Half year results to 30th June 2022 from LSL highlight the damaging effect of conveyancing delays.
Reporting its H1 figures this morning, LSL says that an underlying operating loss of £1m in its Estate Agency Division was caused by delays in turning its pipeline. That happened because of the industry-wide lack of capacity in conveyancing.
Had the pipeline exchanged at normal speed the underlying profit would have been over £6m higher.
The company says that Estate Agency front end sales activity remains stable with a good level of buyer demand
The conversion of residential sales pipeline remains very slow, a trend we expect to continue throughout H2
The consequence of continuing slow pipeline conversion will be to delay profit on some H2 activity into 2023 and as result they now anticipate full year profits to be lower than previous expectations whilst remaining significantly above the pre-COVID 19 performance reported in 2019
Other divisions fared better.
Surveying & Valuation Division delivered an extremely strong performance with underlying operating profit up 14% to £13.1m (H1 2021: £11.4m).
Financial Services Network business reported underlying operating profit of £7.5m in line with the 2021 record (H1 2021: £7.4m) which was a very robust performance in substantially smaller mortgage and protection markets, and delivered during a period of ongoing investment in the business.
David Stewart, Group Chief Executive said:
“These results show that our strategy is on track and that LSL continues to trade strongly.
“Our Surveying & Valuation and Financial Services businesses delivered record revenues and our Estate Agency Division retained the market share gains made in 2021, in doing so building a strong residential sales pipeline as significant profits were delayed by the continuing slow speed of exchange experienced across the market.
“We are well placed to deliver a strong performance in the second half of the year and to grow in 2023 as we increasingly reap the benefits of our financial services led growth strategy.”
2021 was a one off
That’s why any results should have been tempered at the time with a balanced commentary
IF -that’s a good word and we will see it a lot in half year reports
Can’t see conveyancing being sorted any time soon so what’s going to happen ?
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I blame those lazy conveyancers.
If only they actually did some work instead of playing golf all day.
Or deliberately delaying matters so that they can charge more.
Or asking impossible questions so that they can blame the other side for not answering them.
Oh hang on.
I might not have got all my facts straight.
Sorry about that.
🙂
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They used the excuse of conveyancing delays in there report for last year and said they were pleased with the forward pipeline. The problem with LSL is they need more fee earners and less expensive management who produce no fees at all. LSL do not have any estate agents on the board, sounds a bit like countrywide some years ago. To run an estate agency you need to think like an estate agent. As Peter Rollins said last week about Foxtons, ‘we do not have enough agents to look after the business we have’. By and large sales and lettings negs are cheap to employ as they make most of their income from commission. Any agency should not have any expensive staff if they are not bringing in fees and paying for themselves. You cannot afford to have too many admin staff. What you want is as many negs as you can physically accommodate. A good manager of a business should also be a good income producer otherwise they do not understand what they are managing.
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