Ahead of its annual general meeting (AGM), Bill Shannon, outgoing non-executive chair, said that two years ago the firm had set out a new strategy that placed its financial services network at its “heart”.
He said: “As well as capitalising on the significant growth potential we had identified in financial services, we resolved to develop a simpler and more resilient business model that was less vulnerable to housing market cycles, allowing us to better pursue other exciting opportunities to grow our leading surveying and valuations business and develop the potential of our estate agency franchise operation.”
Shannon continued that market conditions had “often been difficult” but said it was pleased with the “very substantial progress we have made”.
This included “consistent and strong financial performance” in its financial services network and surveying and valuations business, the transfer of its direct-to-consumer brokers to Pivotal Growth and its disposal of Marsh and Parsons at an “attractive valuation”.
Estate agencies to become franchises
Shannon added that in May it said that its entire owned estate agency network will convert to franchises, which will transform the firm into a “business-to-business services provider, with a much smaller cost base and significantly less exposure to housing market cycles”.
Of its 183 previously-owned branches, around 143 are trading as franchises with the remaining 40 expected to “complete imminently”.
Shannon said: “The resulting business, with over 60 franchisees operating more than 300 branches, will be a leading player in the sector and is well-placed to grow.
“Importantly, it is also a significantly less complex business to manage, freeing up valuable management time, and will enable the group to deliver margins that are structurally higher than those it has reported historically.”
Chair to step down
Shannon said that market conditions “remain challenging as expected” in the first half of the year, but there have been some “early signs of improved trading” and it expected an improvement in the second half of the year.
This is supported by the remortgage market and “increasing consumer confidence”.
Shannon confirmed that, following the AGM, he would step down as chair and from the board.
He said: “I have thoroughly enjoyed my time on the board and following the significant strategic progress we have been able to report, I believe the group is now very well-placed for future growth.
“I would like to thank my board colleagues, management and the staff at LSL for their support, which I appreciate greatly. I will follow the progress of the group with great interest, and I have every confidence it will go from strength to strength.”
