The parent company of Your Move, Reeds Rains and other agency brands has succeeded where Foxtons yesterday did not - in bucking the poor housing market in part, and seeing its revenue increase despite a sales slump.
In figures released this morning LSL Property Services says its group revenue over the first half of 2018 was 1.0 per cent up on the same period a year ago thanks to “self-help measures ... to deliver organic revenue growth.”
Lettings and Financial Services income were up 4.0 and 5.0 per cent respectively but the sales side saw an 11 per cent slump “and the closure of eight owned branches in the final quarter of 2017.”
In a trading statement on the first half of 2018, LSL says revenue for its overall sales and lettings side increased 3.0 per cent year on year, with market share “maintained at broadly stable levels with residential average fees slightly up.”
However, its agency-side profits were “negatively impacted by a number of factors including the reduction in residential sales exchange revenue whilst in the previous period there was a one-off gain on the sale of a Marsh & Parsons leasehold property amounting to £700,000.”
Marsh & Parsons itself - despite exposure to the challenging London market - delivered what the statement calls “a resilient revenue performance” with total revenue down 3.0 per cent but lettings’ revenue increase of 6.0 per cent largely offsetting a 15 per cent drop in London sales.
Overall, the group's pre-tax profits fell by 51 per cent from £13.2m to £6.4m; its net bank debt rose 45 per cent to £46m thanks partly to £20m invested in the online agency Yopa - the firm in which Savills is also a major investor.
Commenting on today's announcement, Simon Embley, LSL’s chairman, says: "The group has delivered a resilient first half revenue performance in the context of challenging residential property market conditions.
“Whilst residential sales volumes remained suppressed, revenue trends in other parts of our business are more robust due to our ongoing self-help measures. Our lettings and financial services businesses continue to perform positively and financial services income now represents 33 per cent of total estate agency division income.
“During the first half, Lloyds Bank plc awarded LSL a material five-year contract to deliver surveying and valuation services which demonstrates the market leading proposition that we are able to offer our customers and reflects well on our technology investment.
“Whilst market conditions in the first half of 2018 have been softer than the board's expectations and the equivalent period in 2017, LSL's financial performance in the first half of 2018 was in line with the Board's expectations. Given residential sale pipelines are above previous expectations, current trading in surveying is positive and the range of self-help initiatives in progress, the board is confident of delivering a full year group underlying operating profit in line with expectations."