Estate Agent Today: LSL gets new 100m backing from high street banks
Thu 20 Jun 2013
LSL has upped its funding from the banks to 100m. Four high street banks are now backing the group, which operates estate agency chains Reeds Rains and Your Move as well as Marsh & Parsons, and also runs surveying, mortgages and other services.The new lending deal lasts for just over four years, and breaks down into a 5m overdraft facility plus a 95m
revolving credit facility.
The deal replaces a previous 75m funding package from Barclays and Lloyds. The new package is being provided by both those banks, plus HSBC and Santander. Each bank has committed funding of 25m. In a statement, LSL said: The amount of the new facility has been increased to provide additional debt capacity in line with the increase in group profitability over the last three years.
Steve Cooke, LSL group finance director, said:We are delighted with the support shown by our banking partners and are pleased to welcome HSBC and Santander into our banking arrangement. The new facility will enable LSL to continue to deliver its strategy of investing in organic growth initiatives and making selective value enhancing acquisitions. In May, in an update to investors, LSL sounded upbeat, saying there had been an increase in activity levels and that it planned to accelerate investment to increase its market share in estate agency.
However, last August, LSL announced a pre-tax loss of 7.9m for the first half of 2012, after having to set aside 17.3m to cover claims against its valuations business. At the same time, it announced the closure of some of its estate agency branches because of poor sales.
In February this year, LSL which also provides valuation and asset management services for lenders announced interim results for the whole of 2012 showing a profits slump of 62%, down from 17.6m to 6.7m. Despite the fall, it said that there had been impressive growth in its estate agency division, which it said was 31% more profitable than at the height of the market in 2006 when transactions were double.