Belvoir revenue, profits grow amid buoyant property market

Property franchise group Belvoir reported a 13% improvement in group revenue in its final results on Monday, to £21.7m, with 6% of that attributable to the acquisition of Lovelle.

The AIM-traded firm said management service fees - its core income from franchisees - grew by 3% to £9.1m in the year ended 31 December.

Profit before tax was ahead 20% year-on-year at £6.7m, marking the 24th year of consecutive profit growth.

The company’s strong lettings bias was reflected in its gross profit ratio of 60% lettings, to 17% sales and 19% financial services, and 4% other.

Cash at year-end increased “noticeably” to £5.9m from £3.6m.

Net debt was “significantly” reduced over the year to £3.7m from £6.9m, even after the firm deployed £2.0m to acquire Lovelle.

The board reinstated its progressive dividend policy, with a total dividend for the year of 7.2p, up from 6.7p in the prior year which included the catch-up final dividend of 3.3p, as dividend cover stood at 2.1x.

Belvoir confirmed full repayment of the £0.26m Covid-19 financial support received from the government under the Coronavirus Job Retention Scheme and small business grants.

On the operational front, Belvoir said it achieved growth across all three of its markets, being lettings, sales and financial services, despite disruption from the Covid-19 pandemic.

It entered into a strategic alliance with the Nottingham Building Society during the period, which now had 11 dual-branded branches.

The company said it had franchised out all five of the Lovelle corporate-owned offices by January, and exceeded the 200 financial advisers milestone ending the year on 202, up from 166 at the end of 2019.

It also progressed its strategic goal of pairing financial advisers and franchisees, with 141 of its agencies now offering financial services through a Brook financial adviser, up from 95.

Belvoir expanded the number of offices to 418 by year-end, compared to 396 a year earlier.

Since the period ended, Belvoir announced the earnings-enhancing acquisition of the Nicholas Humphreys network of 18 franchises and three corporate-owned estate and lettings agencies for £4m cash, adding around £2.8m of revenue and £1m of operating profit per annum.

“Whilst the property sector was adversely affected by Covid-19 lockdowns, when it reopened in May following the first lockdown, demand across both sales and lettings was exceptionally strong and fuelled further still by the government's announcement of the stamp duty holiday in July,” said chief executive officer Dorian Gonsalves.

“The recent Budget announcement of an extension of the higher stamp duty thresholds through to the end of September, albeit at a lower level from July, will do much to stimulate housing transactions further in 2021.”

Gonsalves said Belvoir’s franchise model again proved its resilience in 2020.

“The entrepreneurial spirit of our franchisees and advisers ensured that they made the most of the market opportunities as soon as the property sector opened up and started moving again.

“Through a combination of strong trading in the second half, and a reduction in overheads as we entered the pandemic, the group was able to achieve a performance during 2020 that exceeded the board's pre-Covid-19 expectations.”

At 1123 BST, shares in Belvoir Group were up 0.48% at 210p.