REG - LSL Property Svcs. - Full Year Results
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RNS Number : 2956X LSL Property Services PLC 19 March 2026
19 March 2026
LSL Property Services plc ("LSL" or "Group")
FULL YEAR RESULTS TO 31 DECEMBER 2025
Strong financial performance reflected in a record underlying operating
margin, 17% profit growth and increased Shareholder returns
LSL, the leading B2B platform for UK residential property services, reports
its preliminary results for the 12 months ended 31 December 2025. Group
underlying operating profit(2) increased to £32.6m (2024: £27.8m(6)), with a
record underlying operating margin of 18%.
Results are in line with the Board's expectations, with progress across the
whole Group, another year of strong cash conversion and continued returns to
Shareholders through dividends and a newly enlarged share buyback programme.
The Board's expectation of delivering a further increase in profits in 2026
remains unchanged.
Adam Castleton, Group Chief Executive of LSL, said:
"2025 has been a year of strong delivery and building momentum for LSL. We
improved profitability across each Division, achieved record margins and
generated strong cash, while continuing to invest for future growth. Markets
are evolving, and so are we. 2025 has been a year of significant activity for
the Group. We are focused on disciplined execution and converting the scale
and capability of the Group into sustained profit growth and continued high
returns on capital. Trading in 2026 has been in line with our expectations."
FINANCIAL HIGHLIGHTS (1)
· Group Revenue of £182.9m (2024: £173.3m(6)). Revenue up 6%,
maintaining strong market share in all three Divisions
· Group Underlying Operating Profit(2) of £32.6m (2024:
£27.8m(6)). Up 17%, including over £1m of NIC tax increase
· Group Underlying Operating Margin at 18% (2024: 16%). A record
high, surpassing the 15-year high reported in the prior period
· Group Operating Profit of £22.6m (2024: £21.9m). Up 3% after
exceptional costs of £5.1m (2024: £4.1m)
· Adjusted Operating Cash Flow(3) of £29.8m (2024: £31.1m) with
cash conversion of 91%
· ROCE of 35% (2024: 32%). With higher returns under the new
operating model compared to historical levels (2016 - 2023: 18%)
· Net Cash of £27.8m(3) at 31 December 2025 (31 December 2024:
£32.4m; 30 June 2025: £22.0m)
· Full year dividend of 11.4p per share (2024: 11.4p), with final
dividend maintained at 7.4p per share reflecting strong balance sheet and
Board's confidence in prospects.
· The £7m share buy-back programme is now complete. A newly
enlarged £12m share buy-back programme was launched in January 2026
STRATEGIC AND OPERATIONAL HIGHLIGHTS
The Group's performance reflects the quality of its underlying businesses and
the benefits of a simpler structure. We are making better use of the combined
strengths of LSL, with a clear focus on broadening our commercial reach and
improving structural cost effectiveness. In this regard, 2025 has been a year
of significant activity as we have executed on our plans to drive Shareholder
returns:
Innovation, data and technology
· We are actively adopting and deploying technology across our
business to enhance capability and extend our service offering. We have signed
our first Automated Valuation Model (AVM) contract with one of the UK's
largest lenders, with significant partner interest in future development and
adoption; reflecting Surveying & Valuation Division's product suite
expansion and commitment to technological innovation. e.surv is the
residential property valuation market leader in the UK through its
comprehensive property risk expertise and is the only provider that offers
AVM, remote and physical property valuations.
· Roll-out of the new broker operating platform, (including CRM),
continues in the Financial Services Division to drive productivity.
· Deployment of digital solutions delivering process automation and
supporting targeted identification of additional service opportunities
particularly in the Surveying & Valuation Division.
Continuing to add scale
· Financial Services Division market share increased, with our overall
share of the UK purchase and remortgage market increasing to 12.0%(5) (2024:
11.8%).
· B2C Revenue growth of 16% on last year in Surveying &
Valuation Division.
· Ten lettings books acquisitions by franchisees and six new branch
openings in Estate Agency Franchising Division. Strong pipeline for further
transactions in 2026.
· In January 2026, the Group completed the small bolt-on
acquisition of National Search Service (NSS), a leading property search
company, enhancing LSL's conveyancing service proposition in the Estate Agency
Franchising Division. The acquisition is expected to be earnings accretive in
year one.
Enhancing our expertise and culture
· Record levels of employee engagement at 77% (2024: 73%).
· Winner of 2025 Moneyfacts Awards - PRIMIS, Mortgage Network of the
Year and e.surv, Best Surveying Service of the Year.
· David Tilak joined as Group CFO in January 2026 bringing over 25
years' experience in strategic, financial and operational roles across complex
multinational businesses.
Leveraging the strengths of the Group
· Strengthened cross-Divisional working across LSL, reinforcing
strategic relationships with lenders and partners, developing commercial
alignment and cross sell opportunities.
· Commenced organisational design work to evolve shared functions in
support of scale and improved coordination across the Group.
Other operational highlights
· Pivotal Growth JV continues to gain scale with 24 acquisitions to
date with a strong M&A pipeline. Pivotal secured external committed debt
funding, repaying shareholder loans, with no anticipation for further
Shareholder cash investment.
· Central costs reduced to £10.2m (2024: £11.1m).
· Total shareholder return (dividend and share buyback) of £16.8m
(2024: £12.6m).
CURRENT TRADING AND OUTLOOK
We have made a positive start to the year across the Group, with trading in
our businesses in line with expectations and our end markets operating in line
with our assumptions. Our current performance supports our expectation of
delivering a further increase in profits in 2026.
Since year end, we have continued to remain active across the Group. In Estate
Agency Franchising, we completed the acquisitions of NSS and three further
lettings books and have developed a healthy pipeline of lettings book
acquisitions and other opportunities to increase our footprint. In Financial
Services, the roll-out of our broker operating platform continues as planned,
which will support improved productivity and product penetration. Across the
Group, we remain focused on operational efficiency and cost management as we
scale the Group through targeted investment and commercial execution. We are
investing in digital solutions, data science, and AI in the Group, supporting
productivity, enhancing decision making and complementing the professional
expertise within our businesses.
The macroeconomic and geopolitical environment remains uncertain, with renewed
concerns around inflation and interest rate expectations contributing to
near-term uncertainty. We have not seen any adverse impact on trading across
the Group in recent weeks, with front-end metrics remaining stable. We have
seen some short-term strength in mortgage activity driven by changes to
product pricing. With daily granular data across the residential property and
mortgage ecosystem, we have clear visibility of leading indicators of demand
and can respond accordingly.
We continue to run the business with discipline and a clear focus on
performance and structural cost effectiveness. The Board remains confident in
the Group's short and medium-term prospects and continues to support
disciplined investment across our businesses to strengthen capability, enhance
returns and drive growth.
FINANCIAL SUMMARY
Key Financials(1) 12 months to 31.12 2025 Restated(6) Year on year change
12 months to 31.12
2024
Group revenue (£m) 182.9 173.3 6%
Group underlying operating profit(2) (£m) 32.6 27.8 17%
Group underlying operating margin (%) 18% 16% 180bps
Group operating profit (£m) 22.6 21.9 3%
Profit before tax (£m) 23.1 23.1 0%
Cash flow from operations (adjusted)(3) (£m) 29.8 31.1 (6)%
Net cash(3) at 31 December (£m) 27.8 32.4 (14)%
Basic earnings per share (pence) 16.6 17.4 (4)%
Adjusted basic earnings per share(4) (pence) 24.4 21.1 16%
Dividend per share (pence) 11.4 11.4 -
Notes:
1. Stated on basis of continuing operations unless otherwise
stated. 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
2. Group (and Divisional) Underlying Operating Profit is stated
before exceptional items, contingent consideration assets & liabilities,
amortisation of intangible assets, share-based payments and other sources of
earnings from joint ventures. 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. Refer to note 34 to the Financial Statements
4. Refer to note 12 to the Financial Statements for the
calculation
5. New mortgage lending by purpose of loan, Bank of England
Table A5.3 - (31 January 2026)
6. Refer to note 35 to the Financial Statements
For further information, please contact:
Adam Castleton, Chief Executive Officer
David Tilak, Chief Financial Officer
LSL Property Services plc investorrelations@lslps.co.uk (mailto:investorrelations@lslps.co.uk)
Helen Tarbet
Sophie Wills
Toto Berger
Burson Buchanan 0207 466 5000 / LSL@buchanan.uk.com (mailto:LSL@buchanan.uk.com)
Notes on LSL
LSL is one of the largest providers of services to mortgage intermediaries and
estate agent franchisees.
Over 2,500 advisers representing around 12% of the total purchase and
remortgage market.
Its 62 estate agency franchisees operate 293 branches.
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
(https://protect.checkpoint.com/v2/r02/___http:/www.lslps.co.uk/___.YXAxZTpzaG9yZWNhcDpjOm86MDlmMjExZDFkN2NhZjBhNzcxZmQzMDI5NzI1ZTczMzU6Nzo1ZmY0OmRhY2VjNmM2MjA0YjdmNjVkNTE2YjRmZTBlZjU5ZDY5MWU2ZTIyYjNiZDBhZDFkN2Y5ZWQ3MmI2ZTZkOTAxODg6cDpGOk4)
LEI: 213800T4VM5VR3C7S706
Group Chief Executive Officer's Review
2025 was another strong year of delivery for LSL. We achieved organic revenue
growth, increased profits, record operating margins and another year of strong
cash generation, driving improved ROCE.
We were very active throughout the year, investing selectively to drive scale
and profitable growth, launching new offerings into the market, and beginning
to make greater use of the Group's combined strengths. We also strengthened
capabilities across the business and saw colleague engagement rise to a record
level.
Our strong balance sheet provides flexibility to invest selectively for growth
while continuing to return capital through dividends and our recently
increased share buyback programme.
Review of 2025
The markets in which we operate further stabilised in 2025. Mortgage activity
strengthened year-on-year as pricing eased and affordability pressures
moderated, with both purchase and remortgage volumes improving. Housing
transactions increased, with activity front-loaded into the first half ahead
of stamp duty changes, and rental markets remained resilient. Our end markets
performed in line with our planning assumptions at the start of 2025, despite
some periodic short-term volatility during the year.
In this context, we made strong progress in 2025, delivering organic revenue
and underlying operating profit growth with a strong improvement in our
underlying operating profit margin, which reached a new high. We continue to
deliver structurally higher ROCE, at 35%, well above historical levels,
reflecting higher operating margin and the Group's capital-light model.
Encouragingly, all our Group financial metrics sequentially improved in the
second half of the year.
Revenue increased by 6% to £182.9m (2024: £173.3m(2)) and we maintained our
strong market share in all three Divisions. Improved remortgage activity
supported both our Financial Services and Surveying & Valuation Divisions.
Revenue growth was 6% year-on-year for H2 2025, a sequential improvement
compared to H1 2025.
Group underlying operating profit(1) was up 17% to £32.6m (2024: £27.8m(2))
and the underlying operating margin of 18% was an 180bps improvement versus
the prior year, marking a new high for the Group. H2 2025 saw a sequential
improvement in underlying operating margin to 19%, up 250bps compared to H1
2025.
Central costs reduced to £10.2m (2024: £11.1m), reflecting tighter cost
discipline and a more normalised level of spend. The Pivotal Growth joint
venture delivered improved profitability as it continues to scale, with 2025
profit contribution of £1.7m (2024: £6k loss).
On a statutory basis, Group operating profit was £22.6m (2024: £21.9m(2))
after exceptional costs of £5.1m (2024: £4.1m).
We ended the year with net cash of £27.8m (2024: £32.4m), supported by
strong underlying profitability and cash conversion of 91%. The business
remains consistently cash generative, underpinned by disciplined investment
and shareholder returns.
The next phase for LSL
Since my appointment in May 2025, I have placed particular emphasis on
culture, clarity of ambition and communication across the Group. We have
sharpened our focus on structural cost effectiveness and worked more closely
across Divisions to make better use of our collective strengths. This has
improved alignment across the leadership team and the wider business as we
position LSL for the next stage of growth. It has been an important priority
for me and will remain so.
Over recent years, we have simplified and strengthened the Group, building a
capital-light and financially resilient model with strong market positions
across the residential property and mortgage ecosystem. These foundations,
together with our deep and well-established relationships with lenders,
insurance product providers, mortgage and insurance brokers and franchise
partners, position us well for the next phase of growth. I see considerable
scope to build from this platform.
Each Division provides mission-critical services to its customers that
underpin our market positions. By working more effectively across Divisions,
we will develop greater commercial alignment, cross sell opportunities and
improve our cost to serve.
Our scale and market access are significant: over 10 million visits to our
estate agency websites, more than 270,000 mortgage completions, approximately
500,000 valuations annually and over one million live customers within
Financial Services.
Technology and data remain central to our business. We have a long track
record of innovation, and continued deployment of our digital capability is
driving efficiency and enhancing our proposition. Our AVM product launch is a
clear example of turning proprietary data and expertise into a new commercial
opportunity.
Underpinning this is the strength of our people. We have deep specialist
knowledge across our markets, supported by a refreshed and energised
leadership team. On 12 January 2026, David Tilak joined the Company as Group
Chief Financial Officer and is already making a positive contribution.
Capital allocation
Our disciplined approach to capital allocation remains unchanged. Capital is
allocated against strict criteria, with a clear focus on improving returns on
capital employed and compounding long-term Shareholder value.
We are committed to delivering sustainable and disciplined returns to
Shareholders, supported by the Group's sustained cash generation and strong
Balance Sheet.
In addition to dividends, the Board continues to utilise share buybacks as a
complementary capital return mechanism. The £7m programme announced on 25
April 2024 has been completed and, since the period end, a further £12m
programme was announced and is being progressed.
The Board is recommending a final dividend of 7.4 pence per share (2024: 7.4
pence), resulting in a total dividend for the year of 11.4 pence per share
(2024: 11.4 pence). While the Group's stated policy remains a pay-out of 30%
of Group underlying operating profit after finance and normalised tax charges,
the Board has proposed a higher pay-out this year to reflect the strength of
cash generation and confidence in the prospects for the Group.
The ex-dividend date for the final dividend is 14 May 2026, with a record date
of 15 May 2026 and a payment date of 16 June 2026. Shareholders may elect to
reinvest their cash dividend through the Group's dividend reinvestment plan,
with the final election date of 26 May 2026.
Pivotal Growth joint venture
Pivotal Growth, our joint venture with Pollen Street Capital established to
execute a buy-and-build strategy in the mortgage and protection intermediary
markets, has delivered substantial momentum over the last two years and
acquired 24 businesses to date, including five in 2025. The business generated
revenue approaching £100m in 2025.
In December 2025, Pivotal Growth secured £80m of committed external funding,
supporting further M&A activity. After the year end, the Group's loan
notes of £13.8m were fully settled, with £10.6m settled in cash and the
remaining £3.2m converted into equity taking LSL's cumulative equity
investment to £19.1m. The Group does not expect to make any further cash
investments into Pivotal Growth going forward.
Pivotal was established by the Group and Pollen Street Capital in 2021, and
our aim was to build the business with a view to an exit event over a
three-to-six-year period after launch.
Adapting to changing markets
The markets in which we operate continue to evolve. Regulatory developments,
including reforms in the rental sector and the FCA's encouragement of more
streamlined and digitally enabled customer journeys, are reshaping
expectations across the property and mortgage ecosystem. At the same time,
advances in technology and AI are changing how our markets operate.
I see these changes as an opportunity rather than a threat. We are already
deploying digital and data-led solutions across our businesses, including the
launch of our AVM capability and the development of digital tools within
Financial Services. Crucially, these technologies are integrated with our
regulatory expertise and market insight of our people, supported by
proprietary datasets and long-standing lender relationships. It is this
combination of data, technology and trusted specialist expertise within
regulated markets that is highly valued by our customers. Increasingly,
lenders and product providers are seeking strategic, mission-critical partners
who can combine scale, insight and regulatory understanding. We believe LSL is
well positioned to fulfil that role as customer needs and market structures
evolve.
Current trading and outlook
We have made a positive start to the year across the Group, with trading in
our businesses in line with expectations and our end markets operating in line
with our assumptions. Our current performance supports our expectation of
delivering a further increase in profits in 2026.
Since year end, we have continued to remain active across the Group. In Estate
Agency Franchising, we completed the acquisitions of NSS and three further
lettings books and have developed a healthy pipeline of lettings book
acquisitions and other opportunities to increase our footprint. In Financial
Services, the roll-out of our broker operating platform continues as planned,
which will support improved productivity and product penetration. Across the
Group, we remain focused on operational efficiency and cost management as we
scale the Group through targeted investment and commercial execution. We are
investing in digital solutions, data science, and AI in the Group, supporting
productivity, enhancing decision making and complementing the professional
expertise within our businesses.
The macroeconomic and geopolitical environment remains uncertain, with renewed
concerns around inflation and interest rate expectations contributing to
near-term uncertainty. We have not seen any adverse impact on trading across
the Group in recent weeks, with front-end metrics remaining stable. We have
seen some short-term strength in mortgage activity driven by changes to
product pricing. With daily granular data across the residential property and
mortgage ecosystem, we have clear visibility of leading indicators of demand
and can respond accordingly.
We continue to run the business with discipline and a clear focus on
performance and structural cost effectiveness. The Board remains confident in
the Group's short and medium-term prospects and continues to support
disciplined investment across our businesses to strengthen capability, enhance
returns and drive growth.
Final thoughts
I am grateful to our colleagues for their commitment and contribution
throughout 2025. It is the combination of experienced people, specialist
expertise, proprietary data and long-standing strategic relationships across
the residential property and mortgage ecosystem that differentiates LSL and
supports our performance.
There are considerable opportunities ahead for LSL and we are not standing
still. My clear ambition is to convert our scale, data and platform capability
into sustained revenue and profit growth and high returns on capital through
disciplined execution and targeted investment. We remain focused and active as
we build on the momentum achieved in 2025.
Adam Castleton
Group Chief Executive Officer
18 March 2026
Notes:
1. Group (and Divisional) Underlying Operating Profit is stated
before exceptional items, contingent consideration assets & liabilities,
amortisation of intangible assets, share-based payments and other sources of
earnings from joint ventures. 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. Refer to note 35 to the Financial Statements
Financial and Divisional Reviews
Financial Review
We report our results for the 12 months ended 31 December 2025 with Group
underlying operating profit(1,2) up 17% on last year at £32.6m
(2024: £27.8m(5)). On a statutory basis Group operating profit was £22.6m
(2024: £21.9m) whilst net cash was £27.8m at 31 December 2025, with cash
conversion of 91%, towards the upper end of our target 75-100%. Underlying
operating margin further grew to 18% which is the highest in 15 years (2024:
16%). These results demonstrate the continued benefits of the strategic
transformation of the Group over the last three years and are in line with
consensus expectations and materially ahead of prior year.
Key financial highlights
Full year financial metrics(1) 2025 Restated(5) Variance
2024
Revenue (£m) 182.9 173.3 6%
Group underlying operating profit(2) (£m) 32.6 27.8 17%
Group underlying operating margin (%) 18% 16% 180bps
Group underlying operating profit from total operations(2) (£m) 32.9 27.3 21%
Exceptional gains (£m) 0.6 1.7 (65)%
Exceptional costs (£m) (5.1) (4.1) (24)%
Group operating profit (£m) 22.6 21.9 3%
Profit before tax (£m) 23.1 23.1 -
Loss from discontinued operations(1) (£m) (0.0) (0.4) 100%
Basic earnings per share (pence) 16.6 17.4 (4)%
Adjusted basic earnings per share(4) (pence) 24.4 21.1 16%
Net cash(3) at 31 December (£m) 27.8 32.4 (14)%
Final dividend per share (pence) 7.4 7.4 -
Full year dividend per share (pence) 11.4 11.4 -
Notes:
1. Stated on basis of continuing operations unless otherwise
stated. 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
2. Group (and Divisional) Underlying Operating Profit is stated
before exceptional items, contingent consideration assets & liabilities,
amortisation of intangible assets, share-based payments and other sources of
earnings from joint ventures. 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. Refer to note 34 to the Financial Statements
4. Refer to note 12 to the Financial Statements for the
calculation
5. Refer to note 35 to the Financial Statements
Group Income Statement Review(1)
Group revenue
Group revenue increased 6% to £182.9m (2024: £173.3m(4)) in a total lending
market that has continued to recover following a period of volatility. The
Surveying & Valuation Division increased by 10% compared to prior year as
a result of a 9% increase in jobs performed and 1% increase in income per job.
The Financial Services Division remained broadly flat with revenue of £48.8m
(2024: £48.4m). The Estate Agency Franchising Division fell by 2% to £26.5m
(2024: £27.1m) despite an increase of 10% in residential sales growth, as a
result of reduced LSL Land & New Home revenues.
Group underlying operating profit
Group underlying operating profit(2) grew strongly by 17% to £32.6m
(2024: £27.8m(4)), with an increase in all three Divisions whilst central
costs reduced by 8% to £10.2m (2024: £11.1m) reflecting tighter cost
discipline and a more normalised level of spend. The Group further continued
to invest in strategic growth initiatives as well as developing enhanced
platform and digital capabilities.
Group operating profit
Group operating profit increased to £22.6m (2024: £21.9m(4)), with profit
growth in Financial Services and Estate Agency Franchising and a reduction in
central costs in the period. The Group also benefitted from a continued
improvement in the contribution generated by the Pivotal Growth joint venture,
offset by £4.5m net exceptional costs (2024: £2.4m).
Adjusted operating expenditure
Adjusted operating expenditure(3) comprises employee costs, other operating
costs, and depreciation and totalled £153.2m in 2025, 5% higher than prior
year (2024: £146.0m(4)). The movement comprises the net effect of employee
costs increased in Surveying & Valuation Division due to higher demand;
the impact of higher National Insurance contributions (from 1 April 2025);
partially offset by lower central costs.
Exceptional items
The exceptional gain of £0.6m (2024: £1.7m) relates to the release of a
claim indemnity provision recognised in 2021. Exceptional costs of £5.1m
(2024: £4.1m) are primarily due to increases in surveying professional
indemnity provisions (£2.0m), restructuring costs in Financial Services
(£0.8m), Central CEO and CFO change costs (£0.7m), restructuring costs in
Estate Agency Franchising (£0.7m), costs incurred as a result of the
administration of TenetLime's seller, Tenet Group Limited (£0.6m) and the
reduction in deferred consideration receivable for businesses sold to Pivotal
Growth in H1 2023 (£0.2m).
Other gains
Total other operating gains were £1.1m (2024: gains of £0.5m). This
primarily included £0.8m relating to the research and development expenditure
tax credit across all three Divisions relating to FY23 and FY24 and the
movement in the fair value of a financial asset having been reassessed at 31
December 2025 as £0.6m (31 December 2024: £0.4m).
Share of profit from joint venture
Our equity share of Pivotal Growth results improved to £0.8m profit (2024:
£6k loss), as the joint venture continued to scale profitability, with 24
acquisitions to date.
Share-based payments
The share-based payment charge of £1.6m in 2025 (2024: charge of £0.9m)
comprises, a charge in the period of £1.8m (2024: £3.1m charge) for LTIP,
SAYE and the all employee share schemes granted between 2022 to 2025, offset
by a credit of £0.5m (2024: £2.2m credit) reflecting lapses. In addition,
£0.3m of employer's NIC was recognised in relation to unexercised schemes
during the year. The increase in the underlying share-based payment charge
during the year was driven by the introduction of the 2025 LTIP scheme.
Amortisation of intangible assets
Amortisation charge of £3.0m (2024: £3.0m), relates to amortisation of
intangible software investment, franchise agreements and relationship assets.
Finance income
Finance income decreased from the prior year to £2.5m (2024: £2.9m) due to
less interest received on funds held on deposit of £1.0m (2024: £1.8m), the
reduction in the unwind of discounting on contingent consideration payable
balances of £0.7m, offset by interest on loan notes to the joint venture,
Pivotal Growth, of £0.9m (2024: nil).
Finance costs
Finance costs of £1.9m (2024: £1.7m) are related principally to the
unwinding of discount on lease liabilities of £0.5m (2024: £0.5m),
commitment and non-utilisation fees on the revolving credit facility of £0.7m
(2024: £0.6m), fair value adjustment to loans receivable of £0.4m (2024:
£0.3m) and £0.2m for the unwinding of discount on dilapidations provisions
(2024: £0.2m).
Profit before tax
Profit was £23.1m (2024: £23.1m(4)). This remained broadly in line
year-on-year due to lower net finance income of £0.5m (2024: £1.1m) combined
with Group operating profit of £22.6m (2024: £21.9m(4)).
Taxation
The tax charge of £6.0m (2024: £5.2m) represents an effective tax rate of
26.1% (2024: 22.7%), which is marginally higher than the headline UK tax rate
of 25.0% largely as a result of the calculated net effect of adjustments
arising in respect of permanent adjustments or deferred tax not recognised
including the prior period adjustment arising in respect of total tax.
Deferred tax assets and liabilities are measured at 25.0% (2024: 25.0%), the
tax rate that came into effect from 1 April 2023.
Discontinued operations(1)
Loss of £0.04m (net of tax) in relation to an increase in the restructuring
and administrative costs associated with the previously owned Estate Agency
branch network (2024: loss of £0.4m).
Earnings per share
2025 Restated(4)
2024
Earnings per share (pence) Basic Diluted Adjusted basic Adjusted basic diluted Basic Diluted Adjusted basic Adjusted basic diluted
Continuing 16.6 16.2 - - 17.4 17.2 - -
Discontinued (0.0) (0.0) - - (0.4) (0.4) - -
Total operations 16.6 16.2 24.4 23.8 17.0 16.8 21.1 20.9
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. 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
3. Refer to note 34 to the Financial Statements
4. Refer to note 35 to the Financial Statements
Group Balance Sheet Review
Goodwill
31 December 2025: £16.9m (31 December 2024: £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
31 December 2025: £29.9m (31 December 2024: £29.9m)
Additions of £3.1m intangible assets were driven by the increased investment
in AVM software in the Surveying and Valuation Division of £1.9m, and
development of new and existing CRM within Financial Services of £1.1m. Total
amortisation of £3.0m was charged in the year (2024: £3.0m). The carrying
value of all franchise agreements was £10.0m at 31 December 2025 (2024:
£10.9m), the acquired relationship assets were £7.7m (2024: £8.5m) and
software assets of £5.2m (2024: £3.6m). Brand intangibles of £6.9m remained
unchanged during the year.
Property, plant and equipment (PPE) and right-of-use assets (RoU assets)
31 December 2025: £7.7m (31 December 2024: £6.4m).
Capital expenditure on owned PPE was £1.2m (2024: £0.9m), reflecting ongoing
IT investment across all Divisions. There has also been £3.6m of additions in
new offices and car lease agreements.
Financial assets (total current and non-current)
31 December 2025: £1.0m (31 December 2024: £6.6m)
Contingent consideration receivable
31 December 2025: £nil (31 December 2024: £5.8m)
During 2023 the Group disposed of Group First, RSC and Embrace D2C brokerage
businesses to Pivotal Growth, with contingent consideration receivable in
2025. In September 2025, the Group received final contingent consideration of
£5.5m after working capital adjustments of £0.2m.
Equity instruments in unlisted companies
31 December 2025: £1.0m (31 December 2024: £0.8m)
There was a £0.2m increase in the fair value of units held in The Openwork
Partnership LLP of £0.6m at 31 December 2025 (31 December 2024: £0.4m). The
fair value has been reassessed as £0.6m at 31 December 2025, with our
valuation based on an estimated strike price which has been calculated using
the strike price from most recently executed trading windows.
There was no change in the fair value of shares held in Twenty7tec Group
Limited at 31 December 2025, remained at £0.4m (31 December 2024: £0.4m).
Loans to joint venture
31 December 2025: £13.8m (31 December 2024: £7.6m)
In December 2024, the Group provided funding of £7.6m to its joint venture
Pivotal Growth in the form of 10% unsecured loan notes with additions of
£5.3m in the year. No repayments were made in 2025 with £0.9m of interest
income recognised during the period. In January 2026, Mottram Topco repaid
£10.6m out of the £13.8m loan notes outstanding in cash. £3.2m were
converted to equity investment in Mottram Topco.
Investment in joint venture
31 December 2025: £15.0m (31 December 2024: £11.6m)
Our 46.8% interest in the Pivotal Growth joint venture is accounted for using
the equity method. The carrying value reflects the movement in our equity
investment during the period of £2.6m, together with our share of profit
after tax of £0.8m.
Investment in subleases (total current and non-current)
31 December 2025 £0.3m (31 December 2024: £0.8m)
The Group is an intermediate lessor, following the Estate Agency conversion to
a wholly franchised model with the carrying value now at £0.3m.
Loans to franchisees and appointed representatives (network firms)
31 December 2025: £3.7m (31 December 2024: £1.8m(1))
Various sized working capital loan facility agreements are in place with
franchisees of the Estate Agency Franchising Division which has 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 may bear
fixed rate interest. In addition, during the year, the Group issued loans to
franchisees for lettings book acquisitions. At 31 December 2025, £3.1m in
principal loan amounts were drawn down/issued (31 December 2024: £1.4m).
Loans to Financial Services appointed representatives are granted in certain
circumstances to support brokers upon joining the PRIMIS network and were
£0.6m as at 31 December 2025 (31 December 2024: £0.5m).
Financial liabilities (total current and non-current)
31 December 2025: £9.8m (31 December 2024: £9.1m)
Contingent consideration liabilities
31 December 2025: £3.3m (31 December 2024: £3.3m)
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 adjusted at 31 December 2025 for the latest update of
retained advisers and discounting.
IFRS 16 lease financial liabilities
31 December 2025: £6.5m (31 December 2024: £5.8m)
The movement in the period reflects payment of lease liabilities of £3.0m and
disposals on assignment to franchisees of £0.3m, offset by new lease
additions of £3.5m.
Provision for liabilities (total current and non-current)
31 December 2025: £11.3m (31 December 2024: £10.4m(1))
PI claim provisions of £4.3m (31 December 2024: £2.6m) include the Surveying
& Valuation PI provision of £3.6m (31 December 2024: £1.9m) and the
Financial Services PI provision of £0.7m (31 December 2024: £0.4m). The
Group has recognised an asset of £0.3m against received claims in other
debtors at 31 December 2025 (31 December 2024: £0.3m).
Dilapidations and restructuring provisions relating to the Estate Agency
Franchising Division following the wholesale franchising in 2023, totalled
£5.3m at 31 December 2025 (31 December 2024: £6.0m).
1. Refer to note 35 to the Financial Statements
Group Statement of Cash Flows
31 December 2025: net cash £27.8m (31 December 2024: net cash £32.4m)
Operating cash flows before movements in working capital were £33.5m (2024:
£30.4m), reflecting the higher underlying operating profits generated in
2025.
The Group is highly cash generative and ordinarily achieves a cash flow
conversion rate of 75-100%. The ratio in 2025 was 91% (2024: 112%), which sits
inside the normative range.
Overall net decrease in cash and cash equivalents in the year was £4.6m.
After the operating cash flow of £33.5m, movements in working capital
consumed £1.8m, income taxes, exceptional costs and leases totalled £9.4m
outflow, net cash expended on investing activities was £7.1m, and net cash
expended in financing activities was £19.8m. The largest area of outflow was
dividends paid of £11.8m.
Movements in working capital in the year were an outflow of £1.8m (2024:
£2.7m inflow), with the change impacted by net working capital movements at
the end of December 2024.
Key cash inflows in 2025 included:
• Receipt of contingent consideration of £5.5m (2024: £0.2m) in
relation to the disposals of EFS, Group First and RSC in H1 2023 to
Pivotal Growth.
• Franchisee and appointed representative loans repaid of £1.8m
(2024: £1.7m).
• Interest received of £1.0m from bank deposits (2024: £1.8m).
Key cash outflows in 2025 included:
• Capital expenditure on PPE and intangibles of £4.3m (2024:
£3.0m).
• Exceptional costs paid of £3.9m (2024: £3.0m).
• Payment of the 2024 final dividend and 2025 interim dividend of
£11.8m (2024: £11.8m) and the repurchase of shares under the share buyback
programme of £5.0m (2024: £0.8m).
• Loans to our joint venture, Pivotal Growth of £5.3m (2024:
£7.6m) and investment in equity of our joint venture of £2.6m (2024:
£2.2m).
• Loans to franchisees to support lettings book acquisitions and
loans to appointed representatives of £3.8m (2024: £1.7m).
• Corporation tax paid in 2025 of £5.0m as the Group returns to
more normalised taxable profits (2024: £1.8m).
Bank facilities
In January 2025, LSL agreed an amendment and restatement of its banking
facility, putting in place a £60m committed revolving credit facility, with a
maturity date of January 2030, replacing a £60m facility maturing in May
2026. The terms have remained materially the same as the previous facility,
provided by the same syndicate members as before, Barclays Bank UK plc,
NatWest Bank plc and Santander UK plc. For further flexibility to support
growth, the facility retains a £30m accordion, on request by LSL, subject to
bank approval.
International Accounting Standards (IAS)
The Financial Statements for the period ended 31 December 2025 have been
prepared in accordance with UK-adopted IAS.
Business & financial review
2025 Profit & Loss (£m) 2025 Restated(1) Var
2024
Divisional group revenue
Surveying & Valuation 107.6 97.8 10%
Financial Services 48.8 48.4 1%
Estate Agency Franchising 26.5 27.1 (2%)
Group revenue 182.9 173.3 6%
Divisional underlying operating profit/(loss)
Surveying & Valuation 23.5 22.5 4%
Financial Services 11.0 8.6 28%
Estate Agency Franchising 8.3 7.8 6%
Central costs (10.2) (11.1) 8%
Group underlying operating profit from continuing operations 32.6 27.8 17%
Divisional operating profit/(loss)
Surveying & Valuation 20.8 22.1 (6%)
Financial Services 6.3 4.6 37%
Estate Agency Franchising 6.4 6.6 (3%)
Central costs (10.9) (11.3) 4%
Group operating profit from continuing operations 22.6 21.9 3%
Estate Agency - discontinued operations (0.0) (0.5) 100%
Group operating profit from total operations 22.6 21.4 6%
1. Refer to note 35 to the Financial Statements
Surveying & Valuation Division
Divisional revenue increased to £107.6m, an increase of 10% from the prior
year (2024: £97.8m). Excluding Asset Management, Surveying & Valuation
revenue was £102.1m, an increase of 10% (2024: £92.5m), reflecting both the
9% increase in jobs performed and the 1% increase in income per job.
Continuing to grow surveyor capacity and capabilities, along with the
introduction of an AVM model, the market share of surveyor led valuations was
c.39% (2024: 38%). The B2C business continued to grow in the period, with 2025
revenue of £7.8m representing a 16% increase on 2024.
Surveying Underlying Operating Profit increased by 4% to £23.5m (2024:
£22.5m), despite continued investment in technology and surveyor capacity.
Asset Management revenues grew by 6% in the year to £5.5m (2024: £5.3m),
reflecting a market that is slowly returning to long-run levels of activity.
Highlights
• Overall strong performance reflecting the benefit of 100% contract
retention, increased allocations with improved terms and several key new
contract wins.
• Surveyor utilisation rates returning to historic highs.
• Mortgage approvals(1) were 10% higher than 2024, driven by 2%
higher purchase approvals and remortgage and other approvals 22% higher.
• B2C revenue increased by 16% to £7.8m (2024: £6.8m), reflecting
both the 9% increase in jobs performed and the 6% increase in income per job
on the comparative period last year.
• Asset Management revenues increased by 6% to £5.5m (2024: £5.3m)
with profit up 13% to £2.6m (2024: £2.3m).
• Continued investment in technology, supporting the establishment
of digital and data as core enablers, opening new revenue opportunities and to
meet lender client needs.
• AVM successfully launched with first commercial contract
operationalised in Q4 2025. Significant partner interest in future development
and adoption.
• On a statutory basis, operating profit was £20.8m (2024:
£22.1m). Reduction driven by increase in surveying professional indemnity
provision recognised as exceptional costs during the year
(1) Approvals for lending secured on dwellings, Bank of England Table A5.4 (31
January 2026)
Financial Services Division
The 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 the Pivotal Growth Joint Venture.
Total revenue was £48.8m (2024: £48.4m) and underlying operating profit
substantially increased by 28% to £11.0m (2024: £8.6m). This reflects a
renewed focus on smaller, mortgage-led financial services businesses that are
best placed to benefit from our platform and service offering and a positive
contribution from the Pivotal Growth Joint Venture.
New mortgage lending increased by 23% to £35bn (2024: £28bn) whilst the
total UK new mortgage lending market(1) grew by 20% to £291bn (2024:
£242bn). As a result, the LSL share of UK purchase and remortgage market
increased to 12.0% (2024: 11.8%).
The PRIMIS network enjoys a leading position in the provision of services to
independent mortgage brokers. At 31 December 2025, PRIMIS members totalled
2,195 advisers who sell mortgage and protection (31 December 2024: 2,282).
Our share of profits after tax in the Pivotal Growth Joint Venture was £0.8m
(2024: losses of £0.0m). The trading EBITDA of Pivotal Growth (before
transactional acquisition costs) was materially ahead of last year.
On a statutory basis, operating profit was £6.3m (2024: £4.7m). The increase
was driven by lower net exceptional costs of £1.1m in 2025 (2024: £2.4m)
The Financial Services network business has a regulatory capital requirement
which represents 2.5% of its regulated revenues. The regulatory capital
requirement was £6.1m at 31 December 2025 (31 December 2024: £6.4m), with a
surplus of £27.8m (31 December 2024: £27.6m).
Highlights
• Phase 1 of a significant platform technology enhancement programme
successfully completed. Enhanced platform functionality will improve
efficiency and sales performance of PRIMIS advisers with phased deployment due
to complete by the end of 2026.
• Underlying operating margin was 23% (2024: 18%) reflecting the
strategic focus on composite advisors and its impact on operational
efficiency. The statutory operating margin was 13% (2024: 10%).
• The strategic decision to focus on composite advisors in place of
protection only firms, resulted in a 5% reduction in network firms to 1,049 as
at 31 December 2025 (2024: 1,108).
• Adviser mortgage revenue increased by 19% to £20.0m in a market
which was c.21% higher. The weighting of margin dilutive product transfers in
the refinancing market remained above the long-term average.
• TenetLime profit contribution was in line with expectations, with
the acquisition delivering returns in excess of the cost of capital.
• On a statutory basis, operating profit was £6.3m (2024: £4.6m),
materially ahead of last year.
(1)New mortgage lending by purpose of loan, Bank of England Table A5.3 - (31
January 2026)
Estate Agency Franchising Division
The Estate Agency Franchise business revenue was £26.5m (2024: £27.1m), with
the decrease entirely due to the LSL Land and New Homes business, due to the
Ministry of Defence's decision to bring a significant contract back in house.
Supporting the growth of franchisees is of paramount importance, including the
provision of loans to facilitate letting book acquisitions. In 2025, loans
were granted enabling the acquisition of ten lettings books, adding 1,400
properties to the lettings portfolio. The average lettings royalties income
per managed property increased by c.+3% with total number of properties in
line with the comparable period last year at 37,451 (2024: 37,462).
The Estate Agency Franchise business continued to deliver a robust residential
sales performance, with sales related royalties increasing 12% year-on-year in
a market which increased by 10%(1).
Highlights
• Estate Agency Franchising underlying operating profit was £8.3m
(2024: £7.8m).
• Underlying operating margin improved to 31% (2024: 29%)
underpinned by cost leverage and operational efficiencies as the business
continues to scale.
• The number of properties under franchisees' management remained
stable at 37,451 (31 December 2024: 37,462).
• Total of 293 branches at 31 December 2025 (31 December 2024: 291),
representing over 65% UK postcode coverage.
• On a statutory basis, operating profit was £6.4m (2024: £6.6m).
Reduction driven by exceptional restructuring costs incurred in the Land and
New Homes business.
(1)Number of residential property transaction completions with value £40,000
or above, HMRC (30 January 2026)
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 impact of transaction volumes,
lender behaviour and availability and pricing of mortgage finance.
2. Market disruption and competitive dynamics.
3. Execution of strategy, including execution of transformation initiatives,
capital allocation and operational change.
4. Claims arising from not meeting standards for our professional services.
5. Significant falls in business volume relating to B2B relationships.
6. Cyber, data and operational resilience.
7. Regulatory compliance and responding to regulatory changes.
8. Credit risk (broker insolvency/commission clawback and lender exposure).
9. Colleague resources, talent and expertise.
Group Statement of Profit or Loss and Other Comprehensive Income for the year
ended 31 December 2025
2025 Restated*
2024
Note £'000 £'000
Continuing operations:
Revenue 3 182,945 173,318
Operating expenses:
Employee costs 15 (109,088) (105,200)
Depreciation on property, plant and equipment and right-of-use assets 18 (3,369) (3,160)
Expected credit loss charge 21 (3,543) (2,061)
Other operating costs (37,173) (35,638)
Other gains 3 1,116 532
Gains/(losses) from joint venture 20 798 (6)
Share-based payments charge 15 (1,597) (920)
Amortisation of intangible assets 17 (3,032) (2,988)
Exceptional gains 9 571 1,745
Exceptional costs 9 (5,066) (4,109)
Contingent consideration payable - 426
Group operating profit 4 22,562 21,939
Finance income 7 2,451 2,868
Finance cost 8 (1,937) (1,741)
Net finance income 514 1,127
Profit before tax 23,076 23,066
Taxation charge 16 (5,994) (5,247)
Profit for the year from continuing operations 17,082 17,819
Discontinued operations:
Loss for the year from discontinued operations 6 (42) (377)
Profit for the year 17,040 17,442
Attributable to:
Owners of the parent 16,960 17,409
Non-controlling interest 80 33
17,040 17,442
Earnings per share from continuing operations (expressed as pence per share):
Basic 12 16.6 17.4
Diluted 12 16.2 17.2
Earnings per share from total operations (expressed as pence per share):
Basic 12 16.6 17.0
Diluted 12 16.2 16.8
*See note 35 for restatement
There was no other comprehensive income during the year ended 31 December 2025
(2024: £nil).
Group Balance
Sheet
as at 31 December 2025
31 December 2025 Restated* Restated*
31 December 2024 1 January 2024
Note £'000 £'000 £'000
Non-current assets
Goodwill 17 16,855 16,855 16,855
Other intangible assets 17 29,881 29,861 21,461
Property, plant and equipment and right-of-use assets 18 7,700 6,400 6,918
Financial assets 19 963 762 5,407
Deferred tax asset 16 - - 166
Investment in subleases 19 131 447 1,757
Investment in joint venture 20 14,988 11,585 9,359
Contract asset - - 329
Loans to franchisees and appointed representatives 19 1,823 902 1,655
Total non-current assets 72,341 66,812 63,907
Current assets
Trade and other receivables 21 25,026 24,161 22,446
Financial assets 19 - 5,772 54
Contract asset - - 40
Loans to joint venture 19 13,840 7,607 -
Investment in subleases 19 164 385 1,582
Current tax assets 16 725 846 2,183
Loans to franchisees and appointed representatives 19 1,827 867 444
Cash and cash equivalents 22 67,050 60,663 58,110
Total current assets 108,632 100,301 84,859
Total assets 180,973 167,113 148,766
Current liabilities
Financial liabilities 24 (5,613) (5,595) (3,320)
Trade and other payables 23 (36,810) (37,493) (31,232)
Provisions for liabilities 25 (6,266) (6,552) (5,903)
Bank overdrafts 22 (39,253) (28,264) (23,139)
Total current liabilities (87,942) (77,904) (63,594)
Non-current liabilities
Financial liabilities 24 (4,148) (3,491) (5,085)
Deferred tax liability 16 (1,999) (1,642) -
Provisions for liabilities 25 (5,002) (3,869) (5,872)
Total non-current liabilities (11,149) (9,002) (10,957)
Total liabilities (99,091) (86,906) (74,551)
Net assets 81,882 80,207 74,215
Equity
Share capital 27 210 210 210
Share premium account 28 5,629 5,629 5,629
Share-based payment reserve 28 3,355 2,634 3,564
Shares held by employee benefit trust and share incentive plan 2,28 (1,316) (1,510) (2,871)
Treasury shares 28 (9,876) (4,831) (3,983)
Fair value reserve 28 (385) (385) (385)
Retained earnings 84,458 78,733 72,357
Total equity attributable to owners of the parent 82,075 80,480 74,521
Non-controlling interest (193) (273) (306)
Total equity 81,882 80,207 74,215
*See note 35 for restatement
Group Statement of Cash Flows
for the year ended 31 December 2025
Note Restated*
2025 2024
£'000 £'000
Profit before tax from continuing operations 23,076 23,066
Loss before tax from discontinued operations 6 (8) (518)
Profit before tax 23,068 22,548
Adjustments for:
Exceptional 6,9 5,386 4,187
costs
Exceptional gains 9 (571) (1,745)
Contingent consideration payable 24 - (426)
Depreciation of tangible assets 18 3,369 3,160
Amortisation of intangible assets 17 3,032 2,988
Share-based payments 15 1,597 920
Loss on disposal of property, plant and equipment and right-of-use assets - (31)
(Profit)/loss from joint venture 20 (798) 6
Other gains 3 (1,116) (482)
Decrease in contract assets - 368
Finance income 7 (2,451) (2,868)
Finance costs 8 1,937 1,741
Operating cash flows before exceptional items and movements in working capital 33,453 30,367
Movements in working capital
Increase in trade and other receivables (530) (1,386)
(Decrease)/increase in trade and other payables (2,282) 5,518
Increase/(decrease) in provisions 1,472 (1,482)
(1,340) 2,650
Cash generated from operations before exceptional items 32,113 33,017
Interest paid (leases) 26 (534) (455)
Interest received (leases) 26 29 96
Income taxes paid (4,968) (1,799)
Exceptional costs paid (3,910) (3,066)
Net cash generated from operating activities 22,730 27,793
Cash flows used in investing activities
Interest received 7 1,023 1,752
Payment of contingent consideration 24 - (65)
Receipt of contingent consideration 19 5,542 155
Investment in joint venture 20 (2,605) (2,232)
Proceeds from sale of financial assets 19 - 119
Franchisees and appointed representatives loans granted 19 (3,768) (1,659)
Franchisees and appointed representatives loans repaid 19 1,832 1,702
Receipt of lease income 26 489 1,046
Purchase of property, plant and equipment 18 (1,241) (939)
Purchase of intangible assets 17 (3,052) (2,092)
Loans to joint venture 19 (5,301) (7,607)
Purchase of relationship asset 17 - (5,695)
Cash acquired on purchase of relationship asset - 503
Net cash expended on investing activities (7,081) (15,012)
Cash flows used in financing activities
Refinance costs (543) -
Commitment and non-utilisation fees on RCF (473) -
Repurchase of treasury shares (5,045) (848)
Proceeds from exercise of share options 46 173
Payment of lease liabilities 14 (2,486) (2,895)
Dividends paid 13 (11,750) (11,783)
Net cash expended in financing activities (20,251) (15,353)
Net decrease in cash and cash equivalents (4,602) (2,572)
Cash and cash equivalents at the beginning of the year 22 32,399 34,971
Cash and cash equivalents at the end of the year 22 27,797 32,399
*See note 35 for restatement
Group Statement of Changes in Equity
for the year ended 31 December 2025
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 2025 (restated) 210 5,629 2,634 (1,510) (4,831) (385) 78,733 80,480 (273) 80,207
Profit for the year - - - - - - 16,960 16,960 80 17,040
Total comprehensive income for the year - - - - - - 16,960 16,960 80 17,040
Transactions with owners in their capacity
Shares repurchased into treasury - - - - (5,045) - - (5,045) - (5,045)
Exercise of options - - (183) 194 - - 107 118 - 118
Vested share options lapsed during the year - - (408) - - - 408 - - -
Dividend paid - - - - - - (11,750) (11,750) - (11,750)
Share-based payments - - 1,255 - - - - 1,255 - 1,255
Tax on share-based payments - - 57 - - - - 57 - 57
At 31 December 2025 210 5,629 3,355 (1,316) (9,876) (385) 84,458 82,075 (193) 81,882
During the period, 103,505 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 £0.1m on exercise of these options.
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
Prior year restatements - - - - - - (1,730) (1,730) - (1,730)
At 1 January 2024 (restated) 210 5,629 3,564 (2,871) (3,983) (385) 72,357 74,521 (306) 74,215
Profit for the year - - - - - - 17,409 17,409 33 17,442
Total comprehensive income for the year (restated) - - - - - - 17,409 17,409 33 17,442
Transactions with owners in their capacity
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 (restated) 210 5,629 2,634 (1,510) (4,831) (385) 78,733 80,480 (273) 80,207
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.
Notes to the Group Financial Statements
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 2026
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. The comparative financial information was audited by Ernst & Young
LLP, and was derived from the statutory accounts for that year, on which an
unmodified audit opinion was issued
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 2025. 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 report. 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. 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 2025. The financial year
represents the year from 1 January 2025 to 31 December 2025.
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
Statement of Profit or Loss and Other Comprehensive Income 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 of the Strategic Report. 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. 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 Risk Management section
of the Strategic Report.
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 2025: £27.8m). The Group's banking
facility, a £60 million committed revolving credit facility has a maturity
date of January 2030. The Group has not currently utilised the facility
leaving £60 million of available undrawn committed borrowing facilities in
respect of which all conditions precedent had been met. The facility agreement
includes financial covenants, including a minimum net debt to EBITDA ratio,
which could result in the full facility not being available during the going
concern period under downside scenarios.
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 2027 (the going concern period). The Directors
considered the period to June 2027, which exceeds the minimum required period,
because it captures the covenant test that could significantly affect the use
of the going concern basis.
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 2.5% and 4.0%, respectively, by the end of
2026 and 2.0% and 4.0%, respectively, by the end of 2027.
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 approximately 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 Strategic Report of the Annual Report and Accounts 2025, 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, to below 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 with no material
uncertainties that the Group and the Company have adequate resources to remain
in operation to 30 June 2027. The Board have therefore continued to adopt the
going concern basis in preparing the Annual Report and Accounts 2025.
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 (excluding Linear Mortgage Network)
Revenue comprises mortgage procuration fees and insurance commissions earned
from the distribution of third-party mortgages, protection and general
insurance products. Revenue from mortgage procuration fees is recognised at
the point in time on completion of the related mortgage or remortgage
transaction. Revenue from insurance commissions is recognised at the point
the related policy incepts and goes on risk, reflecting the transfer of
service to the customer. The Group expects to earn from providing its
services. This includes elements of variable consideration, mainly commission
amounts that may be subject to clawback. These variable amounts are recognised
only to the extent that it is highly probable they will not reverse. As the
revenue streams described above involve a single service obligation in each
case, the full transaction price is attributed to that service and no further
allocation is required.
The Group (excluding Linear) acts as an agent under IFRS 15 and only
recognises the Group's share of commission as revenue. As recognised by IFRS
15, assessing whether the Group is acting as a principal, or an agent requires
judgement which can significantly affect the timing and amount of revenue
recognised. The most judgemental aspect of this relates to the assessment of
who the customer is for the Group. Considering all the factors of the
transactions that result in revenue, it was concluded that the appointed
representatives are the customers of the Group as opposed to the product
providers. The Group has determined that it is acting as an agent and only
recognises the Group's share of commission as revenue. The Group recognises a
liability for commissions due to ARs. Where an AR has departed and the Group
has no present obligation to settle the commission, the liability is
derecognised. The resulting credit is recognised in the income statement in
the period the obligation is extinguished. The assessment of principal versus
agent is made for each distinct arrangement, based on whether the Group
controls the specified service before it is transferred to the customer, in
accordance with IFRS 15.
Financial Services Division (Linear Mortgage Network)
Linear Mortgage Network (Linear) provides regulated mortgage and protection
advice to retail customers through advisers operating within the PRIMIS
network. PRIMIS authorises the regulated activities and provides the
compliance framework and systems; Linear organises, supervises and remunerates
advisers and controls service delivery to customers. Linear does not act as an
insurer or lender; third-party providers underwrite insurance risk and advance
loans. Linear is responsible for the advice delivered by its advisers and can
accept/reject cases, it has discretion over adviser assignment and sales
strategy and has control over allocation of pipeline commissions. Therefore,
Linear acts as a principal under IFRS 15, and as such presents revenue on a
gross basis.
Estate Agency Franchising Division
The accounting policies for both franchise and residential services which
includes new build residential sales and conveyancing services, are set out
below.
Franchise services:
The Group's estate agency franchising arrangements grant franchisees the right
to operate under the Group's trade name, trademarks, operating systems and
manual, together with continuing brand stewardship, training access and
network support. Under IFRS 15, the brand licences and the related ongoing
support are bundled into a single performance obligation that provides a right
to access the Group's intellectual property and is satisfied over time across
the franchise term.
The Group earns sales-based royalties calculated as a stated percentage of the
franchisee's sales and lettings income. These royalties relate predominantly
to the licence of the Group's IP and therefore the sales-based royalty
exception is applied under IFRS 15. Revenue on house sales is recognised at
the point of exchange of contracts, and revenue on lettings, property
management and ancillary services is recognised as those services are
delivered by the franchisee. In addition, the Group earns fixed royalties
which 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.
Interest income from client monies balances:
Revenue is recognised over time as interest accrues. Interest income is
accrued on a time basis, by reference to the principal outstanding and at the
effective interest rate applicable. The Group's interest income from client
monies is presented within revenue given the collection and holding of client
monies is an integral part of the estate agency franchising service provided
to franchisees.
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.
For panelled valuation work, the Group acts as an agent, as the third-party
panel firms perform the valuation services and bear the associated delivery
and professional risks. The Group does not control the service before transfer
to the customer and therefore recognises revenue on a net basis, representing
the fee retained.
Asset management:
Revenue earned from the repossessions asset management business is recognised
by reference to the legal exchange date of the housing transaction.
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 Chief Operating Decision
Maker (CODM), being the Board. The CODM 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.
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 Limited
and Homefast Property Services Limited, representing less than 10% of the
Group's total revenue.
The Group's asset management business is included within the Surveying &
Valuation Division. 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.
The information presented to the Directors directly reflects the Group
Underlying Operating Profit as defined in the alternative performance measures
(APM) in note 5 and 34 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 after 31
December 2023. 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, which relates to the movements in the dilapidation and
restructuring provisions recognised as part of the original asset and share
sales.
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, and 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, or the Monte Carlo
Simulation model where a market condition is part of the vesting condition.
The resulting cost is charged to the Group Statement of Profit or Loss and
Other Comprehensive Income 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. When employees
exercise their awards or vested options lapse, the portion of the share-based
payments reserve which represents the share-based payment charge for those
awards is transferred to retained earnings and the Group discharges its
obligation.
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, 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 franchise agreements, 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.
Development costs that are directly attributable to the testing of
identifiable software products controlled by the Group are recognised as
intangible assets when the project or process is technically and commercially
feasible. Directly attributable costs that are capitalised as part of the
software product include the software development employee costs and an
appropriate portion of relevant overheads.
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 amortised 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 12 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 Statement of Profit or Loss and Other Comprehensive Income 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 Group Statement of Profit or Loss and Other
Comprehensive Income.
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. The overdraft is used to manage daily cash inflows
and outflows. Cash pool balances fluctuate frequently between positive and
negative. The overdraft acts as a working cash buffer rather than a source of
long‑term funding.
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 asset's 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 Statement of Profit or
Loss and Other Comprehensive Income, 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
Statement of Profit or Loss and other Comprehensive Income. 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 and 2025. 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 and were redeemed
in January 2026.aImpairment provisions against loans to joint venture 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 Statement of
Profit or Loss and Other Comprehensive Income.
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 Group Statement of
Profit or Loss and Other Comprehensive Income 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 Group Statement of Profit or Loss and Other
Comprehensive Income. 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 Group Statement of Profit or Loss and
other Comprehensive Income 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 Group Statement of
Profit or Loss and other Comprehensive Income. 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 holds goodwill or indefinite life
intangible assets and therefore an annual impairment review is required.
Judgement is required in identifying the cash-generating units (CGUs) for
impairment testing and in determining whether certain brand intangibles have
an indefinite useful life, based on the expectation of continued use and
strong market positioning.
The Group's goodwill of £16.9m includes Surveying & Valuation (£9.9m)
and Financial Services (£7.0m). At 31 December 2025, the Group held £29.9m
of intangible assets on the balance sheet (2024: £29.9m), of which £6.9m are
indefinite life intangible assets relating to brand (2024: £6.9m). The
remaining balance of £23.0m is split between relationship assets £7.8m
(2024: £8.5m), franchise intangibles £10.0m (2024: £10.9m) and software
£5.2m (2024: £3.6m).
The impairment tests are carried out by a group of CGUs and reflect the latest
Group budgets and forecasts approved by the Board. The recoverable amounts are
determined using value-in-use (VIU) models, based on cash flow projections
incorporating assumptions about market performance (including housing market
activity, mortgage lending trends, interest rates, and broader economic, legal
and technological factors). Discount rates are derived from observable market
data and reflect the specific risk profile of each CGU.
The pre-tax discount rates applied are as follows:
Financial Services Division - 16.4%
Surveying & Valuation Division - 16.5%
Estate Agency Franchising Division - 15.7%
A terminal growth rate of 2.0% is applied to each CGU beyond the three year
forecast period. A sensitivity analysis has been performed to assess the
impact of reasonably possible changes to the key assumptions. Further details
are presented in Note 17.
Commission refund liability (estimate)
Certain subsidiaries earn commission income from the sale of life assurance
and protection products that are cancellable without notice. Where a policy is
cancelled within a defined indemnity period, a proportion of the commission
previously recognised becomes repayable. Under IFRS 15, this represents
variable consideration and is recognised as a reduction in revenue at
inception, constrained to the extent that it is highly probable that a
significant reversal will not occur.
The Group estimates the expected amount of commission subject to clawback
using either the expected value method or the most likely amount method,
whichever more accurately predicts the consideration to which the Group will
be entitled. Persistency assumptions are derived from historical refund
patterns and supported by actuarial analysis, adjusted for known events and
forward-looking information where applicable.
Commission refund liabilities are recognised within trade and other payables.
Estimates are required in determining appropriate lapse assumptions, which are
reviewed regularly against actual experience to ensure continued accuracy.
Details of the assumptions applied and the sensitivity to changes in lapse
rates are presented in Note 23.o
Appointed representative provision (estimate)
The Group recognises an IAS 37 provision for expected cash outflows on
commission clawbacks arising after the termination, suspension or resignation
of appointed representatives (ARs) within the Financial Services Division, to
the extent not recoverable from these ARs. This is separate from the IFRS 15
commission refund liability recorded against revenue for expected clawbacks on
the Group's own commissions while AR relationships remain active. The
provision reflects management's best estimate at the reporting date using an
expected-value approach, based on policy lapse, cancellation assumptions
within clawback windows, provider terms, and expected recoveries from ex-ARs
informed by historical collections and enforceability.
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 both claims reported and
those incurred but not yet reported (IBNR).
Estimation is required in assessing the level of coverage for reported and
IBNR claims, including the likelihood of settlement and recovery under
insurance arrangements.
The provision is estimated using historical claim frequency and severity data,
supplemented by actuarial input where appropriate, and adjusted for current
information on open cases. Estimation uncertainty arises due to the inherent
difficulty in predicting the timing and outcome of claims. Further details of
the assumptions applied to PI claims and related sensitivity analysis are
disclosed in Note 25.
Principal versus agent (judgement)
Within the Financial Services Division, the Group acts as both a principal and
an agent depending on the nature of its arrangements with lenders, insurers,
and advisers. Management exercises judgement in determining whether the Group
controls the specified service before it is transferred to the customer. See
note 2.4 for further detail.
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 9 April 2024. Subject
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
Group Statement of Profit or Loss and other Comprehensive Income, 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 2025. 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 2025
Financial Services (1) Surveying & Valuation(2)
£'000 £'000 Residential sales exchange(3) Asset management(2) Other(3) Total
£'000 Estate Agency Franchising income(3) £'000 £'000 £'000
£'000
Timing of revenue recognition
Services transferred at a point in time 48,838 102,046 3,045 7,518 5,575 1,251 168,273
Services transferred over time - - - 14,672 - - 14,672
Total revenue from contracts with customers 48,838 102,046 3,045 22,190 5,575 1,251 182,945
During the year 19% (2024: 19%) 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 £35.1m (2024: £33.1m).
Other revenue relates to income from conveyancing services.
All revenues were generated from the United Kingdom.
Year ended 31 December 2024 (restated*)
Financial Services (1) £'000 Surveying & Valuation(2) Estate Agency Franchising income(3)
£'000 Residential sales exchange(3) £'000 Asset management(2) Other(3) Total
£'000 Lettings(3) £'000 £'000 £'000
£'000
Timing of revenue recognition
Services transferred at a point in time 48,395 92,547 4,027 367 7,044 5,275 997 158,652
Services transferred over time - - - - 14,666 - - 14,666
Total revenue from contracts with customers 48,395 92,547 4,027 367 21,710 5,275 997 173,318
1. Financial Service segment
2. Surveying & Valuation segment
3. Estate Agency Franchising segment
2025 2024
£'000 £'000
Revenue from services 182,945 173,318
Operating revenue 182,945 173,318
Gain on fair value (note 19) 201 482
R&D expenditure credit 770 50
Other gains 145 -
Other operating income 1,116 532
Total revenue and operating income 184,061 173,850
*See note 35 for restatement
4. Segment analysis
For the year ended 31 December 2025 LSL has reported three operating segments:
Financial Services, Surveying & Valuation, and Estate Agency Franchising.
Within the Estate Agency Franchising operating segment, the only remaining
owned operations relate to the Group's new build residential sales and
conveyancing businesses which are LSL Land & New Homes Limited and
Homefast Property Services Limited, representing less than 10% of the Group's
total revenue.
The Group's asset management business is included within the Surveying &
Valuation Division. 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 in 2023.
All of the Group's non‑current assets are located in its country of
domicile. The Group does not hold non‑current assets in foreign
jurisdictions; therefore, no foreign non‑current asset disclosures are
presented.
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 Underlying Operating Profit, 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, are excluded from segment results, 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 2025 and financial year ended 31 December 2024
respectively.
Year ended 31 December 2025
Financial Services Surveying Estate Agency Franchising Central Total
& Valuation
Income statement information £'000 £'000 £'000 £'000 £'000
Revenue from external customers 48,838 107,620 26,487 - 182,945
Segmental result:
- Group Underlying Operating profit/(loss) from continuing operations 10,955 23,554 8,259 (10,150) 32,618
- Operating profit/(loss) 6,294 20,806 6,404 (10,942) 22,562
Finance income 2,451
Finance costs (1,937)
Profit before tax 23,076
Loss before tax from discontinued operations (8)
Profit before tax 23,068
Taxation (6,028)
Profit for the year 17,040
Balance sheet information
Segment assets - intangible 16,804 14,318 15,614 - 46,736
Segment assets - other 37,310 16,604 7,830 72,493 134,237
Total segment assets 54,114 30,922 23,444 72,493 180,973
Total segment liabilities (21,557) (21,126) (12,656) (43,752) (99,091)
Net assets 32,557 9,796 10,788 28,741 81,882
Other segment items
Capital expenditure including intangible assets 1,435 2,214 644 - 4,293
Depreciation (589) (2,031) (749) - (3,369)
Amortisation of intangible assets (1,866) (311) (855) - (3,032)
Exceptional gains 571 - - - 571
Exceptional costs (1,680) (2,000) (701) (685) (5,066)
Share of results in joint venture 798 - - - 798
PI provision (756) (3,565) - - (4,321)
Dilapidation provision (4,336) - (4,336)
Restructuring provision - - (996) - (996)
Appointed representative provision (1,615) - - - (1,615)
Share-based payment (184) (437) (300) (676) (1,597)
Employee cost (24,344) (66,394) (10,487) (7,863) (109,088)
Expected credit loss (1,397) (18) (2,128) - (3,543)
Central net assets comprise intangible assets and plant and equipment £0.5m,
other assets £4.9m, cash £67.1m, accruals and other payables £2.5m,
deferred tax liabilities £2.0m, overdraft of £39.3m. Central result
comprises costs relating to the Parent Company.
Year ended 31 December 2024 (restated*)
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 27,101 - 173,318
Segmental result:
- Group Underlying Operating profit/(loss) from continuing operations 8,576 22,501 7,757 (11,049) 27,785
- Operating profit/(loss) 4,593 22,083 6,599 (11,336) 21,939
Finance income 2,868
Finance costs (1,741)
Profit before tax 23,066
Loss before tax from discontinued operations (518)
Loss before tax 22,548
Taxation (5,106)
Profit for the year 17,442
Balance sheet information
Segment assets - intangible 17,521 12,771 16,424 - 46,716
Segment assets - other 33,900 15,486 4,356 66,655 120,397
Total segment assets 51,421 28,257 20,780 66,655 167,113
Total segment liabilities (23,697) (18,450) (12,954) (31,805) (86,906)
Net assets 27,724 9,807 7,826 34,850 80,207
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 (676) (1,899) - - (2,575)
Dilapidation provision - - (5,110) - (5,110)
Restructuring provision - - (918) - (918)
Other provision (1,247) - - - (1,247)
Onerous leases provision - - - (571) (571)
Share-based payment (199) (228) (242) (251) (920)
Employee costs (25,919) (59,346) (10,479) (9,456) (105,200)
Expected credit loss (497) (12) (1,552) - (2,061)
Central net assets comprise intangible assets and plant and equipment
£0.7m, other assets £5.3m, cash £60.7m, accruals and other payables £1.9m,
deferred tax liabilities £1.6m, overdraft of £28.3m. Central result
comprises costs relating to the Parent Company.
*See note 35 for restatement
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 2025
Financial Services Surveying Estate Agency Central IFRS reported total from continuing operations
& Valuation
£'000 £'000 £'000 £'000 £'000
Profit/(loss) before tax 7,997 20,645 6,051 (11,617) 23,076
Net finance (cost)/income (1,703) 161 353 675 (514)
Operating profit/(loss) per income statement 6,294 20,806 6,404 (10,942) 22,562
Operating Margin 12.9% 19.3% 24.2% - 12.3%
Adjustments:
Share-based payments 184 437 300 676 1,597
Amortisation of intangible assets 1,866 311 855 - 3,032
Exceptional gains - - - (571) (571)
Exceptional costs 1,680 2,000 701 685 5,066
Other sources of earnings from JV 932 - - - 932
Underlying Operating Profit/(Loss) 10,956 23,554 8,260 (10,152) 32,618
Underlying Operating Margin 22.4% 21.9% 31.2% - 17.8%
Year ended 31 December 2024 (restated*)
Financial Services Surveying Estate Agency Central IFRS reported total from continuing operations
& Valuation
£'000 £'000 £'000 £'000 £'000
Profit/(loss) before tax 6,682 22,805 6,121 (12,542) 23,066
Net finance (cost)/income (2,089) (722) 478 1,206 (1,127)
Operating profit/(loss) per income statement 4,593 22,083 6,599 (11,336) 21,939
Operating Margin 9.6% 22.6% 24.4% - 12.7%
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) 8,576 22,501 7,757 (11,049) 27,785
Underlying Operating Margin 17.7% 23.0% 28.6% - 16.0%
*See note 35 for restatement
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 2025 and 31 December 2024. During
2025 the Group recognised post tax loss from discontinued operations of
£0.04m (2024: loss of £0.4m) 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
2025 2024
£'000 £'000
Other operating credit/(costs) 312 (440)
Exceptional costs (320) (78)
Group operating loss (8) (518)
Loss before tax (8) (518)
Taxation (charge)/credit (34) 141
Loss after tax for the year from discontinued operation (42) (377)
The net cash flows incurred by discontinued operations are, as follows:
2025 2024
£'000 £'000
Operating (775) (1,622)
Investing - -
Financing - -
Net cash outflow (775) (1,622)
Exceptional costs
2025 2024
£'000 £'000
Increase in dilapidation and restructuring provisions 320 78
320 78
Increase in dilapidation and restructuring provisions
During the year, the Group recognised exceptional costs from discontinued
operations of £0.3m (2024: £0.1m) 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
2025 2024
£'000 £'000
Finance income on subleased assets 29 96
Discounting on contingent consideration payable 47 738
Interest from loans to franchisees and appointed representatives 330 225
Bank interest 1,023 1,752
Interest from loan notes receivable 932 -
Other interest receivable 90 57
2,451 2,868
8. Finance costs
2025 2024
£'000 £'000
Commitment and non-utilisation fees on RCF 709 632
Unwinding of discount on lease liabilities 534 455
Unwinding of discount on contingent consideration payable - 132
Unwinding of discount on dilapidations provision 245 192
Finance cost on loans to franchisees and appointed representatives 449 321
Other interest payable - 9
1,937 1,741
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.
2025 2024
£'000 £'000
Exceptional costs:
Financial Services appointed representative costs 31 1,880
Financial Services post-acquisition support costs 584 543
Estate Agency restructuring costs 701 -
Reduction in contingent consideration receivable 230 1,542
Financial Services acquisition costs - 144
Central CEO and CFO change costs 685 -
Surveying professional indemnity provision 2,000 -
Financial Services restructuring costs 835 -
5,066 4,109
Exceptional gains:
Surveying & Valuation restructuring gains - 40
Increase in contingent consideration receivable - 1,705
Release of claims indemnity provision 571 -
571 1,745
Exceptional 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 £0.6m (2024: £0.5m) are recognised as
exceptional costs.
Estate Agency restructuring costs
During 2025, LSL Land and New Homes Limited (LNH) underwent a significant
business restructure. The restructure resulted in redundancy and
staff‑related costs of £0.6m and £0.1m premises dilapidation costs
following the decision to exit the existing office due to the reduced
workforce.
Reduction in contingent consideration receivable
The reduction in contingent consideration receivable relates to contingent
consideration assets recognised on the disposal of Group First, EFS and RSC.
The charge included in exceptionals is the result of reduction in the amounts
receivable after working capital adjustments. 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.
Central CEO and CFO change costs
In 2025 there were £0.7m of non-recurring exceptional costs in relation to
Group's CEO and CFO change.
Surveying professional indemnity provision
Refer to note 25 for further detail.
Financial Services restructuring costs
The Group initiated a restructuring programme in 2025, during which the
Financial Services Division incurred non-recurring restructuring costs. In
addition, the Division incurred exceptional consultancy and outsourcing
expenses following the unexpected departure of a senior executive due to
medical reasons. These costs were necessary to ensure continuity of leadership
and operational oversight through interim support and external consultancy
arrangements.
Exceptional gains
Release of claims indemnity provision
The release relates to a claims indemnity provision which was provided for in
May 2021 when the Group sold its 49.6% interest in LMS, a joint venture whose
principal activity was to provide conveyancing panel management services. The
Group included movements in claims indemnity provisions in exceptional items,
as the original provision was included as an exceptional cost in 2021. The
provision was timebound for a fixed period of four years commencing on the
completion date of the sales purchase agreement, which has now elapsed,
therefore the provision has been released in 2025.
10. Profit before tax
Profit before tax is stated after charging:
2025 2024
£'000 £'000
Auditor's remuneration (note 11) 1,035 1,525
Short-term leases 1,546 1,796
Low value leases 201 196
Depreciation - owned assets 1,124 1,179
Depreciation - right-of-use assets 2,245 1,981
11. Auditor's remuneration
The remuneration of the auditors is further analysed as follows:
2025 2024
£'000 £'000
Audit of the Financial Statements 275 584
Fees payable to company's auditors and its associates for other services:
Audit of subsidiaries 650 701
Total audit 925 1,285
Audit-related assurance services (including interim results review) 110 240
1,035 1,525
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 2025 (2024:
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:
2025 Restated(1)
2024
Profit after tax Weighted average number of shares Weighted average number of shares Per share amount
£'000 Per share amount Profit after tax pence
pence £'000
Basic EPS 16,960 102,322,435 16.6 17,409 102,645,789 17.0
Effect of dilutive share options - 2,404,841 - - 957,578 -
Diluted EPS 16,960 104,727,276 16.2 17,4098 103,603,367 16.8
EPS from continuing operations:
2025 Restated(1)
2024
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 17,002 102,322,435 16.6 17,819 102,645,789 17.4
Effect of dilutive share options - 2,404,841 - - 957,578 -
Diluted EPS 17,002 104,727,276 16.2 17,819 103,603,367 17.2
EPS from discontinued operations:
2025 2024
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 (42) 102,322,435 (0.0) (377) 102,645,789 (0.4)
Effect of dilutive share options - 2,404,841 - - 957,578 -
Diluted EPS (42) 104,727,276 (0.0) (377) 103,603,367 (0.4)
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.
(1) Refer to note 35 to the Financial Statements
Adjusted basic and diluted EPS
The Directors (who were members of the Board at 31 December 2025) consider
that the adjusted earnings shown below give a consistent indication of the
Group's underlying performance:
2025 Restated
2024
£'000 £'000
Group Underlying Operating Profit (See note 5 for the reconciliation from 32,618 27,785
Group Operating Profit)
Profit attributable to non-controlling interest (80) (33)
Finance income (excluding exceptional and contingent consideration items, fair 1,666 1,169
value adjustment to loans receivables and discounting on lease liabilities)
Other sources of earnings from joint venture (932) -
Normalised taxation (tax rate 25.0%, 2024: 25.0%)* (8,318) (7,230)
Adjusted profit after tax attributable to owners of the parent 24,954 21,691
*The headline UK rate of corporation tax for the period is 25.0%.
(2024:25.0%).
Adjusted basic and diluted EPS
2025 2024
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 24,954 102,322,435 24.4 21,690 102,645,789 21.1
Effect of dilutive share options 2,404,841 957,578
Adjusted diluted EPS 24,954 104,727,276 23.8 21,690 103,603,367 20.9
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 2024: 25.0%).
13. Dividends paid and proposed
2025 2024
£'000 £'000
Declared and paid during the year:
2025 Interim: 4.0 pence per share (2024 Interim: 4.0 pence) 4,154 4,069
Dividends on shares proposed (not recognised as a liability as at 31
December):
Equity dividends on shares:
Dividend: 7.4 pence per share (2024: 7.4 pence) 7,572 7,596
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 2025 Cash flow Additions Disposals At 31 December 2025
£'000 £'000 £'000 £'000 £'000
Lease liabilities 5,782 (2,486) 3,543 (335) 6,504
5,782 (2,486) 3,543 (335) 6,504
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
2025 2024
£'000 £'000
Non-current liabilities 4,148 3,493
Current liabilities 2,356 2,289
6,504 5,782
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 (2024:
£0.5m). The Group holds no other long-term debt at 31 December 2025.
15. Directors and employees
Remuneration of Directors
2025 Restated
2024
£'000 £'000
Directors' remuneration (short-term benefits)(1) 1,769 1,728
Contributions to money purchase pensions schemes (post-employment benefits) 2 2
Aggregate gains on exercise of share-based payment awards - 155
1,771 1,885
(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 (2024: £nil). Included
within this amount are accrued bonuses of £0.2m (2024: £0.6m).
The number of Directors who were members of Group money purchase pension
schemes during the year totalled 2 (2024: 2).
Remuneration of Key Management Personnel
2025 2024
£'000 £'000
Key management personnel remuneration (short-term benefits)(2) 3,264 3,618
Contributions to money purchase pensions schemes (post-employment benefits) 45 57
Termination benefits 9 178
Share-based payments charge on current incentive schemes 820 59
4,138 3,912
(2) Included within this amount are accrued bonuses of £0.9m (2024: £1.4m).
Remuneration of Key Management Personnel represents the charge to the income
statement in respect of the remuneration of the Group Board, Group Executive
Committee members and Company Secretary.
Employee numbers and costs
The Group employs staff in divisional offices and head office. Aggregate
payroll costs of these employees, including Directors were:
2025 2024
£'000 £'000
Wages and salaries 89,567 87,914
Social security costs 14,162 12,437
Pension costs 4,677 4,406
Subcontractor costs 682 443
Total employee costs 109,088 105,200
Share-based payment charge 1,597 920
The average monthly headcount (including Directors but excluding
subcontractors) during the year were:
2025 Restated
2024
Financial Services 389 434
Surveying & Valuation 1,098 1,016
Estate Agency Franchising 183 224
Central 106 103
1,776 1,7
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 providing the performance conditions are met. There
are no cash settlement alternatives.
Vesting conditions: For all LTIP options granted between 2022 and 2025, 50%
of each award is subject to a market‑based performance condition, 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 2025 this is 1 January 2025 to 31 December 2027):
• 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 each award is subject to a non‑market‑based
performance condition, based on LSL's Adjusted Basic EPS performance in the
financial year which they become exercisable:
LTIP 2025 LTIP 2024 LTIP 2023 LTIP 2022
EPS (pence) EPS (pence) EPS (pence) EPS (pence)
100% vest (more than or equal to) 34.0 32.5 24.0 52.8
25% vest (equal to) 28.0 26.5 16.0 46.9
Straight-line vesting (between) 28.0-34.0 26.5-32.5 16.0 - 24.0 46.9 - 52.8
No options vest (less than) 28.0 26.5 16.0 46.9
In 2025, the Group has introduced a second LTIP scheme. Under this plan,
participants receive nil-cost options over the Group's ordinary shares which
may vest in two tranches, subject to continued service to the relevant vesting
date and achievement of share-price based performance conditions measured over
the three and five year periods to 31 December 2027 (the First Vesting Date)
and 31 December 2029 (the Second Vesting Date). The Board has discretion, but
not an obligation, to settle in cash. The awards are accounted for as
equity-settled share-based payments under IFRS 2.
Vesting conditions:
For the second LTIP options granted, the options will vest based on the
average market value of a share over the 60-day period ending on the
respective vesting dates. For the 2025 LTIP grant, these vesting dates are 31
December 2027 and 31 December 2029. Vesting condition are as follows:
· First Vesting Date (31 December 2027)
o 12.5% vesting at an average share price of £3.70;
o 50% vesting at an average share price of £4.23;
o between these values, vesting increases on a straight-line basis;
o below £3.70, no awards vest on the First Vesting Date.
· Second Vesting Date (31 December 2029)
o 25% vesting at an average share price of £4.48;
o 100% vesting at an average share price of £5.59;
o between these values, vesting increases on a straight-line basis;
o below £4.48, no additional awards vest on the Second Vesting Date.
The second tranche uses the remaining portion of the award, being 1 minus the
first vesting percentage. If the second vesting hurdle is not achieved, no
further vesting occurs on the second vesting date, but any shares already
vested at the first vesting date are unaffected.
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. There are no cash settlement alternatives.
SAYE (save-as-you-earn) scheme
The Group has offered options under the SAYE scheme (an equity-settled
share-based remuneration scheme) in each of 2021, 2023, 2024 and 2025 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 (an equity-settled share-based
remuneration scheme) 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. There are no cash settlement alternatives.
The Group's first free share scheme (an equity-settled share-based
remuneration 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. There are no cash settlement alternatives.
Movements during the year
The following table illustrates the number and weighted average exercise
prices of, and movements in, share options during the year:
2025 2024
Weighted Number Weighted Number
average exercise average exercise
price price
Outstanding at 1 January 0.85 4,003,768 0.87 4,065,279
Granted during the year 0.99 1,062,798 0.77 1,283,552
Exercised during the year(1) 0.38 (103,505) 0.37 (383,216)
Lapsed during the year 0.83 (1,453,192) 1.04 (961,847)
Outstanding at 31 December 0.91 3,509,869 0.85 4,003,768
(1)The weighted average share price at the date of exercise of these options
was £2.82 in 2025 (2024: £2.73)
· There were no cancellations or modifications to the awards in
2025 or 2024.
· The weighted average remaining contractual life for the share
options outstanding as at 31 December 2025 was 1.55 years (2024: 1.53 years).
· The weighted average fair value of options granted during the
year was £1.33 (2024: £2.39).
· The range of exercise prices for options outstanding at the end
of the year was £nil to £3.64 (2024: £nil to £3.64).
· 335,235 share options were exercisable as at 31 December 2025.
The following tables list the inputs to the models used for the new plans for
the years ended 31 December 2025 and 2024, respectively:
LTIP LTIP SAYE LTIP SAYE
2025 2025
2024 2024
2025
Option pricing model used Monte Carlo Monte Carlo Black Scholes Black Scholes Black Scholes
Weighted average share price at grant date (£) 3.26 2.67 2.48 2.98 2.82
Exercise price (£) - - 2.04 - 2.46
Expected life of options (years) 4.5 3 3 3 3
Expected volatility (%) 86 62 100 100 100
Expected dividend yield (%) 3.50 3.60 3.40 3.69 1.06
Risk free interest rate (%) 3.66 3.82 3.62 4.54 4.36
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:
2025 2024
£'000 £'000
Share-based payment charge during the year 1,597 920
A charge of £1.6m (2024: charge of £0.9m) relates to employees of the Group.
16. Taxation
(a) Taxation charge
The major components of income tax charge in the Group Income Statement are:
2025 2024
£'000 £'000
UK corporation tax - current year 6,059 3,417
- adjustment in respect of prior years (356) (208)
5,703 3,209
Deferred tax:
Origination and reversal of temporary differences (198) 2,446
Adjustment in respect of prior year 523 (549)
Total deferred tax charge 325 1,897
Total tax charge in the income statement 6,028 5,106
Continuing and discontinued operations:
2025 2024
£'000 £'000
Total tax charge from continuing operations 5,994 5,247
Total tax charge/(credit) from discontinued operations 34 (141)
6,028 5,106
Corporation tax is recognised at the headline UK corporation tax rate of 25.0%
(2024: 25.0%).
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 26.1% (2024: 22.7%). The effective
tax rate for 2025 is marginally higher than the headline UK tax rate of 25.0%
largely as a result of the calculated net effect of adjustments arising in
respect of permanent adjustments or deferred tax not recognised including the
prior period adjustment arising in respect of total tax.
Income tax credited directly to the share-based payment reserve is £0.1m
(2024: credit of £0.1m).
(b) Factors affecting tax charge for the year
The tax assessed in the profit and loss account is lower than (2024: lower
than) the standard UK corporation tax (CT) rate, because of the following
factors:
2025 Restated
2024
£'000 £'000
Profit before tax from continuing operations 23,076 23,066
Loss before tax from discontinued operations (8) (518)
Profit before tax 23,068 22,548
Tax calculated at UK standard CT rate of 25% (2024: 5,767 5,635
25%)
Non-taxable (non-deductible) expenditure from joint venture (199) 1
Income not taxable (376) (11)
Other disallowable expenses 1,028 592
Impact of movement in contingent consideration credited to the income - 119
statement
Share-based payment movement 185 (60)
Impact of deferred tax not recognised (543) (413)
Prior period adjustments - current tax (357) (208)
Prior period adjustment - deferred tax 523 (549)
Total taxation charge 6,028 5,106
Total tax charge from continuing operations 5,994 5,247
Total tax charge/(credit) from discontinued operations 34 (141)
Total taxation charge 6,028 5,106
Other disallowable expenses of £1.0m (2024: £0.6m) includes the tax impact
of exceptional costs of £0.1m (2024: £0.1m), which are not
taxable/deductible for tax purposes. This item also includes other permanent
items which are not eligible for tax relief.
Income not taxable of £0.3m (2024: £nil) includes the non-taxable impact of
Research & Development Expenditure Credits (RDEC) of £0.2m (2024: £nil)
and non-taxable exceptional items of £0.1m (2024: £nil). This item also
includes other minor permanent items which are not taxable.
A tax credit of £0.4m has been recognised for corporation tax prior period
adjustments, reflecting refinements to prior estimates following changes in
reported results in standalone statutory accounts and the finalisation of
permanent disallowable expenditure. A key driver is the submission of RDEC
claims to HMRC for the years ended 31 December 2023 and 31 December 2024,
noting an RDEC credit of £0.8m has been recognised in the Group's other
operating income.
A tax debit of £0.5m has been recognised for deferred tax prior period
adjustments, mainly reflecting refinements to the qualifying tax base of
intangible fixed assets (following RDEC claims) and deferred tax not
recognised on tax losses.
(c) Factors that may affect future tax charges (unrecognised)
2025 Restated*
2024
£'000 £'000
Unrecognised deferred tax asset relating to:
Losses 2,632 2,108
Share based payments 251 490
2,883 2,598
*The prior period has been represented to include the balance relating to
deferred tax not recognised on share-based payments. No Profit or Loss debit
or credit arises in respect of this representation.
No deferred tax asset is recognised in respect of trading losses of £6.9m
(2024: £6.7m). 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 £3.7m
(2024: £1.8m) 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.
No deferred tax asset is recognised in respect of share based payments of
£1.0m (2024: £2.0m). The deferred tax asset may be recoverable in the
future, and this is dependent on whether the applicable shares options held
vest in a future period.
(d) Deferred tax
An analysis of the balance sheet movements in deferred tax is as follows:
2025 2024
£'000 £'000
Net deferred tax liability at 1 January 1,642 (166)
Research and development tax credits (26) -
Deferred tax liability recognised directly in equity 58 (88)
Deferred tax charge in income statement for the year from continuing 325 1,897
operations
Net deferred tax liability at 31 December 1,999 1,642
Net deferred tax liability analysed as:
2025 2024
£'000 £'000
Accelerated capital allowances (1,159) (1,433)
Deferred tax liability on separately identifiable intangible assets 4,455 4,410
Deferred tax on financial assets 234 184
Deferred tax on share options (618) (616)
Other short-term temporary differences (330) (221)
Temporary differences - FRS 102 to IFRS alignment 216 -
Total losses recognised (799) (682)
1,999 1,642
At 31 December 2025, the Group has unused trading tax losses of £3.2m
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 in income statement relates to the following:
2025 2024
£'000 £'000
Intangible assets recognised on business combinations (45) 790
Accelerated capital allowance (274) (149)
Deferred tax on financial assets (50) -
Deferred tax on share options 60 40
Other temporary differences 83 (30)
Temporary differences - FRS 102 to IFRS alignment (216) -
Trading losses recognised 117 (2,548)
Total deferred tax charged in income statement (325) (1,897)
2025 2024
£'000 £'000
Deferred tax charged in income statement for the year from continuing (325) (1,897)
operations
Deferred tax charged in income statement for the year from discontinued - -
operations
Total deferred tax charged in income statement (325) (1,897)
17. Intangible assets
Goodwill and brand
Goodwill Brand Total
£'000 £'000 £'000
Cost
At 31 December 2024 16,855 6,911 23,766
At 31 December 2025 16,855 6,911 23,766
Net book value
At 31 December 2025 16,855 6,911 23,766
At 31 December 2024 16,855 6,911 23,766
The carrying amount of goodwill and brand by CGU is summarised below:
Goodwill Brand Goodwill Brand
2025 2025 2024 2024
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.
Cash flow projections are based on the Group's three‑year plan covering the
period 2026 to 2028. Cash flows beyond this period are extrapolated using a
terminal growth rate of 2.0%.
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:
2025 2024
Financial Services 16.4% 16.3%
Surveying & Valuation 16.5% 17.3%
Estate Agency Franchising 15.7% 15.9%
Cash flows beyond the three-year plan are extrapolated using a 2.0% growth
rate (2024: 2.0%). The terminal growth rate of does not exceed the long‑term
average growth rate for the UK economy and reflects management's expectation
of long‑term sustainable growth in the relevant markets.
Performance in the market
Management's impairment assessment incorporates key assumptions reflecting the
performance of the market, such as housing transaction volumes, house price
forecasts, mortgage lending trends, market interest rates, and broader
economic, legal and technological factors affecting operations. These
assumptions are derived from a combination of internal forecasts and external
market data, and are reflected in the revenue growth, margin and cost
projections for each cash-generating unit (CGU).
These assumptions reflect management's expectations of how each CGU will
perform over the three-year forecast period (2026 to 2028) and are used to
calculate the value-in-use of the CGUs. CGU-specific operating assumptions are
applied to forecast cash flows and relate to revenue forecasts and underlying
profit margins within each of the operating CGUs. The values ascribed to each
assumption vary between CGUs, as forecasts are built from the underlying
business units within each CGU group. The assumptions are based on a
combination of historical performance, observable market trends, and
management's expectations of future market developments.
Sensitivity to changes in assumptions
The Group performed sensitivity analysis on key assumptions, including
discount rates (±1.5%) and terminal growth rates (±1%). Under these
scenarios, all CGUs retained sufficient headroom and therefore no impairment
required. The most sensitive CGU is e.surv, where a 1.5% increase in discount
rate would reduce headroom by £10.2m but not result in impairment.
Other intangible assets
Customer contracts Franchise agreements Relationship Asset Total
Software
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2024 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
Additions - - 3,052 - 3,052
Disposals (625) - - - (625)
At 31 December 2025 - 12,766 24,542 9,295 46,603
Amortisation and impairment
At 1 January 2024 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
Amortisation - 851 1,409 774 3,032
Disposal (625) - - - (625)
At 31 December 2025 - 2,750 19,337 1,547 23,633
Net book value
At 31 December 2025 - 10,016 5,206 7,748 22,970
At 31 December 2024 - 10,867 3,562 8,521 22,950
At 31 December 2025, the Group's Relationship Asset has a remaining
amortisation period of 10 years.
Research and development expenditure
During the year, the Group incurred total research and development expenditure
of £1.3m (2024: £1.2m) recognised as an expense Group Statement of Profit or
Loss and other Comprehensive Income.
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 2024 (Restated(1)) 9,018 966 7,226 10,782 27,992
Additions 424 - 1,431 939 2,794
Disposals (5,935) - (2,446) (271) (8,652)
At 31 December 2024 3,507 966 6,211 11,450 22,134
Additions 1,692 - 1,878 1,241 4,811
Disposals (406) - (1,129) (1,073) (2,608)
At 31 December 2025 4,793 966 6,960 11,618 24,337
Depreciation and impairment
At 1 January 2024 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
Charge for the year 710 - 1,535 1,124 3,369
Disposals (406) - (988) (1,072) (2,466)
At 31 December 2025 2,275 966 3,558 9,838 16,637
Net book value
At 31 December 2025 2,518 - 3,402 1,780 7,700
At 31 December 2024 1,536 - 3,200 1,664 6,400
Property, plant and equipment - - - 1,780 1,780
Right-of-use assets 2,518 - 3,402 - 5,920
(1) Refer to note 35 to the Financial Statements
19. Financial assets
2025 Restated(1)
2024
£'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) 963 762
Contingent consideration receivable 5,772
-
(c) Financial assets at amortised cost
Investment in sublease 295 832
Loan to joint venture 13,840 7,607
Loans to franchisees and appointed representatives 3,650 1,769
18,748 16,742
Non-current assets 2,917 2,111
Current assets 15,831 14,631
18,748 16,742
1. Refer to note 35 to the Financial Statements
(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. The Group holds an equity
instrument in Global Property Ventures and 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 were
recognised in the income statement:
2025 2024
£'000 £'000
Fair value gains on equity investments at FVPL recognised in other operating 201 482
costs
Fair value (losses)/gains on contingent consideration recognised as (230) 163
exceptional
Finance income recognised on contingent consideration receivable - 738
Openwork Units
As at 31 December 2025, the fair value of the Group's investment in units held
in The Openwork Partnership LLP increased to £0.6m (31 December 2024: £0.4m)
due to a fair value adjustment of £0.2m recognised in the year. Our valuation
is based on the actual strike price in the most recent trading window.
Twenty7Tec
The Group's holdings in equity instrument in Twenty7Tec Group Limited remained
at £0.4m (31 December 2024: £0.4m). This is based on an external valuation
of the business and is therefore indicative of a fair value.
Contingent Consideration Receivable
Contingent consideration of £5.5m in relation to the disposals of EFS, Group
First and RSC in H1 2023, was fully repaid in 2025.
(c) Financial assets measured at amortised cost
Financial assets measured at amortised cost include investment in subleases,
loan notes receivable 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 (2024: £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 over an agreed period and may bear fixed rate
interest. The Group has issued franchisee loans of £2.7m (2024: £1.1m)
during the period, received principal repayments of £1.3m (2024: £0.4m) and
recognised finance income of £0.3m (2024: £0.1m). An expected credit loss
has been provided against the facility of £0.01m (2024: £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 £0.6m (2024: £0.4m) during the year and
received principal repayments of £0.5m (2024: £1.3m) and recognised finance
income of £0.1m (2024: £0.1m). An expected credit loss has been provided
against the remaining facility of £0.1m (2024: £0.1m), applying a 12-month
expected credit loss model.
Loans notes receivables
In 2025, the Group provided further funding of £5.3m (2024: £7.6m) to its
joint venture Mottram TopCo Limited in the form of 10% unsecured loan notes.
Finance income of £0.9m (2024: £nil) was recognised in 2025. The loan notes
are fully repaid in January 2026, see note 33 for further detail.
20. Investment in joint venture
2025 2024
£'000 £'000
Opening balance 11,585 9,359
Equity investment in Pivotal Growth 2,605 2,232
Equity accounted profit 1,195 107
Adjustment for non-controlling interests (397) (113)
Closing balance 14,988 11,585
Pivotal Growth
The Group is party to one joint venture, Mottram TopCo Limited. As at 31
December 2025, the Group holds a 46.8% (2024: 46.5%) 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 87.1% shareholding in Pivotal Growth Limited (Pivotal) (2024:
85.1%). 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 2025, the Group did not have any commitments or contingent
liabilities relating to Pivotal.
A further £2.6m equity investment was made by the Group during the year
(2024: £2.2m). In September 2025, the Group provided £5.3m (2024: £7.6m)
funding by means of loan notes, which are repayable in 2026 (refer to
note 19 for further details).
The summarised financial information of Pivotal, which is accounted for using
the equity method, is presented below:
2025 2024
Mottram TopCo balance sheet(1): £'000 £'000
Non-current assets 96,341 55,002
Current assets (excluding cash and cash equivalents) 9,744 4,757
Cash and cash equivalents 8,641 7,641
Current liabilities (46,348) (26,513)
Non-current liabilities (27,332) (10,647)
Net assets 41,046 30,240
Less: net assets attributable to non-controlling interests (313) 84
Net assets attributable to Pivotal 40,733 30,324
LSL share of Pivotal's net assets(1) 14,988 11,585
(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.
2025 2024
Pivotal results: £'000 £'000
Revenue 95,129 60,290
Operating expenses (89,383) (60,153)
Operating profit 5,746 137
Finance income 94 16
Finance costs (1,996) -
Profit/(loss) before tax 3,844 152
Taxation (1,731) (52)
Profit after tax 2,113 100
Attributable to NCI of Pivotal 397 113
Attributable to Mottram TopCo 1,716 (13)
LSL share of post-tax profit/(loss) from joint venture 798 (6)
The above Pivotal results for the period ended 31 December 2025 includes the
following:
2025 2024
£'000 £'000
Depreciation (559) (297)
Amortisation (452) (434)
There was no other comprehensive income recognised in Pivotal during the year.
21. Trade and other receivables
2025 Restated(1)
2024
£'000 £'000
Current
Trade receivables 5,693 5,012
Prepayments 6,795 6,135
Accrued income 10,060 10,850
Other debtors 2,478 2,164
25,026 24,161
(1) Refer to note 35 to the Financial Statements
The accrued income balance is expected to be settled within three months of
the year-end date.
Accrued income of £10.1m primarily relates to valuation services performed
but not yet invoiced at year-end and franchise fees earned under contractual
arrangements. These amounts are expected to be billed and settled within three
months. Accrued income represents amounts for which the Group has an
unconditional right to payment and therefore is classified as a receivable
rather than a contract asset under IFRS 15.
Other debtors of £2.5m include PI insurance recoveries (£0.3m) and
operational receivables from franchisees and appointed representatives
(£2.2m).
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 2025,
trade receivables and accrued income with a nominal value of £5.6m (2024:
£4.6m) were provided for. Set out below is the movement in the allowance for
expected credit losses of trade receivables and accrued income:
2025 Restated(1)
2024
£'000 £'000
At 1 January 4,574 3,658
Provision for expected credit losses 3,543 2,061
Amounts written off (2,468) (1,146)
At 31 December 5,649 4,574
(1) Refer to note 35 to the Financial Statements
The Group applies the IFRS 9 expected credit loss model using the simplified
approach, whereby a provision matrix is applied based on the ageing of trade
receivables, historical default rates, and forward-looking information. The
ECL provision increased to £5.6m (2024: £4.6m), reflecting higher exposure
to overdue balances, particularly those greater than 120 days past due, and
management's updated assessment of the current economic environment.
As at 31 December, an analysis of gross trade receivables and accrued income
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
2025 21,402 10,573 3,895 849 544 669 4,872
Restated(1) 20,436 10,220 3,588 706 414 223 5,285
2024
( )
(1) Refer to note 35 to the Financial Statements
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
2025 0.00% 10.06% 14.53% 22.22% 19.20% 67.24%
2024 0.02% 13.11% 17.51% 34.21% 37.14% 69.75%
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:
2025 2024
£'000 £'000
Cash and cash equivalents 67,050 60,663
Bank overdrafts (39,253) (28,264)
Cash and cash equivalents 27,797 32,399
23. Trade and other payables
2025 Restated(1)
2024
£'000 £'000
Current
Trade payables 9,665 9,793
Other taxes and social security payable 7,687 6,120
Other payables 2,866 2,981
Accruals 13,791 15,185
Commission refund liability 2,801 3,414
36,810 37,493
(1) Refer to note 35 to the Financial Statements
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.
Commission income is recognised in accordance with IFRS 15 Revenue from
Contracts with Customers. The potential obligation to repay commission gives
rise to variable consideration, which is constrained to the extent that it is
highly probable that a significant reversal of recognised revenue will not
occur.
The commission refund liability is recognised as a reduction in revenue at the
point commission income is recognised. 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 £0.2m.
24. Financial liabilities
2025 Restated(1)
2024
£'000 £'000
Current
IFRS 16 lessee financial liabilities 2,354 2,289
Contingent consideration 3,259 3,306
5,613 5,595
Non-current
IFRS 16 lessee financial liabilities 4,148 3,493
4,148 3,493
(1) Refer to note 35 to the Financial Statements
Bank loans - RCF and overdraft
In accordance with the terms at 31 December 2025, the utilisation of the RCF
may vary each month as long as this does not exceed the maximum £60.0m
facility (2024: £60.0m). The Group's overdraft is also secured on the same
facility, and the combined overdraft and RCF cannot exceed £60.0m (2024:
£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
(2024: 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 £0.7m during the year (2024: £0.6m)
including amortisation of arrangement fees and non-utilisation fees.
Contingent consideration
2025 2024
£'000 £'000
TenetLime 3,259 3,306
Total contingent consideration 3,259 3,306
Opening balance 3,306 65
Acquisition - 3,600
Cash paid - (65)
Amounts recorded through income statement (47) (294)
Closing balance 3,259 3,306
Contingent consideration payable is measured at fair value using a discounted
cash flow approach. The most significant unobservable inputs are adviser
retention levels, forecast profitability and the discount rate applied to
expected future payments.
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 2025, there are no additional liabilities recognised as a
result of the administration, though £0.6m of exceptional costs were incurred
during the year (2024: £0.5m, 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
June 2026.
25. Provisions for liabilities
PI claim provisions Dilapidation Restructuring provision Appointed representative provision Total
provision
Other
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2025 (restated(2)) 2,575 5,110 918 1,247 571 10,421
Transferred from trade and other payables(1) - - - 543 - 543
Provided in financial year 2,650 16 549 1,615 - 4,830
Amount utilised (153) (383) (441) (1,790) - (2,767)
Amount released (751) (652) (30) - (571) (2,004)
Unwinding of discount - 245 - - - 245
Balance at 31 December 2025 4,321 4,336 996 1,615 - 11,268
Current liabilities 1,030 3,396 996 844 - 6,266
Non-current liabilities 3,291 940 - 771 - 5,002
4,321 4,336 996 1,615 - 11,268
(1)During the period, the Group has reclassified £0.5m of opening balances
from commission refund liability within trade and other payables to appointed
representative provision. This reclassification reflects a more appropriate
presentation of the balance, which relates to obligations that are uncertain
in timing or amount and meet the definition of a provision under IAS 37
(2) Refer to note 35 to the Financial Statements
PI claim provisions
PI claim provisions of £4.3m relate to the Surveying & Valuation Division
(£3.6m) and Financial Services Division (£0.7m).
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. PI claim provisions are not discounted as the timing of
settlement is uncertain and the effect of discounting is not considered
material. 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 2025, the total provision for PI claim was £3.6m. The Directors
have considered the sensitivity analysis on the key risks and uncertainties
discussed above.
The increase in the provision during the year was due to professional
indemnity claims being notified to the Group's Surveying & Valuation
Division in relation to historic valuation engagements. Currently, these
matters are at an early stage of investigation and in accordance with IAS 37,
further information about the potential financial effect and related
uncertainties has not been disclosed because it could prejudice the Group's
position in any dispute.
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 £0.2m.
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 2025, the total provision for Financial Services PI was
£0.5m (2024: £0.4m), including a provision for received claims of £0.3m
(2024: £0.2m) and IBNR of £0.2m (2024: £0.2m). The Group has recognised an
asset of £0.3m (2024: £0.3m) against received claims in other debtors at 31
December 2025.
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 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 2025 was
£19.83 (2024: £18.50).
The provision is discounted using a risk-free discount rate based on expected
date of novation of the lease. The discount rate applied in 2025 was 3.8%
(2024: 4.2%).
If the average rates applied were to increase by 10% this would result in an
increase in the overall provision of £0.4m, 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
The Group recognises a provision for expected cash outflows on commission
clawbacks arising after the termination, suspension or resignation of
appointed representatives (ARs) within the Financial Services Division, to the
extent not recoverable from these ARs. This is separate from the IFRS 15
commission refund liability recorded against revenue for expected clawbacks on
the Group's own commissions while AR relationships remain active.
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 increase by 1.0%, the total provision would increase by
£0.1m.
Restructuring provision
The restructuring provision recognised relates to costs associated with the
disposal of the owned branch network (£0.9m), and restructuring of the Land
and New Homes business (£0.1m, refer to note 9).
The costs associated with the disposal of the owned branch network includes
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 four year claims indemnity of
£2.0m, for which the Group has previously provided £0.6m for certain claims,
which it considers to be the most likely outcome. The Group disposed of LMS in
2021, and therefore the four year limit has now elapsed.
26. Leases
Group as a lessee
At the year ended 31 December 2025, the Group has the following in regards to
leases in the Group Balance Sheet.
Right-of-use assets 2025 2024
Property Motor vehicles Total Property Motor vehicles Total
£'000 £'000 £'000 £'000 £'000 £'000
1 January 1,536 3,201 4,737 1,684 3,279 4,963
Additions 1,692 1,878 3,570 424 1,431 1,855
Disposals - (142) (142) (33) (67) (100)
Depreciation (710) (1,535) (2,245) (539) (1,442) (1,981)
Transfer to investment in sublease - - - - - -
31 December 2,518 3,402 5,920 1,536 3,201 4,737
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 2025 2024
£'000 £'000
1 January 5,782 8,340
Additions 3,543 1,855
Interest expense 534 455
Disposals (335) (1,518)
Repayment of lease liabilities (3,020) (3,350)
31 December 6,504 5,782
The Group added £3.5m (2024: £1.9m) of new lease liabilities in the year.
The weighted average discount rate applied across the Group for these
additions was 9.9% (2024: 10.6%)
Maturity of these lease liabilities undiscounted is analysed as follows:
£'000 £'000 £'000
Property Vehicles Total
Current lease liabilities 995 1,794 2,789
Non-current lease liabilities 2,583 2,265 4,848
31 December 2025 3,578 4,059 7,637
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 has determined that these subleases are finance leases, as
substantially all the risks and rewards incidental to ownership of the
right‑of‑use assets are transferred to the franchisees. On commencement of
the sublease, the Group derecognises the related right‑of‑use asset and
recognises a net investment in the sublease. on its balance sheet. The Group
in 2025 has received £0.5m (2024: £1.0m) of repayments from the franchisees
in relation to the subleases, with finance income of £0.1m (2024: £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:
2025 2024
£000 £000
Less than 1 year 159 527
1-2 years 80 306
2-3 years 47 82
3-4 years 23 41
4-5 years - 9
309 965
Unearned finance income (14) (133)
Net investment in sublease (Note 19) 295 832
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:
2025 2024
£'000 £'000
Depreciation of right-of-use assets:
Property (710) (539)
Vehicles (1,535) (1,442)
Short term and low value lease expense (note 10) (1,747) (1,992)
Sublease income 1,527 1,992
Charge to operating profit (2,465) (1,981)
(534) (455)
Interest expense related to lease liabilities
Interest income related to investment in sublease 29 96
Charge to profit before taxation (505) (359)
(505) (359)
Cash outflow relating to operating activities
Cash inflow relating to investing activities 489 1,046
Cash outflow relating to financing activities (2,487) (2,895)
Total net cash outflow relating to leases (2,503) (2,208)
At the 31 December 2025, the Group had not entered into any leases to which it
was committed but had not yet commenced.
27. Share capital
2025 2024
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. The EBT and SIP are treated as an extension of the Group.
At 31 December 2025, the Trust held 142,244 (2024: 174,248) LSL shares at an
average cost of £3.86 (2024: £3.86), and the SIP held 871,803 (2024:
951,904) LSL shares at an average cost of £0.88 (2024: £0.88). The market
value of the LSL shares at 31 December 2025 was £2.7m (2024: £3.4m). The
nominal value of each share is 0.2 pence.
Treasury shares
Treasury shares represent the cost of LSL shares purchased in the market
under the Group's share buy-back programmes, including the programme initiated
in 2022 and the £7m programme announced in April 2024, which completed in
January 2026 following the repurchase of ordinary shares up to the maximum
consideration. In January 2026, the Board announced the launch of a new £12m
share buy-back programme. At 31 December 2025, LSL had repurchased 3,356,874
(2024: 1,458,933) LSL shares at an average cost of £2.94 (2024: £3.31). The
market value of the LSL shares at 31 December 2025 was £8.8m (2024: £4.4m).
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 £4.7m
(2024: £4.4m). At the 31 December 2025, there were outstanding pension
contributions of £0.6m (2024: £0.6m) included in trade and other payables.
30. Client monies
As at 31 December 2025, monies held by the Group on behalf of franchisees in
separate bank accounts in relation to client monies amounted to £69.8m (2024:
£68.4m). Neither this amount, nor the matching liabilities to the clients
concerned are included in the Group Balance Sheet since these funds belong to
clients.
Client funds are protected by the Financial Services Compensation Scheme
(FSCS) under which the Government guarantees amounts up to £120,000. 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 for the Group to put in place.
The Group has not drawn down on its RCF during the year to 31 December 2025
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
£27.8m (2024: £32.4m). At 31 December 2025, 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 (2024: the Group had available £60.0m
of undrawn committed borrowing facilities, of which the Group could have drawn
£33.0m).
The table below summarises the maturity profile of the Group's financial
liabilities at 31 December 2025 based on contractual undiscounted payments:
Year ended 31 December 2025
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 - 9,665 - - - 9,665
Other payables - 24,343 - - - 24,343
Overdraft 39,253 - - - - 39,253
Contingent consideration - - 3,259 - - 3,259
Lease liabilities - 588 1,765 3,553 595 6,501
39,253 33,596 5,024 3,553 595 83,021
Year ended 31 December 2024 (restated(1))
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 - 9,793 - - - 9,793
Other payables - 24,286 - - - 24,286
Overdraft 28,264 - - - - 28,264
Contingent consideration - - 3,306 - - 3,306
Lease liabilities - 573 1,716 3,406 87 5,782
28,264 34,652 5,022 3,406 87 71,431
(1) Refer to note 35 to the Financial Statements
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 (2024: nil)
due to a net cash position of £27.8m (2024: net cash £32.4m) and underlying
operating profit of £32.6m (2024: £27.8m). 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 franchisees 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:
2025 Total Level 1 Level 2 Level 3
£'000 £'000 £'000 £'000
Assets measured at fair value
Financial assets 963 - 963 -
Liabilities measured at fair value
Contingent consideration payable 3,259 - - 3,259
2024 Total Level 1 Level 2 Level 3
£'000 £'000 £'000 £'000
Assets measured at fair value
Financial assets 762 - 762
Liabilities measured at fair value
Contingent consideration payable 3,306 - - 3,306
The reconciliation of the opening and closing balance for financial assets
measured using level 3 technique is as follows:
£'000
Opening balance as at 1 January 2025 5,772
Fair value remeasurement (230)
Receipts (5,542)
Closing balance as at 31 December 2025 -
The fair value of financial assets that are not traded in the open market is
£1.0m (2024: £0.8m), 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.
The only unobservable input used in the valuation is the discount rate, which
has been estimated at 4.3%. An increase in the discount rate of 1% would
result in a decrease in the fair value of the contingent consideration of
£0.02m. A corresponding decrease in the discount rate would result in an
increase in the fair value.
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
2025 2024
£'000 £'000
Revenue recognised 3,509 3,551
Trade receivables at 31 December 522 676
Loan notes receivable at 31 December 13,840 7,607
There are no transactions with Key Management Personnel other than those
disclosed in note 15.
33. Events after the reporting period
1. In January 2026, Mottram Topco repaid £10.6m out of the £13.8m loan notes
outstanding in cash. £3.2m were converted to equity investment in Mottram
Topco.
2. On 22 January 2026, the Group acquired 100% of the equity of NSS
Franchising Limited (NSS) for total consideration of £2.8m (cash £1.8m,
contingent consideration at fair value £1.0m). The acquisition will be
accounted for as a business combination in accordance with IFRS 3.
NSS is a property search business providing property search packs in England
and Wales. NSS is considered a good strategic fit with the Group and is
expected to enhance the Group's Homefast conveyancing solution, which includes
sourcing search packs for consumers.
No revenue or profit of NSS is included in the Group's results for the year
ended 31 December 2025 as the acquisition completed after the reporting date.
As at the date these Financial Statements were authorised for issue, the
initial accounting for the business combination is incomplete. The amounts
recognised in 2026 may be adjusted within the measurement period as valuations
and assessments are finalised.
3. Following the completion of its £7.0m share buyback programme in January
2026 which was announced on 25 April 2024, the Group announced the
commencement of a new share buyback programme on 27 January 2026 in respect of
its ordinary shares up to a maximum consideration of £12.0m from the date of
the announcement.
4. The Group provided loans totalling £1.5m to franchisees to support the
acquisition of additional lettings books.
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/(Loss) 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. From 2025
onwards, it also includes other sources of earnings from joint ventures (JV),
such as interest income from loan notes issued to JVs. This measure is
reported to the Directors as it is considered to provide a consistent
indication of both Group and Divisional underlying performance.
During the year, the Group revised its definition of Underlying Operating
Profit to also include other sources of earnings from its joint ventures
(JVs), such as interest income from loan notes issued to JVs; in order to
reflect the full economic benefit of the ownership of the JV which forms part
of the Group's underlying operations. Comparative figures have not been
restated, as no other sources of earnings other than the Group's share of the
JV's profit after tax were recognised prior to 2025.
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 was defined as Group Underlying Operating
Profit/(Loss) adjusted for profit/(loss) attributed to non-controlling
interests, net finance cost (excluding exceptional and contingent
consideration items, 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. equivalent IFRS
measures are basic and diluted earnings per share.
In line with the Group's change in definition of Underlying Operating
Profit/(Loss), the Group has also revised its calculation of adjusted profit
after tax used in determining adjusted earnings per share (EPS), to adjust for
other sources of earnings from JVs. This change ensures consistency between
the Group's underlying operating profit/(loss) and its adjusted EPS
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.
2025 Restated(1)
2024
£'000 £'000
Total operating expenditure (160,383) (151,379)
Add back:
Other gains (1,116) (533)
Share of post-tax (profit) /loss from joint venture (798) 6
Share-based payments 1,597 920
Amortisation of intangible assets 3,032 2,988
Exceptional gains (571) (1,745)
Exceptional costs 5,066 4,109
Contingent consideration - (426)
Adjusted operating expenditure (153,173) (146,060)
(1) Refer to note 35 to the Financial Statements
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.
2025 2024
£'000 £'000
Cash and short-term deposits 67,050 60,663
Less: Interest-bearing loans and borrowings (including loan notes, overdraft,
IFRS 16 Leases, contingent and deferred consideration)
Current (44,865) (33,859)
Non-current (4,148) (3,490)
18,037 23,314
Add: IFRS 16 lease financial liabilities 6,501 5,779
Add: deferred and contingent consideration 3,259 3,306
Net cash 27,797 32,399
f) Adjusted cash flow from operations
Adjusted cash flow from operations is defined as cash generated from
operations before exceptional items, less the repayment of lease liabilities,
plus the utilisation of PI provisions.
2025 2024
£'000 £'000
Net cash generated from operating activities 22,730 27,793
Exceptional costs paid 3,910 3,066
Income taxes paid 4,968 1,799
Interest received (leases) (29) (96)
Interest paid (leases) 534 455
Cash generated from operations 32,113 33,017
Payment of principal portion of lease liabilities (2,486) (2,895)
PI provision utilisation 153 950
Adjusted cash flow from operations 29,780 31,072
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.
2025 2024
£'000 £'000
Adjusted cash flow from operations 29,780 31,072
Group Underlying Operating Profit from continuing operations 32,618 27,785
Cash flow conversion rate 91% 112%
35. Prior year restatements
During the year ended 31 December 2025, management performed an enhanced
review of the Group's consolidation processes and supporting journals,
including consolidation entries recorded in connection with disposals
completed in 2023 and the processing of subsidiary statutory audit adjustments
within the Group consolidation.
As a result of this review, the Group has identified certain legacy
consolidation items which require a retrospective restatement of comparative
information in accordance with IAS 8.
Disposal-related consolidation entries (2023)
In respect of disposals completed in 2023, certain consolidation journals used
to derecognise the disposed entities' net assets were not fully aligned to the
agreed completion Balance Sheet inputs. As a result, a lower level of Net
Assets was derecognised at the disposal date than the completion Balance Sheet
position, with residual balances continuing to be reflected within certain
working capital balances and equity.
Subsidiary statutory audit adjustments
In addition, following completion of certain subsidiary statutory audits,
statutory audit adjustments were posted within subsidiary trial balances.
These adjustments were assessed as not material at Group level in the period
recorded and therefore were not reflected consistently in the Group
consolidation in the corresponding period. Over time, in excess of ten years,
the cumulative effect resulted in misalignment between subsidiary statutory
balances and the Group consolidation opening positions, impacting retained
earnings and certain working capital balances.
The matters identified relate to consolidation-level entries and did not arise
from changes to the underlying accounting records of the Group's continuing
subsidiaries or the Parent company in the current year.
Accordingly, the Group has restated comparative information presented,
including the consolidated income statement for the year ended 31 December
2024, and adjusted the opening balance of equity at 1 January 2024.
The restatement has no impact on the Group's consolidated cash and cash
equivalents.
Basic and diluted earnings per share for prior periods have also been
restated, as a result of the items above. For the year to 31 December 2024,
the amount of the correction for basic earnings per share was an increase of
0.1 pence
As the adjustment has a material effect on the information in the statement of
financial position at the beginning of the comparative period presented, the
Group has presented an additional statement of financial position as at 1
January 2024.
The following tables summarise the impact of the restatement on the
consolidated financial statements.
Group balance sheet (extracts)
Reported year ended 31 December 2023 Subsidiary statutory audit adjustments Disposal-related consolidation entries Restated year ended 31 December 2023
£'000 £'000 £'000 £'000
Non-current assets
Property, plant and equipment and right-of-use assets 6,917 1 - 6,918
Investment in sublease 1,756 1 - 1,757
Current assets
Trade and other receivables 23,206 (760) - 22,446
Current liabilities
Trade and other payables (30,485) (6) (741) (31,232)
Non-current liabilities
Provisions for liabilities (5,647) (225) - (5,872)
Net assets 75,945 (989) (741) 74,215
Equity
Retained Earnings 74,087 (989) (741) 72,357
Total Equity 75,945 (989) (741) 74,215
Reported year ended 31 December 2024 Subsidiary statutory audit adjustments Disposal-related consolidation entries Restated year ended 31 December 2024
£'000 £'000 £'000 £'000
Non-current assets
Loans to franchisees and appointed representatives 979 (77) 902
Current assets
Trade and other receivables 24,811 (650) 24,161
Current liabilities
Financial liabilities (5,597) 2 (5,595)
Trade and other payables (36,778) 26 (741) (37,493)
Provisions for liabilities (6,316) (236) (6,552)
Net assets 81,884 (936) (741) 80,207
Equity
Retained Earnings 80,417 (943) (741) 78,733
Non-controlling interest (280) 7 (273)
Total Equity 81,884 (936) (741) 80,207
Group Income Statement (extract)
Year ended 31 December 2024
Reported year ended 31 December 2024 Subsidiary statutory audit adjustments Restated year ended 31 December 2024
£'000 £'000 £'000
Revenue 173,175 143 173,318
Other operating costs (35,548) (90) (35,638)
Group operating profit 21,886 53 21,939
Profit before tax 23,013 53 23,066
Profit for the period from continuing operations 17,766 53 17,819
Profit for the period 17,389 53 17,442
Attributable to:
Owners of the parent 17,363 46 17,409
Non-controlling interest 26 7 33
17,389 53 17,442
36. Annual Report and Annual General Meeting
The Annual Report and Accounts for the year ended 31 December 2025 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 2026.
Details on our 2026 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
18 March 2026
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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
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