LSL describes results as 'robust' as profits tumble

Residential property services provider LSL Property Services announced its preliminary results for the year ended 31 December on Tuesday, with the board reporting “robust performance” in subdued market conditions.

The London-listed company said full-year group underlying operating profit was up 8% to £37.5m, with group adjusted EBITDA ahead 7% at £42.7m.

Group revenue rose 1% to £311.5m.

It wasn’t an entirely rosy picture, however, with LSL’s group operating profit slipping 36% to £42.1m and its profit before tax sliding 37% to £40.1m.

Its net exceptional gain was 73% lower than the prior year at £9.3m, with basic earnings per share down 34% at 32.6p.

Adjusted basic earnings per share were uo 9% at 28.3p.

The board proposed a 16% increase in the final dividend to 7.3p per share, making for 10% growth in the full-year dividend per share to 11.3p.

On the operational front, LSL described “continued momentum” in its estate agency division, with 2% overall revenue growth and underlying operating profit up 10% year-on-year.

It completed the strategic acquisition of a 17.3% shareholding in Yopa during the year, for consideration of £20m, after what the board called a “thorough” market evaluation of digital opportunities.

There was also continued growth of recurring income, with lettings up 4% year-on-year, along with strong growth in financial services income of 16%, with organic growth in that division stated at 14%.

Residential sales exchange income fell 9%.

The LSL board said it saw “strong” performance at Marsh & Parsons, which recorded revenue growth of 2% year-on-year, including lettings income up 10% against a challenging London market.

The company also continued its Marsh & Parsons branch expansion strategy in 2017, opening two new branches in what it called “outer prime central London”.

Its surveying division reportedly delivered strong profit growth of 8%, with strong operating margins of 29.4%.

Contract extensions for surveying and valuation services were signed with two major lenders during the year.

“The group delivered a robust financial performance given the subdued market conditions,” said chairman Simon Embley.

“I am pleased that the business delivered underlying operating profit growth in both the estate agency and surveying divisions.”

Embley said the group had a “strong” balance sheet with relatively low levels of gearing, and was very cash generative at an operational level.

“The business is well placed to capitalise on market conditions to increase shareholder value.

“LSL's financial performance in 2018 has tracked closely to the board's expectations and the group is well placed to deliver a solid performance during the year.”