Belvoir Lettings PLC Assisted Acquisitions Update (6691M)

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RNS Number : 6691M

Belvoir Lettings PLC

10 January 2019

10 January 2019

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

BELVOIR LETTINGS PLC

(the 'Group' or 'Belvoir')

Assisted Acquisitions Update

Belvoir lettings plc (AIM: BLV), the UK's largest property franchise, is pleased to report that it exceeded its 2018 target for Assisted Acquisitions by its franchisees, a core part of Belvoir's growth strategy.

During 2018 franchisees completed on 26 transactions under the Belvoir Assisted Acquisitions programme, increasing the acquired annualised network revenue to GBP6.9 million which exceeded the ambitious GBP6.6 million target, double the 2017 level, set by the Board. These acquisitions are expected to add in excess of GBP600,000 p.a. of recurring Management Service Fees (MSF), the main revenue stream for the Group. It also adds over 4,400 managed properties, increasing the portfolio by 7%. The Belvoir Group now represents over 62,000 managed properties.

The Assisted Acquisitions programme has been embraced by all three networks within the Belvoir Group with 11 taken up by the Belvoir network, 13 by Northwood and 2 by Newton Fallowell. In comparison with 2017, the average size of the business acquired increased by 85% from GBP144,000 annual revenue in 2017 to GBP266,000 in 2018. This reflects a contraction of the number of agents in the sector not only amongst the smaller but also many of the larger independent agents, as the impact of the number of landlords selling their properties due to a less favourable tax regime and the increased regulation on lettings agents takes effect.

Belvoir has supported many of its franchise owners to take advantage of these changes within the sector, through its highly skilled in-house Acquisitions team and by providing internal funding of up to 30% where required. In 2018 the Group contributed GBP660,000, approximately 9% of the total consideration, by means of a loan; whilst 17 of the deals were funded entirely by franchisees utilising their own cash reserves or sourcing funds from other loan providers.

A more detailed pre-close trading update for the year ended 31 December 2018 will be provided on Thursday 31 January 2019.

Dorian Gonsalves, CEO of Belvoir, commented;

"The Assisted Acquisitions programme, now in its sixth year, has gone from strength to strength and continues to grow. Since 2014 we have provided both commercial and financial support to 70 of our franchise owners, many of whom have doubled the size of their business overnight.

We continue to witness consolidation within the sector, a trend which supports our 2018 prediction that there will be 20% fewer agents by the end of 2020. This is evidenced by our acquisition opportunities pipeline being far greater than in previous years. Our franchisees are professionally and financially equipped to take advantage of these opportunities and we currently have 83 franchise owners who are actively searching for a suitable match within their territory. Belvoir is here to support our franchisees' entrepreneurial growth ambitions, which will benefit the Group and our shareholders alike."

For further details:

 
Belvoir Lettings PLC                                  01476 584900 
 Dorian Gonsalves, Chief Executive Officer             [e-mail] 
 Louise George, Chief Financial Officer 
Cantor Fitzgerald Europe 
 Rick Thompson, Phil Davies, Will Goode               0207 894 7000 
 
Buchanan 
 Charles Ryland, Victoria Hayns, Madeleine Seacombe   0207 466 5000 
 

Note to Editors:

About Belvoir Lettings PLC

Founded in 1995 and listed on AIM in 2012 (BLV.L), Belvoir operates a nationwide property franchise group with 364 offices across four brands specialising in residential lettings, property management, residential sales and property-related financial services. With its Central Office in Grantham, Lincolnshire, the Group manages over 61,000 properties and reported revenue of GBP11.3m in 2017 making Belvoir the largest property franchise group in the UK.

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January 10, 2019 02:00 ET (07:00 GMT)