LSL Property Services Trading Update-2016 Expectations Unchanged (3577Q)

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RNS Number : 3577Q

LSL Property Services

29 November 2016

 
 FOR IMMEDIATE RELEASE    29 November 2016 
 

LSL Property Services plc ("LSL")

Trading Update-2016 Expectations Unchanged

LSL, a leading provider of residential property services incorporating both Estate Agency and Surveying businesses, issues a trading update for the period up to 31 October 2016.

Group Performance and Outlook

Group revenues for the ten months ended 31 October 2016 increased by 3.0% to GBP258.0m (2015: GBP250.6m) reflecting overall growth in both Divisions: Estate Agency up 3.5% and Surveying up 0.9%.

Whilst Group revenues for the four months ended 31 October 2016 of GBP106.6m (2015: GBP110.4m) were 3.4% lower year on year reflecting the effect of lower activity levels in the residential sales market, strong performances during the same four month period were delivered in Lettings revenue (+7%) and Financial Services revenue (+24%) reflecting the strength of the Group through its broad range of businesses across the residential property services sector.

We expect Group Underlying Operating Profit(1) for calendar 2016 to be in line with our expectations.

With the reduction in market activity levels in the second half of 2016 and uncertainty over UK economic conditions, we are cautious on the market outlook for 2017. However, mortgage costs and availability remain positive and the medium to longer-term fundamentals of the UK housing market remain positive.

LSL has very strong fundamentals, with a robust balance sheet and a balanced business portfolio including its counter-cyclical Asset Management business. The business is well positioned to adapt quickly to changing market conditions to deliver long-term value to shareholders.

Balance Sheet Update

Between 20 July 2016 and 31 October 2016, LSL sold its entire holding of 11.3m ordinary shares in Zoopla Property Group PLC for total proceeds of GBP36.1m at an average price per share of GBP3.19.

The proceeds of the disposal are being used to reduce corporate indebtedness.

Net Bank Debt at 31 October was GBP43.5m (2015: GBP55.5m) with a gearing level of 0.98 times 12 month adjusted EBITDA (2015: 1.21 x).

Autumn Statement

LSL notes that the Chancellor has as part of the 2016 Autumn Statement announced that the Government intends to commence a consultation in relation to tenant fees. The Government has not announced any details on the scope or timetable of this consultation or any timetable regarding the implementation of any legislative changes. LSL will continue to monitor the Government review of tenant fees and contribute to the consultation in due course.

Note to trading update

(1) Group Underlying Operating Profit is before exceptional gains and exceptional costs, contingent consideration, amortisation of intangible assets and share-based payments

For further information, please contact:

 
 Ian Crabb, Group Chief Executive 
  Officer 
 Adam Castleton, Group Chief 
  Financial Officer 
 LSL Property Services plc           0207 382 0360 
 
 Richard Darby, Sophie McNulty, 
  Sophie Cowles 
 Buchanan                            0207 466 5000 
 

Forward Looking Statements:

This trading update may contain forward looking statements with respect to certain plans, goals and expectations relating to the future financial condition, business performance and results of LSL. By their nature, all forward looking statements involve risk and uncertainty because they relate to future events and circumstances that are beyond the control of LSL, and they may cause the actual results or performance of LSL to be materially different from the results or performance implied by such statements. Any forward looking statement will be by reference to the date of this trading update and must not be regarded as guarantees of future performance. Further, nothing in this trading update should be construed as a profit forecast. Some of the factors which may affect LSL's actual future conditions, business performance and results are contained within LSL's Annual Report & Accounts 2015, together with information on the management of the principal risks and uncertainties faced by LSL.

Notes on LSL:

LSL is a leading provider of residential property services to its key customer groups. Services to consumers include: residential sales, lettings, surveying, conveyancing and advice on mortgages and non-investment insurance products. Services to mortgage lenders include: valuations and panel management services, asset management and property management services. For further information, please visit LSL's website: www.lslps.co.uk

This information is provided by RNS

The company news service from the London Stock Exchange

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November 29, 2016 02:00 ET (07:00 GMT)