Property group's 2014 results are its best ever
Fri 13 Mar 2015
The Newcastle based LSL Property Services plc has reported a record year.
Financial results for the 12 months ending December 31, 2014 show the company achieved underlying operating profit of 42m, up 13% from 37.1m in 2013.
The firm has never achieved such a high figure, even during the peak of the property market boom.
Group revenues, meanwhile, rose 11% from 258.6m to 287.5m, while profit before tax increased 87% from 17.1m to 31.9m.
According to a report accompanying the results, the group managed to make strong progress "against a rapidly changing market backdrop."
The estate agency division, which runs the likes of Your Move and Reeds Rains, delivered a particularly impresive performance, increasing operating profit by 16% to 33.9m and growing profit per branch - excluding Marsh & Parsons - by 44% to 46,000.
In the surveying business, mean-while, underlying profit performance was maintained as a result of contract wins and efficiency improvements offset by a decline in volumes.
During the year, LSL acquisitions included Hawes & Co, a London based agent with six branches, along with 10 small lettings books purchased for a consideration of 1.8m. The company, which says it will continue to acquire attractive businesses, likewise benefited significantly from the initial public offering (IPO) of Zoopla, an initial investment cost of 1.9m increasing in value to 44.1m.
The report said: "We took the decision to sell 48.9% of our share-holding in Zoopla at IPO. As a result, we have generated a 19.8m exceptional profit on disposal while still retaining a 2.6% shareholding, which has been revalued in the balance sheet at 21.3m.
"In addition, we received a total divident of 1.1m from Zoopla during the year."
The company which saw head-count drop during the period from 5,299 to 5,222 "in light of the softening in the market", is proposing a final ordinary dividend per share of 8.3p, up from 7.2p in 2013, growing the full year ordinary dividend by 17% to 12.3p.
LSL group chairman Simon Embley said: "I am very pleased to report that 2014 was a record year for the group with underlying operating profit higher than LSL achieved in the property market peak of 2007.
"The year saw the orderly transition of senior management, with Ian Crabb's first full year as group CEO and Adrian Gill assuming responsibility for the estate agency division.
"The year also saw the achievement of our profitability per branch target that we set in 2011, while Marsh & Parsons expanded its branch footprint in a difficult market. The surveying division secured new contracts on improved margins."
He added that the group had a robust balance sheet, was extremely cash generative at the operational level and was well-positioned to capitalise on changing market conditions.
Looking forward, he said: "The forthcoming year is expected to see uncertain market conditions in the first half with the potential for improved market conditions during the second half of the year.
"Year on year, market comparatives in the first quarter are expected to be adverse in part due to the lower opening pipeline of activity following the weaker last quarter of 2014.
"Whilst we are seeing improvements currently, the second quarter is expected to be impacted by the upcoming general election. Against this uncertain market backdrop, the group remains committed to driving profitable organic growth across the business."