Belvoir Group PLC – BLV – Interim Results

Belvoir Group PLC – BLV – Interim Results

Belvoir Group PLC (AIM: BLV), the UK's largest property franchise, is pleased to announce Interim Results for the six months ended 30 June 2020.


Financial Highlights

·    8% increase in revenue to £9,774,000 (H1 2019: £9,047,000), of which 2% related to the underlying business and 6% to the acquired Lovelle network

·    Management Service Fees (MSF) held up well at £4,157,000 (H1 2019: £4,201,000), only a 1% decrease

·    7% increase in Financial Services revenue to £4,253,000 (H1 2019: £3,969,000)

·    8% increase in gross profit to £6,720,000 (H1 2019: £6,198,000)

·    17% increase in profit before tax to £3,164,000 (H1 2019: £2,695,000) with 7% arising from the acquired Lovelle network and 10% from the underlying business

·    16% increase in basic earnings per share to 7.3p (2019: 6.3p)

·    The impact of Covid-19 on the Group's expected revenue was substantially mitigated by a reduction in operating expenses and £250,000 of government Covid-19 support

·    Overall H1 results are in line with management's pre Covid-19 expectations

Reinstatement of Dividend

·    The Board has reinstated its progressive dividend policy with the payment of an interim dividend of 3.4p per share (H1 2019: 3.4p) with interim dividend cover at 2.1x (H1 2019: 2.0x)

·    The Board also announces an additional 2.0p per share payable with the interim dividend as partial compensation for the suspension of the final 2019 dividend, with a view to a further catch-up payment at the time of the final 2020 dividend, dependent on prevailing circumstances at that time


Operational Highlights

·    Completion in January on the acquisition of the 17-office Lovelle estate agency network

·    Net increase of 38 financial services advisers bringing total to 174 (H1 2019: 136)

·    Gross profit split of 62% lettings: 15% sales: 18% financial services: 5% other; relatively unchanged reflecting continued lettings bias

·    Delivery of 35 training webinars, with over 1,650 attendees, to support our networks through the two month estate agency lockdown

·    On 9 July 2020 the Group entered into a strategic alliance with The Nottingham Building Society ("The Nottingham") under which they transferred their estate and lettings agency activity to Belvoir.



Dorian Gonsalves, Chief Executive Officer of Belvoir Group, commenting on the results, said:


"I am delighted to report another half year of strategic and trading growth, having bought and integrated the Lovelle network and increased revenue and profitability from the underlying business.  This is testament to the resilience of our franchise model during what has been a challenging time for our sector and the wider economy and a busy time for Belvoir.


"The reliable and recurring nature of our lettings business, which underpins 62% of gross profit, was evident during H1 with lettings operating on par with 2019.  A strong Q1 for property sales and financial services was followed by a lockdown on estate agency activity for half of Q2 during which time our franchisees focused on looking after their pipeline so as to safeguard sales post-lockdown, and our financial advisers switched to selling remortgage and income and life protection products.  Since our sector was 'unlocked' in May, both property sales and financial services activities have been at record-breaking levels for the Group in terms of instructions, sales agreed and written mortgages.  These are expected to convert to sales fees and banked mortgage income during the remainder of the year.


"H2 started with further strategic progress through our alliance with The Nottingham Building Society.  In addition to taking on their estate and lettings agency business, a number of our franchisees will also have the opportunity to offer The Nottingham members high quality estate agency services from co-branded building society branches.                                                                                                                                                                                                                                                                                                                                        


"Given results are on track in H1, a promising start to H2, and a strong pipeline of agreed property sales and written mortgage business, the Board is confident of meeting management's pre-Covid expectations for the full year.  As a reflection of the Board's confidence in the improving outlook, it was decided to reinstate our progressive dividend policy including a partial catch-up of the previously suspended final 2019 dividend."

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