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LSL the latest firm expected to enter 'digital' market

LSL Property Services - which owns high street agency brands Your Move, Reeds Rains and Marsh & Parsons - is the latest agency to state its interest in the online/hybrid market.

Upon reporting its preliminary results for the year to December 31 2016, the firm said it is 'exploring options to capitalise on the growth in consumer acceptance of online/hybrid agency business models'.

It says it has undertaken 'extensive consumer and market research' and is now progressing to the next phase by exploring and evaluating its 'digital opportunities'.

LSL says it will provide a further update on the subject to shareholders at some point in 2017.

If LSL - which currently runs 12 agency brands - enters the online/hybrid market it will be the latest firm to follow high profile moves to enter the space by competitors Countrywide, Connells, Savills and Martin & Co.

In a note issued to investors yesterday morning, Jefferies analysts Anthony Codling and Sam Cullen said they expect LSL to be able to sustain an online or hybrid model.

"Aside from one notable exception we doubt that the rest of the digital players have the scale to make a low income model work, whereas LSL is the third largest agent in the UK and has more listings than all of the digital players (bar one) combined," reads the statement.

"LSL sat back whilst the other majors laid their digital bets and is now on the verge of laying its own."

The organisation's preliminary results for the year to December 31 2016 show a considerable increase in pre-tax profits, up 65% on 2015 to £63.5 million. 

A significant contributing factor to this is the firm's disposal of Zoopla's shares, accounting for £32.9 million.

Group revenue was up 2% to £307.8 million, while underlying profit dropped by 19% from £42.9 million in 2015 to £34.6 million last year.

Estate agency revenue increased by 3% and lettings income growth was recorded at 9%.

The organisation's leading London brand - Marsh & Parsons - registered a 5% decline in total revenues, despite lettings revenue growth of 6%.

Marsh & Parsons' profits dropped by 36% to £4.4 million.

LSL says it considers the 26-branch brand's performance to be 'solid' in light of 'overall London market conditions'.

Commenting on the group's overall results, chairman Simon Embley said: "Following a strong first half performance, the Group delivered a resilient second half performance given the changing market conditions. I am pleased that we maintained revenue growth in both the Estate Agency and Surveying Divisions."

LSL's report to the city is set to be followed by Foxtons this morning and Countrywide on Thursday.

Both firms are expected to announce substantial declines in profits.  

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    Why don't these firms have Estate Agents running them. Look at Connells and get the message and do right by your share holders !

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    No surprise that LSL is thinking of launching hybrid. The only surprise is perhaps that it's taken them so long after their main competitors to act.

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    I wonder how the staff will take it after being told for 2 years that 'hybrid' is nonsense, they are better than that and they will never go down that route? They have been trained/brainwashed sales pitches based around negativity of the online/hybrid model now they will be told it is the way forward!

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