate
cash reserved for the buyback into other Group activities. To date, £1.3m of
the share buyback programme announced on 25 April 2024 has been deployed. The
current buyback programme has been extended to the date of the 2025 AGM.
Change of auditor
As highlighted in the 2024 Interim results announced in September 2024, an
audit tender exercise had been concluded in advance of the Group's current
auditor's (Ernst & Young LLP (EY)) tenure reaching its maximum term limit.
This resulted in a recommendation from the Audit & Risk Committee, which
has now been endorsed by the Board, that Grant Thornton UK LLP be appointed as
the Group's auditor for the year ending 31 December 2025.
Accordingly, it is our expectation that, following the completion of the audit
of the Group's 2024 financial statements, EY will resign as auditor of the
Company creating a casual vacancy. In accordance with the Companies Act 2006,
Grant Thornton UK LLP will be appointed by the Directors to fill that casual
vacancy and to audit the financial statements of the Group for the year ending
31 December 2025 and subsequent financial periods. EY will not therefore stand
for reappointment at the 2025 Annual General Meeting (AGM), and a resolution
to ratify Grant Thornton's appointment will be put to Shareholders for
approval instead.
Appointment of Group Chief Executive Officer Designate
As announced on 30 January 2025, Adam Castleton, previously Group CFO, has
been appointed as CEO Designate, following my notification to the Board of my
intention to retire from my Executive role and the LSL Board.
Adam will formally take up the CEO position on 1 May 2025, following a
transition and handover period. The Nominations Committee has agreed a process
to identify and appoint a new CFO, and will make a further announcement in due
course. In addition, and subject to FCA approval, I am pleased that I will
remain with LSL as a non‐executive director of our Financial Services
business and that I will also continue as LSL's nominated director for Pivotal
Growth.
Living Responsibly and ESG
In 2021 we established our 'Living Responsibly' programme focused on creating
a positive impact across the communities we serve. In 2024 we introduced paid
volunteering days, which resulted in our colleagues collectively contributing
534 days to support various causes.
By listening and taking action, we further strengthened this commitment
through apprenticeships, improved colleague benefits and learning and
development opportunities. This was reflected in our most recent colleague
engagement survey with a record high participation rate of 84%.
Addressing the impact we have on the environment remains central to Living
Responsibly, and during 2024 we have taken steps to better understand this and
our pathway to Net Zero 2040.
Reflecting on our progress affords us the time to look forward and plan the
next steps for Living Responsibly; at the start of 2025 we welcomed in new
colleagues from across the Group, who will ensure our Living Responsibly
programme continues to have a positive impact and aligns with the needs of all
our stakeholders.
Current trading and outlook
We have made a positive start to the year with trading in line with
expectations. Our end markets have been operating broadly in line with our
assumptions.
We continue to expect the Group to deliver a further increase in profits in
2025. The Board remain positive about the Group's short and medium-term
prospects and fully supports the programme of investment across each of its
businesses to take advantage of the value accretive growth opportunities
ahead.
David Stewart
Group Chief Executive Officer
25 March 2025
Notes:
1 Group (and Divisional) Underlying Operating Profit is
before exceptional items, contingent consideration assets & liabilities,
amortisation of intangible assets and share-based payments. Refer to note 5 to
the Financial Statements for reconciliation of Group and Divisional Underlying
Operating Profit to statutory operating profit/(loss) for continuing,
discontinued and total operations
2 Mortgage lending excluding product transfers - New
mortgage lending by purpose of loan, UK Finance (Bank of England) - Table MM23
(30 January 2025)
3 Refer to note 12 to the Financial Statements for the
calculation of Group Underlying Operating Profit after finance and normalised
tax charges
FY P&L (£m) 2024 Restated(1) Var
2023
Divisional Group Revenue(2)
Financial Services 48.4 51.7 (6)%
Surveying & Valuation 97.8 71.9 36%
Estate Agency Franchising 27.0 20.9 29%
Group Revenue 173.2 144.4 20%
Estate Agency - discontinued operations 0.0 32.3 (100)%
Group Revenue (incl. discontinued operations) 173.2 176.8 (2)%
Divisional Underlying Operating Profit/(Loss)(2,3)
Financial Services Network 8.7 7.4 17%
Pivotal joint venture (0.0) (0.4) 99%
Financial Services 8.7 7.0 23%
Surveying & Valuation 22.5 6.7 234%
Estate Agency Franchising 7.6 4.3 77%
Central (11.0) (7.7) (43)%
Group Underlying Operating Profit from continuing operations 27.7 10.3 169%
Estate Agency - discontinued operations (0.4) (1.0) 55%
Group Underlying Operating Profit 27.3 9.3 192%
from total operations
Divisional operating profit/(loss)(2,3)
Financial Services 4.7 5.0 (8)%
Surveying & Valuation 22.1 3.4 550%
Estate Agency Franchising 6.5 3.0 118%
Central (11.3) 7.7 (48)%
Group operating profit/(loss) from continuing operations 21.9 3.7 484%
Estate Agency - discontinued operations (0.5) (45.4) 99%
Group Operating Profit / (Loss) 21.4 (41.7) 151%
from total operations
Notes:
1 Refer to note 4 to the Financial Statements
2 Following the conversion of the entire owned estate agency
network to franchises in 2023, the previously owned network was classified as
a discontinued operation and is presented as such in the Financial Statements.
Refer to note 6 to the Financial Statements
3 Group (and Divisional) Underlying Operating Profit is
before exceptional items, contingent consideration assets & liabilities,
amortisation of intangible assets and share-based payments. Refer to note 5 to
the Financial Statements for reconciliation of Group and Divisional Underlying
Operating Profit to statutory operating profit/(loss) for continuing,
discontinued and total operations
FINANCIAL & DIVISIONAL REVIEWS
Group Income Statement Review(1)
Group Revenue increased 20% to £173.2m (2023: £144.4m). After adjusting for
disposals in 2023 and for the purchase of TenetLime in H1 2024, revenue was
23%(2) above prior year in a total lending market that was broadly flat and
housing market that increased by 7%. The increase was primarily in the
Surveying & Valuation Division with a 36% increase compared to prior year,
driven by 2023 contract enhancements and a 21% increase in total BoE mortgage
approvals, and a 29% increase in Estate Agency Franchising due to 12 months'
trading in 2024 compared to only eight months in 2023 of the wholly franchise
model. After adjusting for businesses disposed of during 2023, Financial
Services Division revenue was up 3%(2), with total Divisional revenue of
£48.4m (2023: £47.0m).
Group Underlying Operating Profit(3) recovered strongly to £27.7m (2023:
£10.3m), with a year-on-year increase in each Division. Group Underlying
Operating margin of 16% was the highest margin for over 15 years, particularly
reflecting high utilisation in Surveying & Valuation and the benefits of
the franchising model in Estate Agency Franchising for the whole period. Group
Underlying Operating Profit from total operations was £27.3m (2023:
£9.3m(4)).
Group Operating Profit increased to £21.9m (2023: £3.7m), resulting from the
improved trading performance in the period, offset by £2.4m net exceptional
costs in 2024 (2023: £4.4m).
Adjusted operating expenditure(5), comprises employee costs, Other operating
costs, and Depreciation and totalled £146.0m in 2024, 9% higher than prior
year (2023: £133.5m), with the movement comprising the net effect of the
following factors:
- Reduction of c.£7m due to disposed businesses during H1 2023.
- After adjusting for disposed businesses, costs were £1.0m
higher in Financial Services in line with revenue.
- Increased variable costs in Surveying & Valuation arising from
36% increase in revenues.
- The increased costs in Estate Agency Franchising reflect a full year
of franchise operations compared to the prior part year of operations.
- Central costs of £11.0m (2023: £7.7m) with the increase
primarily due to strategic investment, Board changes and additional audit fees
incurred in 2024 in respect of the prior period reflecting the accounting
treatment for the Group transformation in 2023.
This is broadly in line with expectations in comparison to the historical
operating expenditure levels of c.£280m(4), and the targeted annualised total
operations cost reduction of c.£140m following the restructuring of the Group
in 2023.
Other gains
Total other operating gains were £0.5m (2023: losses of £0.2m). This
primarily included both a part sale of shares held in an unlisted investment
in H2 2024 (£0.1m) and the movement in the fair value of the remaining
holding, having been reassessed at 31 December 2024 as £0.4m (31 December
2023: £nil).
Share of losses from joint venture
Our equity share of Pivotal Growth results improved to broadly break-even
(2024: £6k loss, 2023: £0.4m loss), reflecting increased trading EBITDA,
before acquisition transaction fees, which more than doubled in comparison to
the prior period reflecting the benefit from ongoing acquisitions.
Share-based payments
The share-based payment charge of £0.9m in 2024 (2023: credit of £0.2m)
comprises, a charge in the period of £3.1m for LTIP, SAYE and BAYE schemes
granted in 2021 to 2024, offset by a credit of £2.2m reflecting lapses and
leavers. The prior year included a similar charge of £3.0m, offset by higher
lapse and leaver adjustments largely as result of the significant
restructuring across the Group in 2023.
Amortisation of intangible assets(6)
Amortisation charge of £3.0m (2023: £2.3m), relates to amortisation of
intangible software investment, franchise agreements and relationship assets.
The year-on-year movement comprises mainly of amortisation for the newly
established franchise intangibles and acquired TenetLime intangible assets
offset by a reduction in both lettings books and certain software intangibles
as they have been fully amortised.
Exceptional items(7)
The exceptional gain of £1.7m in 2024 (2023: £9.3m) relates primarily to the
increase in contingent consideration receivable on the disposal of RSC
(£1.7m). The gain on disposal in 2023 related to the disposal of the Embrace
and First2Protect businesses to Pivotal Growth.
Exceptional costs of £4.1m in the period (2023: £13.8m), are primarily due
to the charge relating to the decrease in contingent consideration receivable
on the disposal of Group First and Embrace Financial Services (£1.5m),
Financial Services protection related appointed representative costs (£1.9m)
and costs incurred as a result of the administration of TenetLime's seller,
Tenet Group Limited (£0.5m). The prior year costs of £13.8m related to
restructuring activity and corporate transaction costs of £5.8m, the
reduction in deferred consideration receivable for businesses sold to Pivotal
in H1 2023 (£4.1m), the net loss on disposals of Group First, RSC and Marsh
& Parsons of £1.7m, and intangible asset impairment (£2.2m).
Contingent consideration credit to the income statement of £0.4m (2023:
charge of £0.03m), relates to the reduction of the contingent consideration
liability for TenetLime, based on advisers retained.
Finance income remained in line with prior year at £2.9m (2023: £2.8m)
mainly from increased interest received of £1.8m on funds held on deposit
(2023: £1.5m) offset by the reduction in the unwind of discounting on
contingent consideration receivable balances of £0.7m (2023: £1.0m).
Finance costs of £1.7m (2023: £1.7m) are related principally to the
unwinding of discount on lease liabilities of £0.5m (2023: £0.5m),
commitment and non-utilisation fees on the revolving credit facility of £0.6m
(2023: £0.7m), unwinding of discount on contingent consideration payable of
£0.1m (2023: £nil), fair value adjustment to loans receivable of £0.3m
(2023: £0.3m) and £0.2m for the unwinding of discount on dilapidations
provisions (2023: £0.1m).
Profit before tax
Profit before tax was £23.0m (2023: £4.9m). The year-on-year movement is
primarily due to the materially higher Group Underlying Operating Profit in
2024, offset by net exceptional costs in 2024 of £2.4m (2023: £4.4m).
Taxation
The tax charge of £5.2m (2023: credit of £3.2m) represents an effective tax
rate of 22.8% (2023: 65.2%), which is slightly lower than the headline UK tax
rate of 25.0% primarily because of a prior year adjustment of £0.2m for
overpayment relief claims. Deferred tax assets and liabilities are measured
at 25.0% (2023: 25.0%), the tax rate that came into effect from 1 April 2023.
Discontinued operations(1) loss of £0.4m (net of tax) in relation to an
increase in the restructuring and administrative costs associated with the
previously owned Estate Agency branch network (2023: loss of £46.1m). The
prior period reflects the discontinued operations in Estate Agency Franchising
which included exceptional restructuring costs of £16.5m and write down of
associated disposed goodwill (£38.1m), offset in part by the exceptional gain
on recognition of intangible franchise agreements of £10.7m.
Earnings per share(8)
2024 2023
Earnings per Share (pence) Basic Diluted Adjusted basic Adjusted basic diluted Basic Diluted Adjusted basic Adjusted basic diluted
Continuing 17.3 17.1 - - 7.9 7.8 -
Discontinued (0.4) (0.4) - - (44.7) (44.4) - -
Total operations 16.9 16.8 21.1 20.9 (36.9) (36.6) 7.6 7.5
Business Reviews
Surveying & Valuation Division
Surveying revenue increased significantly to £92.5m, an increase of 36% on
2023 (£67.8m), reflecting both the 26% increase in jobs performed and the 8%
increase in income per job on the comparative period. The increase in jobs
performed resulted in the market share of valuations instructions increasing
to c.38% in 2024 (2023: c.37%). Growth in D2C in recent years has continued in
the period, with 2024 revenue of £6.8m representing a 87% increase on 2023.
Surveying Underlying Operating Profit(3) increased materially to £20.2m
(2023: £5.4m), benefiting from the strong revenue growth and the surveyor
capacity retention and self-help cost measures taken in 2023.
The Group's asset management business was transferred from Estate Agency
Franchising to Surveying & Valuation following changes in management
responsibilities from 1 January 2024. Management deemed the Group's asset
management operations, including the class of customer for its services, are
more closely aligned to the Surveying & Valuation Division.
Asset Management revenues grew by 31% to £5.3m in the year, reflecting the
moderately more active market. However, the market still remains below
long-run trend levels. The profit(3) for the year was £2.3m (2023: £1.3m).
Total Surveying & Valuation Division revenue of £97.8m in the year was an
increase of £26.0m compared to 2023 (£71.9m). Underlying Operating Profit(3)
increased materially to £22.5m (2023: £6.7m) reflecting the benefit of the
revenue increases in both the e.surv and asset management businesses. On a
statutory basis, operating profit was £22.1m (2023: £3.4m).
Financial Services Division
Our Financial Services Division is reported in two business lines: our core
Financial Services Network business comprising PRIMIS and TMA mortgage club,
and our share of profit after tax of Pivotal Growth.
Total revenue was £48.4m (2023: £51.7m). After adjusting for businesses
disposed of during H1 2023, revenue was up 3%(2). We increased our share of
the purchase and remortgage and of the product transfer markets, with a record
share of the purchase and remortgage (11.8% up from 10.6%) and the product
transfer markets (6.9% up from 6.1%). After adjusting for disposals, Network
protection revenue was 4% lower than 2023.
Network Underlying Operating Profit(3) was £8.7m (2023: £7.4m), which was
marginally ahead of 2023 on an organic basis, in what was a flat market,
whilst also absorbing the cost of an extended governance framework and
restructuring costs.
Our share of losses after tax in our joint venture Pivotal Growth was £0.0m
(2023: loss of £0.4m). The trading EBITDA of Pivotal (before transactional
acquisition costs) was materially ahead of last year.
Exceptional costs of £2.4m were recognised primarily relating to the exit of
a large protection only firm (£1.9m) and costs associated with the
administration of the sellers of TenetLime (£0.5m).
Total Financial Services Division Underlying Operating Profit(3) was £8.7m
(2023: £7.0m, £7.4m after adjusting for disposed businesses). On a statutory
basis, operating profit was £4.7m (2023: £5.0m).
The Financial Services Network business has a regulatory capital requirement
which represents 2.5% of its regulated revenues. The regulatory capital
requirement was £6.4m at 31 December 2024 (31 December 2023: £6.1m), with a
surplus of £27.6m (31 December 2023: £24.7m).
Estate Agency Franchising Division
Estate Agency Franchising business revenue was £27.0m (2023: £20.9m), with
the increase primarily reflecting the wholesale franchising of the Division
only part way through H1 2023.
The Division continued to support the growth of its franchisees, including the
provision of loans to facilitate lettings acquisitions, adding c.700
properties to the franchisee portfolios during 2024. The average lettings
income per managed property was up c.+2% with total number of properties in
line with the prior year.
The Estate Agency Franchise business delivered a robust residential sales
performance, with the total number of exchange units 10% above 2024 in a
market which was 8% ahead.
Underlying Operating Profit(1,3) of £7.6m was delivered in 2024 (2023:
£4.3m) at a 28% operating margin (2023: 20%). On a statutory basis, operating
profit was £6.5m (2023: £3.0m).
Group Balance Sheet Review
Goodwill - 31 December 2024: £16.9m (31 December 2023: £16.9m)
The carrying value of Goodwill relates to previous acquisitions in the
Surveying & Valuation Division of £9.9m and Financial Services Division
of £7.0m.
Other intangible assets(6) - 31 December 2024: £29.9m (31 December 2023:
£21.5m)
Intangible relationship assets of £9.3m were recognised during the period
upon the purchase of TenetLime, with further additional investments in
Financial Services and Surveying of £2.1m. Total amortisation of £3.0m was
charged in the year (2023: £2.3m). The carrying value of all franchise
agreements was £10.9m at 31 December 2024 (31 December 2023: £11.7m), the
acquired relationship assets was £8.5m (2023: £nil) and software assets of
£3.6m (2023: £2.8m). Brand intangibles of £6.9m remained unchanged during
the year.
Property, plant and equipment (PPE) and right-of-use assets (RoU assets) - 31
December 2024: £6.4m (31 December 2023: £6.9m)
Capital expenditure on owned PPE in the year amounted to £0.9m (2023:
£0.7m), primarily reflecting ongoing IT investment across all divisions.
Total depreciation of £1.2m was charged in the year (2023: £1.7m).
Financial assets (total current and non-current) - 31 December 2024: £6.5m
(31 December 2023: £5.5m)
Contingent consideration receivable
31 December 2024: £5.8m (31 December 2023: £5.1m)
During H1 2023 the Group disposed of Group First, RSC and Embrace B2C
brokerage businesses to Pivotal Growth, with contingent consideration
receivable in the first half of 2025 based on 7x 2024 EBITDA performance. As
at 31 December 2024, this asset is recorded at £5.7m (31 December 2023:
£4.8m).
The Group also has contingent consideration receivable in relation to disposed
lettings books, which are due to be fully repaid by November 2025. As at 31
December 2024, this asset is recorded at £0.1m (31 December 2023: £0.3m).
Equity instruments in unlisted companies
31 December 2024: £0.8m (31 December 2023: £0.4m)
There was no change in the fair value of units held in The Openwork
Partnership LLP of £0.4m at 31 December 2024 (31 December 2023: £0.4m). The
fair value has been reassessed as £0.4m at 31 December 2024, with our
valuation based on an estimated strike price which has been calculated using
the strike price from most recently executed trading windows.
The fair value of shares held in Twenty7tec Group Limited was reassessed at 31
December 2024 as £0.4m (31 December 2023: £nil). Part of the interest held
in Twenty7tec was sold in H2 2024 for consideration of £0.1m. Twenty7tec is a
provider of technology to mortgage advisers and lenders.
Loans to joint venture - 31 December 2024: £7.6m (31 December 2023: £nil)
In December 2024, the Group provided funding of £7.6m to its joint venture
Pivotal Growth in the form of 10% unsecured loan notes. The loan notes are
redeemable in H1 2025 and no repayments were made in 2024.
Investment in joint venture - 31 December 2024: £11.6m (31 December 2023:
£9.4m)
Our 46.5% share of the Pivotal Growth joint venture is accounted for using the
equity method with the change in value resulting from our equity investment in
Pivotal Growth during the period (£2.2m), and our share of profit after tax
for the period (£6k loss).
Investment in subleases (total current and non-current) - 31 December 2024:
£0.8m (31 December 2023: £3.3m)
This reflects the situation whereby the Group is an intermediate lessor,
following the Estate Agency conversion to a wholly franchised model. As part
of the franchising transition, some of the leases held by the Group in respect
of the previously owned network have been transferred to the franchisees,
resulting in a reduction in both the investment in sublease balance by £1.5m
and a similar reduction in IFRS 16 lease financial liabilities. The balancing
movement reflects payments made by franchisees during the period.
Loans to franchisees and appointed representatives (Network firms) - 31
December 2024: £1.8m (31 December 2023: £2.1m)
Various sized working capital loan facility agreements are in place with
several franchisees of the Estate Agency Franchising Division which have
availability over a range of periods from 31 December 2024 to 31 December
2025, are repayable in full within 24 months from the respective period end
and bear fixed rate interest at 8.5%. At 31 December 2024, £1.4m in principal
loan amounts were drawn down (31 December 2023: £0.8m).
Loans to FS appointed representatives are granted in certain circumstances to
support brokers upon joining the PRIMIS network and were £0.5m as at 31
December 2024 (31 December 2023: £1.3m).
Financial liabilities (total current and non-current) - 31 December 2024:
£9.1m (31 December 2023: £8.4m)
Contingent consideration liabilities - 31 December 2024: £3.3m (31 December
2023: £0.07m)
Contingent consideration liabilities relate solely to the cost of acquiring
the intangible relationship assets in TenetLime in February 2024, with the
consideration of £3.3m payable in H1 2025 adjusted at 31 December 2024 for
the latest update of retained advisers and discounting.
IFRS 16 lease financial liabilities - 31 December 2024: £5.8m (31 December
2023: £8.3m)
The movement in the period reflects payment of lease liabilities of £3.4m and
disposals on assignment to franchisees of £1.5m, offset by new lease
additions of £1.9m and unwinding of discounting of £0.5m.
Provision for liabilities (total current and non-current) - 31 December 2024:
£10.2m (31 December 2023: £11.6m)
PI claim provisions of £2.3m (31 December 2023: £3.2m) include the Surveying
& Valuation PI provision of £1.9m (31 December 2023: £2.3m) and the
Financial Services PI provision of £0.4m (31 December 2023: £0.9m). The
Group has recognised an asset of £0.3m against received claims in other
debtors at 31 December 2024 (31 December 2023: £0.6m).
Dilapidations and restructuring provisions relating to the Estate Agency
Franchising Division following the wholesale franchising in 2023, totalled
£6.0m at 31 December 2024 (31 December 2023: £7.8m). The movement in the
year relates mainly to a release of £1.5m in the dilapidations provisions and
£1.3m of payments made relating to the restructuring provision.
A claims indemnity included in the sale agreement of LMS remains unchanged at
£0.6m at the period end (31 December 2023: £0.6m). A provision of £1.2m has
been recognised during the period relating to one of the Group's former
protection only appointed representatives (2023: £nil).
Group Statement of Cash flows - 31 December 2024: Net Cash(10) £32.4m (31
December 2023: Net Cash £35.0m)
Operating cashflows before movements in working capital were £30.3m (2023:
£14.9m) reflecting the higher underlying operating profits generated in 2024.
The business is highly cash generative and ordinarily achieves a cash flow
conversion rate(10) of 75% to 100%. The ratio in 2024 was 114% reflecting the
materially higher Underlying Operating Profit, with a ratio of (2)% achieved
in 2023.
Movements in working capital during the period were an inflow of £2.7m (2023:
outflow of £11.0m). The higher outflow in 2023 reflected the significant
change in structure in the Group during that year, especially in Estate Agency
Franchising. The operating cycle of working capital continues to settle
following the completion of significant restructuring and transformation
programmes during 2023.
The movements in the year also included:
· the initial consideration of £5.7m for the purchase of TenetLime
assets
· a total of £9.8m investment into our joint venture Pivotal Growth
(£2.2m equity/£7.6m loan notes, 2023: £4.7m equity)
· capital expenditure on PPE and intangibles of £3.0m (2023:
£2.9m)
· exceptional costs paid in relation to divisional restructure and
transformation programmes first executed in 2023 of £3.1m (2023: £10.4m)
· payment of the 2023 final and 2024 interim dividends of £11.8m
(2023: £11.7m) and the repurchase of shares under the share buyback programme
of £0.8m (2023: £nil)
· corporation tax paid in 2024 of £1.8m as the Group returns to
more normalised taxable profits (2023: £nil)
Bank facilities
In January 2025, LSL agreed an amendment and restatement of our banking
facility, with an unchanged £60m committed revolving credit facility, and a
maturity date of January 2030, which replaced the previous £60m facility due
to mature in May 2026. The terms of the facility have remained materially the
same as the previous facility. The facility is provided by the same syndicate
members as before, namely Barclays Bank UK plc, NatWest Bank plc and Santander
UK plc.
In arranging the banking facility, the Board took the opportunity to review
the Group's borrowing requirements, considering our strong cash position, our
strategy and the Group's capital allocation policy. To provide further
flexibility to support growth, the facility retains a £30m accordion, to be
requested by LSL at any time, subject to bank approval.
International Accounting Standards (IAS)
The Financial Statements for the period ended 31 December 2024 have been
prepared in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and UK-adopted IAS.
Notes:
1 Based on continuing operations unless otherwise stated.
Following the conversion of the entire owned Estate Agency network to
franchisees in 2023, this was classified as a discontinued operation and is
now presented as such in the Financial Statements. Refer to note 6 to the
Financial Statements
2 Revenue: £170.5m in FY 2024 with statutory revenue of
£173.2m less £2.7m revenue due to acquisitions in 2024, as compared to
£138.3m in FY 2023 with statutory revenue of £144.4m less £6.1m revenue
from businesses disposed in 2023. FS Revenue of £48.4m in FY 2024, as
compared to £47.0m in FY 2023 with statutory revenue of £51.7m less £4.7m
revenue from businesses disposed in 2023
3 Group (and Divisional) Underlying Operating Profit is
before exceptional items, contingent consideration assets & liabilities,
amortisation of intangible assets and share-based payments. Refer to note 5 to
the Financial Statements for reconciliation of Group and Divisional Underlying
Operating Profit to statutory operating profit/(loss) for continuing,
discontinued and total operations
4 Stated on total operations basis
5 Refer to note 34 to the Financial Statements
6 Refer to note 2 and 17 to the Financial Statements
7 Refer to note 9 to the Financial Statements
8 Refer to note 12 to the Financial Statements
9 Mortgage lending excluding product transfers - new
mortgage lending by purpose of loan, UK (BOE) - Table MM23 (February 2025)
10 Refer to note 34 to the Financial Statements
Principal risks and uncertainties
Our principal risks and uncertainties, that the Board has assessed as being
the most significant risks that may adversely affect our business strategy,
financial position or future performance, are set out in the Group's Annual
Report and Accounts.
In summary, these are linked to the impact on the Group of:
1. The cyclicality of the UK housing market and fluctuations in the
lending market.
2. Exposure to competitive pressures from market participants.
3. Execution of strategic initiatives and associated capital
allocations.
4. Claims arising from systemic lapses in the delivery of professional
services.
5. Significant falls in business volume.
6. Information security.
7. Regulatory compliance and responding to regulatory changes.
8. Environmental, social and governance matters.
9. Colleague resources, talent and expertise.
10. Credit risk.
Group Income Statement
for the year ended 31 December 2024
2024 2023
Note £'000 £'000
Continuing operations:
Revenue 3 173,175 144,418
Operating expenses:
Employee costs 15 (105,200) (99,090)
Depreciation on property, plant and equipment and right-of-use assets 18 (3,160) (3,362)
Other operating costs (37,609) (31,046)
Other gains/(losses) 3 532 (211)
Share of post-tax loss from joint venture 20 (6) (390)
Share-based payments (charge)/credit 15 (920) 164
Amortisation of intangible assets 17 (2,988) (2,258)
Exceptional gains 9 1,745 9,320
Exceptional costs 9 (4,109) (13,767)
Contingent consideration payable 24 426 (31)
Group operating profit 4 21,886 3,747
Finance income 7 2,868 2,817
Finance cost 8 (1,741) (1,701)
Net finance income 1,127 1,116
Profit before tax 23,013 4,863
Taxation (charge)/credit 16 (5,247) 3,170
Profit for the period from continuing operations 17,766 8,033
Discontinued operations:
Loss for period from discontinued operations 6 (377) (46,093)
Profit/(Loss) for the period 17,389 (38,060)
Attributable to:
Owners of the parent 17,363 (38,001)
Non-controlling interest 26 (59)
17,389 (38,060)
Earnings per share from continuing operations (expressed as pence per share):
Basic 12 17.3 7.9
Diluted 12 17.1 7.8
Earnings/(Loss) per share from total operations (expressed in pence per
share):
Basic 12 16.9 (36.9)
Diluted 12 16.8 (36.6)
Group Statement of Comprehensive Income
for the year ended 31 December 2024
2024 2023
Note £'000 £'000
Profit/(Loss) for the year 17,389 (38,060)
Items that will not to be reclassified to profit and loss in subsequent
periods:
Revaluation of financial assets not recycled through the income statement - (116)
Tax on revaluation - (1)
Total other comprehensive loss for the year, net of tax - (117)
Total comprehensive profit/(loss) for the year, net of tax 17,389 (38,177)
Attributable to:
Owners of the parent 17,363 (38,118)
Non-controlling interest 26 (59)
Group Balance
Sheet
as at 31 December 2024
Note 2024 2023
£'000 £'000
Non-current assets
Goodwill 17 16,855 16,855
Other intangible assets 17 29,861 21,461
Property, plant and equipment and right-of-use assets 18 6,401 6,917
Financial assets 19 762 5,407
Deferred tax asset 16 - 166
Investment in sublease 19 447 1,756
Investment in joint venture 20 11,585 9,359
Contract assets - 329
Loans to franchisees and appointed representatives 19 979 1,655
Total non-current assets 66,890 63,905
Current assets
Trade and other receivables 21 24,811 23,206
Financial assets 19 5,772 54
Loans to joint venture 19 7,607 -
Contract assets - 40
Investment in sublease 19 385 1,582
Current tax assets 16 846 2,183
Loans to franchisees and appointed representatives 19 867 444
Cash and cash equivalents 22 60,663 58,110
Total current assets 100,951 85,619
Total assets 167,841 149,524
Current liabilities
Financial liabilities 24 (5,597) (3,320)
Trade and other payables 23 (36,778) (30,485)
Provisions for liabilities 25 (6,316) (5,903)
Bank overdrafts 22 (28,264) (23,139)
Total current liabilities (76,955) (62,847)
Non-current liabilities
Financial liabilities 24 (3,491) (5,085)
Deferred tax liability 16 (1,642) -
Provisions for liabilities 25 (3,869) (5,647)
Total non-current liabilities (9,002) (10,732)
Total liabilities (85,957) (73,579)
Net assets 81,884 75,945
Equity
Share capital 27 210 210
Share premium account 28 5,629 5,629
Share-based payment reserve 28 2,634 3,564
Shares held by employee benefit trust and share incentive plan 2,28 (1,510) (2,871)
Treasury shares 28 (4,831) (3,983)
Fair value reserve 28 (385) (385)
Retained earnings 80,417 74,087
Total equity attributable to owners of the parent 82,164 76,251
Non-controlling interest (280) (306)
Total equity 81,884 75,945
Group Statement of Cash Flows
for the year ended 31 December 2024
Note 2024 2023
£'000 £'000
Profit before tax from continuing operations 23,013 4,863
Loss before tax from discontinued operations (518) (45,425)
Profit/(loss) before tax 22,495 (40,562)
Adjustments for:
Exceptional 9 4,187 57,650
costs
Exceptional gains 9 (1,745) (9,320)
Contingent consideration payable 24 (426) 31
Depreciation of tangible assets 18 3,160 4,512
Amortisation of intangible assets 17 2,988 2,660
Share-based payments 15 920 (109)
Loss on disposal of property, plant and equipment and right-of-use assets (31) (2)
Loss from joint venture 20 6 390
Recognition of investments at fair value through the income statement 19 (482) 279
Decrease in contract assets 369 410
Finance income 7 (2,868) (2,817)
Finance costs 8 1,741 1,811
Operating cash flows before movements in working capital 30,314 14,933
Movements in working capital
(Increase)/decrease in trade and other receivables (1,356) 909
Increase/(decrease) in trade and other payables 5,552 (13,130)
(Decrease)/increase in provisions (1,493) 1,203
2,703 (11,018)
Cash generated from operations 33,017 3,915
Interest paid (leases) 26 (455) (580)
Interest received (leases) 26 96 140
Income taxes paid (1,799) -
Exceptional costs paid (3,066) (10,391)
Net cash generated/(expended) from operating activities 27,793 (6,916)
Cash flows used in investing activities
Interest received 7 1,752 1,599
Disposal of businesses, net of cash disposed - 26,538
Payment of contingent consideration 24 (65) (2,280)
Receipt of contingent consideration 155 -
Investment in joint venture 20 (2,232) (4,681)
Proceeds from sale of financial assets 19 119 206
Franchisees and appointed representatives loans granted 19 (1,659) (2,914)
Franchisees and appointed representatives loan repayments 19 1,702 1,275
Receipt of lease income 26 1,046 1,134
Purchase of property, plant and equipment and intangible assets 17,18 (3,031) (2,856)
Loans to joint venture 19 (7,607) -
Purchase of relationship asset 17 (5,695) -
Cash acquired on purchase of relationship asset 503 -
Net cash (expended)/generated on investing activities (15,012) 18,021
Cash flows used in financing activities
Repurchase of treasury shares (848) -
Proceeds from exercise of share options 173 -
Payment of lease liabilities 14 (2,895) (4,529)
Dividends paid 13 (11,783) (11,714)
Net cash expended in financing activities (15,353) (16,243)
Net decrease in cash and cash equivalents (2,572) (5,138)
Cash and cash equivalents at the beginning of the year 22 34,971 40,109
Cash and cash equivalents at the end of the year 22 32,399 34,971
Group Statement of Changes in Equity
for the year ended 31 December 2024
Share- based payment reserve
Share premium account
Share Shares held by EBT and SIP Treasury shares Fair value reserve Retained earnings Equity attributable to owners of the parent Non-controlling interest Total
capital equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2024 210 5,629 3,564 (2,871) (3,983) (385) 74,087 76,251 (306) 75,945
Profit for the year - - - - - - 17,363 17,363 26 17,389
Total comprehensive income for the year - - - - - - 17,363 17,363 26 17,389
Shares repurchased into treasury - - - - (848) - - (848) - (848)
Exercise of options - - (943) 1,361 - - (245) 173 - 173
Vested share options lapsed during the year - - (995) - - - 995 - - -
Dividend paid - - - - - - (11,783) (11,783) - (11,783)
Share-based payments - - 920 - - - - 920 - 920
Tax on share-based payments - - 88 - - - - 88 - 88
At 31 December 2024 210 5,629 2,634 (1,510) (4,831) (385) 80,417 82,164 (280) 81,884
During the period, 383,216 share options were exercised relating to LSL's
various share option schemes resulting in the shares being sold by the
Employee Benefit Trust. LSL received £0.2m on exercise of these options.
Group Statement of Changes in Equity
for the year ended 31 December 2023
Share- based payment reserve
Share premium account
Share Shares held by EBT and SIP Treasury shares Fair value reserve Retained earnings Equity attributable to owners of the parent Non-controlling interest Total
capital equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 210 5,629 5,331 (5,457) (3,983) (20,239) 144,133 125,624 428 126,052
Loss for the year - - - - - - (38,001) (38,001) (59) (38,060)
Revaluation of financial assets - - - - - (116) - (116) - (116)
Tax on revaluations - - - - - (1) - (1) - (1)
Total comprehensive loss for the year - - - - - (117) (38,001) (38,118) (59) (38,177)
Acquisition of non-controlling interests - - - - - - 675 675 (675) -
Exercise of options - - (1,106) 2,586 - - (1,480) - - -
Vested share options lapsed during the year - - (445) - - - 445 - - -
Dividend paid - - - - - - (11,714) (11,714) - (11,714)
Fair value reclassification following disposals - - - - - 19,971 (19,971) - - -
Share-based payments - - (109) - - - - (109) - (109)
Tax on share-based payments - - (107) - - - - (107) - (107)
At 31 December 2023 210 5,629 3,564 (2,871) (3,983) (385) 74,087 76,251 (306) 75,945
During the period, 567,665 share options were exercised relating to LSL's
various share option schemes resulting in the shares being sold by the
Employee Benefit Trust. LSL received £nil on exercise of these options.
Notes to the Group Financial Statements
For the year ended 31 December 2024
1. General information
The above results and the accompanying notes do not constitute statutory
accounts within the meaning of Section 435 of the Companies Act 2006.
Statutory Financial Statements for this year will be filed following the 2025
AGM and will be available on LSL's website: lslps.co.uk. The auditors have
reported on these Financial Statements. Their report was unqualified and did
not contain a statement under section 498 (2), (3) or (4) of the Companies Act
2006.
2. Accounting policies, judgements and estimates
2.1 Basis of preparation
The accounting policies which follow set out material information about the
accounting policies which apply in preparing the Financial Statements for the
year ended 31 December 2024. The policies have been applied consistently to
all years presented. The Group's Financial Statements are presented in pound
sterling and all values are rounded to the nearest thousand pounds (£'000)
except when otherwise indicated.
These Financial Statements have been prepared in accordance with UK-adopted
International Accounting Standards. The Group Financial Statements have been
prepared on a going concern basis under the historical cost convention and on
a historical cost basis, except for certain debt and equity financial assets
that have been measured at fair value.
In preparing the Financial Statements management has considered the impact of
climate change, which is described in detail in our TCFD and CFD Statement.
The Group has assessed climate-related risks, covering both physical risks and
transition risks. In the short (0-3 years) to medium term (4-9 years).
Climate-related matters have a relatively low impact on LSL's strategy and
business model, and therefore there is a high degree of resilience. However,
there are number of risks that may result in increased costs and have an
impact on operations that, whilst unlikely to have a significant impact, are
factored into our business and financial planning. Over the long term (beyond
10 years), there could be physical risks, such as severe weather, flooding
events, increase in temperature and rising sea levels, as well as transition
risks such as policy and regulation changes. The risk to the Group's own
premises as a result of climate change is considered low, the majority of our
property portfolio is leased, and we would not expect significant
climate-related costs during the remainder of our current lease terms. The
impact of climate change in the medium to long term is likely to be localised
and have varying degrees of impact on the areas where we work and our revenue
profile. This could have an impact on the carrying value of goodwill and
investments.
2.2 Basis of consolidation
The consolidated Financial Statements comprise the Financial Statements of the
Company and its subsidiaries as at 31 December 2024. The financial year
represents the year from 1 January 2024 to 31 December 2024.
Subsidiaries
Subsidiaries are consolidated from the date that control commences until the
date control ceases. A change in the ownership interest of a subsidiary,
without a loss of control, is accounted for as an equity transaction.
Interest in joint venture
The Group's share of the results of joint venture is included in the Group
Income Statement using the equity method of accounting. Investment in joint
ventures are carried in the Group Balance Sheet at cost plus post-acquisition
changes in the Group's share of the net assets of the entity, less any
impairment in value. Goodwill relating to the joint venture is included in the
carrying amount of the investment and is not tested for impairment
individually. Unrealised gains and losses resulting from transactions between
the Group and the joint venture are eliminated to the extent of the interest
in the joint venture.
In addition, when there has been a change recognised directly in the equity of
the joint venture, the Group recognises its share of any changes, when
applicable, in the statement of changes in equity.
The Financial Statements of the joint venture are prepared for the same
reporting period as the Group. When necessary, adjustments are made to bring
the accounting policies in line with those of the Group.
2.3 Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position, are set out in the Financial
and Divisional Reviews section (page 14) of the Strategic Report in our Annual
Report and Accounts 2024. The financial position of the Group, its cash flows,
liquidity position and policy for treasury and risk management are described
in the Financial Review section of the Strategic Report (page 14) in our
Annual Report and Accounts 2024. Details of the Group's borrowing facilities
are set out in note 31. The Group's objectives, policies and processes for
managing its capital, its financial risk management objectives, details of its
financial instruments, and its exposures to credit risk and liquidity risk are
also set out in note 31. A description of the Group's principal risks and
uncertainties and arrangements to manage these risks can be found in the
Principal Risks and Uncertainties section of the Strategic Report on page 34
in our Annual Report and Accounts 2024.
The UK Corporate Governance Code requires the Board to assess and report on
the prospects of the Group and whether the business is a Going Concern. In
considering this requirement, the Directors have taken into account the
Group's forecast cash flows, liquidity, borrowing facilities and related
covenant requirements and the expected operational activities of the Group.
The Group expects to continue to meet its day-to-day working capital
requirements through cashflows generated by its trading activities and
available cash resources (31 December 2024: £32.4m). The Group's banking
facility, a £60.0m committed revolving credit facility has a maturity date of
January 2030. The Group have not currently utilised the facility leaving
£60.0m of available undrawn committed borrowing facilities in respect of
which all conditions precedent had been met. The facility agreement contains
financial covenants, including minimum net debt to EBITDA ratio, which mean
that, under downside scenarios, the full facility would not be available in
the going concern period. In January 2025, LSL amended and restated the
previous RCF facility that had a maturity date of May 2026. The renewed
facility now matures in January 2030 with the same limit of £60.0m on
materially the same basis, including covenants.
The Directors have continued to run a variety of scenario models throughout
the year to help the ongoing assessment of risks and opportunities covering
the period to 30 June 2026 ("the going concern period"). In the scenarios, the
Directors considered both current trading and external industry data. In
developing a base case forecast the Directors have assumed inflation and
interest rates of 2.4% and 4.25%, respectively, by the end of 2025 and 2.0%
and 3.5%, respectively, for 2026.
The Directors have performed a reverse stress test to determine the events and
circumstances which would need to arise in order to threaten the Group's
ability to continue as a going concern. Such scenarios would require a
significant reduction in market transaction volumes below the low point
experienced during the Global Financial Crisis and in turn reduce Group
revenue by c.25% compared to current performance. Under such a scenario, all
available cash balances would be utilised and the facility would be
unavailable due to financial covenants. If severe downside scenarios arose,
there are cost mitigations that could be applied, as well as cash conservation
action such as pausing dividend payments and planned investments. The
Directors have concluded that the likelihood of such a severe scenario arising
is remote and have concluded that there are no plausible threats to the
Group's ability to continue through the going concern period. Therefore, the
financial information has been prepared under the going concern basis of
preparation.
In reaching its conclusion on the going concern assessment, the Board
considered the findings of the work performed to support the Group's long-term
viability statement. As noted in the Viability Statement, which is included in
the Principal Risks and Opportunities section of the Annual Report and
Accounts 2024 (page 39), this included assessing forecasts of severe but
plausible downside scenarios related to our principal risks, notably the
extent to which a severe downturn in the UK lending and housing markets, close
to levels seen during the financial crisis in 2008, would affect the Group's
base forecasts.
Having due regard to the scenarios above and after making appropriate
enquiries, the Directors have a reasonable expectation that the Group and the
Company have adequate resources to remain in operation to 30 June 2026. The
Board have therefore continued to adopt the Going Concern basis in preparing
the Annual Report and Accounts 2024.
2.4 Revenue recognition
Revenue is recognised under IFRS 15. The standard is based on a single model
that distinguishes between promises to a customer that are satisfied at a
point in time and those that are satisfied over time. Revenue is recognised
when performance obligations are fulfilled.
Financial Services Division
Revenue is earned on mortgage procuration fees and insurance commissions from
brokering of protection and general insurance policies. Revenue from mortgage
procuration fees is recognised by reference to the completion date of the
mortgage/remortgage on the housing transaction and revenue from insurance
commissions is recognised by reference to the date that the policy goes on
risk. The commission refund liability associated with insurance commissions is
recognised as a reduction in revenue which is calculated with reference to
historical refunds which have occurred, commission refund liabilities are
recorded within trade and other payables.
The Group acts as both a principal and agent depending on its arrangements
with the lenders and broker firms. In scenarios where the Group determines
that it has control of the service before it is provided to a client, the
Group recognises revenue as the gross amount of consideration expected to be
received following satisfaction of the performance obligation. In scenarios
where the Group concludes that it does not control the service before it is
provided to a client, the Group recognises revenue on a net basis, being gross
consideration less any fee or commission due to a counterparty.
Estate Agency Franchising Division
In 2023, the Group transitioned to a fully franchised business model for its
principal estate agent businesses and the revenue from the formerly owned
operations has been presented as discontinued, see note 2.7 for further
details. The accounting policies for both franchise and residential services
which includes lettings, new build residential sales and conveyancing
services, are set out below.
Franchise services:
Revenue represents the value of commissions, charges for services and fixed
fees due to the Group under franchise agreements. The Group earns a percentage
of all sales and lettings income generated by the franchisees. Revenue in
respect of commissions due on house sales is recognised at the point of the
relevant property sale where the contracts are exchanged, in which the
franchisee acts as estate agent. Revenue in respect of commissions due on
lettings, property management and ancillary products is recognised at the
point at which the underlying performance obligation has been delivered by the
franchisee. Revenue for services provided by the Group to franchisees is
recognised at a point in time when the service has been performed, reflecting
the completion of the Group's performance obligation. The franchise agreements
include fixed fees which are charged per branch on a monthly basis for the
term of the franchise agreement and are recognised over time.
Residential services:
New build residential sales:
Revenue earned by the Group's new build residential sales business is
recognised by reference to the legal exchange date of the housing transaction.
Conveyancing services:
Where the Group provides conveyancing packaging services, the revenue is
recognised by reference to the legal exchange date of the housing transaction.
Surveying & Valuation Division
Surveying & Valuation:
Revenue from the supply of surveying and valuation services is recognised upon
the completion of the professional survey or valuation by the surveyor, and
therefore at a point in time.
Asset management:
Revenue earned from the repossessions asset management business is recognised
by reference to the legal exchange date of the housing transaction.
Interest income from client monies balances
Revenue is recognised at a point in time as interest accrues (using the
effective interest method - that is the rate that discounts estimated future
cash receipts through the expected life of the financial instrument to the net
carrying amount of the financial asset).
2.5 Segment reporting
An operating segment is a distinguishable segment of an entity that engages in
business activities from which it may earn revenues and incur expenses and
whose operating results are reviewed regularly by the Board. The Board reviews
the Group's operations and financial position as Financial Services, Surveying
& Valuation and Estate Agency Franchising, and therefore considers that it
has three operating segments. During 2023, the Group made the strategic
decision to convert the entire owned estate agency branch network into
franchises, in doing so the Estate Agency Franchising operating segment became
mainly a provider of franchise services.
Within the Estate Agency Franchising operating segment, the only remaining
owned operations relate to the Group's new build residential sales and
conveyancing packaging businesses which are LSL Land & New Homes Ltd and
Homefast Property Services Limited, representing less than 10% of the Group's
total revenue.
The Group's asset management business was transferred from Estate Agency
Franchising to Surveying & Valuation following changes in management
responsibilities from 1 January 2024. Management deemed the Group's asset
management operations, including the class of customer for its services, are
more closely aligned to the Surveying & Valuation Division after the
Estate Agency Division's transformation into a franchise model. Internally,
the Chief Operating Decision Maker ("CODM") has begun monitoring the
performance of the asset management businesses as part of the Surveying &
Valuation segment from 1 January 2024. As a result, the Group's operating
segment disclosure in note 4 for the year ended 31 December 2023 has been
restated to reflect this change.
The information presented to the Directors directly reflects the Group
Underlying Operating Profit as defined in the alternate performance measures
(APM) in note 5 to these Financial Statements and they review the performance
of the Group by reference to the results of the operating segments against
budget.
2.6 Alternative Performance Measures (APMs)
In reporting financial information, the Group presents a number of APMs that
are designed to assist with the understanding of underlying Group performance.
The Group believes that the presentation of APMs provides stakeholders with
additional helpful information on the performance of the business. APMs are
also used to help enhance comparability of information between reporting
periods. The Group does not consider APMs to be a substitute for or superior
to IFRS measures and the Group's APMs are defined, explained and reconciled to
the nearest statutory measure in notes 5, 12 and 34.
2.7 Discontinued operations
The Group has classified its previously owned network of estate agency
branches as a discontinued operation for the reporting periods ending 31
December 2023 and 31 December 2024. The Group operated a network of both owned
and franchised branches prior to disposing of its entire owned network in
2023. The owned network was determined to be a separate major line of business
because it made up the majority of the branch network, its revenue, costs and
risk profile was significantly different to that of franchise and its cash
flows could be clearly distinguished.
Discontinued operations are presented in the Group Income Statement as a
single line, which comprises the post-tax profit or loss of the discontinued
operation along with the post-tax gain or loss recognised on the
re-measurement to fair value less costs to sell on disposal of the assets or
disposal groups constituting discontinued operations.
2.8 Exceptional items
Exceptional items are those which are material by size and are both
non-recurring and unusual in nature. These items are presented within their
relevant income statement category but highlighted separately on the face of
the income statement. Items that management considers fall into this category
are also disclosed within the notes to the Financial Statements (see notes 6
and 9).
Due to the nature and expected infrequency of these items, separate
presentation helps provide a better indication of the Group's underlying
business performance. This allows shareholders to better understand the
elements of financial performance in the year, so as to facilitate comparison
with prior periods and to better assess trends in financial performance.
2.9 Income taxes
Current tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities, based on tax rates and
laws that are enacted or substantively enacted by the balance sheet date.
Management periodically evaluates positions taken in the tax returns with
respect to the situations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.
Deferred income tax is recognised on all temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the
Financial Statements, with the following exceptions:
- where the temporary difference arises from the initial recognition
of goodwill or of an asset or liability in a transaction that is not a
business combination that at the time of the transaction affects either
accounting nor taxable profit or loss;
- in respect of taxable temporary differences associated with
investments in subsidiaries, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future; and
- deferred income tax assets are recognised only to the extent that it
is probable that taxable profit will be available, against which the
deductible temporary differences, carried forward tax credits or tax losses
can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted
basis at the tax rates that are expected to apply when the related asset is
realised or liability is settled, based on tax rates and laws enacted or
substantively enacted at the balance sheet date.
The carrying amount of deferred income tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be utilised. Unrecognised deferred tax assets are
reassessed at each reporting period and are recognised to the extent that it
has become probable that future taxable profits will allow the deferred tax
asset to be recovered.
Deferred income tax assets and liabilities are offset, only if a legally
enforceable right exists to offset current tax assets against current tax
liabilities, the deferred income taxes relate to the same taxation authority
and that authority permits the Group to make a single net payment. Income tax
is charged or credited directly to other comprehensive income (OCI) or equity,
if it relates to items that are charged or credited in the current or prior
periods to OCI or equity respectively. Otherwise, income tax is recognised in
the income statement.
2.10 Share-based payment transactions
The equity share option programme allows Group employees to acquire LSL
shares. The fair value of the options granted is recognised as an employee
expense with a corresponding increase in equity in the case of equity-settled
schemes. The fair value is measured at grant date and spread over the period
during which the employees become unconditionally entitled to the options. The
fair value of employee share option plans, which are all equity-settled, is
calculated at the grant date using the Black Scholes model. The resulting cost
is charged to the Group Income Statement over the vesting period. The value of
the charge is adjusted to reflect expected and actual levels of vesting.
No expense is recognised for awards that do not ultimately vest, except for
equity-settled transactions where vesting is conditional upon a market or
non-vesting condition, which are treated as vesting irrespective of whether or
not the market or non-market vested condition is satisfied, provided that all
other performance and/or service conditions are satisfied.
The dilutive effect of outstanding options is reflected as additional share
dilution in the computation of diluted earnings per share. Further details are
given in note 12 to these Financial Statements.
2.11 Business combinations and goodwill
The Group accounts for business combinations using the acquisition method of
accounting when control is transferred to the Group. On acquisition, the
assets, liabilities, and contingent liabilities of a subsidiary are measured
at their fair values at the date of acquisition. Any excess of the cost of
acquisition over the fair values of the net assets acquired is recognised as
goodwill.
Deferred and contingent consideration payable, resulting from business
combinations is valued at fair value at the acquisition date, and is
subsequently reassessed at each reporting date. The determination of the fair
value for deferred and contingent consideration payable is based on discounted
cash flows and is included within financial liabilities on the balance
sheet.
After the initial recognition, goodwill is measured at cost less accumulated
impairment losses, for the purposes of impairment testing, goodwill acquired
in a business combination is allocated to each of the Group's cash generating
units (CGU) that are expected to benefit from the combination. Where goodwill
has been allocated to a CGU and part of the operations within that unit are
disposed of, the goodwill associated with the disposed operation is included
in the carrying amount when determining the gain or loss on disposal. Goodwill
disposed in these circumstances is measured based on the relative values of
the disposed operation and the portion of the CGU retained.
2.12 Intangible assets
Intangible assets such as brand names, franchise agreements, customer
relationships, appointed representative relationships, and in-house software
are measured at cost less accumulated amortisation and impairment losses.
Internally generated intangibles, excluding capitalised development costs, are
not capitalised and the related expenditure is reflected in the profit or loss
in the period in which the expenditure is incurred.
Intangible assets acquired in a business combination are deemed to have a cost
to the Group of the asset's fair value at the acquisition date. The fair value
of an intangible asset reflects market expectations about the profitability
that the future economic benefits embodied in the asset will flow up to the
Group.
Gains or losses arising from derecognition of an intangible asset are measured
as the difference between the net disposal proceeds and the carrying amount of
the asset and are recognised in the income statement when the asset is
derecognised.
The useful lives of intangible assets are assessed as either finite or
indefinite.
Brand names are not amortised as the Directors are of the opinion that they
each have an indefinite useful life based on the expectation that there is no
foreseeable limit to the period over which each of the assets are expected to
generate net cash inflows to the businesses. The Directors are confident that
trademark registration renewals will be filed at the appropriate time and
sufficient investment will be made in terms of marketing and communication to
maintain the value inherent in the brands, without incurring significant cost.
All brands recognised have been in existence for a number of years and are not
considered to be at risk of obsolescence from technical, technological nor
commercial change. Whilst operating in competitive markets they have
demonstrated that they can continue to operate in the face of such competition
and that there is expected to remain an underlying market demand for the
services offered. The lives of these brands are not dependent on the useful
lives of other assets of the entity.
Franchise agreements entered into by the Group (as franchisor) as part of
contractual arrangements concerning the disposal of previously owned branches
are recognised as intangible assets. Franchise intangible assets are initially
recognised at fair value and subsequently amortised on a straight-line basis
over their useful economic lives, being the term of the agreement. The
franchise intangible assets are being written off over a remaining life of 15
years as based on the agreements, this is the most likely minimum term. The
life of the relationship is assessed annually.
All other intangible assets are amortised on a straight-line basis over their
useful economic lives of two years for customer contacts, twelve years for
appointed representative relationships and between three and five years for
in-house software.
2.13 Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation
and impairment losses. Property, plant and equipment is depreciated on a
straight-line basis to its residual value over its anticipated useful economic
life:
Office equipment, fixtures and fittings - over three to seven years
Computer equipment - over three to four years
Motor vehicles - over three to four years
Leasehold improvements - over the shorter of the lease term or ten years
Freehold and long leasehold property - over fifty years or the lease term whichever is shorter
An item of property, plant and equipment is derecognised upon disposal. Any
gain or loss arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the
asset) is included in the income statement when the asset is derecognised.
These assets' residual values, useful lives and methods of depreciation are
reviewed at each financial year end, and adjusted prospectively, if
appropriate.
2.14 Financial instruments
Financial assets and financial liabilities are recognised in the Group's
Balance Sheet when the Group becomes a party to the contractual provisions of
the instrument. When financial assets are recognised initially, they are
measured at fair value, being the transaction price plus, in the case of
financial assets not at fair value through the income statement, directly
attributable transaction costs. Financial assets are derecognised when the
Group no longer has the rights to cash flows, the risks and rewards of
ownership or control of the asset. Financial liabilities are derecognised when
the obligation under the liability is discharged, cancelled or expired. The
subsequent measurement of financial assets depends on their classification.
The Group's accounting policy for each category of financial instruments is as
follows:
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its
equity investments as equity instruments designated at fair value through OCI
when they meet the definition of equity under IFRS 9 Financial Instruments and
are not held for trading. The classification is determined on an
instrument-by-instrument basis. Gains and losses on these financial assets are
never recycled to profit or loss. Dividends are recognised as other income in
the Group income statement when the right of payment has been established,
except when the Group benefits from such proceeds as a recovery of part of the
cost of the financial asset, in which case such gains are recorded in OCI.
Equity instruments designated at fair value through OCI are not subject to
impairment assessment.
Financial assets designated at fair value through the income statement
Gains and losses arising from the changes in the fair value of equity
investments are recorded in the income statement.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and on demand deposits and
fixed-term deposits with original maturities of three months or less with the
Group's relationship banks. Bank overdrafts which are repayable on demand are
included in cash and cash equivalents only when there is a legal right to
offset and an intention to settle net, otherwise these amounts are classified
separately as liabilities on the balance sheet. For the purposes of the
statement of cash flow, bank overdrafts are a component of cash and cash
equivalents as they are repayable on demand and form an integral part of the
Group's cash management.
Trade receivables
Trade receivables do not carry any interest and are stated at their original
invoiced value as reduced by appropriate allowances for estimated
irrecoverable amounts. The expected credit loss model under IFRS 9 is applied
to trade and other receivables. The chosen method of recognising the expected
credit loss across the Group is the simplified approach allowing a provision
matrix to be used, which is based on the expected life of trade receivables
and historic default rates, default being defined as when impaired debts are
assessed as uncollectable. The carrying amount of the receivables is reduced
through use of an allowance account and impaired debts are derecognised when
they are assessed as uncollectable.
Trade payables
Trade payables are stated on the balance sheet at their original invoice
value.
2.15 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that
an asset may be impaired. If any such indication exists, or when annual
impairment testing for an asset is required, the Group makes an estimate of
the asset's recoverable amount. For the purposes of impairment testing, assets
are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows
of other assets or cash generating units (CGUs). An assets or CGU's
recoverable amount is the higher of its fair value less costs to sell (FVLCTS)
and value-in-use (VIU). Where the carrying amount of an asset exceeds its
recoverable amount, the asset is considered impaired and is written down to
its recoverable amount. In assessing an asset's VIU, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks
specific to the asset. Impairment losses of continuing operations are
recognised in the income statement in those expense categories consistent with
the function of the impaired asset.
For assets excluding goodwill and brand, an assessment is made at each
reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If
such indication exists, the Group estimates the assets or CGU's recoverable
amount.
2.16 Loans to franchisees and appointed representatives
The Group issues loans to its franchisees and appointed representatives, the
Group's objective is to hold these loans to collect contractual cash flows and
the contractual cash flows are solely payments of principal and interest. They
are initially recognised at fair value plus transaction costs that are
directly attributable to their issue and are subsequently carried at amortised
cost, less provision for impairment.
Loans to appointed representatives are made in the normal course of business
and on standard terms, the duration is typically three years and the loans are
offered on an interest-free basis. The Group calculates the difference between
the par value and fair value on recognition using a market rate of interest
and charges this amount to finance costs in the Group Income Statement, the
residual loan amount is recorded as a financial asset at amortised cost.
Impairment provisions against loans to franchisees and appointed
representatives are recognised based on an expected credit loss model. The
methodology used to determine the amount of provision is based on whether
there has been a significant increase in credit risk since initial recognition
of these financial assets and is calculated by considering the cash shortfalls
that would be incurred and probability of these cash shortfalls using the
Group's model. Where a significant increase in credit risk is identified,
lifetime expected credit losses are recognised; alternatively, if there has
not been a significant increase in credit risk, a 12-month expected credit
loss is recognised. Such provisions are recorded in a separate allowance
account with the loss being recognised within operating expenses in the Group
Income Statement. On confirmation that a loan will not be collectable, the
gross carrying value of the asset is written off against the associated
provision.
2.17 Loans to joint venture
The Group issued loan notes to its joint venture in 2024. The Group's
objective is to hold these loans to collect contractual cash flows and the
contractual cash flows are solely payments of principal and interest. They are
initially recognised at fair value plus transaction costs that are directly
attributable to their issue and are subsequently carried at amortised cost,
less provision for impairment. The loan notes are redeemable in June 2025.
2.18 Provisions
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event and it is
probable that an outflow of economic benefits will be required to settle the
obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate,
the risks specific to the liability.
2.19 Leases
Leases are defined as a contract which gives the right to use an asset for a
period of time in exchange for consideration. As a lessee, the Group
recognises three classes of leases on this basis:
- Property leases
- Motor vehicle leases
- Other leases
Property leases and motor vehicle leases have been recognised on the Group
Balance Sheet, in financial liabilities, by recognising the future cash flows
of the lease obligation, discounted using the incremental borrowing rate of
the Group, adjusted for factors such as swap rates available and the credit
risk of the entity entering into the lease.
Corresponding right-of-use assets have been recognised on the Group Balance
Sheet under property, plant and equipment and have been measured as being
equal to the discounted lease liability plus any lease payments made at or
before the inception of the lease and initial direct costs, less any lease
incentives received. Cash flows from these leases have been recognised by
including the principal portion of the lease payments in cash flows from
financing activities and the interest portion of the lease payment recognised
through operating activities.
Other leases are leases for low value items or leases whose contract term is
less than 12 months. The practical expedient not to recognise right-of-use
assets and lease liabilities for these leases has been utilised by the Group.
A charge for these leases has been recognised through the income statement as
an operating expense. The cash flows relating to low value and short-term
leases have been recognised in net cash flows from operating activities. No
leases where the Group is a lessee, or a lessor contain variable lease
payments.
In scenarios where the Group is an intermediate lessor, the sublease is
classified as a finance lease if substantially all of the risk and rewards
incidental to the ownership of the leased asset have transferred to the
sublessee, otherwise the sublease is classified as an operating lease. The
Group accounts for finance subleases by derecognising the existing
right-of-use asset at the effective date of the sublease and recognising a
receivable for the Group's net investment in the sublease, with any resultant
gain/(loss) recognised in the income statement. The net investment in the
leases equals remaining fixed payments, discounted at the interest rate
implicit in the lease. After initial recognition, the Group recognises finance
income over the remaining lease using the amortised cost method. The net
investment in sublease is subsequently reviewed for impairment under IFRS 9
(further details are given in note 26 to these Financial Statements).
Rental income including the effect of lease incentives from sublet properties
and vehicles are recognised over time on a straight-line basis, throughout the
lease term for operating leases or by recognising in the balance sheet a lease
receivable equal to the investment in the lease for finance leases. Subleases
are assessed as finance leases or operating leases in reference to the
right-of-use asset the lease generates.
2.20 Shares held by employee benefit trust (EBT) and share incentive plan
(SIP)
The Group has an employee share scheme (ESOT) for the granting of LSL shares
to Executive Directors and selected senior employees; and an employee share
incentive plan. Shares in LSL held by the ESOT and the trusts are treated as
treasury shares and presented in the balance sheet as a deduction from equity.
No gain or loss is recognised in the income statement on the purchase, sale,
issue or cancellation of the Group's own equity instruments. The finance costs
and administration costs relating to the ESOT and the trusts are charged to
the income statement. Dividends earned on shares held in the ESOT and the
trusts have been waived. The ESOT and trust shares are ignored for the
purposes of calculating the Group's earnings per share (EPS).
2.21 Treasury shares
Where the Group repurchases shares from existing shareholders, they are held
as treasury shares and are presented as a deduction from equity. No gain or
loss is recognised in the income statement on the purchase, sale, issue or
cancellation of the Group's own equity instruments. Treasury shares are
ignored for the purposes of calculating the Group's EPS and adjusted EPS.
2.22 Dividends
Equity dividends are recognised when they become legally payable. In the case
of interim dividends to shareholders, this is when paid. In the case of final
dividends, this is when approved by shareholders at each AGM.
2.23 Pensions
The Group operates a defined contribution pension scheme for employees of all
Group companies. The assets of the scheme are invested and managed
independently of the finances of the Group. The pension cost charge represents
contributions payable in the year.
2.24 Critical accounting judgements and estimates
The preparation of the Group's Financial Statements requires the use of
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the Financial Statements and the reported amounts
of revenue and expenses during the year. These estimates and judgements are
based on Management's best knowledge of the amount, event or actions and
actual results ultimately may differ from those estimates. Group Management
believe that the estimates and assumptions listed below have a significant
risk of resulting in a material adjustment to the carrying amounts of assets
and liabilities.
Carrying value of goodwill and intangible assets (estimate)
The Group carries out impairment reviews of intangible assets when there is an
indication that the carrying value may not be recoverable and tests the
carrying value of goodwill and indefinite life intangibles at least annually,
each of the Group's three segments hold goodwill or indefinite life intangible
assets and therefore an annual impairment review is required.
The Group's goodwill of £16.9m includes Surveying & Valuation (£9.6m),
Estate Agency Franchising (£0.3m) and Financial Services (£7.0m). At 31
December 2024, the Group held £29.9m of intangible assets on the balance
sheet (2023: £21.4m), of which £6.9m are indefinite life intangible assets
relating to brand (2023: £6.9m), the remaining balance of £23.0m is split
between relationship asset £8.5m (2023: £nil), franchise intangibles £10.9m
(2023: £11.7m) and software £3.6m (2023: £2.8m).
In 2023, the Estate Agency segment disposed of £38.1m of goodwill associated
with the owned network, and a franchise asset of £11.7m was recognised in the
new franchise operation (Estate Agency Franchising), the value of brand was
transferred from Estate Agency to Estate Agency Franchising. Surveying &
Valuation and Financial Services have always previously had high levels of
headroom and have therefore typically not been sensitive.
The impairment tests are carried out by CGU and reflect the latest Group
budgets and forecasts approved by the Board. The budgets and forecasts are
based on various assumptions relating to the Group's business including
assumptions relating to market outlook, observable trends, and profitability.
A pre-tax discount rate has been used to discount the CGU cash flows:
· Financial Services Division - 16.3%
· Surveying & Valuation Division - 17.3%
· Estate Agency Franchising Division - 15.9%
A terminal value is also applied using a long-term growth rate of 2.0%. A
sensitivity analysis has been performed allowing for possible changes to the
assumptions in the impairment model, see note 17 for details.
Commission refund liability (estimate)
Certain subsidiaries sell life assurance products which are cancellable
without a notice period, and if cancelled within a set period require that a
portion of the commission earned must be repaid. This also includes commission
refund liabilities for sales by leaver firms which would ordinarily have been
recoverable from them when they had previously been part of the Network. The
commission refund liability is recognised as a reduction in revenue which is
calculated with reference to historic refunds which have occurred. Details of
the assumptions applied to commission refund liability and the impact of
changes in average lapse rates are shown in note 23.
Professional Indemnity (PI) claims (estimate)
A provision is made for professional indemnity claims and potential claims
that arise during the normal course of business in the Financial Services
Division and in relation to valuations performed by the Surveying &
Valuation Division. This includes an estimate for the settlement of claims
already received as well as claims incurred but not yet reported (IBNR).
Details of the assumptions applied to PI claims areas are disclosed in note 25
to these Financial Statements. A sensitivity analysis which illustrates the
impact of different assumptions on the required PI costs provision is also
included in note 25.
2.25 New standards and interpretations not applied
IFRS 18 "'Presentation and Disclosure in Financial Statements" was issued by
the International Accounting Standards Board (IASB) on 09 April 2024.
Subjected to UK endorsement, the new standard is effective for the Group's
accounting periods beginning on or after 1 January 2027.
New requirements under IFRS 18 are expected to have an impact on the Group
Financial Statements, key changes include:
• Mandatory subtotals and categories of income and expense in the income
statement, as well as new requirements for the disclosure of operating
expenses,
• Disclosures about management-defined performance measures in the financial
statements,
• Enhanced requirements for the aggregation and location of information
presented in the primary financial statements and disclosed in the notes as
well as guidance on providing informative labels.
Management are continuing to assess the impact of the accounting changes that
will arise under IFRS 18.
There have been no other new relevant standards that have been published and
are mandatory for the Group's accounting periods beginning on or after 1
January 2024. Amendments to existing standards do not have a material impact
on the Financial Statements.
3. Disaggregation of revenue
Set out below is the disaggregation of the Group's revenue from contracts with
customers:
Year ended 31 December 2024
Financial Services £'000 Surveying & Valuation
£'000 Residential sales exchange Asset management £'000 Other Total
£'000 Lettings Estate Agency Franchising income £'000 £'000
£'000 £,000
Timing of revenue recognition
Services transferred at a point in time 48,395 92,547 4,027 367 20,081 5,275 997 171,689
Services transferred over time - - - - 1,486 - - 1,486
Total revenue from contracts with customers 48,395 92,547 4,027 367 21,567 5,275 997 173,175
During the year 19% (2023: 14%) of the Group's revenue was generated from a
single large customer within the Surveying & Valuation division. The
revenue recorded within continuing operations in relation to this customer
during the year was £33.1m (2023: £19.9m).
Year ended 31 December 2023
Financial Services £'000 Surveying & Valuation
£'000 Residential ales exchange Asset management £'000 Other Total
£'000 Lettings Estate Agency Franchising income £'000 £'000
£'000 £,000
Timing of revenue recognition
Services transferred at a point in time 51,692 67,834 4,115 950 13,529 3,907 1,156 143,183
Services transferred over time - - - 170 952 113 - 1,235
Total revenue from contracts with customers 51,692 67,834 4,115 1,120 14,481 4,020 1,156 144,418
2024 2023
£'000 £'000
Revenue from services 173,175 144,418
Operating revenue 173,175 144,418
Gain/(loss) on fair value (note 19) 482 (279)
Other gains 50 68
Other operating income/(loss) 532 (211)
Total revenue and operating income 173,707 144,207
4. Segment analysis
For the year ended 31 December 2024 LSL has reported three operating segments:
Financial Services, Surveying & Valuation, and Estate Agency Franchising.
The Estate Agency segment previously included the Group's owned network,
pre-existing franchise network, residential sales exchange, conveyancing
services, lettings and asset management businesses. The Estate Agency segment
was replaced by Estate Agency Franchising on 4 May 2023 which includes the
Group's franchise operations, residential sales exchange, and conveyancing
services.
From 1 January 2024, the Group's asset management business was transferred
from Estate Agency Franchising to Surveying & Valuation following changes
in management responsibilities, see note 2.5 for further detail.
Operating segments
The Chief Operating Decision Maker ("CODM") monitors the operating results of
its segments separately for the purpose of making decisions about resource
allocation and performance assessment. Segment performance is evaluated based
on operating profit or loss which in certain respects, as explained in the
table below, is measured differently from operating profit or loss in the
Group Financial Statements. Head office costs, Group financing (including
finance costs and finance income) and income taxes are managed on a Group
basis and are not allocated to operating segments.
Reportable segments
The following table presents revenue and profit information regarding the
Group's reportable segments for the financial year ended 31 December 2024 and
financial year ended 31 December 2023 respectively.
Year ended 31 December 2024
Financial Services Surveying Estate Agency Franchising Central* Total
& Valuation
Income statement information £'000 £'000 £'000 £'000 £'000
Revenue from external customers 48,395 97,822 26,958 - 173,175
Segmental result:
- Group Underlying Operating profit/(loss) 8,653 22,501 7,626 (11,048) 27,732
- Operating profit/(loss) 4,670 22,083 6,468 (11,335) 21,886
Finance income 2,868
Finance costs (1,741)
Profit before tax 23,013
Loss before tax from discontinued operations (518)
Profit before tax 22,495
Taxation (5,106)
Profit for the year 17,389
Balance sheet information
Segment assets - intangible 17,521 12,771 16,424 - 46,716
Segment assets - other 33,977 15,486 4,699 66,963 121,125
Total segment assets 51,498 28,257 21,123 66,963 167,841
Total segment liabilities (23,697) (18,450) (12,749) (31,061) (85,957)
Net assets 27,801 9,807 8,374 35,902 81,884
Other segment items
Capital expenditure including intangible assets 1,259 1,439 333 - 3,031
Depreciation (540) (1,925) (695) - (3,160)
Amortisation of intangible assets (1,806) (230) (916) (36) (2,988)
Exceptional gains 1,705 40 - - 1,745
Exceptional costs (4,109) - - - (4,109)
Share of results in joint venture (6) - - - (6)
PI Costs provision (440) (1,899) - - (2,339)
Dilapidation provision - - (5,110) - (5,110)
Restructuring provision - - (918) - (918)
Appointed representative provision (1,247) - - - (1,247)
Other provision - - - (571) (571)
Share-based payment (199) (228) (242) (251) (920)
Employee Costs (25,919) (59,346) (10,479) (9,456) (105,200)
*Formerly named "Unallocated"
Central net assets comprise intangible assets and plant and equipment £0.7m,
other assets £5.6m, cash £60.7m, accruals and other payables £1.2m,
deferred tax liabilities £1.6m, overdraft of £28.3m. Central result
comprises costs relating to the Parent Company.
Year ended 31 December 2023 (restated)
Financial Services Surveying Estate Agency Franchising Central* Total
& Valuation
Income statement information £'000 £'000 £'000 £'000 £'000
Gross income from external customers from continuing operations 53,284 71,854 20,872 - 146,010
Introducer's fee (1,592) - - - (1,592)
Revenue from continuing operations 51,692 71,854 20,872 - 144,418
Revenue from external customers from discontinued operations - - 30,750 - 30,750
Introducer's fee - - 1,592 - 1,592
Total revenue from continuing and discontinued operations 51,692 71,854 53,214 - 176,760
Segmental result:
- Group Underlying Operating profit/(loss) from continuing operations 7,022 6,730 4,305 (7,738) 10,319
- Operating profit/(loss) 5,049 3,396 2,968 (7,666) 3,747
Finance income 2,817
Finance costs (1,701)
Profit before tax 4,863
Loss before tax from discontinued operations (45,425)
Loss before tax (40,562)
Taxation 2,502
Loss for the year (38,060)
Balance sheet information
Segment assets - intangible 8,893 11,962 17,425 36 38,316
Segment assets - other 23,439 14,175 10,418 63,176 111,208
Total segment assets 32,332 26,137 27,843 63,212 149,524
Total segment liabilities (14,476) (15,383) (17,855) (25,865) (73,579)
Net assets 17,856 10,754 9,988 37,347 75,945
Other segment items
Capital expenditure including intangible assets (2,065) (623) (168) - (2,856)
Depreciation (590) (1,796) (976) - (3,362)
Amortisation of intangible assets (1,733) (46) (443) (36) (2,258)
Exceptional gains 8,981 339 - - 9,320
Exceptional costs (9,275) (3,661) (831) - (13,767)
Share of results in joint venture (390) - - - (390)
PI Costs provision (905) (2,313) - - (3,218)
Dilapidation provision - - (5,691) - (5,691)
Restructuring provision - - (2,069) - (2,069)
Other provision - - (571) - (571)
Onerous leases provision - - (1) - (1)
Share-based payment 54 (37) 8 139 164
Employee Costs (28,132) (51,910) (9,971) (9,077) (99,090)
*Formerly named "Unallocated"
Central net assets comprise intangible assets and plant and equipment £1.0m,
other assets £4.2m, cash £58.0m, accruals and other payables £2.8m,
overdraft of £23.1m. Central result comprises costs relating to the Parent
Company.
5. Group and Divisional Underlying Operating Profit
Group and Divisional Underlying Operating Profit are alternative performance
measures (APMs) used by the Directors and Group Management to monitor
performance of operating segments against budget. It is calculated as
profit/(loss) before tax adjusted for the items set out below. The Group's
APMs are defined, explained, and reconciled to their closest statutory
measures in note 34.
Year ended 31 December 2024
Financial Services Surveying Estate Agency Central* IFRS reported total from continued operations
& Valuation
£'000 £'000 £'000 £'000 £'000
Profit/(loss) before tax 6,759 22,805 5,990 (12,541) 23,013
Net finance income/(cost) (2,089) (722) 478 1,206 (1,127)
Operating profit/(loss) per income statement 4,670 22,083 6,468 (11,335) 21,886
Operating Margin 9.6% 22.6% 24.0% - 12.6%
Adjustments:
Share-based payments 199 228 242 251 920
Amortisation of intangible assets 1,806 230 916 36 2,988
Exceptional gains (1,705) (40) - - (1,745)
Exceptional costs 4,109 - - - 4,109
Contingent consideration (426) - - - (426)
Underlying Operating Profit/(Loss) 8,653 22,501 7,626 (11,048) 27,732
Underlying Operating Margin 17.9% 23.0% 28.3% - 16.0%
*Formerly named "Unallocated"
Year ended 31 December 2023 (restated)
Financial Services Surveying Estate Agency Franchising Central* Total including discontinued operations
& Valuation IFRS reported total from continuing operations
Discontinued operations
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Profit/(loss) before tax 5,848 3,960 3,733 (8,678) 4,863 (45,425) (40,562)
Net finance income/(cost) (799) (564) (765) 1,012 (1,116) 110 (1,006)
Operating (loss)/profit per income statement 5,049 3,396 2,968 (7,666) 3,747 (45,315) (41,568)
Operating Margin 9.8% 4.7% 14.2% - 2.6% (140.1%) (23.5%)
Adjustments:
Share-based payments (54) (34) 63 (139) (164) 55 (109)
Amortisation of intangible assets 1,733 46 443 36 2,258 402 2,660
Exceptional gains (8,981) (339) - - (9,320) - (9,320)
Exceptional costs 9,275 3,661 831 - 13,767 43,883 57,650
Contingent consideration payable - - - 31 31 - 31
Underlying Operating Profit/(Loss) 7,022 6,730 4,305 (7,738) 10,319 (975) 9,344
Underlying Operating Margin 13.6% 9.4% 20.6% - 7.1% (3.0%) 5.3%
*Formerly named "Unallocated"
6. Discontinued operations
In 2023, the Group franchised its entire owned estate agency network of 183
branches, with the operations of the previously owned network disposed to a
combination of new and existing franchisees between 3 May and 31 May 2023. The
operations of the branches were sold to the franchisees through either asset
or share sales. The operations of the owned branch network were classified as
a discontinued operation and presented as such in the Group Financial
Statements for the year ended 31 December 2024 and 31 December 2023.
During 2024 the Group recognised post tax loss from discontinued operations of
£0.4m (2023: loss of £46.1m) due to follow on administrative costs from the
restructuring, and increase in dilapidation and restructuring provisions
recognised as part of the original asset and share sales, as per note 25.
Financial performance and cash flow information
2024 2023
£'000 £'000
Revenue - 32,342
Operating Expenses:
Employee and subcontractor costs - (20,660)
Depreciation on property, plant and equipment - (1,150)
Other operating costs (440) (11,509)
Gain on sale of property, plant and equipment - 2
Share-based payments - (55)
Amortisation of intangible assets - (402)
Exceptional gains - -
Exceptional costs (78) (9,049)
Group operating loss (518) (10,481)
Finance costs - (110)
Net finance costs - (110)
Loss before tax (518) (10,591)
Taxation credit/(charge) 141 (668)
Loss for the year (377) (11,259)
Loss on sale of discontinued operation - (34,834)
Loss after tax for the period from discontinued operation (377) (46,093)
The net cash flows generated/(incurred) by discontinued operations are, as
follows:
2024 2023
£'000 £'000
Operating (1,622) (3,524)
Investing - (671)
Financing - (935)
Net cash outflow (1,622) (5,130)
Exceptional costs
2024 2023
£'000 £'000
Estate Agency restructuring costs - (9,049)
Increase in dilapidation and restructuring provisions (78) -
(78) (9,049)
Increase in dilapidation and restructuring provisions
During the year, the Group recognised exceptional costs from discontinued
operations of £0.1m (2023: £9.0m exceptional cost) due to increases in
dilapidation and restructuring provisions recognised as part of the original
asset and share sales, as per note 25 of the Group Financial Statements.
7. Finance income
2024 2023
£'000 £'000
Finance income on subleased assets 96 140
Unwinding of discount on contingent consideration receivable 738 986
Interest from loans to franchisees and appointed representatives 225 148
Bank interest 1,752 1,536
Other interest receivable 57 7
2,868 2,817
8. Finance costs
2024 2023
£'000 £'000
Commitment and non-utilisation fees on RCF 632 728
Unwinding of discount on lease liabilities 455 499
Unwinding of discount on contingent consideration payable 132 3
Unwinding of discount on dilapidations provision 192 119
Finance cost on loans to franchisees and appointed representatives 321 332
Other interest payable 9 20
1,741 1,701
9. Exceptional items
Exceptional items are those which are material by size and are both
non-recurring and unusual in nature, see note 2.8 for the Group's accounting
policy for exceptional items.
2024 2023
£'000 £'000
Exceptional costs:
Financial Services appointed representative costs 1,880 -
Financial Services post-acquisition support costs 543 -
Reduction in contingent consideration receivable 1,542 4,093
Financial Services acquisition costs 144 2,164
Surveying & Valuation restructuring costs - 3,661
Loss on sale of disposal groups - 1,697
Intangible assets write down - 2,152
4,109 13,767
Exceptional gains:
Surveying & Valuation restructuring gains 40 -
Increase in contingent consideration receivable 1,705 -
Gain on sale of disposal groups - 8,981
Exceptional gain in relation to historic PI costs - 339
1,745 9,320
Exceptional costs
Financial Services appointed representative costs
During the year, the Group's PRIMIS Network served notice to one of its
protection only appointed representative (AR) firms, made up of two trading
entities. The Group is responsible for the future reimbursements of
commissions received from product providers in the event that policies are
cancelled during an indemnity period, which is a maximum of 4 years. The Group
has agreements in place with its AR firms and certain advisers to recover
their contractual liability in respect of these amounts.
Given the trading position of these AR firms following the notice, the PRIMIS
Board has determined that not all future commission reimbursements are likely
to be recovered. Consequently, a specific provision of £1.2m has been
recognised in the Group's balance sheet to reflect this potential exposure.
The Group's exposure will reduce significantly over time as active policies
move beyond the indemnity period and due to the substantial decline in trading
activity during the final months of the AR firms' operations. The remaining
exceptional costs in this category relates to bad debt write off and
consultancy costs.
Financial Services post-acquisition support costs
On 2 February 2024, the Group acquired the entire issued share capital of
TenetLime Limited ("TenetLime"), a subsidiary of Tenet Group Limited ("Tenet
Group"). As part of the purchase agreement, Tenet Group agreed to provide a
number of services to LSL after the transaction. Subsequent to the purchase,
LSL was notified that Tenet Group Limited entered administration on 5 June
2024, see note 24 for further detail. Additional costs to the Group as a
consequence of the administration of £0.5m are recognised as exceptional
costs.
Reduction in contingent consideration receivable
The reduction in contingent consideration receivable relates to contingent
consideration assets recognised on the disposal of Group First and EFS. The
charge included in exceptionals is the result of a downward revision of future
forecasts at the reporting date in comparison to original recognition. The
Group has included movements in the contingent consideration for these
disposals in exceptional items, because the original gain/loss on disposal was
taken to exceptional items. The Group recognises finance income on the
unwinding of the receivables in finance income in the income statement.
Financial Services acquisition costs
Financial Services restructuring costs relate to corporate activity, including
costs related to the acquisition of TenetLime Limited of £0.1m (refer to note
24).
Exceptional gains
Increase in contingent consideration receivable
The increase in contingent consideration receivable relates to contingent
consideration assets recognised on the disposal of RSC. The gain included in
exceptionals is the result of a upward revision of future forecasts at the
reporting date in comparison to original recognition. The Group has included
movements in the contingent consideration for these disposals in exceptional
items, because the original gain/loss on disposal was taken to exceptional
items. The Group recognises finance income on the unwinding of the receivables
in finance income in the income statement.
10. Profit before tax
Profit before tax is stated after charging:
2024 2023
£'000 £'000
Auditor's remuneration (note 11) 1,525 1,533
Short-term leases 1,796 1,960
Low value leases 196 334
Depreciation - owned assets 1,179 1,482
Depreciation - right-of-use assets 1,981 1,880
11. Auditor's remuneration
The remuneration of the auditors is further analysed as follows:
2024 2023
£'000 £'000
Audit of the Financial Statements 584 490
Audit of subsidiaries 701 588
Total audit 1,285 1,078
Audit-related assurance services (including interim results review) 240 455
1,525 1,533
12. Earnings per Share (EPS)
Basic EPS amounts are calculated by dividing net profit for the year
attributable to ordinary equity holders of the parent by the weighted average
number of ordinary shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the net profit attributable to
ordinary equity holders of the parent by the weighted average number of
ordinary shares outstanding during the year, plus the weighted average number
of ordinary shares that would be issued on the conversion of all the dilutive
potential ordinary shares into ordinary shares.
As the Group reported a profit from continuing operations in 2024 (2023:
profit from continuing operations), the effect of dilutive share options has
been included in the calculation of diluted earnings per share for continuing
operations, discontinued operations and the overall result:
Total EPS:
2024 2023
Profit after tax Weighted average number of shares Weighted average number of shares Per share amount
£'000 Per share amount Loss after tax pence
pence £'000
Basic EPS 17,363 102,645,789 16.9 (38,001) 103,066,026 (36.9)
Effect of dilutive share options 957,578 - 817,786 -
Diluted EPS 17,363 103,603,367 16.8 (38,001) 103,883,812 (36.6)
EPS from continuing operations:
2024 2023
Profit after tax Weighted average number of shares Profit after Weighted average number of shares
£'000 Per share amount tax Per share amount
pence £'000 pence
Basic EPS 17,740 102,645,789 17.3 8,092 103,066,026 7.9
Effect of dilutive share options 957,578 - 817,786 -
Diluted EPS 17,740 103,603,367 17.1 8,092 103,883,812 7.8
EPS from discontinued operations:
2024 2023
Loss after tax Weighted average number of shares Loss after tax Weighted average number of shares
£'000 Per share amount £'000 Per share amount
pence pence
Basic EPS (377) 102,645,789 (0.4) (46,093) 103,066,026 (44.7)
Effect of dilutive share options 957,578 - 817,786 -
Diluted EPS (377) 103,603,367 (0.4) (46,093) 103,883,812 (44.4)
There have been no other transactions involving ordinary shares or potential
ordinary shares between the reporting date and the date of completion of these
Financial Statements.
Adjusted basic and diluted EPS
The Directors (who were members of the Board at 31 December 2024) consider
that the adjusted earnings shown below give a consistent indication of the
Group's underlying performance:
2024 2023
£'000 £'000
Group Underlying Operating Profit (See note 5 for the reconciliation from 27,732 9,344
Group Operating Profit)
(Profit)/loss attributable to non-controlling interest (26) 59
Finance income (excluding exceptional and contingent consideration items, fair 1,169 795
value adjustment to loans receivables and discounting on lease liabilities)
Normalised taxation (tax rate 25.0%, 2023:23.5%)* (7,219) (2,396)
Adjusted profit after tax attributable to owners of the parent 21,656 7,802
*The headline UK rate of corporation tax for the period is 25.0% (2023:
23.5%).
Adjusted basic and diluted EPS
2024 2023
Profit after tax Weighted average number of shares Profit after tax Weighted average number of shares
£'000 Per share amount per share amount
pence £'000 pence
Adjusted basic EPS 21,656 102,645,789 21.1 7,802 103,066,026 7.6
Effect of dilutive share options 957,578 - 817,786 -
Adjusted diluted EPS 21,656 103,603,367 20.9 7,802 103,883,812 7.5
This represents adjusted profit after tax attributable to equity holders of
the parent. Tax has been adjusted to exclude the prior year tax adjustments,
and the tax impact of exceptional items, amortisation, and share-based
payments. The effective tax rate used is 25.0% (31 December 2023: 23.5%).
13. Dividends paid and proposed
2024 2023
£'000 £'000
Declared and paid during the year:
2024 Interim: 4.0 pence per share (2023 Interim: 4.0 pence) 4,069 4,098
Dividends on shares proposed (not recognised as a liability as at 31
December):
Equity dividends on shares:
Dividend: 7.4 pence per share (2023: 7.4 pence) 7,596 7,714
14. Cash flow from financing activities
Set out below are the movements in the Group's lease liabilities and long-term
debt during the year.
At 1 January 2024 Cash flow Additions Disposals At 31 December 2024
£'000 £'000 £'000 £'000 £'000
Lease liabilities 8,340 (2,895) 1,855 (1,518) 5,782
8,340 (2,895) 1,855 (1,518) 5,782
At 1 January 2023 Cash flow Additions Disposals
At 31 December 2023
£'000 £'000 £'000 £'000 £'000
Lease liabilities 10,915 (4,529) 4,350 (2,396) 8,340
10,915 (4,529) 4,350 (2,396) 8,340
2024 2023
£'000 £'000
Non-current liabilities 3,491 5,085
Current liabilities 2,291 3,255
5,782 8,340
Lease liability movements comprise new leases entered into during the year,
cancellation of leases and movements between current and non-current
liabilities, this also includes interest paid during the year of £0.5m (2023:
£0.6m). The Group holds no other long-term debt at 31 December 2024.
15. Directors and employees
Remuneration of Directors
2024 2023
£'000 £'000
Directors' remuneration (short-term benefits)(1) 1,504 1,367
Contributions to money purchase pensions schemes (post-employment benefits) 1 2
Aggregate gains on exercise of share based payment awards 155 479
1,660 1,848
(1)Directors' remuneration (short term benefits) excludes the value of share
awards (including the value of matching shares, dividend shares and free share
awards) that vested in the year amounting to £nil (2023: £0.2m). Included
within this amount are accrued bonuses of £0.6m (2023: £nil).
The number of Directors who were members of Group money purchase pension
schemes during the year totalled 2 (2023: 2).
Remuneration of Key Management Personnel
2024 2023
£'000 £'000
Key management personnel remuneration (short-term benefits)(2) 3,618 2,641
Contributions to money purchase pensions schemes (post-employment benefits) 57 63
Termination benefits 178 142
Share-based payments charge on current incentive schemes 59 377
3,912 3,223
(2) Included within this amount are accrued bonuses of £1.4m (2023: £0.1m).
Remuneration of Key Management Personnel represents the charge to the income
statement in respect of the remuneration of the Group Board and Group
Executive Committee members.
Employee numbers and costs
The Group employs staff in divisional offices and head office. Aggregate
payroll costs of these employees, including Directors were:
2024 2023
£'000 £'000
Wages and salaries 87,914 83,401
Social security costs 12,437 10,862
Pension costs 4,406 4,536
Subcontractor costs 443 291
Total employee costs 105,200 99,090
Share-based payment charge/(credit) (see below) 920 (164)
The average monthly FTE staff numbers (including Directors) during the year
were:
2024 2023
Financial Services 413 490
Surveying & Valuation 900 879
Estate Agency Franchising 307 1,006
1,620 2,375
Share-based payments
The Group operates the following equity-settled share-based remuneration
schemes:
Long-term incentive plan (LTIP)
The Group operates a LTIP (an equity-settled share-based remuneration scheme)
for certain employees. Under the LTIP, the options vest if the individual
remains an employee of the Group after a three-year period, unless the
individual has left under certain 'good leaver' terms in which case the
options may vest earlier and providing the performance conditions are met.
Vesting conditions:
For all LTIP options granted between 2021 and 2024, 50% of the options vest
based on the total shareholder return (TSR) of LSL as compared to a comparator
group of FTSE Small Cap, excluding investment trusts, over the three-year
performance period (for LTIP 2024 this is 1 January 2024 to 31 December 2026):
• if the Group is in the top 25% percentile, all of these options will vest;
• if the Group is at the median, 25% will vest;
• straight-line vesting between median and top 25% percentile; and
• below the median, no options vest.
The remaining 50% of the options are based on LSL's Adjusted Basic EPS
performance in the financial year which they become exercisable:
LTIP 2024 LTIP 2023 LTIP 2022 LTIP 2021
EPS (pence) EPS (pence) EPS (pence) EPS (pence)
100% vest (more than or equal to) 32.5 24.0 52.8 31.5
25% vest (equal to) 26.5 16.0 46.9 25.6
Straight-line vesting (between) 26.5-32.5 16.0 - 24.0 46.9 - 52.8 25.6 - 31.5
No options vest (less than) 26.5 16.0 46.9 25.6
Company stock option plan (CSOP)
The Group operates a CSOP (an equity-settled share-based remuneration scheme)
for certain employees. Under the CSOP the options vest if the individual
remains an employee of the Group after a three-year period, unless the
individual has left under certain 'good leaver' terms in which case the
options may vest earlier.
SAYE (save-as-you-earn) scheme
The Group has offered options under the SAYE scheme in each of 2011 to 2014,
2016 to 2019, 2021, 2023 and 2024 years. All these offers were open to all
qualifying employees and provide for an exercise price equal to the daily
average market price on the date of grant. The options will vest if the
employee remains in service for the full duration of the option scheme (three
years). There are no cash settlement alternatives.
All employee share award
The Group launched its second free share award under its SIP Plan in 2022. The
award was £500 worth of shares per full-time employee and a pro-rated award
for all part-time employees. This award offer was made to LSL employees who
had joined the Group on or before 28 February 2022 and remain employed and not
serving notice at the date the shares are awarded in April 2022. The awards
will normally become available for employees once they have been held in the
SIP for three years or more.
The Group's first free share scheme awarded £500 worth of shares per
full-time employee and a pro-rated award for all part-time employees who had
joined the Group on or before 31 March 2020 and were still employed and not
serving notice at the time the grant was made on 1 October 2020. The awards
will normally become available for employees once they have been held in the
SIP plan for three years or more.
Movements during the year
The following table illustrates the number and weighted average exercise
prices of, and movements in, share options during the year:
2024 2023
Weighted Number Weighted Number
average exercise average exercise
price price
Outstanding at 1 January 0.87 4,065,279 0.71 4,808,256
Granted during the year 0.77 1,283,552 0.98 1,639,999
Exercised during the year(3) 0.37 (383,216) 0.00 (567,665)
Lapsed during the year 1.04 (961,847) 0.81 (1,815,311)
Outstanding at 31 December 0.85 4,003,768 0.87 4,065,279
(3)The weighted average share price at the date of exercise of these options
was £2.73 in 2024 (2023: £2.35)
· There were no cancellations or
modifications to the awards in 2024 or 2023.
· The weighted average remaining
contractual life for the share options outstanding as at 31 December 2024 was
0.74 years (2023: 1.46 years).
· The weighted average fair value of
options granted during the year was £2.39 (2023: £1.76).
· The range of exercise prices for options
outstanding at the end of the year was £nil to £3.64 (2023: £nil to
£3.64).
· 492,891 share options were exercisable
as at 31 December 2024.
The following tables list the inputs to the models used for the new plans for
the years ended 31 December 2024 and 2023, respectively:
LTIP SAYE LTIP SAYE
2024
2023
2023
2024
Option pricing model used Black Scholes Black Scholes Black Scholes Black Scholes
Weighted average share price at grant date (£) 2.98 2.82 2.44 2.50
Exercise price (£) - 2.46 - 1.99
Expected life of options (years) 3 3 3 3
Expected volatility (%) 100 100 100 100
Expected dividend yield (%) 3.69 1.06 3.96 6.03
Risk free interest rate (%) 4.54 4.36 3.99 3.83
The volatility assumption, measured at the standard deviation of expected
share price returns, is based on statistical analysis of historical share
price. The dividend yield assumption is based on the fact that the shares
awarded are not eligible to receive dividends until the end of the vesting
period.
The total cost recognised for equity-settled transactions is as follows:
2024 2023
£'000 £'000
Share-based payment charge/(credit) during the year 920 (164)
A charge of £0.9m (2023: credit of £0.2m) relates to employees of the
Company.
16. Taxation
(a) Taxation charge
The major components of income tax charge in the Group Income Statement are:
2024 2023
£'000 £'000
UK corporation tax - current year 3,417 -
- (208) 153
adjustment in respect of prior years
3,209 153
Deferred tax:
Origination and reversal of temporary differences 2,446 246
Rate differential - 16
Adjustment in respect of prior year (549) (416)
Deferred tax balances written back on disposal of subsidiaries - (2,501)
Total deferred tax charge / (credit) 1,897 (2,655)
Total tax charge / (credit) in the income statement 5,106 (2,502)
Continuing and discontinued operations:
2024 2023
£'000 £'000
Total tax charge / (credit) from continuing operations 5,247 (3,170)
Total tax (credit)/charge from discontinued operations (141) 668
5,106 (2,502)
Corporation tax is recognised at the headline UK corporation tax rate of 25.0%
(2023: 23.5%).
The opening and closing deferred tax balances in the Financial Statements were
measured at 25%. This is in accordance with rates included in the Finance Act
2021 which was enacted on 10 June 2021 and came into effect from 1 April 2023.
The effective rate of tax for the year was 22.7% (2023: 6.2%). The effective
tax rate for 2024 is lower than the headline UK tax rate of 25.0% largely as a
result of the calculated adjustments arising in respect of prior periods.
Income tax credited directly to the share-based payment reserve is £0.1m
(2023: debit of £0.1m).
(b) Factors affecting tax charge for the year
The tax assessed in the profit and loss account is lower than (2023: higher
than) the standard UK corporation tax (CT) rate, because of the following
factors:
2024 2023
£'000 £'000
Profit before tax from continuing operations 23,013 4,863
Loss before tax from discontinued operations (518) (45,425)
Profit/(loss) before tax 22,495 (40,562)
Tax calculated at UK standard CT rate of 25% (2023: 5,624 (9,532)
23.5%)
Non-deductible expenditure from joint venture 1 91
Other disallowable expenses 592 9,934
Net non-taxable gains on disposal of investments - (834)
Impact of movement in contingent consideration credited to the income 119 817
statement
Share-based payment relief (60) (229)
Movement in deferred tax previously not recognised on tax losses (413) (1)
Impact of rate change on deferred tax - 16
Prior period adjustments - current tax (208) 153
Prior period adjustment - deferred tax (549) (416)
Deferred tax balances written back on disposal of subsidiary undertakings - (2,501)
Total taxation charge/(credit) 5,106 (2,502)
Total tax charge/(credit) from continuing operations 5,247 (3,170)
Total tax (credit)/charge from discontinued operations (141) 668
Total taxation charge/(credit) 5,106 (2,502)
Other disallowable expenses of £0.6m (2023: £9.9m) includes the tax impact
of exceptional costs of £0.1m (2023: £9.7m), which are not
taxable/deductible for tax purposes. This item also includes other permanent
items which are not eligible for tax relief.
There is a credit to the income statement of £0.2m in relation to a
corporation tax prior year adjustment. This balance refines the estimate
previously reported and its main contributing component is the submission of
an overpayment relief claim upon finalising the restatements reflected in two
Group subsidiaries standalone statutory accounts.
There is a credit to the income statement in relation to a deferred tax prior
year adjustment of £0.5m. This predominately relates to the refinement of the
qualifying tax base of the Group's intangible fixed assets and losses
available to carry forward in the Group.
(c) Factors that may affect future tax charges (unrecognised)
2024 2023
£'000 £'000
Unrecognised deferred tax asset relating to:
Losses 2,108 3,020
2,108 3,020
No deferred tax asset is recognised in respect of trading losses of £6.7m
(2023: £9.5m). The losses may be recoverable in the future, and this is
dependent on subsidiary companies generating taxable profits sufficient to
allow the utilisation of these amounts. These deferred tax assets cannot be
offset against profits elsewhere in the Group as they relate to losses brought
forward which can only be offset against taxable profits arising from the same
trade in which the losses arose. There is no time limit for utilisation of
these tax losses.
No deferred tax asset is recognised in respect of capital losses of £1.8m
(2023: £2.6m) as there are no capital profits forecast against which these
losses can be utilised. There is no time limit for utilisation of these tax
losses.
(d) Deferred tax
An analysis of the balance sheet movements in deferred tax is as follows:
2024 2023
£'000 £'000
Net deferred tax liability at 1 January (166) 2,392
Research and development tax credits - (14)
Deferred tax liability recognised directly in other comprehensive income (88) 108
Deferred tax (credit) in income statement for the year from continuing 1,896 (5,898)
operations
Deferred tax charge in income statement for the year from discontinued - 3,246
operations
Net deferred tax liability/(asset) at 31 December 1,642 (166)
Net deferred tax (asset)/liability analysed as:
2024 2023
£'000 £'000
Accelerated capital allowances (1,433) (1,583)
Deferred tax liability on separately identifiable intangible assets on 4,410 5,200
business combinations
Deferred tax on financial assets 184 93
Deferred tax on share options (616) (487)
Other short-term temporary differences (221) (166)
Total losses recognised (682) (3,223)
1,642 (166)
At 31 December 2024, the Group has unused trading tax losses of £2.1m
available for offset against future profits. See note 16c for commentary on
those balances for which no deferred tax asset is recognised.
At the end of either year there was no unrecognised deferred tax liability for
taxes that would be payable on the unremitted earnings of the Group's
subsidiaries.
Deferred tax (charge)/credit in income statement relates to the following:
2024 2023
£'000 £'000
Intangible assets recognised on business combinations 790 (2)
Accelerated capital allowance (149) 267
Deferred tax on share options 40 (119)
Other temporary differences (30) (213)
Trading losses recognised (2,548) 2,722
Total deferred tax (charged)/credited in income statement (1,897) 2,655
2024 2023
£'000 £'000
Deferred tax (charge)/credit in income statement for the year from continuing (1,897) 5,901
operations
Deferred tax charge in income statement for the year from discontinued - (3,246)
operations
Total deferred tax (charged)/credited in income statement (1,897) 2,655
17. Intangible assets
Goodwill and brand
Goodwill Brand Total
£'000 £'000 £'000
Cost
At 31 December 2022 54,997 6,911 61,908
Disposed (38,142) - (38,142)
At 31 December 2023 16,855 6,911 23,766
At 31 December 2024 16,855 6,911 23,766
Net book value
At 31 December 2024 16,855 6,911 23,766
At 31 December 2023 16,855 6,911 23,766
Following the reorganisation of internal reporting structure, including the
implementation of a new governance framework within the financial services
division, entities within the PRIMIS Network: First Complete Limited, Advance
Mortgage Funding Limited, Personal Touch Financial Services Limited, and
TenetLime Limited; have been aggregated into a single cash-generating unit
(CGU) from 2024. This aligns with how Management monitors the Financial
Services Network's performance and reflects the Group's internal resource
allocation.
The carrying amount of goodwill and brand by CGU is summarised below:
Goodwill Brand Goodwill Brand
2024 2024 2023 2023
CGUs £'000 £'000 £'000 £'000
PRIMIS Network 6,950 180 6,950 180
Financial Services segment total 6,950 180 6,950 180
e.surv 9,569 1,305 9,569 1,305
Templeton LPA 336 - 336 -
Surveying & Valuation segment total 9,905 1,305 9,905 1,305
Your Move and Reeds Rains - 3,751 - 3,751
LSLi - 1,675 - 1,675
Estate Agency Franchising segment total - 5,426 - 5,426
Total 16,855 6,911 16,855 6,911
Impairment of goodwill and other intangibles with indefinite useful lives
The Group tests goodwill and the indefinite life intangible assets annually
for impairment, or more frequently if there are indicators of impairment.
Goodwill and brands acquired through business combinations have been allocated
for impairment testing purposes to statutory companies or groups of statutory
companies which are managed as individual CGUs as disclosed in the table
above.
Recoverable amount of CGUs
The recoverable amounts of the Financial Services, Surveying & Valuation
and Estate Agency Franchising companies have been determined based on a
value-in-use (VIU) calculation using cash flow projections based on financial
budgets and forecasts approved by the Board and in the three-year plan.
The calculation of value-in-use for each of the Financial Services, Surveying
& Valuation and Estate Agency companies is most sensitive to the following
assumptions:
· Discount rates
· Performance in the market
Discount rates
The pre-tax discount rate applied to cash flow projections used in the VIU
models is as follows:
2024 2023
Financial Services 16.3% 15.6%
Surveying & Valuation 17.3% 15.6%
Estate Agency Franchising 15.9% 15.7%
Cash flows beyond the three-year plan are extrapolated using a 2.0% growth
rate (2023: 2.0%).
Performance in the market
Reflects how management believes the CGU will perform over the three-year
period and is used to calculate the value-in-use of the CGUs.
CGU specific operating assumptions are applicable to the forecasted cash flows
for the years 2025 to 2027 and relate to revenue forecasts and underlying
profit margins in each of the operating CGUs. The value ascribed to each
assumption will vary between CGUs as the forecasts are built up from the
underlying business units within each CGU group. These assumptions are based
upon a combination of past experience of observable trends and expectations of
future changes in the market.
Sensitivity to changes in assumptions
Sensitivity analysis has been performed to assess whether changes to key
assumptions would lead to impairments across the Group. Management deemed that
there are no reasonably possible changes in key assumptions that would cause
any of the Group's CGUs carrying amounts to exceed its recoverable amounts.
Other intangible assets
Customer contracts Lettings contracts Franchise agreements Relationship Asset Total
Software
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2023 625 21,770 2,059 21,200 - 45,654
Additions - - 10,707 2,137 - 12,844
Disposals - (21,770) - - - (21,770)
Impairment - - - (3,940) - (3,940)
At 31 December 2023 625 - 12,766 19,397 - 32,788
Additions - - - 2,093 9,295 11,388
At 31 December 2024 625 - 12,766 21,490 9,295 44,176
Amortisation and impairment
At 1 January 2023 599 20,200 526 16,542 - 37,867
Amortisation 26 291 494 1,849 - 2,660
Disposals - (20,491) - (10) - (20,501)
Impairment - - - (1,788) - (1,788)
At 31 December 2023 625 - 1,020 16,593 - 18,238
Amortisation - - 879 1,335 774 2,988
At 31 December 2024 625 - 1,899 17,928 774 21,226
Net book value
At 31 December 2024 - - 10,867 3,562 8,521 22,950
At 31 December 2023 - - 11,746 2,804 - 14,550
Relationship Asset
On 2 February 2024, the Group acquired the entire issued share capital of
TenetLime Limited (TenetLime), a subsidiary of Tenet Group Limited (Tenet
Group).
The Group's purchase of TenetLime expanded its existing Financial Services
Network by increasing the number of appointed representatives (ARs) using
LSL's PRIMIS Network. The Group acquired contracts with 153 AR firms through
the acquisition of TenetLime and immediately transferred those firms onto the
PRIMIS Network.
Management performed a concentration test (IFRS 3) to determine whether
substantially all the fair value of the gross assets acquired was concentrated
in a single identifiable asset. The test indicated that substantially all the
value acquired was attributable to TenetLime's contractual relationships with
the AR firms. Based on the assessment performed, management concluded that the
Group did not acquire a business as part of the transaction and therefore the
acquisition is not a business combination.
However, the Group did acquire an intangible asset, being the acquired
contracts with each of the respective AR firms which have been assigned a
value based on the transaction price excluding the cash acquired. The cost
paid for the relationship intangible asset represents initial consideration of
£5.7m and contingent consideration of £3.6m.
The contingent consideration is calculated by reference to each AR firm's
turnover in 2022 and AR firm retention at 02 February 2025. The Group have
assumed an AR firm attrition rate of 7.6% which has been calculated using
actual attrition rates experienced in the PRIMIS Network over a five-year
period. The contingent consideration has been discounted at a rate of 4.3%, in
line with the Group's cost of debt. The AR relationship asset has a useful
life of 12 years, which is also based on PRIMIS Network attrition and
amortisation of £0.8m has been recognised in the year.
18. Property, plant and equipment and right-of-use assets
Fixtures, fittings and computer equipment
Land and buildings Leasehold Motor
improvements vehicles Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2023 21,914 1,446 7,444 15,920 46,724
Additions 1,614 100 2,710 620 5,044
Disposals (4,861) (580) (2,190) (5,758) (13,389)
Transfer to investment in sublease (9,649) - (738) - (10,387)
At 31 December 2023 9,018 966 7,226 10,782 27,992
Additions 424 - 1,431 939 2,794
Disposals (5,935) - (2,445) (271) (8,651)
At 31 December 2024 3,507 966 6,212 11,450 22,135
Depreciation and impairment
At 1 January 2023 14,857 1,094 4,473 10,730 31,154
Charge for the year 1,356 57 1,425 1,674 4,512
Disposals (3,021) (185) (1,728) (3,576) (8,510)
Transfer to investment in sublease (5,858) - (223) - (6,081)
At 31 December 2023 7,334 966 3,947 8,828 21,075
Charge for the year 539 - 1,442 1,179 3,160
Disposals (5,902) - (2,378) (221) (8,501)
At 31 December 2024 1,971 966 3,011 9,786 15,734
Net book value
At 31 December 2024 1,536 - 3,201 1,664 6,401
At 31 December 2023 1,684 - 3,279 1,954 6,917
Property, plant and equipment - - - 1,664 1,664
Right-of-use assets 1,536 - 3,201 - 4,737
19. Financial assets
2024 2023
£'000 £'000
(a) Financial assets at fair value through other comprehensive income
(FVOCI)
Unquoted shares at fair value - -
(b) Financial assets at fair value through income statement (FVPL)
Unquoted shares at fair value (Openwork units and Twenty7Tec) 762 399
Contingent consideration receivable 5,772 5,062
(c) Financial assets at amortised cost
Investment in sublease 832 3,338
Loan to joint venture 7,607 -
Loans to franchisees and appointed representatives 1,846 2,099
16,819 10,898
Non-current assets 2,188 8,818
Current assets 14,631 2,080
16,819 10,898
(a) Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income (FVOCI)
include unlisted equity instruments which are carried at fair value and
measured using level 3 valuation techniques. During 2023, the Group revalued
its investment in Global Property Ventures to £nil and there has been no
further change. The Group also holds an equity instrument in NBC Property
Master Limited which is carried at £nil value.
(b) Financial assets at fair value through income statement
Financial assets through profit or loss (FVPL) include unquoted units in
Twenty7Tec Group Limited and Openwork Partnership LLP, and contingent
consideration receivable which are carried at fair value and measured using
level 2 valuation technique. During the period, the following gains/(losses)
were recognised in the income statement:
2024 2023
£'000 £'000
Fair value gains/(losses) on equity investments at FVPL recognised in other 482 (279)
operating costs
Fair value gains/(losses) on contingent consideration recognised as 163 (4,093)
exceptional
Finance income recognised on contingent consideration receivable 738 986
Openwork Units
During the period the fair value of units held in The Openwork Partnership LLP
was unchanged (31 December 2023: £0.4m). Our valuation is based on the actual
strike price in the most trading window, adjusted for volume of units traded
during the window.
Twenty7Tec
The Group holds an equity instrument in Twenty7Tec Group Limited which was
historically valued at £nil. In 2024 the value of the Group's shareholding
was increased to £0.4m, this is based on a recent external valuation of the
business and is therefore indicative of a fair value.
Contingent Consideration Receivable
Contingent consideration of £5.7m relates to EFS, Group First and RSC which
were sold in H1 2023. The consideration receivable will be 7x the combined
EBITDA in calendar year 2024 subject to final working capital adjustments, and
is due in H1 2025. The fair value of the contingent consideration receivable
as at 31 December 2024 has been calculated for each of the three disposals
noted above based on the actual performance in calendar year 2024, adjusted
for working capital using information that was available to the Group at the
balance sheet date. The consideration receivable in H1 2025 is subject to
final working capital adjustments under the share purchase agreement which may
result in a change to the final consideration received in H1 2025.
The remaining £0.1m of contingent consideration relates to amounts due from
disposed lettings books, amounts are receivable in November 2025.
(c) Financial assets measured at amortised cost
Financial assets measured at amortised cost include investment in subleases
and loans to franchisees and appointed representatives.
Investment in subleases
The Group recognises an investment in sublease in scenarios where it is an
intermediate lessor, and the sublease is classified as finance lease. On
recognition, the investment in sublease is valued as the remaining fixed
payments due from the sublessor, discounted at the discount rate implicit in
the headlease. The Group recognises finance income over the remaining life of
the leases. An expected credit loss has been provided against the investment
in sublease of £0.1m (2023: £0.1m), applying a 12-month expected credit loss
model.
Loans to franchisees and appointed representatives
The loans to franchisees and appointed representatives balance includes loans
to franchisees in the Estate Agency Franchising segment and loans to appointed
representatives in Financial Services.
The franchisee loans reflect drawdowns on agreed facilities which have
availability over a range of periods from 31 December 2024 to 31 December
2025, are repayable in full within 24 months from the respective period end
and bear fixed rate interest at 8.5%. The Group has issued franchisee loans of
£1.1m during the period, received principal repayments of £0.4m and
recognised finance income of £0.1m. An expected credit loss has been provided
against the facility of £0.1m applying a 12-month expected credit loss model.
The Group issues loans to appointed representatives in the normal course of
business and on standard terms, the duration is typically three years and the
loans are offered on an interest-free basis. The Group has issued loans to
appointed representatives of £0.4m during the year, which were subsequently
written down by £0.1m, and received principal repayments of £1.3m. An
expected credit loss has been provided against the remaining facility of
£0.1m, applying a 12-month expected credit loss model.
Loans notes receivables
In December 2024, the Group provided funding of £7.6m to its joint venture
Mottram TopCo Limited in the form of 10% unsecured loan notes. The loan notes
are redeemable in H1 2025 and no repayments were made in 2024.
20. Investment in joint venture
2024 2023
£'000 £'000
Opening balance 9,359 5,068
Equity investment in Pivotal Growth 2,232 4,681
Equity accounted profit / (loss) 107 (549)
Adjustment for non-controlling interests (113) 159
Closing balance 11,585 9,359
Pivotal Growth
The Group is party to one joint venture, Mottram TopCo Limited. As at 31
December 2024, the Group holds a 46.5% (2023: 47.8%) shareholding in Mottram
TopCo Limited and has joint control by virtue of its holding of 50% of the
voting shares in Mottram TopCo Limited and through rights granted to it under
a joint venture agreement.
Mottram TopCo Limited holds a 100% shareholding in Mottram MidCo Limited which
in turn holds a 85.1% shareholding in Pivotal Growth Limited (Pivotal) (2023:
89.6%). Mottram TopCo and Mottram MidCo are both holding companies. Pivotal
invests in direct-to-consumer (D2C) financial services advice (mortgage and
protection) brokerages to help them build long-term sustainable value.
Pivotal's principal place of business is the United Kingdom.
As at 31 December 2024, the Group did not have any commitments or contingent
liabilities relating to Pivotal.
A further £2.2m equity investment was made by the Group during the year
(2023: £4.7m). In December 2024, the Group also provided £7.6m funding by
means of loan notes, which are repayable in June 2025 (refer to note 19 for
further details).
The summarised financial information of Pivotal, which is accounted for using
the equity method, is presented below:
2024 2023
Mottram TopCo balance sheet(1): £'000 £'000
Non-current assets 55,002 28,981
Current assets (excluding cash and cash equivalents) 4,757 2,273
Cash and cash equivalents 7,641 8,896
Current liabilities (26,513) (7,874)
Non-current liabilities (10,647) (12,574)
Net assets 30,240 19,702
Less: Net assets attributable to non-controlling interests 84 241
Net assets attributable to Pivotal 30,324 19,943
LSL share of Pivotal's net assets(1) 11,585 9,359
(1. Mottram TopCo Limited prepares its financial statements in
accordance with FRS102. In accordance with IAS 28, LSL's share of the joint
venture's assets is adjusted to reflect LSL's accounting policies. The
adjustments primarily relate to the changes in accounting policy regarding
goodwill and share-based payments.)
( )
2024 2023
Pivotal results: £'000 £'000
Revenue 60,290 37,308
Operating expenses (60,024) (37,886)
Operating profit / (loss) 266 (578)
Finance income 16 34
Profit / (loss) before tax 282 (544)
Taxation (52) (606)
Profit / (loss) after tax 230 (1,150)
LSL share of total profit/(loss) after tax 107 (549)
Adjustment for non-controlling interests (113) 159
LSL share of post-tax (loss) from joint venture (6) (390)
The above Pivotal results for the period ended 31 December 2024 includes the
following:
2024 2023
£'000 £'000
Depreciation (297) (170)
Amortisation (434) (51)
There was no other comprehensive income recognised in Pivotal during the year.
21. Trade and other receivables
2024 2023
£'000 £'000
Current
Trade receivables 5,087 5,611
Prepayments 6,413 6,377
Accrued income 11,193 9,656
Other debtors 2,118 1,562
24,811 23,206
The accrued income balance is expected to be settled within three months of
the year-end date. The accrued income balance as at 1(st) January 2023 of
£8.0m was settled in 2023.
Trade receivables are non-interest-bearing and are generally on 4 to 30 day
terms depending on the services to which they relate. As at 31 December 2024,
trade receivables with a nominal value of £4.5m (2023: £3.6m) were impaired
and provided for. Set out below is the movement in the allowance for expected
credit losses of trade receivables:
2024 2023
£'000 £'000
At 1 January 3,622 2,988
Provision for expected credit losses 2,061 1,588
Amounts written off (1,146) (954)
At 31 December 4,537 3,622
The chosen method of recognising the expected credit loss across the Group is
the simplified approach allowing a provision matrix to be used, which is based
on the expected life of trade receivables, historic default rates and
forward-looking information.
As at 31 December, an analysis of gross trade receivables by credit risk
rating grades is as follows:
Neither past due nor impaired
Total <30 days 30-60 days 60 - 90 90 - 120 > 120 days
days days
£'000 £'000 £'000 £'000 £'000 £'000 £'000
2024 20,817 10,220 3,588 706 414 223 5,666
2023 18,889 7,215 5,568 863 362 515 4,366
The expected credit loss rate applied by ageing bracket has been disclosed
below:
Neither past due nor impaired
<30 days 30-60 days 60 - 90 90 - 120 > 120 days
days days
2024 0.02% 13.11% 17.51% 34.21% 37.14% 69.75%
2023 0.24% 6.29% 14.03% 28.60% 33.81% 64.71%
During 2024 the expected credit loss rate applied to >120 days ageing
bracket has increased due to a higher expectation of credit risk. This has
been driven by increased bad debt write offs in the year.
22. Cash and cash equivalents
Bank overdrafts reflect the aggregate overdrawn balances of Group companies
(even if those companies have other positive cash balances). The overdrafts
are held with the Group's relationship banks.
For the purpose of the statement of cash flows, cash and cash equivalents
comprise the following at 31 December:
2024 2023
£'000 £'000
Cash and cash equivalents 60,663 58,110
Bank overdrafts (28,264) (23,139)
Cash and cash equivalents 32,399 34,971
23. Trade and other payables
2024 2023
£'000 £'000
Current
Trade payables 9,790 6,423
Other taxes and social security payable 6,119 4,755
Other payables 2,950 6,683
Accruals 14,505 9,769
Commission refund liability 3,414 2,855
36,778 30,485
Commission refund liability
Certain subsidiaries earn commissions on the sale of life assurance and
general insurance products with terms from one to four years which are
cancellable without a notice period, and if cancelled within a set period,
require that a portion of the commission earned must be repaid. The
subsidiaries do not hold insurance risk on the life assurance and general
insurance products sold.
The commission refund liability is recognised as a reduction in revenue. The
liability represents management's best estimate of commissions that will be
clawed back for insurance products sold that may be cancelled in future
periods and is calculated based on historic cancellation experience. If
average lapse rates across all products sold were to increase by 1.0%, the
total liability would increase by £0.3m.
24. Financial liabilities
2024 2023
£'000 £'000
Current
IFRS 16 lessee financial liabilities 2,291 3,255
Contingent consideration 3,306 65
5,597 3,320
Non-current
IFRS 16 lessee financial liabilities 3,491 5,085
3,491 5,085
Bank loans - RCF and overdraft
In accordance with the terms at 31 December 2024, the utilisation of the RCF
may vary each month as long as this does not exceed the maximum £60.0m
facility (2023: £60.0m). The Group's overdraft is also secured on the same
facility, and the combined overdraft and RCF cannot exceed £60.0m (2023:
£60.0m).
In January 2025, LSL amended and restated the RCF facility, the renewed
facility now runs to January 2030 with the same limit of £60.0m.
The Group's revolving credit facility ("RCF) was undrawn as at the year end
(2023: undrawn). Any amounts drawn under the RCF are secured via cross
guarantees issued from the following businesses: LSL Property Services plc,
Your-Move.co.uk Limited, Reeds Rains Limited, e.surv Limited, Lending
Solutions Holdings Limited, First Complete Limited, New Daffodil Limited, St
Trinity Limited, LSL Corporate Client Services Limited, Advance Mortgage
Funding Limited, Personal Touch Financial Services Limited, Personal Touch
Administration Services Limited, LSLi Limited and Vitalhandy Enterprises
Limited.
Fees payable on the RCF amounted to £0.6m during the year (2023: £0.7m)
including amortisation of arrangement fees and non-utilisation fees.
Contingent consideration
2024 2023
£'000 £'000
TenetLime 3,306 -
DLPS - 65
3,306 65
Current contingent consideration 3,306 65
Total contingent consideration 3,306 65
Opening balance 65 2,311
Acquisition 3,600 -
Cash paid (65) (2,280)
Amounts recorded through income statement (294) 34
Closing balance 3,306 65
TenetLime Limited
On 2 February 2024, the Group acquired the entire issued share capital of
TenetLime Limited ("TenetLime"), a subsidiary of Tenet Group Limited ("Tenet
Group"). The value of the company was concentrated in the contracts with the
appointed representative firms. Consequently, the transaction has been
accounted for as an asset acquisition. A relationship intangible asset of
£9.3m has been recognised, please refer to note 17. The cost paid for the
relationship intangible asset represents initial consideration of £5.7m and
contingent consideration of £3.6m. The contingent consideration is based on
the retention rate of firms within LSL's PRIMIS network 12 months after the
transaction completed.
As part of the purchase agreement, Tenet Group agreed to provide a number of
services to LSL after the transaction. Subsequent to the purchase, LSL was
notified that Tenet Group Limited entered administration on 5 June 2024. As at
the 31 December 2024, there are no additional liabilities recognised as a
result of the administration, though £0.5m of exceptional costs were incurred
during the year (see note 9). Management have assessed the potential future
costs that may arise for LSL due to Tenet Group Limited's administration and
is currently in discussions with the administrators regarding these costs. As
at the reporting date, the Group had no legal or constructive obligation for
any future costs that may arise. Additionally, discussions are ongoing with
the administrators to offset these amounts against the contingent
consideration payable, which was originally due in H1 2025 but has been
delayed due to an extension of the administration process to 4 June 2026.
25. Provisions for liabilities
2024
PI claim provisions Onerous leases Dilapidation Restructuring provision Appointed representative provision Total
provision
Other
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 3,218 1 5,691 2,069 - 571 11,550
Provided in financial year 209 - 460 432 1,247 - 2,348
Amount utilised (950) - (391) (917) - - (2,258)
Amount released (138) (1) (842) (666) - - (1,647)
Unwinding of discount - - 192 - - - 192
Balance at 31 December 2,339 - 5,110 918 1,247 571 10,185
Current liabilities 1,122 - 2,458 918 1,247 571 6,316
Non-current liabilities 1,217 - 2,652 - - - 3,869
2,339 - 5,110 918 1,247 571 10,185
PI claim provisions
PI claim provisions of £2.3m relate to the Surveying & Valuation division
(£1.9m) and Financial Services division (£0.4m).
PI claim provision - Surveying & Valuation
The PI claim provision is to cover the costs of claims that arise during the
normal course of business. The PI claim provision includes both valuation and
defect claims and provides for claims already received from clients and claims
yet to be received. The provision is management's best estimate of the likely
outcome of such claims, taking account of the incidence of such claims and the
size of the loss that may be borne by the claimant, after taking account of
actions that can be taken to mitigate losses.
The PI claim provision will be utilised as individual claims are settled, and
the settlement amount may vary from the amount provided depending on the
outcome of each claim. The timing of payment for all claims remains uncertain.
Based on past experience, a significant proportion of the provision has
historically been settled after more than 12 months. As a result, a
substantial portion of the provision has been classified as non-current. As of
31 December 2024, the total provision for PI claim was £1.9m. The Directors
have considered the sensitivity analysis on the key risks and uncertainties
discussed above.
Valuation claims:
· Cost per claim
A substantial element of the PI claim provision relates to specific claims
where disputes are ongoing. These specific claims have been separately
assessed and specific provisions have been made. The average cost per claim
has been used to calculate the claims incurred but not yet reported (IBNR).
Should the costs to settle and resolve these specific claims and future claims
increase by 10%, an additional £0.1m would be required.
· Rate of claim
The IBNR assumes that the rate of claim for the high-risk lending period
reduces over time. Should the rate of reduction be lower than anticipated and
the duration extended, further costs may arise. An increase of 30% in
notifications more than that assumed in the IBNR calculations would increase
the required provision by £0.3m. Claims are settled, on average, 4.1 years
after initial notification.
Defect claims:
The Group also provides for defect claims, whereby it is found that a property
has a defect which was not identified when the survey was performed. The value
provided for each received claim is the expected value of that claim. To
assess the value of future claims incurred but not yet received (IBNR),
analysis is performed on the number of surveys that lead to future claims and
the average cost per claim.
PI claim provision - Financial Services
The PI claim provision is to cover the costs of claims that arise during the
normal course of business. The PI provision provides for both claims which
have been received from customers and claims yet to be received (IBNR). The
Group calculates a provision for claims expected to be received based on the
historical rate of claims, average cost per claim and the time which elapses
between the advice being provided and the claim being raised. In addition, an
asset is recognised for the estimated recoveries from professional indemnity
insurance. The provision is presented gross of amounts due from insurers which
form part of other debtors included in note 21.
As at 31 December 2024, the total provision for Financial Services PI was
£0.4m (2023: £0.9m), including a provision for received claims of £0.2m
(2023: £0.7m) and IBNR of £0.2m (2023: £0.2m). The Group has recognised an
asset of £0.3m (2023: £0.6m) against received claims in other debtors at 31
December 2024.
Dilapidation provision
The Group recognises its obligation to make good its leased properties when it
becomes probable that there will be an economic outflow and a reliable
estimate can be made, this is typically where notice has been served to the
landlord and there is an agreed exit date.
During 2023, the Group has entered into a number of 'right to occupy'
agreements with its estate agency franchisees. The right to occupy agreements
relate to leases held by the Group that are due to be novated to the
franchisees. They set out the Group's obligations to the franchisees,
regarding the making good of existing modifications to the leased properties
incurred during the Group's tenancy, which will be payable to the franchisees
at the point of novation. The calculation of the Group's dilapidation
settlement provision is based on an average cost rate per square foot, for
damages already incurred during the Group's occupancy. The average cost rate
per square foot applied in 2024 was £18.50 (2023: £19.34).
The provision is discounted using a risk-free discount rate based on expected
date of novation of the lease. The discount rate applied in 2024 was 4.2%
(2023: 3.8%).
If the average rates applied were to increase by 10% this would result in an
increase in the overall provision of £0.5m, if they were to decrease by 10%
this would result in a reduction of the same amount. If the discount rate was
to increase by 1.0% this would result in a decrease in the provision of
£0.1m, if the discount rate was to decrease by 1.0% this would result in an
increase in the provision of the same amount. Management has concluded the
provision to be the best estimate of the expenditure required to settle
present obligations at the end of the reporting period.
Appointed representative provision
During the year, the Group's PRIMIS Network served notice to one of its
protection only appointed representative (AR) firms. The Group is
responsible for the future reimbursements of commissions received from product
providers in the event that policies are cancelled during an indemnity period.
Consequently, a specific provision of £1.2m has been recognised in the
Group's statement of financial position to reflect this potential exposure.
The Group's gross maximum exposure will continue to reduce over time as active
policies move beyond the indemnity period and due to the substantial decline
in trading activity during the final months of the AR firms' operations.
Restructuring provision
The restructuring provision recognised relates to costs associated with the
disposal of the owned branch network (£0.6m), including committed branch
works (£0.6m) and legal costs for the novation of leases to franchisees
(£0.3m).
Other - Claims indemnity provision and contingency
Included in the sale agreement of LMS was a claims indemnity of £2.0m, for
which the Group has provided £0.6m for certain claims, which it considers to
be the most likely outcome, the Group disposed of LMS in 2021. Further cases
exist and are considered possible, not probable, therefore no further
provision has been made for these cases in the Financial Statements. Should
these claims succeed the estimated further costs would be £1.4m.
26. Leases
Group as a lessee
At the year ended 31 December 2024, the Group has the following in regards to
leases in the Group Balance Sheet.
Right-of-use assets 2024 2023
Property Motor vehicles Total Property Motor vehicles Total
£'000 £'000 £'000 £'000 £'000 £'000
1 January 1,684 3,279 4,963 6,813 2,971 9,784
Additions 424 1,431 1,855 1,615 2,710 4,325
Disposals (33) (67) (100) (1,597) (462) (2,059)
Depreciation (539) (1,442) (1,981) (1,356) (1,425) (2,781)
Transfer to investment in sublease - - - (3,791) (515) (4,306)
31 December 1,536 3,201 4,737 1,684 3,279 4,963
These are included in the carrying amounts of property, plant and equipment on
the face of the Group Balance Sheet and have been included in note 18.
Lease liabilities 2024 2023
£'000 £'000
1 January 8,340 10,915
Additions 1,855 4,350
Interest expense 455 580
Disposals (1,518) (2,396)
Repayment of lease liabilities (3,350) (5,109)
31 December 5,782 8,340
The Group added £1.9m (2023: £4.4m) of new lease liabilities in the year.
The weighted average discount rate applied across the Group for these
additions was 10.6% (2023: 7.40%)
Maturity of these lease liabilities undiscounted is analysed as follows:
£'000 £'000 £'000
Property Vehicles Total
Current lease liabilities 1,043 1,646 2,689
Non-current lease liabilities 1,655 2,131 3,786
31 December 2024 2,698 3,777 6,475
These are included in non-current and current financial liabilities on the
face of the Group Balance Sheet and have been included in note 24. Maturity
analysis of the future cash flows of lease liabilities has been included in
note 31.
Group as a lessor
Following the transition of the Group's entire owned estate agency network to
franchises in 2023, the Group has become an intermediate lessor on premises it
leased whilst owning the estate agency network, that are now operated by
franchisees. In such situations, the Group has maintained the head lease with
the original lessor and has entered a sublease with the franchisee until the
head lease transfers or expires.
The Group, in its capacity as lessor, has determined that the subleases with
franchisees are finance leases and on the commencement date of the sublease,
the Group has derecognised the right-of-use assets previously associated with
these leases and recognised a net investment in the sublease on its balance
sheet. The Group in 2024 has received £1.0m (2023: £1.1m) of repayments from
the franchisees in relation to the subleases, with finance income of £0.1m
(2023: £0.1m) being
recognised.
These leases have a term of up to five years. Although the risks associated
with rights that the Group retains in underlying assets are not considered to
be significant, the Group employs strategies to further minimise these risks.
For example, including clauses to enable periodic upward revision of the
rental charge in line with the head lease.
The maturity analysis of lease receivables, including the undiscounted lease
payments to be received are as follows:
2024 2023
£000 £000
Less than 1 year 527 1,540
1-2 years 306 965
2-3 years 82 570
3-4 years 41 239
4-5 years 9 102
More than 5 years - 74
965 3,490
Unearned finance income (133) (152)
Net investment in sublease 832 3,338
The following shows how lease income and expenses have been included in the
income statement and cash flow statement, broken down between amounts charged
to operating profit and amounts charged to finance costs:
2024 2023
£'000 £'000
Depreciation of right-of-use assets:
Property (539) (1,356)
Vehicles (1,442) (1,425)
Short term and low value lease expense (note 10) (1,992) (2,294)
Sublease income 1,992 2,294
Charge to operating profit (1,981) (2,781)
(455) (580)
Interest expense related to lease liabilities
Interest income related to investment in sublease 96 140
Charge to profit before taxation (359) (440)
(359) (440)
Cash (outflow) relating to operating activities
Cash inflow relating to investing activities 1,046 1,134
Cash outflow relating to financing activities (2,895) (4,529)
Total net cash (outflow) relating to leases (2,208) (3,835)
At the 31 December 2024, the Group had not entered into any leases to which it
was committed but had not yet commenced.
27. Share capital
2024 2023
Shares £'000 Shares £'000
Authorised:
Ordinary shares of 0.2 pence each 500,000,000 1,000 500,000,000 1,000
Issued and fully paid:
At 1 January 105,158,950 210 105,158,950 210
At 31 December 105,158,950 210 105,158,950 210
Each issued, called-up and fully paid ordinary share of 0.2p is a voting share
in the capital of the Company, is entitled to participate in the profits of
the Company.
28. Reserves
Share premium
The amount subscribed for share capital in excess of nominal value less any
costs attributable to the issue of new shares.
Share-based payment reserve
The share-based payment reserve is used to record the value of equity-settled
share-based payment provided to the employees, as part of their remuneration.
Note 15 gives further details of these plans.
Shares held by employee benefit trust (EBT) and share incentive plan (SIP)
Shares held by EBT represent the cost of LSL shares purchased in the market
and held by the Employee Benefit Trust and the Share Incentive Plan (SIP) to
satisfy future exercise of options under the Group's employee share options
schemes.
At 31 December 2024, the Trust held 174,248 (2023: 517,949) LSL shares at an
average cost of £3.86 (2023: £3.86), and the SIP held 951,904 (2023:
991,419) LSL shares at an average cost of £0.88 (2023: £0.88). The market
value of the LSL shares at 31 December 2024 was £3.4m (2023: £3.9m). The
nominal value of each share is 0.2 pence.
Treasury shares
Treasury shares represent the cost of LSL shares purchased in the market as a
result of a share buy-back scheme in 2022 and another announced in April 2024.
The 2024 buyback was extended to the date of 2025 AGM. At 31 December 2024,
LSL had repurchased 1,458,933 (2023: 1,179,439) LSL shares at an average cost
of £3.31 (2023: £3.38). The market value of the LSL shares at 31 December
2024 was £4.4m (2023: £3.0m). The nominal value of each share is 0.2 pence.
Fair value reserve
The fair value reserve is used to record the changes in fair value of equity
financial assets that the Group has elected to recognise through OCI.
29. Pension costs and commitments
The Group operates defined contribution pension schemes for certain Executive
Directors and certain employees. The assets of the schemes are held separately
from those of the Group in independently administered funds, the total
contributions to the defined contribution schemes in the year were £4.4m
(2023: £4.5m). At the 31 December 2024, there were outstanding pension
contributions of £0.6m (2023: £0.5m) included in trade and other payables.
30. Client monies
As at 31 December 2024, monies held by the Group on behalf of franchisees in
separate bank accounts in relation to client monies amounted to £68.4m (2023:
£68.4m). Neither this amount, nor the matching liabilities to the clients
concerned are included in the Group Balance Sheet.
Client funds are protected by the Financial Services Compensation Scheme
(FSCS) under which the Government guarantees amounts up to £85,000. This
guarantee applies to each individual client, not the total of deposits held by
LSL.
31. Financial instruments - risk management
The Group's principal financial instruments comprise of cash and cash
equivalents with access to a further £60m revolving credit facility which is
undrawn at the balance sheet date, and in January 2025, it was extended to
January 2030. The main purpose of these financial instruments is to raise
finance for the Group's operations and support its capital allocation policy.
The Group has various financial assets and liabilities such as trade
receivables, cash and short term deposits and trade payables, which arise
directly from its operations.
The Group is exposed through its operations to the following financial risks:
· interest rate risk;
· liquidity risk; and
· credit risk.
Policy for managing these risks is set up by the Board following
recommendations from the Group Chief Financial Officer. Certain risks are
managed centrally, while others are managed locally following communications
from the centre. The policy for each of the above risks is described in more
detail below.
Interest rate risk
The Group's exposure to the risk of changes in market interest rates relates
primarily to the use of the Group's RCF. The RCF incurs interest on drawings
at a variable rate, based on the Bank of England base rate plus a margin and
this policy is managed centrally by the Group treasury function. The
subsidiaries are not permitted to borrow from external sources directly
without approval from the Group treasury function. The Group does not
currently have any derivatives in place for interest rate hedging and
continues to monitor the market for any opportunities to do so that would be
beneficial to the Group to put in place.
The Group has not drawn down on its RCF during the year to 31 December 2024
and therefore has incurred no interest, the amount shown in finance costs
relates to the amortisation of facility fees and non-utilisation fees.
Liquidity risk
The Group aims to mitigate liquidity risk by managing cash generation by its
operations and capital allocation policy. An Investment Committee is in place
to review investment proposals and the performance of previous investments
against the original business cases and Group hurdle rate, and to identify any
learnings for future capital allocation decisions. The work of the Investment
Committee allows the Board to assess the Group's projected near and
medium-term capital requirements. This facilitates an appropriate capital
structure and capital allocation policy, taking into account economic
conditions, the Group's improved resilience to market cycles and organic and
inorganic opportunities. In this way the Group aims to maintain a good credit
rating to facilitate fundraising. The Group has net current assets in the
current year. The requirement to pay creditors is managed through future cash
generation and, if required, from the RCF.
The Group manages liquidity risk by maintaining adequate reserves, via ongoing
assessment of projected cash flows from operations and actual cash flows. This
includes consideration of the maturity of both its financial investments and
financial assets (e.g. accounts receivable, and other financial assets). The
Group's objective is to maintain a balance between continuity of funding and
flexibility for its capital allocation policy.
Cash at the bank earns interest at floating rates based on daily bank
overnight deposit rates. Short term deposits are made for varying periods of
time depending on the immediate cash requirements of the Group and earn
varying interest rates. The fair value of net cash and cash equivalents is
£32.4m (2023: £35.0m). At 31 December 2024, the Group had available £60.0m
of undrawn committed borrowing facilities, of which the Group could have drawn
£60.0m under the terms of the facility (2023: the Group had available £60.0m
of undrawn committed borrowing facilities, of which the Group could have drawn
£33.0m). Our banking facility contains covenants relating to the ratio of Net
Debt: adjusted EBITDA (2.75x with a ratio of 3.00x allowable for two
consecutive periods), and interest cover (4.00x), which are tested at each
June and December.
The table below summarises the maturity profile of the Group's financial
liabilities at 31 December 2024 based on contractual undiscounted payments:
Year ended 31 December 2024
On demand Less than 3 months 3 to 12 months 1 to 5 years
> 5 years Total
£'000 £'000 £'000 £'000 £'000 £'000
Trade payables - 9,790 - - - 9,790
Other payables - 23,574 - - - 23,574
Overdraft 28,264 - - - - 28,264
Contingent consideration - 3,306 - - - 3,306
Lease liabilities - 573 1,718 3,406 85 5,782
28,264 37,243 1,718 3,406 85 70,716
Year ended 31 December 2023
On demand Less than 3 months 3 to 12 months 1 to 5 years
> 5 years Total
£'000 £'000 £'000 £'000 £'000 £'000
Trade payables - 6,423 - - - 6,423
Other payables - 21,207 - - - 21,207
Overdraft 23,139 - - - - 23,139
Contingent consideration - 65 - - - 65
Lease liabilities - 963 2,890 5,385 79 9,317
23,139 28,658 2,890 5,385 79 60,151
The liquidity risk of each Group entity is managed centrally by the Group
Treasury function. The Group's cash requirement is monitored closely. All
surplus cash is held centrally to achieve higher interest income. The type of
cash instrument used and its maturity date will depend on the Group's forecast
cash requirements. The Group has a RCF with a syndicate of major banking
corporations to manage longer term borrowing requirements.
Capital management
The primary objective of the Group's capital management is to ensure that it
maintains appropriate capital structure to support its business objectives,
including any capital adequacy requirements, and maximise shareholder value.
The capital structure of the Group consists of cash and cash equivalents and
equity attributable to the shareholders comprising issued capital, reserves
and retained earnings as disclosed in the statement of changes in equity.
The Group does not have a current ratio of Net Bank Debt to EBITDA (2023: nil)
due to a net cash position of £32.4m (2023: net cash £35.0m) and operating
profit before exceptional costs, amortisation and share-based payment charge
of £27.7m (2023: £9.3m). The business is cash generative with a low capital
expenditure requirement. The Group remains committed to its stated dividend
policy of 30% of Group Underlying Operating Profit after interest and tax. The
Board has reviewed the policy in line with the risks and capital management
decisions facing the Group.
Credit risk
The Group is exposed to credit risk in respect of revenue transactions. It is
Group policy, implemented locally, to obtain appropriate details of new
customers before entering into contracts.
Estate Agency Franchising's and Financial Services' highest risk exposure is
in relation to loans to franchises and appointed representatives and their
ability to service their debt. The Directors have established a credit policy
under which each new franchisee and appointed representative are analysed
individually for creditworthiness before a loan is offered. The Company's
review includes external ratings, when available, and in some cases bank
references.
Risk of exposure to non-return of cash on deposit is managed by placing funds
with lenders who form part of the Group's agreed banking facility syndicate,
which comprises several leading UK banks.
The majority of the Surveying & Valuation customers and those of the asset
management business are large financial institutions and as such, the credit
risk is not expected to be significant. The maximum credit risk exposure
relating to financial assets is represented by the carrying value as at the
balance sheet date.
Financial instruments are grouped on a subsidiary basis to apply the expected
credit loss model. The chosen method of recognising the expected credit loss
across the Group is the simplified approach allowing a provision matrix to be
used, which is based on the expected credit life of trade receivables,
historic default rates and forward-looking information. Trade receivable
balances are written off when the probability of recovery is assessed as being
remote.
Fair values of financial assets and financial liabilities
There are no differences between the carrying amounts and fair values of all
of the Group's financial instruments that are carried in the Financial
Statements.
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair
value of the financial instruments by valuation technique:
· Level 1: quoted (unadjusted) prices in active markets for identical
assets or liabilities;
· Level 2: other techniques for which all inputs which have a significant
effect on the recorded fair value are observable, either directly or
indirectly; and
· Level 3: techniques which use inputs which have a significant effect
on the recorded fair value that are not based on observable market data.
The following table provides the fair value measurement hierarchy of the
Group's assets and liabilities:
2024 Total Level 1 Level 2 Level 3
£'000 £'000 £'000 £'000
Assets measured at fair value
Financial assets 6,534 - 762 5,772
Liabilities measured at fair value
Contingent consideration 3,306 - - 3,306
2023 Total Level 1 Level 2 Level 3
£'000 £'000 £'000 £'000
Assets measured at fair value
Financial assets 5,461 - - 5,461
Liabilities measured at fair value
Contingent consideration 65 - - 65
Contingent consideration receivable of £5.7m relates to EFS, Group First and
RSC which were sold in 2023, these are valued using level 3 technique in
accordance with the fair value hierarchy. The consideration payable will be 7x
the combined EBITDA in calendar year 2024, subject to working capital
adjustments and is payable in H1 2025. The fair value of the contingent
consideration receivable has been calculated for each of the three disposals
noted above based on profitability in calendar year 2024. The remaining £0.1m
contingent consideration receivable relates to the Group's disposal of
lettings books in 2023. Amounts are receivable in November 2025.
The reconciliation of the opening and closing balance for financial assets
measured using level 3 technique is as follows:
£'000
Opening balance as at 01 January 2024 5,461
Transferred out of level 3(1) (399)
Unrealised gains recognised in the income statement 163
Receipts (155)
Finance income 738
Excepted credit loss recognised (36)
Closing balance as at 31 December 2024 5,772
(1)Transfers out of Level 3 relate to the Group's investment in Twenty7Tec and
Openwork units (see Note 19). These investments were transferred from Level 3
to Level 2 during the year due to transactions occurring with quoted prices
for the assets within an inactive market. The transfers out of Level 3 took
place on the dates of these transactions.
The fair value of financial assets that are not traded in the open market is
£0.8m (2023: £0.4m), these are valued using Level 2 technique in accordance
with the fair value hierarchy and management use all relevant and up to date
information to arrive at their judgement.
The contingent consideration payable relates to amounts payable in the future
on the assets acquired from TenetLime in February 2024. The consideration
calculated is based on the retention rate of firms within LSL's PRIMIS network
12 months after the transaction completed. Further details of the contingent
consideration payable are disclosed in note 24.
32. Related party transactions
As disclosed in note 20 LSL have one joint venture partner, Mottram Topco.
Transactions with Mottram Topco (Pivotal Growth) and its subsidiaries
2024 2023
£'000 £'000
Revenue recognised 3,551 3,688
Trade receivables at 31 December 676 682
Loan notes receivable at 31 December 7,607 -
During the year, the Group recognised net recharges of £0.2m (2023: £0.8m)
for services provided to Mottram Topco (Pivotal Growth) and its subsidiaries.
There are no transactions with Key Management Personnel other than those
disclosed in note 15.
33. Events after the reporting period
In January 2025, the Group amended and restated its banking facility which
runs to January 2030 with an unchanged limit of £60m; this replaced the
previous RCF which had a maturity date of May 2026.
34. Alternative performance measures
In reporting financial information, the Group presents APMs which are not
defined or specified under the requirements of IFRS. The Group believes that
the presentation of APMs provides stakeholders with additional helpful
information on the performance of the business but does not consider them to
be a substitute for or superior to IFRS measures. Definitions and
reconciliations of the financial APMs used to IFRS measures, are included
below.
The Group reports the following APMs:
a) Group and Divisional Underlying Operating Profit
Underlying Operating Profit represents the profit/(loss) before tax for the
period before net finance cost, share-based payments, amortisation of
intangible assets, exceptional items and contingent consideration. This is the
measure reported to the Directors as it considered to give a consistent
indication of both Group and Divisional underlying performance.
The closest equivalent IFRS measure to Underlying Operating Profit is
operating profit/(loss). Refer to note 5 for a reconciliation between
profit/(loss) before tax and Group and Divisional Underlying Operating Profit.
b) Group and Divisional Underlying Operating Margin
Underlying Operating Margin is defined as Underlying Operating Profit divided
by revenue. Refer to note 5 for the calculation of both Group and Divisional
Underlying Operating Margin. The closest equivalent IFRS measure to Underlying
Operating Margin is operating margin, refer to note 5 for a reconciliation
between operating margin and Group Underlying Operating Margin.
c) Adjusted basic earnings per share, adjusted diluted earnings per
share and adjusted profit after tax
Adjusted basic earnings per share is defined as Group Underlying Operating
Profit adjusted for profit/(loss) attributed to non-controlling interests, net
finance cost (excluding exceptional and contingent consideration items and
discounting on leases) less normalised tax (to arrive at adjusted profit after
tax), divided by the weighted average number of shares in issue during the
financial period. The effect of potentially dilutive ordinary shares is
incorporated into the diluted measure.
The closest equivalent IFRS measures are basic and diluted earnings per share.
Refer to note 12 for a reconciliation between earnings/(loss) per share and
adjusted earnings per share.
d) Adjusted operating expenditure
Adjusted operating expenditure is defined as the total of employee costs,
depreciation on property, plant and equipment and other operating costs and is
considered to give a consistent indication of the Group's underlying operating
expenditure.
2024 2023
£'000 £'000
Total operating expenditure (151,289) (140,671)
Add back:
Other (losses) / gains (532) 211
Share of post-tax (loss)/profit from joint venture 6 390
Share-based payments 920 (164)
Amortisation of intangible assets 2,988 2,258
Exceptional gains (1,745) (9,320)
Exceptional costs 4,109 13,767
Contingent consideration (426) 31
Adjusted operating expenditure (145,969) (133,498)
e) Net cash/debt
Net cash/debt is defined as cash and short-term deposits less current and
non-current borrowings, add IFRS 16 financial liabilities, deferred and
contingent consideration and where applicable cash held for sale.
2024 2023
£'000 £'000
Cash and short term deposits 60,663 58,110
Less: Interest-bearing loans and borrowings (including loan notes, overdraft,
IFRS 16 Leases, contingent and deferred consideration)
Current (33,861) (26,459)
Non-current (3,491) (5,085)
23,311 26,566
Add: IFRS 16 lease financial liabilities 5,782 8,340
Add: deferred and contingent consideration 3,306 65
Net Cash 32,399 34,971
f) Adjusted cash flow from operations
Adjusted cash flow from operations is defined as cash generated from
operations, less the repayment of lease liabilities, plus the utilisation of
PI provisions.
2024 2023
£'000 £'000
Cash generated from operations 33,017 3,916
Payment of principal portion of lease liabilities (2,895) (4,529)
PI provision utilisation 950 406
Adjusted cash flow from operations 31,072 (207)
g) Cash flow conversion rate
Cash flow conversion rate is defined as cash generated from operations (pre-PI
Costs and post-lease liabilities, divided by Group Underlying Operating
Profit.
2024
2023
£'000 £'000
Adjusted cash flow from operations 31,072 (207)
Group Underlying Operating Profit 27,292 9,344
Cash flow conversion rate 114% (2.2%)
35. Annual Report and Annual General Meeting
The Annual Report and Accounts for the year ended 31 December 2024 will be
available shortly on the Company's website lslps.co.uk and will be circulated
to those Shareholders who have elected to receive copies in April
2025. Details on our 2025 Annual General Meeting will be published in due
course.
Directors' responsibilities in respect of the Financial Statements
Each of the Directors confirm that to the best of their knowledge:
· The Financial Statements, prepared in accordance with the relevant
financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit of the Company and undertakings
included in the consolidation taken as a whole.
· The Management Report in the Annual Report and Accounts, comprising the
Strategic Report and the relevant parts of the Directors' Report, includes a
fair review of the development and performance of the business and the
position of the Company and undertakings included in the consolidation taken
as a whole, together with a description of the principal risks and
uncertainties that they face.
· The Annual Report and Accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for Shareholders to
assess the Company's position, performance, business model and strategy.
This statement was approved by and signed on behalf of the Board of Directors.
Debbie Fish
Group Company Secretary
25 March 2025
Forward-Looking Statements
This announcement contains certain statements that are forward-looking
statements. They appear in a number of places throughout this announcement and
include statements regarding our intentions, beliefs or current expectations
and those of our officers, directors and employees concerning, amongst other
things, our results of operations, financial condition, liquidity, prospects,
growth, strategies and the business we operate. By their nature, these
statements involve uncertainty since future events and circumstances can cause
results and developments to differ materially from those anticipated. The
forward-looking statements reflect knowledge and information available at the
date of preparation of this update and, unless otherwise required by
applicable law, LSL undertakes no obligation to update or revise these
forward-looking statements. Nothing in this update should be construed as a
profit forecast. LSL and its Directors accept no liability to third parties in
respect of this update save as would arise under English law.
Any forward-looking statements in this update speak only at the date of this
document and LSL undertakes no obligation to update publicly or review any
forward-looking statement to reflect new information or events, circumstances
or developments after the date of this document.
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