Belvoir is on course for a 22nd year of unbroken profit growth after reporting strong results for the first six months.

For the half-year period to the end of June, there was a 19% increase in revenue across the group to £6.1m, while headquarters’ income from Management Service Fees paid by the franchisees went up 6% to £4m.

Profits before tax rose to £2.9m, up from £1.7m in the same period last year.

Speaking to EYE, chief executive Dorian Gonsalves said that while overall sales transactions in the UK had fallen by 3.8%, Belvoir’s Management Service Fees from sales had actually risen by 8%.  He also expected to see a pick-up in sales in the second half of this year.

Lettings still remain easily the lion’s share of the business, at 81%. The number of managed properties stood at 61,100, up from 57,637.

Gonsalves and finance director Louise George also revealed that Belvoir expects to end up paying £13.2m for its purchase of Northwood.

The earn-out period ended in May, and a board meeting will decide whether the final £4.2m will be paid in cash or shares.

While the final price will be £800,000 less than Belvoir could have paid, George said there was no question of under-performance by Northwood – in fact, the exact opposite. Belvoir had simply been cautious in putting into its accounts what it could have paid.

She also revealed that four senior managers, including newly promoted Eric Walker, have 8% share options in the business.

Gonsalves said that the tenant fees ban, likely to come into force next April, remains a concern.

Franchisees across the group will lose an average of 12% revenue when the ban is implemented.

Gonsalves expects – as he has said before – 20% of letting firms to go out of business.

But, he said, this will give franchisees across the Belvoir, Newton Fallowell and Northwood brands greater acquisition opportunities, assisted by head office.

There are currently six assisted acquisition deals with lawyers, 15 opportunities under review and 65 franchisees “actively” seeking an acquisition.

Gonsalves said that there has been great emphasis on training and help for franchisees to compensate for the lost income – including financial services, now possible since the acquisition of Brook Financial Services.

He also revealed that at head office, there is no promotion of the tenancy deposit replacement products now coming into the market ahead of the ban.

He said the average rent across the group was £800 and that there has been no demand for a replacement deposit product.

Gonsalves also did not rule out possible mergers or acquisitions at a top level: a move to take over competitor The Property Franchise Group failed last autumn.

Belvoir, which ended the half year with net debt of £3.8m, down from £5.1m at the end of last December, is to pay a first-half dividend of 3.4p.