REG - LSL Property Svcs. - Sale of new build assets to Pivotal Growth

LSL Property ServicesAnnouncement

13/01/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230113:nRSM6592Ma&default-theme=true

RNS Number : 6592M  LSL Property Services PLC  13 January 2023

 
13 January 2023

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

Sale of LSL's new build assets to further simplify the Group and build scale
in Pivotal Growth

LSL announces the sale of its new build mortgage and protection brokerage
firms Group First Limited ("Group First") and RSC New Homes Limited ("RSC") to
Pivotal Growth Limited ("Pivotal Growth"), its joint venture with Pollen
Street Capital, established in 2021 to "buy and build" a leading national
mortgage broker.

The consideration payable is 7x the combined Group First and RSC EBITDA in
calendar year 2024, subject to agreed working capital adjustments, capped at a
maximum of £20m. The consideration is payable in cash to LSL during H1 2025,
at which time LSL will consider the most effective use of the funds.

Going forward, LSL will continue to account for its 47.8% equity share of
Pivotal Growth profits after tax, which will include the profits generated by
Group First and RSC. LSL will also benefit from the incremental profits of
Group First and RSC in any future Pivotal Growth exit event.

These disposals are in line with LSL's strategy to simplify the Group, and to
focus on developing further its leading Financial Services Network business.
We also believe that Pivotal Growth is better placed to increase the value of
Group First and RSC, and these acquisitions mark a significant step in
building critical mass in the new build brokerage sector, that has been
targeted by Pivotal, as it becomes a leading player in this space.

For the 2021 financial year, the value of Group First's gross assets was
£15.2m and profit for the year was £1.4m. The value of RSC's gross assets at
31 December 2021 was £3.7m and profit for the year was £0.7m. Combined
profit for the 2022 financial year is expected to be £0.7m, and the impact of
the disposals will, therefore, not be material to the Group.

David Stewart, Chief Executive, commented:

"The transfer of Group First and RSC represents an important step in the
execution of our strategy and in the development of Pivotal Growth. Financial
Services is at the heart of the Group's growth strategy where we have
identified significant opportunities to develop LSL's position as the leading
provider of services to independent mortgage brokers.

"These transactions help to simplify the Group structure to allow us to focus
on maximising these business-to-business opportunities, whilst also reducing
exposure to housing market cycles. Pivotal Growth was established in 2021 to
exploit the opportunities we had identified in the direct-to-consumer mortgage
broking market, and growth in the new build sector is a strategic focus for
Pivotal Growth."

For further information, please contact:

 

 David Stewart, Group CEO

 Adam Castleton, Group CFO
 LSL Property Services plc   investorrelations@lslps.co.uk (mailto:investorrelations@lslps.co.uk)
 Helen Tarbet

 Simon Compton

 George Beale
 Buchanan                    0207 466 5000  LSL@buchanan.uk.com (mailto:LSL@buchanan.uk.com)

 

This announcement contains inside information.

 

Notes on LSL

LSL is one of the largest providers of services to mortgage intermediaries and
mortgage and protection advice to estate agency customers,
completing around £41bn of mortgages in 2021. It represents around 10% of
the total purchase and re-mortgage market with around 2,900 financial
advisers. PRIMIS was named Best Network by Money Marketing in their 2021
awards and Best Network, 300+ appointed representatives at the 2022 Mortgage
Strategy Awards.

LSL is one of the UK's largest providers of surveying and valuation
services, supplying seven out of the ten largest lenders in the UK,
employing around 500 operational surveyors, and performing over 500,000
valuations and surveys per annum for key lender clients. It was named Best
Surveying Firm at the 2022 Mortgage Finance Gazette Awards and Best Surveyor
at the 2022 Equity Release Awards with Mortgage Solutions.

LSL also operates a network of 225 owned and 128 franchised estate agency
branches.

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

 

 

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
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  DISUOONROBUAARR