6 March 2024
LSL Property Services plc ("LSL" or "Group")
Trading Update
2024 trading ahead of expectations
In advance of the 2023 Preliminary results, LSL issues a trading update for the first two months of 2024.
Highlights
Following a positive final quarter in 2023, momentum has increased at the start of the new financial year with positive activity levels across the Group.
At the end of February 2024, Group Underlying Operating Profit1 was materially ahead of the Board's previous expectations and around £7.5m ahead of the same period in 2023 and around £2.5m above 2022, reflecting in particular very strong trading in the Surveying & Valuation Division.
Surveying & Valuation Division
From the middle of January there has been a material and sustained increase in valuation instructions reflecting the benefit of contract wins as well as increased market activity, and a reduced proportion of product transfer business in the mortgage market.
Across the first two months of the year, Surveying & Valuation income per day was 50% higher than for the equivalent period in 2023 and in February was at its highest level since the market disruption that followed the mini budget in October 2022, and approaching the very strong performance recorded in Q1 2022.
Financial Services Division
Mortgage completions were in line with our expectations, reflecting the opening pipeline at 1 January 2024. Consistent with the surveying valuation instructions, LSL mortgage applications over the first two months of the year are significantly ahead of expectations with February mortgage applications per day 23% higher than 2023 and 5% above the strong performance in 2022. The benefit of these applications will be seen in completions during the first half of the year.
Estate Agency Franchising Division
Early performance in 2024 reflects the benefit of the reduced volatility of the franchising model. Cumulative profit over the first two months of the year was around £1m compared to losses of £1.5m and £2m for the same period in 2023 and 2022 respectively.
Balance Sheet
The Group retains a strong balance sheet. Net Cash at 29 February 2024 was c.£28m (31 December 2023: £34.9m) with the reduction reflecting the acquisition of the TenetLime mortgage network which completed at the beginning of February.
Outlook
Whilst commentators have pointed to improving conditions in the mortgage and housing markets, it remains difficult to predict the future path of these with confidence. However, early trading reaffirms the Board's confidence that profits in 2024 will be materially ahead of 2023. The earlier than expected recovery means that even at this stage of the year, the Board's expectations for the full year have increased.
A further update on current trading, outlook and progress against our strategy will be shared with the release of our Preliminary Results in April.
Board changes
We will move at pace to appoint an independent Chair who will work with the Board to continue to maintain an open dialogue with shareholders, and drive forward the evolution of our strategy, building on the steps taken in 2023 to restructure the Group.
Notes to trading update:
1. Group Underlying Operating Profit is including discontinued operations, before exceptional costs, contingent consideration assets & liabilities, amortisation of intangible assets and share-based payments
For further information, please contact:
| David Stewart, Group Chief Executive Officer | |
| Adam Castleton, Group Chief Financial Officer | |
| LSL Property Services plc | |
| | |
| Helen Tarbet | |
| Sophie Wills | |
| George Beale | |
| Buchanan | 0207 466 5000 / LSL@buchanan.uk.com |
This announcement contains inside information.
Notes on LSL
LSL is one of the largest providers of services to mortgage intermediaries and estate agent franchisees.
Its c.2,800 advisers represent around 11% of the total purchase and remortgage market.
Its 61 estate agency franchisees operate in over 300 territories making it one of the leading providers of estate agency franchise services in the UK with leading local brands.
LSL is also one of the UK's largest providers of surveying and valuation services, supplying seven out of the ten largest lenders in the UK.
For further information please visit LSL's website: lslps.co.uk
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