Belvoir announces £2m acquisition of 19-branch estate and letting agency businesses

Franchising group Belvoir has reported a major acquisition that will add 19 offices to its Newton Fallowell network.

The £2m purchases are of Lovelle Estate Agency and Lovelle Bacons, collectively known as Lovelles and operating in Lincolnshire and the Humber region.

Its offices are largely already franchised, and Belvoir said the six that are not will be franchised as soon as possible.

The purchase price will be paid in cash from existing reserves, Belvoir said, with the acquisition being earnings accretive next year.

In the 12 months to March 31 this year, Lovelles made an operating profit of £500,000 with assets of around £100,000.

Belvoir Group yesterday also posted an update, saying that trading in the second half of its financial year continues to be strong and that the board is confident that the business is in line “to comfortably achieve market expectations for the full year”.

Belvoir CEO Dorian Gonsalves said: “We are delighted to confirm the acquisition of Lovelles by Newton Fallowell.

“Lovelles is a third-generation family property business that dates back to 1932, and adopted a franchising business model in 2006.

“Based on performance in the year to July 2019 Lovelles was the largest agency in its region, delivering around 1,425 completed sales transactions and managing 1,600 properties.

“Lovelles was recognised as the ‘Yorkshire and Humber Agency of the Year’ at the 2019 Negotiator Awards.

“The network consists of 19 branches, centred around the town of Grimsby, extending north to Hull, east to Skegness and south to Lincoln. Eleven of the offices exclusively offer property sales, with one dedicated to lettings, and the remaining six providing a sales and lettings service.

“Twelve of the Lovelles branches are already franchised, with a further three scheduled to be franchised to the branch manager by April 2020.

“In line with Belvoir’s multi-brand strategy, Lovelles will become part of the Newton Fallowell Group, which will then operate three brands – Newton Fallowell, Goodchilds and Lovelles.

“The 36 staff employed within the six corporate owned branches, as well as the business development manager, will be transferring to Newton Fallowell.

“Lovelles is an ideal fit for Belvoir’s acquisition strategy, being largely based on a franchise model, with a strong estate agency background and geographically well positioned to be part of the Newton Fallowell network. Completion is expected by January 20, 2020.

“I would like to pay tribute to MD Jonathan Lovelle who is well respected within the property sector and has built Lovelles into the highly successful franchise network that it is today.

“We believe that becoming part of the Newton Fallowell network, which is part of the Belvoir Group, with access to our experienced and highly professional franchise support team, will further the Lovelles offering.”

Speaking of the acquisition, Jonathan Lovelle said: “Having seen how the Newton Fallowell network has flourished as part of the Belvoir Group, I knew Belvoir would be the right home for the Lovelles network.

“Belvoir shares my vision of franchising as being the optimum business model for our industry and I know that their management team is committed to supporting the growth aspirations of all franchisees.

“I am proud of what our franchisees have achieved and of the strong reputation that Lovelles has within the Lincolnshire and Humber region.

“I look forward to seeing the network go from strength to strength as part of the Belvoir Group.”

Newton Fallowell was established by Mark Newton in 1999 and acquired by Belvoir in 2015.

Although the announcement of the acquisition mentions Lovelles as dating back to 1932, this was challenged in a complaint last year to the Advertising Standards Authority.

While the case was informally resolved, with Lovelles agreeing to remove the claim, the firm stuck by its antiquity, saying that there had been some name changes over the years.

The City yesterday reacted positively both to Belvoir’s confident trading update and to news of the acquisition. Shares rose by some 5% to finish at about 128p.

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