The Leaders Romans Group has confirmed that it is planning to expand.
Despite its latest accounts showing a loss of £30m for 2018, the group also said it had cash in the bank and was keen to acquire other businesses.
The group has now released a statement from Matthew Light, mergers and acquisitions director, who said that Leaders Romans has secured “its highest ever financial backing in support of the group’s ongoing expansion focus.”
Light said: “We have made no secret of the group’s intention to further expand its network across the UK.
“Following a strong and structured acquisition plan, we have already acquired 128 businesses since 2010.
“Having recently secured our most sizeable financial backing to date, our focus on introducing Leaders Romans Group’s property service offerings to wider parts of the UK is stronger than ever.”
The group is particularly looking to acquire businesses where it is currently unrepresented, in a bid to extend services nationwide.
It also wants to expand its block management services, following the acquisition of Revolution Block Management in Manchester earlier this year.
Light said: “As the group continues to diversify its services within the residential corporate property markets, we are also interested in exploring acquisition opportunities in other related sectors including, but not limited to, commercial and build-to-rent.”
Leaders and Romans currently have 150 branches, north to south from Manchester to Southampton and west to east from Bristol to Norwich.
Matthew Light, pictured below, can be contacted in confidence: mlight@lrg.co.uk
It’s difficult to see this announcement as anything more than a morale boosting exercise (seemingly aimed at boosting their own internal/ investor morale), following LRG’s posting of a £30m loss and eye-watering levels of debt…
With little to no ‘silver-lining’ on the horizon for the property industry, spending more borrowed money is IMHO, very risky.
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How can a group company be in business posting a loss of £30m? That’s a huge hole, how does that even work? Should be consolidation not expansion.
And who are these investors?
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I think what we are seeing here is the final end of the Romans’ brand as was.
It’s clear they originally thought they could role out some of the things that made Romans sales successful across all of the Leaders branches, when that failed the tactic seemed to be “let’s just back boiler sales and go for volume lettings”
The MD of Romans sales has recently been made redundant, the second in two years, so for a company to suggest expansion rather suggests they don’t require senior management to control it, which was perhaps one of Romans successes in the past. In fact I think I’m right in saying just one of the original Romans management team remains within the business?
Anyway I would think that this is all good news for their competitors in the areas where there were original Romans offices!
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Throwing good money after bad……………………..
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It was pretty much Leaders and Countrywide who between them, paid silly prices for portfolios and artificially skewed the market. Let’s be honest, how can any business which only ‘owns’ intangible management rights but usually trades from a place of business with a long term liability, be ‘worth’ the silly multiples that get paid?
That said, if you’re contemplating retiring/selling up, now would be the time to sell to Leaders; once they (Leaders) no longer can pay, prices will drop like a stone. As long as you don’t care about your legacy i.e. what your former clients think about being sold to a corporate, then go for it.
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If you keep your landlords then letting agencies can be good investments even at high multiples.
If you leak landlords then you have problems – both operational and financial.
The challenge then is to have a business geared to keeping customers.
>> I have a question: why did Adrian Gill leave after his very high profile “poaching” from LSL? Very clumsy from a respected PE firm (Bowmark).
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I have an answer……He was terrible!
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Quite often, one of the bigger issues relating to ‘corporate’ type agencies purchasing independent brands, is one of self-inflicted but unintended ‘wastage’…
IMHE, Landlords who are loyal to an independent firm (whichever firm that may be), are with that independent precisely because they aren’t attracted to the ‘corporate’ type agency (often largely ‘style over substance’ businesses) with their offerings of shiny-suited (and sometimes ‘smarmy’), latte-fuelled, Pellegrino-steeped youngsters skipping around town with empty leather binders (in true 1990-2000s EA style).
Therefore (and we’ve seen it before), the moment those client emails are sent out declaring that customers of the once independent agent, are now a part of an ‘exciting future’/’new management’/’New technology’/’Improved this or that’…etc. No small number of those clients can be found running for the hills (or at least running to another local agent). Making what could be viewed as a high value acquisition, into a very poor value purchase.
Too much of the above…and your £30m loss can quickly become a far larger haemorrhage, as the ‘life-blood’ slowly (or quickly) drains from a business…
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Leaders Romans are clearly not in the business of making money right now – what’s important to them is market share and revenue. They can absorb losses for the time being as long as they have VC money.
There will, however come a time – and you can bet your house that this is right there in their business plan – when they decide it’s time to focus on profit rather than growth, and that’s when they’ll start to slash costs by consolidating their network, introducing tech and reducing the headcount, most likely when the “hub” method of estate agency becomes the norm rather than an innovation.
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……”expanding our Losses?”
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Leaders Romans are the new countrywide. Terrible service, poorly trained inexperienced staff, and very unhappy clients who invariably leave in their droves soon after acquisition….
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