LSL Property Services (LSL) continued to battle a weak residential housing market during the first half of 2019, which forced like-for-like revenue down 5 per cent at its core estate agency business. That excluded the impact of closing more than half of LSL's Your Move and Reeds Rains branches to focus on those chief executive Ian Crabb says are “larger, have more people, more economies of scale and better market share".
Running costs saved from cutting branches boosted underlying operating profit for that division almost threefold, although the one-off expenses associated with the closures pushed the group into a statutory loss. Profit per branch was £48,400, which management hopes to increase to between £80,000 and £100,000 in the medium term, based on a “normalised” level of market transactions.
The surveying and valuations division was also under pressure, impacted by weaker market conditions and a change in the business mix, which reduced income per job to £170 from £201 and caused operating profits to fall by more than a quarter to £6.3m. The financial services division was a comparative bright spot, as a rise in mortgage lending helped boost underlying operating profits by a fifth.
Bloomberg consensus forecasts are for adjusted EPS of 26.2p for 2019, down from 27p in 2018.
| LSL PROPERTY SERVICES (LSL) | ||||
| ORD PRICE: | 196p | MARKET VALUE: | £201m | |
| TOUCH: | 196-210p | 12-MONTH HIGH: | 305p | LOW: 196p |
| DIVIDEND YIELD: | 5.6% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 127p* | NET DEBT: | 40% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 153 | 6.42 | 4.7 | 4 |
| 2019 | 154 | -4.56 | -3.1 | 4 |
| % change | +1 | - | - | - |
| Ex-div: | 8 Aug | |||
| Payment: | 16 Sep | |||
| *Includes intangible assets of £191m, 186p a share | ||||
