Opinion: How will Leaders Romans Group manage their debt mountain?

Having reviewed many of the top agents’ financial accounts at the end of last year, a few more have since filed at Companies House, offering an interesting insight for the whole industry.

Leaders Romans, which is backed by private equity, has shown a startling increase in losses, up from a £30.6m loss in 2018 to £43.8m – yet revenue remained the same at £117m. Debt at the end of 2019 was £267m. Given what’s happened to the market because of Covid, I’m struggling to see how current trading will generate enough cash to service its debt and pay off its loans.

The accounts show the company was refinanced to the tune of £176m in August 2019 in order to continue its mergers and acquisitions strategy over the coming years and received a further £5m in April 2020.

What options will this leave? They could float the business if they can grow their profits dramatically to pay off the debts, or they could refinance or restructure. If trading does not support these options, the current backers will take a hit so could we see another situation like Countrywide emerging at some point in the future? Except they don’t have surveyors or a strong financial services business to sell off.

Please note: Property Industry Eye gave Leaders Romans Group an opportunity to respond. The company declined to comment. 

Another agent to flag up big losses is Yopa, taking a £17.8m hit in 2019 on top of a £30.4m loss in 2018. Its turnover may have slightly risen to £8.4m in 2019 and it has cut its costs, but this is clearly a company that relies on its shareholders to keep forking out cash in order to survive, receiving an additional cash injection of £16m in August 2019.

Its accounts state if there is a severe downturn, ‘these circumstances represent a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern’. It may be a standard auditing phrase but I can’t help think that investors must have better things to do with their money than keep throwing money at a flawed hybrid model that shows no sign of turning the corner. Just like Purplebricks and Strike.

At the other end of the spectrum, Chestertons reported a record year for revenue in 2019, up 8% to £43m, with profits increasing from £2.8m the previous year to £4.8m.

Connells had already given an interim statement last year but its annual report and financial statement for 2019, now filed at Companies House, shows income and profits slightly down on the previous year, but still generating a post-tax profit of £38.7m from £428.8m total income.

Finally, Kinleigh Folkard & Hayward (KFH) reported a £625k profit in 2019, just slightly down from the year before as was turnover at £6.4m.

So despite all the uncertainties caused by Brexit, affecting many agents in 2019, we can see most of the larger traditional agents still managed to stay strong – except Leaders Romans – while the big internet agents showed they have no coping mechanism for when the market is flat. Goodness knows what their results will look like for 2020, once the full impact of the coronavirus pandemic is revealed.


Paul Smith is chief executive officer of Spicerhaart.


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  1. AlwaysAnAgent

    We all know what happens when a large EA firm continues to acquire businesses when their debt pile is like a “mountain”.

  2. JohnJames

    Leaders Romans are £267M in debt? – over £2M per branch? How can that get repaid?

  3. Robert_May

    Would it be reasonable to expect some balance to this  public dissection of his competitors’ performance to have included an analysis of Mr. Smiths performance?


    This analysis is fair and reasonable for discussion in  the boardroom but I don’t think it’s appropriate to publish this without that balance  as the article headline focuses commercial, undermining concern on Leaders Romans.  That is IMO unacceptable.

    1. iainwhite87

      Absolutely agree , the article is not to inform , it is designed to undermine a competitor and is made either without full knowledge of the financial position of the parent company or deliberately omits that information because they would explain quite clearly how the debt can be managed.

      1. JohnJames

        Well Paul Smith will of course be biased as he owns a competitor! He’s published this under his own name and isn’t skulking in the shadows about any of this.

        That’s an eye-watering debt for LR that will need to be carried now and repaid later, and their yearly losses grew >£43 million in the reported year? Paul may gloat, but it’s not his fault.

        1. Robert_May

          but is it an appropriate thing to do?  These opinion pieces find their way to Google  and this will report back to people who are not aware that Mr. Smith is a competitor to Leaders Romans as a news story on a  property industry news site expressing concern at Leaders Romans debts

          That is potentially damaging and something the  executives or investors in Leaders Romans don’t need and realistically shouldn’t have introduced to their working week

        2. iainwhite87

          Not sure anyone blamed him.

          The fact he wrote it and published it as a competitor with only half the facts deliberately to unsettle a competitor and potentially cause stress to over 2000 employees tells everyone what type of man he is and what type of boss he might be and what his organisation might be like to work for .

          On the flip side the LRG dignified silence tell you all you need to know about their leadership team and what the organisation might be like to work for.


          1. Mokhan

            See the real glass door reviews why he is allowed on is beyond us 
            sacked 300 people by conference 
            there’s a racism complaint to him on linkedin not answered too

  4. Kyran

    The cynic in me would say that he failed to mention Spicer Haart beacuse they incurred a loss in 2019 of £1.6 million and the parent company was in a net liability position at the end of 2019.

    Let’s hope, for their sake that they manage to roll their £10m bank facility when it comes up for renewal later this year, even if they do breach their covenants which they are saying they could do during Q1

    The directors still did ok though, trousering more than the annual loss.


  5. GeorgeHammond78

    Leaving aside the rather obvious whack Mr Smith has had at Leaders, he is correct in what he says about them. Thing is, with a lettings business, there are no real assets. Strong stable cashflows are great and provide the incentive to take on inelastic liabilities and costs, however, ballooning the liability side of the balance sheet to acquire ‘assets’ comprising of nothing more than goodwill is just plain daft. Especially so, when stupid multiples are paid for said goodwill.

    Owned as they are by a Hedge Fund, the exit strategy was probably either a Bond or an IPO (or both) but neither are looking likely at the moment. However, the great smoke and mirrors sleight of hand is being played here – as it is by most hedge funds – namely defraying all the risk onto the lenders and having little or no equity at stake.

    The old adage is ever thus: owe the bank £25k and its your problem; owe the bank £250million, then its the bank’s problem. Right now the banks have too many other things to worry about, so I doubt they’ll be pulling the plug on Leaders any time soon.

    1. Centurion53

      What’s “plain daft” is somebody that doesn’t know the difference between a hedge fund and private equity.

  6. Mokhan

    He just been called out for racism at one of his branches on LinkedIn nearly a year on from sacking 300 people by conference calls and then getting someone to write a piece on here how well they doing in the lock down 1


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