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TODAY'S OTHER NEWS

More of the same expected this year from ‘profit hunter’ LSL

LSL, the UK’s second largest estate agency division, has received a glowing endorsement from two property market analysts.

In a note issued to investors last week, equity analysts Anthony Codling and Sam Cullen of Jefferies handed LSL a 'Buy' rating.

The analysts made reference to LSL’s performance as the ‘only major UK estate agent to grow profits in 2015’.

“LSL did not make bold claims like some that it would grow without help from the market, it just got on with it,” say the analysts. “We remain buyers of the shares.”

Jefferies says LSL has the ambition to grow average operating profits per branch from £42,500 to £80,000+.

It also claims that Marsh & Parsons, which was acquired by LSL in 2011, can grow its branch network by ten offices to a total of 35 during 2016.

The note also predicts that LSL will make several further lettings book acquisitions this year.

Codling and Cullen suggest that LSL will produce more of the same this year but warn that it remains exposed due to the UK’s housing market. 

They say that a drop in house price growth or transaction levels could lead them to reduce their estimates and that should the UK vote to leave the EU in June, their estimates could also be revised downwards.

Codling frequently comments on the property market and Jefferies is widely known as the firm which helped Zoopla to launch on the stock market in 2014.

He recently suggested that Rightmove is seeking to increase its involvement in the day-to-day management of estate agencies and that Zoopla is no longer 'competing directly' with the UK's number one portal.

LSL’s positive assessment comes after Countrywide recently announced to the city that its operating profits dropped by 37% in 2015, while last week Foxtons reported that its profits dipped by 2.6% last year.

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