LSL has just issued a pre-close trading update for the 12-month period ending 31 December 2024, revealing that the second half of the year was resilient and much stronger than 2023.
Group revenues for the 12 months ended 31 December 2024 are expected to increase by c.20% to c.£173m (2023: £144.4m). Group Underlying Operating Profit is significantly ahead of prior year and slightly ahead of the Board’s prior expectations, with each of our three divisions reporting an increase in Underlying Operating Profit.
Operating margin improved in each division, with group operating margin of c.16% compared to LSL’s historical norm of 12%, reflecting the benefits of the reorganised Group structure. The Group cash flow conversion rate improved to over 100% (2023: -2%).
In the Estate Agency Franchising Division, LSL completed its first full year with an entirely franchised branch network, delivering a material increase in profits.
The Newcastle-based group, which includes brands such as Your Move and Reeds Rains, told investors that a major shake-up of LSL Property Services’ estate agency division, which included franchising its network of more than 180 locations, is proving profitable, with an operating margin of 28% last year, up from 21% in 2023.
Elsewhere, in the group’s financial services division, overall share of the UK purchase and remortgage market increased to 11.6% (2023: 10.7%). Operating margin for the year improved to c.18% (2023: 14%).
Surveying & Valuation performance increased materially from prior year, benefiting from normalising market conditions and contract extensions. Operating margin for the year improved to c.23% (2023: 9%).
The Group retains a strong balance sheet, with Net Cash of £32.4m at 31 December 2024 (31 December 2023: £35.0m).
Looking ahead, LSL says it remains confident about the group’s prospects. Whilst current economic sentiment, higher interest rates, and the increase in employer NI costs constitute headwinds, we entered the year with stronger pipelines than in 2024 and January trading is in line with expectations.
The group adds that it will continue to invest further in each of our businesses to take advantage of the growth opportunities identified, and at this early stage of the year we expect to deliver an increase in profit for 2025 compared to 2024 in line with expectations, as our markets continue to normalise. A further update on current trading and outlook will be shared with the release of our preliminary results.
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