LSL has reported its results for the six month period ended 30 June 2023 during which it made significant strategic progress towards creating a higher margin, higher cash converting business that the company believes will perform more consistently through market cycles.
The group has a strong balance sheet with a net cash position of £36.3m at 30 June 2023, and the Board has maintained the interim dividend at 4p per share.
However, the strategic transformation of the group means that its financial results are less directly comparable against the same period in 2022.
Key highlights:
+ Focusing of Financial Services Division exclusively on business-to-business services, reducing costs and operating a scalable platform business
+ Sale of four direct-to-consumer financial service advice businesses to Pivotal Growth, LSL’s joint venture with Pollen Street Capital was completed in April 2023
+ Announced acquisition of TenetLime network in August 2023, subject to FCA approval, adding up to 278 advisers to LSL’s Financial Services network
+ Conversion of entire owned estate agency network of 183 branches to franchisees announced on 4 May 2023. LSL is now one of the leading providers of estate agency franchise services in the UK, supplying services to a network of over 300 branches
+ Disposal of Marsh & Parsons in January 2023 for £29m gross proceeds, boosting further LSL’s already strong balance sheet, which at 30 June 2023 included Net Cash of £36.3m (H1 2022: £30.7m)
|
H1 financial metrics |
2023 |
2022 |
Var |
|
Group Revenue (£m) |
72.5 |
110.2 |
(34)% |
|
Group Underlying Operating Profit from continuing operations2,3 (£m) |
4.3 |
14.7 |
(71)% |
|
Group Underlying Operating Profit from total operations2,3 (£m) |
3.3 |
14.2 |
(76)% |
|
Group Underlying Operating margin (%) |
3% |
9% |
(560)bps |
|
Exceptional Gains (£m) |
8.6 |
– |
nm |
|
Exceptional Costs (£m) |
(4.3) |
(2.0) |
(116)% |
|
Group statutory operating profit (£m) |
7.2 |
9.9 |
(27)% |
|
Profit before tax (£m) |
7.1 |
8.9 |
(20)% |
|
Loss from discontinued operations3 |
(42.9) |
(1.7) |
nm |
|
Basic Earnings per Share4 (pence) |
5.0 |
7.3 |
(32)% |
|
Adjusted Basic Earnings per Share4 (pence) |
2.7 |
10.7 |
(75)% |
|
Net Cash5 at 30 June (£m) |
36.3 |
30.7 |
18% |
|
Interim Dividend (pence) |
4.0 |
4.0 |
– |
+ Group Statutory Operating Profit was £7.2m (H1 2022: £9.9m)
+ Group Underlying Operating Profit from continuing operations was £4.3m (H1 2022: £14.7m)
+ Group Underlying Operating Profit from total operations was £3.3m (H1 2022: £14.2m), broadly in line with our expectations as reported in the pre-close trading update on 7 August 2023
+ Group Underlying Operating Loss from discontinued operations was £1m (H1 2022: £0.5m loss)
+ Unallocated central costs reduced by 14% to £3.5m (H1 2022: £4.0m)
+ Net Exceptional gains of £4.3m were recognised during the first half of the year, including the net gain on disposals of £7.2m partly offset by re-structuring activity and non-recurring corporate costs of £2.9m
+ Net Cash of £36.3m at 30 June 2023
+ Agreed new RCF of £60m, extending maturity two years to May 2026, with existing mainstream UK lenders, providing further financial flexibility to the group
David Stewart, group chief executive at LSL, commented: “It has been a period of significant strategic progress to simplify the group and create a more focused business that will perform more consistently through market cycles. I’m proud of how the team has worked tirelessly to reshape LSL while navigating significant macroeconomic headwinds and thank them for their focus and dedication – it is a significant achievement.
“During the period we have successfully executed the transition of Estate Agency to a Franchise business. We have similarly focused our Financial Services Division to become an exclusively business-to-business service provider, completing the transfer of each of our direct-to-consumer businesses to Pivotal Growth. In August, we also announced the acquisition of TenetLime, which adds up to 278 advisers to our network, subject to FCA approval.
“Our strong balance sheet continues to provide opportunities to consider value-enhancing M&A and invest in organic growth initiatives in our core segments, whilst maintaining our interim dividend at 4p per share.”
