AGM Statement
LSL Property Services plc, a leading provider of residential property services incorporating both estate agency
and surveying businesses, is holding its Annual General Meeting (AGM) today in London, where the following
comments will be made regarding current trading, financial performance and outlook for the current financial
year.
Market Backdrop:
Market volumes, as measured by Bank of England Total Mortgage1 and Total House Purchase Approvals1, have
increased significantly in the first two months of 2016 compared to the same period in 2015. This reflected
accelerating Buy-to-Let market activity ahead of the 1 April changes in Stamp Duty, compared to the same period
in 2015. The number of Total Mortgage Approvals1 for the two months to 29 February were up 25.1% relative to
the corresponding period last year, whilst the number of House Purchase Approvals1 were up 21.0% on the same
comparative basis. Although market volumes from the Bank of England are not yet available for March 2016,
market estimates indicate very strong volumes in March as completions accelerated still further ahead of the
Stamp Duty changes.
We expect that the acceleration of market activity in quarter one caused by the changes in Stamp Duty will soften
in quarter two and we have already seen this trend in our April trading.
Group Performance:
The Group has traded well year to date. Group revenues for the three months ended 31 March 2016 increased by
16.9% year on year as we benefited from the pre-Stamp Duty acceleration in market activity. The percentage
increase in revenue for each of the two and three month periods ended 29 February 2016 and 31 March 2016
respectively is set out below:
2 months to 29 February
3 months to 31 March
Estate Agency Estate Agency and Related Services:
The Estate Agency Division has traded well during the first three months of 2016 with the growth in exchange
income, lettings income and financial services income demonstrating the benefits of LSL’s Estate Agency strategy.
Surveying and Valuation Services:
The Surveying Division has traded well during the first three months of 2016: LSL’s continuing Estate Agency
strategy is to increase operating profit per branch; expand the number of Marsh & Parsons branches; grow
recurring revenue streams and evaluate selective acquisitions. LSL’s continuing Surveying strategy is to
maximise revenue generation from B2B customers and optimise capacity management. We expect that the
strong market activity in quarter one will soften in quarter two, caused in part by some caution among both buyers
and sellers in the run up to the EU Referendum on 23 June. The outlook for the year as a whole continues to be
in-line with the Board’s expectations.
The Group has a strong balance sheet, is extremely cash generative and is well placed to increase shareholder
value in a changing market with potential additional benefit from selective acquisitions.
1 Source: Bank of England for “House Purchase Approvals” and “Total Mortgage Approvals” 2015 & 2016
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