Given the tough trading climate in the estate agency sector, LSL Property Services delivered a pretty robust performance in the six months to June 2017. A diverse revenue stream certainly helped, and the core estate agency division managed to maintain revenue at the same level as the previous year. The jump in headline profit included a £1.1m provisions release for professional indemnity liability.
Residential sales income was 13 per cent lower at £37m, reflecting a 10 per cent fall in transactional volume, and the impact of branch closures last year. However, lettings income rose by 4 per cent to £35.7m including acquisitions and 3 per cent organically. Financial services revenue, which is generated by organising mortgages and insurance, rose by 16 per cent to £34.1m despite lower volume, and as the growth came through the company took a larger share of the market, up from 7.1 per cent to 7.8 per cent.
LSL’s surveying division also managed to push revenue ahead by 2 per cent, and underlying operating profit was up by 16 per cent, while revenue per job edged up to £207 from £203. After the half-year end, LSL completed the sale of its investment in the Guild of Professional Estate Agents, which generated £3m in cash.
Analysts at Peel Hunt are forecasting adjusted pre-tax profit for the year to December 2017 of £27m and EPS of 20.7p (from £32.7m and 25.3p in 2016).
| LSL PROPERTY SERVICES (LSL) | ||||
| ORD PRICE: | 262p | MARKET VALUE: | £269m | |
| TOUCH: | 257-262p | 12-MONTH HIGH: | 263p | LOW: 180p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 131p* | NET DEBT: | 24% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 151 | 8.4 | 6.3 | 4 |
| 2017 | 152 | 13.2 | 10.3 | 4 |
| % change | - | +57 | +63 | - |
| Ex-div: | 10 Aug | |||
| Payment: | 8 Sep | |||
| *Includes intangible assets of £183m, or 179p a share | ||||
