LSL has just announced it full year results to 31 December 2024 with Group Underlying Operating Profit of £27.7m (2023: £10.3m), supported in part by its growing Estate Agency Franchising division. On a statutory basis Group Operating Profit was £21.9m (2023: £3.7m).

LSL says that these results “demonstrate the benefits of the strategic transformation of the Group over the last two years” and are just above consensus expectations and materially ahead of prior year.

The company adds that it has made a positive start to the year with trading in line with its expectations in markets operating broadly in line with their assumptions. LSL continue to expect that in 2025 it will increase profits further over 2024 and the Board’s expectations for the full year remain unchanged.

David Stewart, group chief executive commented: “2024 was a year of positive progress, as we built successfully on the restructuring work completed in 2023. We were able to grow profits materially, and at a faster rate than we had anticipated at the start of the year.

“Trading in the early months of the new year is in line with expectations, indicating we will be able to improve performance again in 2025. I believe the Group is now well positioned to build on solid foundations and I am sure that under the leadership of Adam Castleton, who will take over as Group CEO on 1 May, the Group will go from strength to strength.”

LSL says that last year’s performance demonstrates the “benefits” of the successful completion of its significant restructuring and transformation programmes in 2023, as a result of which LSL is now a much simpler Group; “well positioned to deliver higher operating margins, and more consistent earnings through market cycles”.

This helped the Group to deliver a substantial profit increase in markets that remained supressed in 2024 compared to the long-term average, with new lending 6% below the 10-year average and housing transactions 9% below. Economic and geo-political uncertainty, sticky inflation and delays to interest rate reductions continued to impact consumer confidence during H2.

Strategic and operational highlights:

+ Significant recovery in profitability with Group Underlying Operating Profit increasing by £17.4m to £27.7m. All divisions reported increases in profitability

+ Investment to support future growth. During 2024, the Group invested £1m, £0.7m in H2, to develop new products in Surveying & Valuation and announced a major programme to upgrade its Financial Services technology offering, that will commence in 2025

+ Estate Agency Franchising continues to support the growth of franchisees, to facilitate territory expansion and by supporting three lettings book acquisitions completed in H2 2024

+ Acquisition during 2024 of eight businesses by our Pivotal Growth JV, with advisers increasing to over 500

+ Purchase of TenetLime mortgage network completed in February with integration programme on track and financial performance and adviser retention in line with expectations

+ In January 2025, LSL announced the appointment of Adam Castleton, previously Group CFO, as CEO Designate, formally taking up the CEO position on 1 May 2025, following David Stewart’s notification to the Board of his intention to retire from his Executive role and the LSL Board

+ Strengthened management bench strength with a number of senior Divisional appointments  

+ Adrian Collins appointed as Chair and Michael Stoop as Non-Executive Director, strengthening the Group’s Board

+ Full year dividend of 11.4p (2023: 11.4p), with final dividend maintained at 7.4p per share, reflecting strong balance sheet and Board’s confidence in prospects

Financial Highlights 

Full year financial metrics	2024	2023	Var
Revenue (£m)	173.2	144.4	20%
Group Underlying Operating Profit (£m)	27.7	10.3	169%
Group Underlying Operating margin (%)	16%	7%	+890bps
Group Underlying Operating Profit from total operations (£m)	27.3	9.3	192%
Exceptional Gains (£m)	1.7	9.3	(81)%
Exceptional Costs (£m)	(4.1)	(13.8)	70%
Group operating profit (£m)	21.9	3.7	484%
Profit before tax (£m)	23.0	4.9	373%
Loss from discontinued operations (£m)	(0.4)	(46.1)	99%
Basic Earnings per Share (pence)	17.3	7.9	119%
Adjusted Basic Earnings per Share (pence)	21.1	7.6	178%
Net Cash at 31 December (£m)	32.4	35.0	(7)%
Final dividend per share (pence)	7.4	7.4	–
Full year dividend per share (pence)	11.4	11.4	–

 + Group Revenue was £173.2m (2023: £144.4m). Revenue was 20% above prior year in a total mortgage lending market that was broadly flat and housing market that increased by 7%

+ Group Underlying Operating Profit was £27.7m (2023: £10.3m from continuing operations, £9.3m from total operations), significantly ahead of the prior year, with particularly strong recovery in the Surveying & Valuation Division

+ Material improvement in Group Underlying Operating margin to 16% (2023: 7%), representing the highest margin reported in over 15 years

+ Group operating profit was £21.9m (2023: £3.7m)

+ Net Cash of £32.4m at 31 December 2024 (31 December 2023: £35.0m), with adjusted cash flow from operations of £31.1m (2023: £(0.2)m) and cash flow conversion rate⁸ of 114% (2023: (2)%) reflecting a return to more normalised profit levels in the period

+ Net Exceptional costs of £2.4m (2024: £4.4m) primarily relating to costs incurred in the exit of a large protection only firm and costs associated with the administration of the company from which TenetLime was purchased (the latter of which we expect to be recovered against deferred consideration)

Divisional Performance: 

 

Estate Agency Franchising Division

+ Continued support of the growth of franchisees, including the first loans granted to support lettings book acquisitions, adding c.700 properties to the franchisee lettings portfolios

+ Benefits of new business model are reflected in a substantial increase in Underlying Operating Profit to £7.6m (2023: £4.3m) with an underlying operating margin of 28%

+ Scope remains for further cost efficiency gains within Estate Agency business as the operating model approaches target state

+ The number of properties under franchisees management remained stable at 37,462 (31 December 2023: 37,502)

 

Surveying & Valuation Division

+ Surveying & Valuation performance was strong reflecting the benefit of contract extensions with improved terms as well as a recovery in market conditions following the significant reduction experienced in 2023

+ Surveying & Valuation revenue increased significantly to £97.8m, an increase of 36% on 2023 (£71.9m), reflecting a 26% increase in jobs performed and 8% increase in income per job on the comparative period

+ Mortgage approvals were 21% above 2023, driven by higher purchase approvals (up 31%) with remortgage and other approvals 8% higher

+ LSL estimate that its market share of physical and remote valuation instructions was around 38%, representing a small increase over 2023 (c.37%)

+ Long-term contract extension with Lloyds Banking Group, underpinning the Group’s leading market position. LSL also secured a substantial improvement in terms and allocation with another major lender

+ Retained contracts with all lending customers with no loss in allocations

+ Underlying Operating Profit increased to £22.5m (2023: £6.7m)

+ Good progress continues against strategic objectives to develop new survey and valuation income from the end customer: B2C revenue increased by 87% to £6.8m (2023: £3.6m), having grown from £1.1m in 2020

+ Substantial investment made throughout 2024, increasing in H2, to support data and model development initiatives to diversify future revenue streams and meet lender client needs

 

Financial Services Division

+ LSL says its Financial Services Network business increased its focus on its core market, serving the needs of smaller, mortgage-led financial services businesses, reflecting the strategic decision to reduce its focus on larger, pure protection brokerages

+ Successfully integrated 145 TenetLime firms with both profit contribution and adviser retention in line with expectations

+ Increased market share of the UK purchase and remortgage market of 11.8% (2023: 10.6%)

+ Total advisers increased by 75 to 2,736 as at 31 December 2024 (2023: 2,661) including 247 TenetLime advisers

+ The number of advisers that sell both mortgages and protection increased by 214 to 2,282. The number of protection only advisers was reduced by 137, following the decision to exit some firms whose business model was not in line with our risk appetite and strategic focus

+ LSL advisers continue to adapt effectively to changes in the mortgage market, increasing product transfer mortgage lending by 2%, resulting in a further increase in share of the product transfer market to 6.9% (2023: 6.1%)

+ Financial Services Network business traded resiliently, reporting Underlying Operating Profit of £8.7m (2023: £7.4m)

+ The weighting of margin dilutive product transfers in the refinancing market remained above the long-term average

+ Network protection revenue remained broadly flat at £12.9m after adjusting for disposals

+ Total revenue of £48.4m was down 6% on the prior year as reported (2023: £51.7m), reflecting the net impact of the disposal of businesses in 2023 and the purchase of TenetLime in 2024

+ The number of Network firms increased to 1,108 as at 31 December 2024 (2023: 1,000), including 145 TenetLime firms

 

Pivotal Growth Joint Venture

+ Acquisition during 2024 of eight businesses, including John Charcol with 150 mortgage and protection advisers

+ Pivotal Growth now has over 500 advisers, making it one of the largest mortgage and protection brokers in the UK, giving it critical mass to leverage its scale to attract deals and drive revenue synergies and profitability

+ Pivotal Growth’s financial performance has steadily improved (in trading EBITDA before transaction costs) as it has increased in scale and moved out of its establishment phase

+ Following material growth in trading EBITDA (before transaction costs) in 2024 compared to prior year, our share of Pivotal profit after tax is expected to continue to improve in future periods

 

Current trading and outlook 

LSL says it has made a positive start to the year with trading in line with expectations. Its end markets have been operating broadly in line with their assumptions.

LSL continue to expect the Group to deliver a further increase in profits in 2025. The Board remain positive about the Group’s short and medium-term prospects and fully supports the programme of investment across each of its businesses to take advantage of the value accretive growth opportunities ahead.

 

LSL welcomes franchise renewals