LSL Property Services released this morning a pre-close trading update for the year ended 31 December 2021, which shows a strong performance in line with the boards expectations, along with continued progress in implementing its strategy for growth.

The company plans further investment in its financial services offering, which it believes will deliver benefits in future years.

Group revenue is expected to increase by around 23% to £327m, from £266.7m in 2020, while underlying operating profit is significantly ahead of prior year, also in line with the LSL board’s expectations; net cash at 31 December 2021 of about £48.5m (31 December 2020: net bank debt £1.6m).

Financial adviser numbers ended 2021 up 273 year-on-year to 2,858, while estate agency division increased its residential market share across its core catchment areas

However, LSL said its estate agency residential pipeline conversion slowed in H2 2021, following the record market levels experienced in the lead up to the 30 June 2021 stamp duty deadline and capacity issues in the conveyancing market

But the group insists that it retains a strong residential sales exchange pipeline at 31 December 2021, albeit 7% lower than the record pipelines reported at the same date in 2020. Residential fall-throughs remain at normal levels.

This morning’s trading statement states: “We announced the sale of investments in two non-core businesses to simplify the Group structure, LMS (May 2021) and TM Group (July 2021), for a combined total of £41.3m in cash. LSL estimates the lost profit contribution for these two businesses in 2021 to be c.£1m.

“LSL’s balance sheet and strong cash generation enables further investment to deliver the Group’s ambitious growth strategy, including expected investment in Pivotal Growth, established in April 2021 as a joint venture with Pollen Street Capital, to “buy and build” a leading national mortgage broker.”

LSL will provide an update on current trading, outlook, and strategic progress with the release of our preliminary results for the year ended 31 December 2021, which we expect to report on Wednesday 16 March 2022.