Belvoir performed ‘stronger than expected’ during April lockdown

Belvoir Group shareholders backed all resolutions at the agency franchise network’s annual general meeting (AGM) yesterday as the alternative investment market (AIM)-listed brand revealed how it has performed during and since lockdown.

Resolutions included allowing directors to issue and sell shares and authorising the company to purchase up to approximately 14.99% of its issued ordinary share capital at any time up to the next AGM or 15 months from the date this resolution is passed, whichever is the earlier.

A statement from the Belvoir said: “The directors consider it desirable for the proposed general authority to be available.

“The directors have no present intention to make such market purchases but consider it desirable to be given the flexibility to do so by shareholders.”

There was no breakdown of the votes as this is not a requirement for AIM stocks.

It comes as Belvoir issued a trading update for the first quarter of 2020 and also gave an indication of its trading during the coronavirus pandemic.

The announcement said trading during the first quarter, which incorporated just one week of the Covid-19 lockdown, was strong and in line with management expectations.

At the end of April, fewer than 5% of tenants were in arrears compared with the usual 2% experienced across its network, Belvoir said.

The agent said this increased was ” considerably less than the board expected.”

On the sales side, Belvoir said agents completed on around a third of usual transaction levels, drawing from the pipeline of house sales agreed prior to the lockdown.

Its financial services division focused on remortgages and income and life protection sales during the period, the update said.

This all meant April’s performance was “significantly stronger than had been anticipated.”

Since the market reopened on May 13th, Belvoir said franchisees have been able to resume operating from their offices and to carry out physical appraisals and viewings while following safe-working practices.

The update said the board is confident that the group’s balance sheet provides adequate liquidity to trade through this crisis and to continue to operate within its banking covenants for the foreseeable future.

Dorian Gonsalves, chief executive of Belvoir Group, said: “Having reported significant growth in 2019 and got off to a good start in the first quarter of 2020, it has been hugely frustrating for the group not to have been able to build further on this momentum due to Covid-19.

“However, the current climate has proved once again just how robust and resilient our franchise business model is.

“The board is encouraged that the restrictions on the housing sector were among the first to be lifted.

“Clearly time will tell as to the lasting impact of the current environment on the wider economy and on the UK housing sector more specifically.

“However, as a group, Belvoir benefits from a high degree of recurring revenue with 61% of gross profit derived from lettings and just 16% dependent on estate agency.

“Meanwhile, our financial services division has a substantial client base to which we sell a wide variety of financial products, with no excessive dependency on new mortgage sales alone.

“Whilst 2020 will undoubtedly be a difficult year for the property market, our franchisees and advisers have the knowledge and resilience to overcome and indeed benefit from such challenges in the sector.”

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