LSL property services surpass expectations
LSL Property Services has reported a positive start to the year as operating profits outpace expectations.
The Newcastle-based group, which includes brands such as Your Move and Reeds Rains, told investors that operating profits in the first two months of the year were £7.5m ahead of 2023 levels and £2.5m above 2022 levels. It said there had been particularly strong trading across its surveying and valuation business.
It pointed to increased activity from mid-January thanks to contract wins and a healthier market. The division saw income per day 50% higher than the same period of 2023 and in February at its highest level since Liz Truss’ mini-Budget in October 2022.
LSL bosses said they remained cautious about the year’s outlook, despite positive sentiments among contemporaries in the market. They described an earlier than expected recovery which would lead to profits well ahead of 2023.
Elsewhere, in the group’s financial services division, mortgage completions met expectations while applications over the first two months of 2024 were ahead of expectations at 23% higher per day and 5% above 2022’s strong performance. LSL said the applications would benefit the first half of the year.
And a major shake-up of the group’s estate agency division which included franchising its network of more than 180 locations was said to be paying off with lower volatility. The division turned a profit of £1m in the first two months of the year, compared with losses of £1.5m and £2m for the same period in 2023 and 2022.
Preliminary results are expected for LSL next month when it will hope to report a turnaround in profitability, which had been impacted by the fallout from 2022’s mini-Budget and its disruption to the mortgage market.
Franchising the estate agency business was intended to cut out most of the division’s cost base, reducing it from £125m to £2.5m. The group has ambitions to provide estate agency services to more than 300 branches operated by 62 franchisees under the Your Move, Reeds Rains and LSL group brands.
Last month LSL issued a trading update in which it said 2023 group revenue from continuing operations was £144m, down from £217m.