LSL says it is ‘well-placed’ to deliver growth despite drop in revenue

LSL has just released its preliminary results for the year ended 31 December 2022.

The company says all divisions traded well and gained market share despite tougher market conditions, while the FY22 performance is in line with the Board’s November guidance.

But group revenue, albeit ‘resilient’ at £321.7m, fell from £326.8m in 2021.

The group’s underlying operating Profit of £36.9m is also down from £49.3m in 2021, impacted by smaller purchase market and adverse effect of mini-budget on our Surveying & Valuation business in Q4 2022.

Group operating loss of £56.7m (2021: £72.6m profit) after the Board reduced the carrying value of goodwill by £87.2m. This is a non-cash item reflecting the impact of more conservative mid-term housing market assumptions, higher discount rates and the disposal of non-core businesses. In 2021, the statutory operating profit was boosted by a £29.4m gain on the disposal of interests in joint ventures, which was also part of our strategy to exit from non-core businesses

·    The Group is highly cash-generative with £35.2m generated from operations in FY22

·    Share of UK purchase and re-mortgage market increased to a record 10.4%2 (2021: 9.6%)

·    Surveying & Valuation performed strongly, delivering resilient margins and profits

·    Estate Agency retained local market share gains made in 2021, and slightly increased national market share

·    Significant strategic progress to simplify the Group and focus on business-to-business services (B2B), with the disposal of direct-to-consumer (D2C) financial services businesses to our Pivotal Growth joint venture and the Marsh & Parsons disposal

·    Very strong balance sheet with Net Cash of £40.1m at 31 December 2022 (2021: £48.5m)

·    Full year dividend maintained at 11.4p

·    Improved trading momentum in challenging markets, with higher levels of activity in all divisions, will support stronger performance expected in the second half of 2023

David Stewart, Group CEO, commented: “I am pleased to report that LSL is in good shape. In 2022, the Group traded well in challenging market conditions, whilst making substantial progress in the execution of our strategy to grow and to become a B2B financial services provider. As a result, we remain well-placed to deliver on our strategy and capitalise on the significant opportunities we see available.”


·    LSL says it expects market conditions to remain challenging during H1 but to improve in H2 and thereafter, supported by a strong re-mortgage market, and further improvements in consumer confidence and transaction levels assisted by recent reductions in mortgage rates

·    Trading in LSL’s Financial Services Network and Estate Agency businesses is in line with expectations, with signs of increasing momentum

·    In Surveying & Valuation, valuations in more specialist areas such as equity release and buy-to-let have recovered less quickly after the rise in interest rates and market disruption which followed the 2022 mini-budget, with these segments still trending significantly below 2022

·    We will manage costs pro-actively as market conditions evolve

·    Planned investment for the longer term will continue, underpinning confidence for the future

·    LSL remains very well-placed to benefit as market conditions improve

Financial results 

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Exceptional Gains (£m)




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Adjusted Basic Earnings per Share2 (pence)




Net Cash3 at 31 December (£m)




Final Proposed dividend (pence)



Full Year Dividend (pence)



Group chief executive’s review 

Review of 2022 Performance

David Stewart

I am pleased to confirm that LSL remains in good shape and is well-positioned to grow once market conditions improve.

Although the mortgage and housing markets have been adversely impacted by economic and political uncertainty, the Group has continued to trade well and backed by a strong balance sheet, we expect to remain resilient throughout 2023 in what are anticipated to be difficult, but steadily improving, market conditions.

Furthermore, we have made very substantial progress in executing our Financial Services-led growth strategy, significantly reducing our exposure to housing market cycles.  With a strong balance sheet, including Net Cash balances of £40.1m at the year end, and a business model that remains highly cash-generative, LSL is well placed to benefit as soon as market conditions normalise.

Group Revenue was broadly in line with 2021 at £321.7m. This included record revenue of £81.7m in Financial Services, and a very strong H1 2022 performance in Surveying & Valuation, which was subsequently impacted by the significant and unexpected market disruption resulting from economic and political uncertainty in Q4 2022.

Group Underlying Operating Profit was down 25% compared to 2021 at £36.9m, which is mostly attributable to reduced volumes in Surveying & Valuation during Q4 2022 and the impact of a slowdown in the residential sales market in Estate Agency. On a statutory basis, the Group operating loss was £(56.7)m, after the Board reduced the carrying value of goodwill by £87.2m. This is a non-cash item reflecting the impact of more conservative mid-term housing assumptions, higher discount rates and the disposal of non-core businesses, including Marsh & Parsons. In 2021, the Group reported a statutory operating profit of £72.6m, which was boosted by a £29.4m gain on the disposal of interests in joint ventures, which was also part of our strategy to exit from non-core businesses.

In Financial Services, the Underlying Operating Profit of our Network business was £15.5m, ahead of the record result in 2021 (£14.4m). Although member firms were naturally cautious about adviser numbers in H2, there was also modest further year-on-year growth in the number of advisers, bringing the year-end total to 2,867. In addition, more than 700 other firms submitted business through LSL’s mortgage club, further boosting our market share.

The Financial Services Division as a whole secured an 11% increase in overall lending, well ahead of the whole market which had only modest growth of 1.9%. This resulted in a substantial market share improvement to 10.4%3 from 9.6% in 2021.

Underlying Operating Profit for the Financial Services Division as a whole reduced by £1.5m, as the Group’s D2C advice businesses were impacted by lower levels of activity in the new build market in particular, and the house purchase market in general. Our direct-to-consumer financial services businesses were transferred during the early part of 2023 to our joint venture with Pollen Street Capital, Pivotal Growth, in line with LSL’s strategy to focus its activities on B2B services. We believe Pivotal Growth, in which the Group has a 48% equity share, is better placed to take these businesses forward for the benefit of our shareholders.

Surveying & Valuation traded very strongly through to the end of Q3 2022, capitalising on recent contract wins and increased allocations as well as further growth of 73% in D2C and data revenues. Its excellent performance was interrupted by the market-wide hiatus in mortgage activity in October and November, as lenders remained cautious whilst the political and economic impact of the events that followed September’s mini-budget became clearer. This is estimated to have directly reduced H2 Underlying Operating Profit in the Surveying & Valuation Division by at least £5m.

Nevertheless, the Surveying & Valuation Division still reported Underlying Operating Profit of £20.4m, down £3.2m on 2021, but still £4.1m or 25% higher than the pre-COVID-19 performance of £16.3m reported in 2019. Despite the market pressure, the Underlying Operating Profit margin2 remained resilient at 22%. Income-per-job increased slightly to £175, £2 up on 2021.

Estate Agency revenues were down 5% on 2021, when performance was boosted substantially by the extension of the stamp duty holiday. H2 2022 improved materially year-on-year on the back of the pipeline built up in H1. Lettings revenue was resilient and increased by 4%, on a like for like basis, over the prior year.

Estate Agency retained the residential sales market share gains made in its core catchment areas in 2021, and as a result slightly increased its national market share to 1.30% (2021: 1.28%). Conversion of its exchange pipeline remained slow throughout the year, impacting H1 performance in particular. H2 2022 saw fewer new properties coming to market and fewer sales agreed but the strong pipeline built in H1 secured an operating profit double the size of H2 2021. Unsurprisingly, given increased economic and housing market uncertainty, there was a trend towards more fall-throughs, largely affecting more recently agreed sales, both of which will impact performance in Q1 2023.

Lettings revenue was resilient, increasing by 4%, on a like for like basis, over 2021. The impact of slow exchange speeds, reduced house purchase activity and a solid lettings performance combined to produce Underlying Operating Profit for the Estate Agency Division of £10.5m, £7.9m below the performance in 2021 which had benefited significantly from the extension of the stamp duty holiday to 30 June 2021. The performance during H2 was 4% ahead of H2 2021.

Strategic priorities and developments

The Group has made substantial progress with the strategy we set out in 2020 to reduce our exposure to housing market cycles, simplify the business and focus investment on high-growth areas, notably our Financial Services Network business.

In January 2023, we announced the disposal of our London estate agency business, Marsh & Parsons, to Dexters for a consideration of £29m. Marsh & Parsons, which contributed £1.5m to 2022 Underlying Operating Profit, has a relatively low volume, high fee business model when compared to the rest of the Estate Agency Division, and was particularly exposed to London housing market cycles giving rise to a relatively volatile earnings profile. Other steps to simplify the Group include the disposal of our small property management business PRSim and the consolidation of our asset management operations within our Surveying & Valuation Division.

Throughout 2022 we maintained our level of investment in Mortgage Gym and DLPS, the technology businesses acquired in April 2021 to support our Financial Services growth plans. Work continued to adapt and develop the technology with a view to deployment across our Financial Services Network, with the first stage of this work to be completed during 2023. This technology investment helps our Network members become more efficient as well as generating additional income for them and the Group.

In 2023, we will complete our work to re-focus these businesses, which will be absorbed into the Financial Services Network reflecting what is now their predominant business focus.

Our Financial Services led growth plans are centred on the B2B service offered to our Network members where we believe there are significant opportunities to grow further by expanding the number of advisers and the product range they distribute. The Network business offers a highly scalable, low-cost platform through which strong margins can be sustained in different market conditions and is consistent with our vision of LSL as a B2B service provider.

We previously concluded that it would be better to pursue the considerable opportunities in the D2C mortgage broking market under a different ownership structure to that of the Group, so that significant capital could be deployed and entrepreneurs incentivised appropriately through different economic cycles. This led to the announcement in 2021 of our Pivotal Growth “buy-and-build” joint venture with Pollen Street Capital.

Pivotal Growth has now acquired eight businesses, comprising around 330 advisers, including the Group First and RSC, Embrace Financial Services and First2Protect direct-to-consumer businesses transferred from LSL. The consideration for RSC, Group First and Embrace Financial Services will be based on their financial performance in 2024. The consideration for F2P is payable at completion.

I believe this is an exciting move for both Pivotal Growth and LSL, providing increased scale for Pivotal Growth and the right environment for these businesses to grow further. It has also helped simplify the LSL Group considerably, substantially reducing our cost base and exposure to housing market cycles whilst also reducing management stretch to enable us to focus on the substantial opportunity to grow the remaining Financial Services Network, Surveying & Valuation and Estate Agency businesses.

In Surveying & Valuation we have continued to diversify our revenue streams. In May 2022, we launched a consumer-facing website to support the growth of our enhanced direct-to-consumer proposition, where we achieved a 60% increase in revenue year-on-year. Providing data services to lenders has strengthened our relationships and helped secure contract wins and increased allocations of valuation instructions, whilst we have established a strong position in the equity release valuation segment, a sector we expect to grow significantly over the medium term. Equity release instructions accounted for approximately 16% of revenue in 2022 (2021: 12%).

Strong balance sheet

Our cash generation in the year resulted in a Net Cash balance of £40.1m. This was boosted further in January 2023 following the disposal of Marsh & Parsons for a consideration of £29m. Our strong balance sheet and continuing strong cash generation enables us to invest with confidence throughout the economic cycle, including restructuring the Group to deliver our ambitious growth strategy. In 2023, we will continue to invest in capability and technology, support Pivotal Growth in its acquisition of D2C brokerages, and consider potential acquisition targets to build our Financial Services Network business. The Board will continue to actively review its capital allocation policy to ensure we maintain an efficient balance sheet.

To provide further flexibility to our balance sheet, during February 2023 we agreed an amended and restated banking facility with a maturity date of May 2026, arranged on materially the same terms, replacing the previous £90m with a £60m revolving credit facility with major mainstream UK lenders, available on request at any time.


The Board has considered the proposed dividend in light of the Group’s policy to pay out 30% of Group Underlying Operating Profit after finance and normalised tax charges, such that dividend cover is held at approximately three times earnings over the business cycle. This policy was designed to provide clarity to shareholders and ensure the Group retained a strong balance sheet for all market conditions.

Although economic conditions have affected current earnings, we have made significant progress in executing our strategic shift to develop a business that is less exposed to the housing market cycle.

As part of that shift and the associated rationalisation of certain businesses such as the recent sale of Marsh & Parsons, we have built significant Net Cash balances, which at 31 December 2022 and prior to the disposal of Marsh & Parsons, stood at £40.1m. In light of this exceptionally strong cash position and the Board’s confidence in the future prospects of the Group, the Board recommends a final dividend of 7.4 pence. If approved, this would give a total dividend of 11.4 pence per share, unchanged from last year.

The ex-dividend date is 27 April 2023 with a record date of 28 April 2023 and a payment date of 2 June 2023.  Shareholders can elect to reinvest their cash dividend and purchase additional shares in LSL through a dividend reinvestment plan. The election date is 11 May 2023.

The Board continues to keep its capital allocation policy and balance sheet structure under close review to ensure it is fit for purpose for our evolving business model and will seek to update shareholders on this as appropriate.

Living Responsibly

The Board believes that success is measured by more than just profits and our Living Responsibly programme is at the centre of our sustainability strategy. Put simply, our objective is to have a positive effect on the communities in which we operate, whether that is measured by the impact we have on the environment, the opportunities we provide to colleagues, the way we serve our customers or the work we undertake in our communities.

In our ESG and our Living Responsibly reports, we set out some of the steps we have taken to limit our environmental impact, help ensure LSL is a supportive and inclusive workplace and provide support to good causes.

It is vital that our Living Responsibly programme has real substance and is reflected in everything we do. We are helped to achieve this by a number of independent colleague forums and working groups which provide additional insight in key areas. Further information on these, including the establishment in 2023 of LSL Voices is also set out in our Living Responsibly Report. I am grateful to the very many colleagues who have willingly given their time and energy to support this work.

I am equally grateful for the hard work and commitment of all our staff during what has been a hugely challenging period and which has helped ensure LSL is well-positioned to thrive in all market conditions, and would like to take this opportunity to thank them for their effort and support.

Looking Ahead

We have made significant progress in re-shaping the Group in line with our strategy and each of our core businesses are performing well. After a strong start to 2022 which saw us build substantial pipelines in Estate Agency and Financial Services, market conditions deteriorated as a result of political instability and sharply rising interest rates and although we expect to see a steady improvement in activity over the course of the year, it is clear that conditions will remain challenging throughout 2023.

However, LSL remains well-positioned for future growth. Independent mortgage brokers typically perform well in challenging markets, being agile and close to their client’s needs, and this will help ensure our Financial Services Network businesses will remain resilient. In addition, although some areas of the valuation market remain depressed following the market uncertainty which followed the 2022 mini-budget, our Surveying & Valuation business remains very well-placed for medium-term growth, helped by recent contract wins and good progress made in developing new income streams.

We have made substantial progress in restructuring and re-focusing the Group’s activities and will continue this work in 2023. Our very strong balance sheet allows us to continue to invest for the future with confidence, and I am excited about the Group’s potential and look forward to reporting growth in 2024 and beyond.


LSL sells mortgage broker firm to PE-backed venture


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  1. 40yearvetran08

    Smoke and mirrors!

  2. nick1927

    So true! What a load of waffle. All of the corporates say the same nonsense.

    Challenging market conditions? These last 3 years (aside from fees) have been the golden years in the UK housing market.

    If you haven’t put enough in the bank to be OK going forward, then if it does become challenging it’ll be a rude awakening.


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