Belvoir: 'Sales market has normalised'

Market activity has shifted back from sales to lettings, Belvoir has reported.

Half-year results from the agency franchise network show the “race for space” has eased and there remains a shortage of property to buy and rent.

At the end of June, Belvoir said, pipelines of agreed sales transactions remained high with the timescales between the sale subject to contract and completion increasing to 17 weeks or more but the lack of available properties ensuring that fall-through rates remain low. 

The agency said: “The normalisation in the number of house sales transactions resulted in the group's ratio of lettings to sales returning to a more typical 78:22 in H1 2022 (H1 2021: 73:27) reflecting the strong recurring lettings business that underpins the group's performance. “

Financial Highlights

• 12% increase in revenue to £15.4m (H1 2021: £13.8m), of which 1% relates to the growth in the underlying business and 11% to corporate acquisitions in 2021 and 2022
• 1% increase in Management Service Fees (MSF) to £5.3m (H1 2021: £5.2m)
• 20% increase in Financial Services revenue to £7.7m (H1 2021: £6.4m)
• Gross profit split of 60% lettings: 17% sales: 19% financial services: 4% other (H1 2021: 56%, 21%, 18%, 5%) reverting to the pre-2021 ratio with a strong contribution from recurring lettings income
• Administrative costs up 29% to £5.4m (H1 2021: £4.2m) reflecting the enlarged group and a return to a more normal cost base post-Covid
• Profit before tax of £4.0m (H1 2021: £4.8m)
• Basic earnings per share of 8.7p (2021: 9.9p)
• Unchanged interim dividend of 4.0p per share (H1 2021: 4.0p) payable on 28 October 2022
• H1 results in line with management's expectations

Operational Highlights

• Acquisition of The TIME Group, a network of 63 highly motivated financial services advisers, for £3.8m net cash on 23 May 2022, funded from existing cash reserves
• Acquisition of Mr and Mrs Clarke, a specialist concierge-style personal estate agency business operating through 10 partners, for £0.05m on 11 March 2022, funded from existing cash reserves
• Nine (H1 2021: five) franchisee assisted acquisitions completed in the year to date contributing £2.2m (H1 2021: £1.3m) of acquired franchisee turnover
• Dorian Gonsalves, chief executive of Belvoir Group, sai:  "I am delighted to report that our strong lettings base, investment in further franchise networks and diversification into financial services have all helped to mitigate the correction in the level of property sales transactions after the exceptional year for the housing market in 2021.

"During the first half of 2022 the Board continued to pursue its growth strategy to strengthen the Group's service offering.  The acquisition of Mr and Mrs Clarke provided the Group with a platform from which to develop its personal agency model, and the acquisition of The TIME Group added a further 63 advisers to our already established and successful financial services network.

"The group's investment in businesses to expand both the property and the financial services divisions, and the strong pipelines of house sales and related mortgages at the start of H2, underpin the board's confidence of achieving managements' expectations for the full financial year."

Belvoir also announced that Michael Stoop, non-executive chairman, will be stepping down from the board with effect from 30 September 2022 in order to focus on his other business interests.  

Jon Di-Stefano, who was appointed as a non-executive to the board in April 2022, will take over the role of non-executive chairman.  

https://www.londonstockexchange.com/news-article/BLV/interim-results/15613328