Belvoir Lettings PLC – Preliminary results

Belvoir Lettings PLC – Preliminary results

Belvoir Lettings plc (AIM: BLV), the UK's largest property franchise group, is pleased to announce its preliminary results for the year ended 31 December 2018.

Financial highlights

  • 21% increase in Group revenue to £13.7m (2017: £11.3m)
  • Growth in management service fees (MSF) of 7% to £8.5m (2017: £7.9m)
  • Strong lettings bias reflected in gross profit ratio of 71% lettings:18% sales:11% financial services (2017: 74%:19%:7%)
  • Exceptional credit of £0.8m on finalisation of Northwood earn out
  • 40% increase in profit before tax to £5.5m (2017: £3.9m)
  • Strong cash flow from operating activities of £4.6m (2017: £3.7m)
  • Increased year-end bank balance of £1.8m (2017: £1.4m)
  • Net debt of £9.6m (2017: £5.1m) following £4.2m Northwood earn out settled in cash and the £4.0m MAB Glos cash consideration.  Net debt to adjusted EBITDA is 1.8.  
  • Adjusted fully diluted EPS of 11.7p (2017: 10.7p)
  • Recommended final dividend up 9% to 3.8p (2017: 3.5p) giving total dividend for the year of 7.2p (2017: 6.9p)

Operational highlights

  • Acquisition of MAB Glos, a network of 87 financial services advisers operating through 64 offices
  • Further integration of Northwood into Group functions, reducing cost base by £0.2m p.a.
  • 26 (2017: 23) franchisee assisted acquisitions completed, adding over £6.9m (2017: £3.3m) of network revenue; ahead of £6.6m target
  • 8% increase in properties under management at 62,780 (2017: 58,020)
  • Average MSF per office up 8% to £28,333 (2017: £26,333)
  • Recruitment of ten (2017: six) new franchise owners
  • Net increase of 94 financial service advisers (including 87 MAB Glos advisers) to 123 (2017: 29)
  • Number of offices up to 365 (2017: 300)
  • Encouraging start to 2019

Dorian Gonsalves, Chief Executive Officer of Belvoir Lettings, commented:

"The Group achieved another year of significant growth with revenue up 21% to £13.7m (2017: £11.3m), outperforming both the sales and lettings elements of the housing market and the financial services market.  The increase in our like-for-like lettings MSF of 2.6% outstripped the 1% rental index, and lettings were boosted further by a 4.5% uplift from our assisted acquisitions programme which performed ahead of our expectations.  Meanwhile, our sales MSF increased by 8.4% against the backdrop of a flat sales market in which a 2% fall in the number of UK property transactions was compensated by a modest increase of 2.5% in house prices.  Revenue from Brook, our 2017 financial services acquisition, increased by 20%, on a full year basis, compared with a 3.7% increase in the value of gross mortgage advances. 

2018 saw the Group invest further into financial services with the acquisition of MAB Glos which has provided a platform for Belvoir to build a nationwide network of financial advisers to work with our franchise owners to maximise the sales of mortgages and other property-related financial services to our customers.

Belvoir is uniquely positioned within the property sector, benefiting from the agility of a franchise business model compared with the larger corporate players, whilst providing our networks with the Central Office systems and support, not available to the smaller independent agents.  Our value creating strategy has enabled us to consistently deliver profit growth for over two decades and achieve a threefold increase in profit before tax since 2014.  Belvoir is a strongly cash generative business with revenues underpinned by the recurring 'annuity-style' lettings income stream coupled with the diversification into complementary property-related services, which will enable the Group to overcome changes and outperform in the sector over the coming year."

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