Belvoir Lettings PLC (AIM:BLV), the UK's largest property franchise, issues the following trading update ahead of the Group's Annual General Meeting to be held at 11.30a.m. today.
Trading during the first four months of the current financial year has continued well and is in line with the Board's expectations with increased revenue from the three key income streams of residential lettings, property sales and financial services. The Group continues to follow its successful growth strategy of acquisition and diversification at both the corporate and the franchisee level.
Our franchisees, across all three brands, have completed on ten portfolio transactions under our Assisted Acquisitions programme adding £3.2m network revenue, nearly 2,500 managed properties and £0.3m p.a. of recurring Management Service Fees ("MSF"). The Group is seeing an unprecedented number of smaller independent lettings agents choosing to withdraw from the sector in the face of increased legislation and the previously announced ban on tenant fees, now expected in the Spring of 2019. As a result, there remains a strong pipeline of further opportunities to underpin the Group's growth target for 2018.
Our 2017 corporate acquisition of Brook Financial Services ("Brook") outperformed the same period last year (when not part of the Group) by over 20%, as its offering of financial services is rolled out across our networks. Brook is providing our traditional lettings franchisees, many of whom are already diversifying into property sales, the opportunity to increase their income per property transaction through the addition of financial services.
We continue to bring fresh impetus to the Group with four new franchise owners having been recruited in the year to date; one has taken on the previously corporate-owned Belvoir Spalding, another is acquiring an existing Belvoir office and two (one Belvoir and one Newton Fallowell) are opening in a new territory. The three new Belvoir franchise owners are each in the process of acquiring a local lettings portfolio to give them an enhanced start.
Dorian Gonsalves, CEO, commented:
"The Group has seen a healthy start to 2018 including increased MSF from property sales despite a widely reported background of softening house transactions. A further ten of our franchise owners have substantially grown their businesses by acquiring a local competitor and we are seeing our lettings-biased Belvoir and Northwood franchisees extending their services to encompass property sales and related financial services. We continue to work closely with our franchisees, providing the support they need to strengthen their businesses, ensuring they are in the best position to take advantage of the opportunities arising from changes in the sector."