Every year, I undertake a review of all the major estate agencies to see how they are faring, and the figures to the end of December 2020 (which are the most recent for many) show some interesting results. It may come as a surprise, but most of the UK’s largest estate agencies managed to maintain – and even improve – their financial performance during 2020 – despite the pandemic, furlough and lockdowns, with many showing a sizeable increase in profits.

There is no doubt that the government’s support through the Coronavirus Job Retention Scheme, as well as VAT and PAYE deferral, business rates holidays, the Retail, Hospitality and Leisure Grant funds, Government backed loans and the Stamp Duty Holiday, made a massive difference to the business fortunes of most (and will have skewed estate agents’ accounts in the process).

Many people have forgotten those initial days of uncertainty, pre-vaccine, when we thought our businesses wouldn’t survive. There was so much fear around as to what the future would hold. Instead, we came through the worst as an industry, thanks to the resilience and adaptability of people to new ways of working and better technology, as we strived to keep people safe.

Inevitably, many high street branches have closed with more people working from home – including Countrywide, which had 78 fewer branches by the year end, down from 731 to 653.

Its income in 2020 dropped 17% from £498.1m to £415.9m, although its losses almost halved from £41.7m to £23.5m. At this point, the company was acquired by Connells, who paid 395p per share for Countrywide in a deal that valued Countrywide at around £134m.

Although Connells’ turnover had dropped 11%, their post-tax profits increased from £38.8m to £40.9m. Its cash balances increased to £103.1m from £75.7m, even after paying £20m to shareholders. Its branch network remained steady in terms of numbers, at 581.

With no long-term debt, it states in its accounts that it is in a good position to service the £253m intercompany loan from parent company Skipton Building Society for Countrywide. The loan funded the acquisition, paid off Countrywide’s debts and will provide additional investment and working capital for the combined business.

Among the biggest profit makers were Savills UK, up 7% to £51.8m, Connells up 6% to £40.9m and LSL up 26% to £16.3m. Interestingly LSL, which has a stake in Yopa (as does Savills’ investment arm and the Daily Mail), states that ‘traditional estate agents will represent the substantial majority of the residential sales and lettings markets for the foreseeable future and that LSL’s Estate Agency branches will remain core to providing the service customers expect’.

At Dexters, profits to September 2020 had shot up to £13.5m from £3.6m – but this was distorted by the fact it had adopted IFRS16. Arun’s profits to September 2020 showed a slight increase to £7.6m.

Chestertons almost doubled its profits to December 2020 from £3.4m to £6.7m – but I can’t see how it’s worth the £100m price tag that’s been put on it.

The Belvoir Group (franchise) showed a 12% increase in profit to £5.2m. The Property Franchise Group increased from £3.2m to £3.8m. Acorn’s profits have increased from £2.0m to £2.8m, but their debt has also significantly increased, having taken out £4.5m in bank loans.

Chancellors (Group) managed to get its profits back up again, to £2.1m by December 2020, after a slip last year, while profits at Winkworth (another franchise group) remained fairly static at £1.2m.

This data supplied by Paul Smith comes from company accounts of the big estate agencies. 

Smith is chief executive officer of Spicerhaart. You can read more of his views – on some of of the largest loss-making estate agencies – on EYE tomorrow.