Mortgage Strategy: LSL posts 62% drop in pre-tax profits but group revenues rise 12%
Thu 28 Feb 2013
LSL posts 62% drop in pre-tax profits but group revenue rises 12%
Cash generated from operations increased by 28 per cent to 26.9m, up from 21.3m in 2011, after capital expenditure of 5.7m.
Total mortgage approvals for 2012, were down 6 per cent to 1.16m, from 1.23m in 2011 which included a 12 per cent reduction in remortgages, down from 387,000 to 340,000.
In total the Group arranged mortgage lending of 7.1bn during 2012 up from 6.8bn in 2011 - out of a total intermediary lending market estimated at 72bn.
However, LSL also incurred exceptional costs of 17.7m in 2012, up from 2m in 2011, which included PI costs of 17.3m.
A non-cash charge of 4.2m was made in relation to contingent considerations resulting from the acquisitions of estate agents March & Parsons, Davis Tate and Lauristons.
The acquisition of Marsh & Parsons in November 2011 resulted in an exceptional expense of 1.8m in 2012 while the acquisitions of Davis Tate and Lauristons in 2012 resulted in an exceptional expense of 2.3m.
The amortisation of intangible assets during the year reduced to 3.5m, from 8.5m following the expiration of the valuation and associated panel management services contract with mortgage provider Cheltenham and Gloucester.
LSL Property Services chairman Roger Matthews says: LSL has made strong progress in 2012 despite continued challenging market conditions. The Group reported double digit revenue growth in 2012 and is in a stronger position than a year ago with the Estate Agency Division demonstrating significant organic growth potential. We remain committed to our strategy of driving organic growth in all parts of the business and plan to invest further in Lettings and to focus on growing market share in the Estate Agency division to maintain our excellent progress.
We will also continue to invest in our Financial Services division and expand the provision of Surveying services to private buyers.
The Group continues to be extremely cash generative and maintains a strong balance sheet, having reduced the level of net debt by 25 per cent to 26.6m. We remain confident that pursuing a strategy of investment in organic growth initiatives combined with acquisitions will deliver increased shareholder value into the medium term even without a recovery in market conditions.