LSL reveals its £11.8m stake in Zoopla

LSL has revealed that it increased its shareholding in Zoopla ahead of its merger with the Digital Property Group portals. LSL now owns a 4.8% stake which it estimates is now worth £11.8m.

The disclosure came in yesterday’s interim financial results of the parent company of Your Move and Reeds Rains estate agents, which showed that pre-tax profits slumped 62% last year, down from £17.6m to £6.7m.

The fall was due to a provision for professional indemnity claims of £17.3m, relating to valuations.

Despite the fall, underlying profits bounced up 11% and there was ‘impressive growth’ in the estate agency division – now 31% more profitable than at the height of the market in 2006 when transaction volumes were more than double.

The estate agency division delivered a 138% increase in underlying operating profits to £24.4m, up from £10.3n the year before. This was despite “no significant improvement in transaction levels” says the group’s interim results for 2012.

Profit per branch, excluding Marsh & Parsons, was £21,000 last year, up from £6,000 in 2011.

London agency Marsh & Parsons, which was acquired by LSL in November 2011, was said to have put in a solid performance in its first full year in new ownership. It increased its revenue by 2% to £27.3m and operating profits by 6% to £7.2m.

New estate agency acquisitions last year were Davis Tate and Lauristons. Both business have performed well, says LSL, which is looking for similar deals.

Lettings was much expanded, with 101 new members of staff taken on, helping to deliver a revenue increase of 23% to £35.8m.

Financial services income delivered through both LSL’s estate agency branches and its financial service intermediary network rose by 15% last year.

In total, LSL arranged mortgage lending of £7.1bn, up from £6.8bn in 2011, out of a total intermediary lending marketed estimated at £72bn.

LSL warns that market conditions were difficult last year, and that it is still too early to judge whether there will be a “significant positive impact on the market” from the Funding for Lending scheme.

Roger Matthews, LSL chairman, said: “LSL has made strong progress in 2012 despite continued challenging market conditions. The group reported double digit revenue growth in 2012 and is in a stronger position than a year ago, with the estate agency division demonstrating significant organic growth potential.

“We remain committed to our strategy of driving organic growth in all parts of the business and plan to invest further in lettings and to focus on growing market share in the estate agency division to maintain our excellent progress.

“We will also continue to invest in our financial services division and expand the provision of surveying services to private buyers.

“The group continues to be extremely cash generative and maintains a strong balance sheet, having reduced the level of net debt by 25% to £26.6m.

“We remain confident that pursuing a strategy of investment in organic growth initiatives combined with acquisitions will deliver increased shareholder value into the medium term even without a recovery in market conditions.”