The introduction of a higher stamp duty on second homes and uncertainty ahead of the EU referendum didn't provide the easiest backdrop for Belvoir Lettings (BLV) in the first half of 2016. But the longer-term shift towards renting rather than buying properties, combined with a trio of acquisitions, propelled the group's adjusted pre-tax profits up 69 per cent to £1.3m.
Belvoir's big coup was its takeover of franchise network Northwood GB, leaving it as the largest property franchise group in the UK with 306 offices and around 54,000 managed properties. The upshot was a 46 per cent rise in management service fees to £2.6m. The expansion also underpinned lettings revenues of £2.8m - an increase of over a third - while revenues in the budding property sales business more than tripled to just north of £1m.
Management is betting that fielding multiple brands and rolling out more services such as buy-to-let support will underpin further growth. However, analysts at Cantor Fitzgerald predict that reduced buy-to-let mortgage activity, longer tenancies and political uncertainty will constrain the lettings industry's annual growth to about 3 per cent in the near future. The broker expects adjusted pre-tax profits of £3.0m for the December year-end, giving EPS of 7.2p (up from £2.4m and 7.3p in 2015).
| BELVOIR (BLV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 133.5p | MARKET VALUE: | £45m | |
| TOUCH: | 130-137p | 12-MONTH HIGH: | 140p | LOW: 86p |
| DIVIDEND YIELD: | 5.1% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 52p* | NET DEBT: | 33% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 2.7 | 0.7 | 2.5 | 3.4 |
| 2016 | 4.3 | 1.1 | 2.6 | 3.4 |
| % change | +60 | +43 | +4 | - |
Ex-div: 15 Sep Payment: 21 Oct *Includes intangible assets of £27.9m, or 83p a share | ||||
