Latest market data from LSL Property Services - which includes the Your Move and Reeds Rain brands - shows a 10 per cent rise in lettings income in the first half of the year.
However, that’s not enough to persuade the firm away from its switch from residential agency to financial services.
In its half year figures LSL reveals that it’s suffered a big fall in revenues and profits in the worsening housing market but insists it is making “significant” progress towards a stronger business by focussing on financial services.
The company hopes the strategy of franchising all of its agency branches, plus its sell-off of high profile London agency Marsh & Parsons, will create a “a higher margin, higher cash converting business that will perform more consistently through market cycles”.
LSL says its transition makes year-on-year comparisons difficult - possibly just as well as the figures released by the firm show a 34 per cent fall in revenues to £72.5m in the first half of 2023, while underlying operating profits plummeted 76 per cent to £3.3m.
Chief executive David Stewart says: “It has been a period of significant strategic progress to simplify the group and create a more focused business that will perform more consistently through market cycles. I’m proud of how the team has worked tirelessly to reshape LSL while navigating significant macroeconomic headwinds and thank them for their focus and dedication - it is a significant achievement.
“During the period we have successfully executed the transition of estate agency to a franchise business. We have similarly focused our financial services division to become an exclusively business-to-business service provider, completing the transfer of each of our direct-to-consumer businesses to Pivotal Growth. In August, we also announced the acquisition of TenetLime, which adds up to 278 advisers to our network, subject to FCA approval.
“Our strong balance sheet continues to provide opportunities to consider value-enhancing M&A and invest in organic growth initiatives in our core segments, whilst maintaining our interim dividend at 4p per share.”
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However you want to position it to shareholders and the City, LSL EA division used to turnover about £240m and make £35m profit on its own, let alone the rest of the business which now only makes £3m all in? Im not sure about strategy that reduces profits by 95% can be called a significant achievement.
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