LSL Property Services has announced a considerable surge in operating profits for the first half of the year, despite challenges in the housing market. The company’s transition to a franchise model and a national rise in mortgage approvals have been pivotal in this performance.
The Newcastle-based group, previously operating under the Your Move and Reeds Rains brands, reported a 72% increase in group operating profit to £13 million compared to the same period in 2023. Additionally, the group’s underlying operating profit from total operations soared by 354%, reaching £14.4 million, as revenue rose by 18% to £85.4 million.
Chief Executive Dave Stewart attributed these results to significant transformations within the company, including the decision to offload 183 estate agent branches to franchisees last year. This strategic move resulted in savings of £140 million in annualised total operating costs, with the latest half-year results showing a 17% improvement in operating margins over the first half of 2023.
Despite a ‘fairly muted’ market, where lending was 10% below the 10-year average and housing sales were down by 14%, LSL Property Services managed to enhance its financial performance. The acquisition of mortgage and protection advisory business TenetLime, formerly a part of the defunct Tenet Group, bolstered its financial services division and increased its market share in the mortgage sector.
During this period, the financial services businesses experienced an increase in underlying operating profits from £3.8 million to £4.3 million. The group’s surveying and valuations business also showed recovery, with underlying operating profit rising to £12.9 million from £3.7 million in the first half of the previous year. Notably, mortgage approvals were 14% higher than the same time in 2023, primarily due to increased purchase approvals, while remortgage and other approvals remained stable.
Furthermore, the joint venture with Pollen Street Capital showed improvement, supported by the acquisition of five businesses in 2024 and an increase in adviser numbers. Pivotal Growth, the resulting entity, is now among the largest mortgage and protection brokers in the United Kingdom.
Dave Stewart remarked, ‘Following a period of significant strategic transformation, we have delivered a robust financial performance in the first half of 2024 during a period in which our end markets have been fairly muted. Each of our businesses has achieved strong market share whilst focusing on delivering against our strategic priorities and putting in place a solid platform for future growth. Today, LSL is a more streamlined, agile group comprising three strong businesses, each with attractive organic growth opportunities that are well positioned to capitalise from any further improvement in the housing and mortgage markets. Our focus is on maximising the performance of our businesses to deliver value to shareholders.’
In conclusion, LSL Property Services’ strategic restructuring and expansion into new market areas have enabled the company to achieve substantial profit growth despite existing market challenges. The company’s future focus remains on capitalising on market improvements and delivering sustained value to shareholders.
