LSL Property Services PLC on Thursday said its entire owned estate agency network of 183 branches will become franchises.

The Newcastle, England-based estate agency said franchise agreements have been reached with 143 of its 183 owned branches, with agreements for the remaining 40 branches at an advanced stage.

LSL said following the completion of these deals, it will supply services to a network of around 300 branches in the UK.

Significant cost reductions of around £110 million will be achieved ‘immediately’ from the franchise move.

This announcement follows a strategic review to ‘simplify’ the company and focus its activities on business-to-business services, LSL said.

Looking ahead, the company expects the move to have a neutral impact on its 2023 underlying operating profit, but noted that the change will be accretive to LSL’s profit from 2024 onwards.

Chief Executive Officer David Stewart said: ‘The estate agency franchise model is similar to our financial services network and it will make us a much simpler, more resilient business whilst opening up new opportunities to grow our estate agency division. I am delighted we have been able to complete this major project and excited about the growth opportunities ahead.’

Shares in LSL were up 6.2% at 296.23 pence each in London on Thursday morning.

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