REG - LSL Property Svcs. - Full Year Trading Update

LSL Property ServicesAnnouncement

01/02/2024 07:00

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RNS Number : 5967B  LSL Property Services PLC  01 February 2024

 
 
                                 1 February 2024

 

LSL Property Services plc ("LSL" or "Group")

Full Year Trading Update

 

 2023 results in line with expectations

LSL issues a pre-close trading update for the 12-month period ending 31
December 2023(1).

Highlights

Following a positive final quarter, full year results for 2023 are in line
with the Board's expectations, and at this early stage we remain comfortable
with delivering profits in 2024 materially ahead of 2023.

We also report the extension of our Surveying and Valuation Division's
contract with Lloyds Banking Group plc and confirm that the acquisition of
TenetLime announced in August is expected to complete imminently.

Trading

Group Underlying Operating Profit(2) in the second half of the year showed a
material improvement on H1.

 

As expected, subdued activity levels across the valuations market continued to
impact our Surveying Division. However, there were some signs of improvement
in the final months of the year which will support our expectation of improved
Surveying earnings in 2024.

 

Performance of LSL's Financial Services Network business remained resilient
with profitability slightly ahead of plan. Our overall share of the UK
Purchase and Remortgage market(3) increased to 10.7% (2022: 10.5%).

 

Following the conversion of our Estate Agency network to a wholly franchise
model during H1, the Division continues to perform ahead of plan for both
revenue and profits, with second half operating margin of c.30%.

 

Surveying & Valuation Division

We are pleased to confirm that in January we extended our contract to supply
surveying and valuation services to Lloyds Banking Group, underpinning our
leading market position. The contract was originally awarded in May 2018 and
has been extended to September 2028.

 

Financial Services Division

On 21 August 2023 we announced the acquisition of the TenetLime mortgage
network subject to FCA approval. This approval has been received with
completion now imminent. Plans for the integration are in place and we are on
track to deliver the planned business benefits.

Pivotal Growth, our joint venture with Pollen Street Capital has made two
further acquisitions since our last update.

Financial performance

Group Revenue from continuing operations(4) was £144m (2022: £217m). After
adjusting for disposals, like-for-like revenue was 10% below prior year in a
housing market 19% lower and in a smaller lending market.

Strong balance sheet with Net Cash of £34.9m at 31 December 2023 (31 December
2022: £40.1m), providing flexibility for future deployment of capital.

Outlook

The Group's trading in January was in line with management expectations and
ahead of 2023. At this early stage of the year, we remain on track to deliver
a material increase in profit for 2024 compared to 2023 due mainly to the
benefits of improved performance in Surveying, as well as a full year of
operating the franchising model. A further update on current trading and
outlook will be shared with the release of our preliminary results.

 

Notes to trading update:

1.         This trading update is based on preliminary unaudited
financial information.

2.         Group Underlying Operating Profit is including discontinued
operations, before exceptional costs, contingent consideration assets &
liabilities, amortisation of intangible assets and share-based payments.

3.         Mortgage lending excluding product transfers. New mortgage
lending by purpose of loan, UK (BOE) - Table MM23 released January 2024

4.         Following the conversion of the entire owned Estate Agency
network to franchisees in H1 2023, this was classified as a discontinued
operation.

 

For further information, please contact:

 

 David Stewart, Group Chief Executive Officer
 Adam Castleton, Group Chief Financial Officer
 LSL Property Services plc                      investorrelations@lslps.co.uk (mailto:investorrelations@lslps.co.uk)

 Helen Tarbet
 Sophie Wills
 George Beale
 Buchanan                                       0207 466 5000 / LSL@buchanan.uk.com

 

 

Notes on LSL

LSL is one of the largest providers of services to mortgage intermediaries and
estate agent franchisees.

 

Its c.2,700 advisers represent around 11% of the total purchase and remortgage
market.

 

Its 61 estate agency franchisees operate in 306 territories making it one of
the leading providers of estate agency franchise services in the UK with
leading local brands.

 

LSL is also one of the UK's largest providers of surveying and valuation
services, supplying seven out of the ten largest lenders in the UK.

 

For further information please visit LSL's website: lslps.co.uk
(http://www.lslps.co.uk/)

 

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