LSL has issued its annual report for last year, telling shareholders that it delivered a robust performance in subdued market conditions.
The report highlights its “strategic investment” in online agency Yopa as a milestone of last year.
In 2017, group revenue was up 1.2% at £311.6m, but pre-tax profits were down almost 37% at £40.1m.
However, the report stresses that LSL is positive about the outlook and says that this year it hopes to restart its lettings book acquisition programme.
The business also plans selective acquisitions of sales agencies.
The report reveals that last year, underlying profit per agency branch across Your Move, Reeds Rains and LSLi averaged £32,000 – up from £30,500 in 2016.
The group has ambitions to drive this to between £80,000 and £100,000 “on the expectation of a normalised level of market transactions in the UK residential property sales market”.
However, group chief executive officer Ian Crabb says that market conditions this year “have been slightly softer than the equivalent period in 2017”.
He says that a modest reduction in the volume of transactions is expected.
The annual report also shows earnings for the 2018 financial year, including for Crabb and the executive director in charge of estate agency, Helen Buck.
Crabb’s basic earnings from January 1 are £448,000, rising to a maximum of £1,375,000 if he earns a full bonus.
The equivalent figures for Buck are £321,000 rising to maximum of £1,006,000.
The AGM is on April 26.
Comments (3)
To increase profitability from £30k – £80k if the market returns to ‘normalised levels of transactions’ is not actually such a big ask. If a branch is in profit you get to the point where most of the extra income hits the bottom line. Getting all the branches in profit is the real challenge. When everything goes right in the sales side the acceleration of profit in an Estate Agency business can be enormous. The reverse is also true which is why profit levels per branch are currently modest.
One thing is certain though, the effect that Mr Crabb & Ms Buck have on any major profit increase will be down to the market rather than them so getting a bonus or not is really out of their hands and is down to timing. If they can hang on in there then they should see an upswing in profits at some point. Where their skills will be tested will be if they can hold it all together until the market returns to normal levels.
They are well rewarded!! Intrigued by their statement that they plan to more than double or even triple the profit per branch bearing in mind that during after the strong markets of the last 2 years they only raised increased profits by £1,500, allowing for the melt down at their largest peer! How will they do that in a more challenging market now upon us, love the ‘on the expectation of a normalised level of market transactions in the UK residential property sales market’ Yet they state in the following sentence ‘However, group chief executive officer Ian Crabb says that market conditions this year “have been slightly softer than the equivalent period in 2017”.
I hope investors look really closely at this statement before buying into that message.
An example of how the be better than Countrywide and PB