Once again, diversity has paid off for property services group LSL Property Services (LSL), with 2017 underlying operating profits ahead by 8 per cent to £37.5m. Headline figures were lower, but that’s because the previous year’s number included an exceptional gain of £32.9m on the sale of shares in Zoopla (ZPG).
Key growth areas included lettings income, which grew by 4 per cent, and now comprises 30 per cent of revenue generated in the estate agency division. Chief executive Ian Crabb pointed out that the proposed lettings fee ban doesn’t come into effect until the first quarter of 2019, so earnings in the current year will not be affected.
The financial services division provided further support, with 16 per cent growth in income and mortgage completions rising from £17.1bn to £21bn. However, income from residential sales fell by 9 per cent to £76.6m, as transactional volumes declined. Meanwhile, LSL increased its digital presence through a 17.3 per cent stake in online estate agent Yopa, with the intention of increasing its exposure to the fast-growing transactional online business.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to December 2018 of £30.6m and EPS of 23.6p.
| LSL PROPERTY SERVICES (LSL) | ||||
| ORD PRICE: | 270p | MARKET VALUE: | £277m | |
| TOUCH: | 268-270p | 12-MONTH HIGH: | 298p | LOW: 195p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 145p* | NET DEBT: | 20% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 259 | 17.1 | 13.6 | 10.5 |
| 2014 | 288 | 31.9 | 24.5 | 12.3** |
| 2015 | 301 | 38.6 | 29.7 | 12.6 |
| 2016 | 308 | 63.5 | 49.2 | 10.3 |
| 2017 | 312 | 40.1 | 32.6 | 11.3 |
| % change | +1 | -37 | -34 | +10 |
| Ex-div: | tba | |||
| Payment: | tba | |||
| *Includes intangible assets of £182m, or 177p a share **Excludes special dividend of 16.5p per share | ||||
