Downgraded profit forecasts are no reason to avoid residential property rental agency Belvoir Lettings (BLV:AIM) at 112p. We see long-term growth in lettings demand as so many people cannot afford to buy their own home.

Cantor Fitzgerald analyst Ian Osborn has reduced his pre-tax profit expectations for 2016 by 8.3% to £3.3 million due to rising costs and management funding acquisitions through issuing new shares.

The new figure still represents a 50% improvement on the £2.2 million pre-tax profit recorded in 2015.

Future growth is expected to be driven by recruiting new franchisees, making acquisitions and finding franchisees to take over the branches owned by the group.

Osborn forecasts Belvoir will open a net eight new outlets, aside from any added to the network by acquisitions.

The company is expected to pay 6.9p a share dividend in 2016, according to Cantor Fitzgerald’s forecasts. This represents a 5% prospective dividend yield.



Growth expectations remain strong after a positive set of results for 2015 saw the franchisor’s sales and earnings per share (EPS) figures beat forecasts.

Revenue improved 19% to £6.9 million, EPS was 16% higher at 6.5p while pre-tax profit jumped 25% to £2.2 million.

The stock presently trades on 13.3 times earnings based on the prospective 8.4p EPS estimate.

Web - Belvoir - 12 April 2016


Issue Date: 12 Apr 2016