LSL Property Services plc (LON:LSL) has issued a pre-close trading update for the year ended 31 December 2021.
Highlights
· On track with the execution of the Group’s Financial Services led growth strategy, with further investment in Financial Services during H2 which is expected to deliver benefits in future years
· Financial adviser numbers at 31 December 2021 increased by a record 273 year-on-year to 2,858
· Surveying Underlying Operating Margin increased to c.25% (20202: 21.0%), benefiting from operational efficiency and improved income per job
· Estate Agency increased its residential market share across its core catchment areas
· Estate Agency residential pipeline conversion slowed in H2 2021, following the record market levels experienced in the lead up to the 30 June 2021 Stamp Duty deadline and capacity issues in the conveyancing market
· We retain a strong residential sales exchange pipeline at 31 December 2021, 7% lower than the record pipelines reported at the same date in 2020. Residential fall-throughs remain at normal levels
Financial performance
· Group Revenue expected to increase by around c.23% to £327m (2020: £266.7m)
· Record Group Underlying Operating Profit2, significantly ahead of prior year, and in line with the LSL Board’s expectations
· Net Cash at 31 December 2021 of about £48.5m (31 December 2020: Net Bank Debt £1.6m)
Strong balance sheet
We announced the sale of investments in two non-core businesses to simplify the Group structure, LMS (May 2021) and TM Group (July 2021), for a combined total of £41.3m in cash. LSL estimates the lost profit contribution for these two businesses in 2021 to be c.£1m.
LSL’s balance sheet and strong cash generation enables further investment to deliver the Group’s ambitious growth strategy, including expected investment in Pivotal Growth, established in April 2021 as a joint venture with Pollen Street Capital, to “buy and build” a leading national mortgage broker.
Preliminary results
LSL Property Services will provide an update on current trading, outlook, and strategic progress with the release of our preliminary results for the year ended 31 December 2021, which we expect to report on Wednesday 16 March 2022.
Notes to trading update:
- This trading update is based on preliminary unaudited financial information
- Group Underlying Operating Profit is before exceptional costs, contingent consideration, amortisation of intangible assets and share-based payments. 2020 Surveying Underlying Operating Margin is stated on post-COVID 19 costs basis
