Franchising businesses Belvoir and Hunters both released upbeat trading updates yesterday.
Hunters said that four weeks into the new year, sentiment seems to be improving, while Belvoir – whose shares shot up yesterday – said that January has signalled a “marked improvement”.
Both also shrugged off the effects of the tenancy fees ban, with Hunters saying its mitigation was ahead of schedule, and Belvoir praising its franchisees for rising above its effect.
Belvoir said that although it had expected its franchisees to lose 10% of lettings income because of the fees ban, they had actually increased revenue.
Belvoir was reporting on a 23rd year of uninterrupted profit growth.
Revenue for last year was up 43% to £19.5m, and it expects to announce pre-tax profits “comfortably ahead of management’s expectations”.
Its property division achieved 6% growth, overcoming the twin challenges of the tenant fees ban and a subdued sales market.
Management service fees, core income for Belvoir, was up 4% to £8.8m, with its agents having fully mitigated the effect of the ban by December.
Part of the mitigation arose from the ongoing success of the assisted acquisitions programme, which helped 24 franchisees to make local purchases, adding 4,500 properties.
At the end of the year Belvoir’s portfolio of managed properties was 67,000, a record.
Belvoir also said that its diversification into financial services had delivered significant revenue growth, with 166 financial advisers now offering specialist high street mortgage advice both to franchisees and independent agents.
Meanwhile Hunters said it had a strong finish to 2019, with income up 7% at £42.4m, and having opened 20 branches, bringing the total outlets to 206.
Hunters also said it is ahead of plans to mitigate the effects of the tenant fees ban.
Hunters said that it is third in the market for Sold Subject to Contract, citing TwentyCI as the source.
Hunters is forecasting further growth, saying: “We believe market conditions and increasing compliance requirements will continue to motivate proven independent operators to become part of a stronger group.”
It said that its investment in technology, marketing and cost savings it could offer particularly in portal charges “means Hunters are well placed to attract independent agents looking to progress”.
Yesterday, shares in Hunters finished little changed at 74.5p, while shares in Belvoir shot up almost 9%, finishing at 161p, having touched a high of 167.5p