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LSL trading update shows struggling residential but robust financial services

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  • 29/11/2017
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LSL trading update shows struggling residential but robust financial services
LSL Property Services has revealed cooling house sales but healthy uptick in financial services revenue in its trading update for the period up to 31 October 2017.

Group revenues for the ten months ending in October increased by 1.1% to £260.9m, against £258m in 2016.

Within the ten month period, estate agency revenues were up a net 1.6% – although residential sales, which make up a part of estate agency revenues, fell by 9% – whilst surveying fell by 0.7%.

For the four months ending in October, group revenues stood at £109.4m – an annualised 2.6% increase against the £106.6m seen in 2016.

In this period, income from residential sales exchange fell by 2% in reflection of lowered exchange volumes, whilst lettings revenue grew by 4% and financial services revenue jumped 17%.

Nevertheless, the LSL board anticipates the full year 2017 underlying operating profit will be “marginally ahead of its prior expectations.”

The trading update also noted the subdued market activity throughout 2017, saying that the group will “continue to remain cautious on the market outlook for 2018” amidst continued uncertainty over UK economic conditions and the global political environment.

Adam Castleton, group chief financial officer of LSL, acknowledged that it has been a challenging market, and expects to see the difficulties continue into the next year.

Nevertheless, he said the results were “relatively well received from the people we’ve spoken to today.”

“I think we performed pretty well in a difficult market,” said Castleton, “and there’s been continuing growth in the financial services area.”

“We’re looking forward to updating the market at the end of the financial year,” he added.

Net bank debt as of 31 October stood at £42.3m, compared to the £43.5m owed in 2016.

LSL also said that it expects to disclose in the 2017 financial statements a £5.6m gain on disposal for the completed sale of its investment in the Guild of Professional Estate Agents (GPEA) on 12 July 2017, with consideration made up of £3m cash and ordinary shared in eProp Services plc.

 

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