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RNS Number : 1186N
Belvoir Group PLC
28 January 2021
This announcement contains inside information.
28 January 2021
BELVOIR!
BELVOIR GROUP PLC
(the "Company" or "Belvoir" or "Group")
Pre-Close Trading Update
Trading Ahead of Expectations
Belvoir Group PLC (AIM:BLV), the UK's largest property
franchise, is pleased to provide the following positive Trading
Update on the outcome of the financial year ended 31 December 2020,
another year of significant growth.
The Board is delighted to report that trading in 2020 exceeded
its pre-Covid-19 expectations with revenue up 12% to GBP21.6m*
(2019: GBP19.3m) and consequently the Board expects that the
performance for the year, including profit before tax, will be
comfortably ahead of management's expectations.
The property division achieved revenue growth of 12% of which
10% related to the acquisition of the Lovelle network. The Lovelle
network comprises of eleven franchise offices and six
corporate-owned offices, which were franchised out between October
2020 and January 2021 as planned.
Management service fees ("MSF"), the key underlying return from
franchisees, was up 3% to GBP9.0m* (2019: GBP8.8m). The Covid-19
lockdown in Q2 had minimal impact on lettings MSF, which achieved
2% growth in 2020, as a result of the strong recurring nature of
this revenue stream. Meanwhile the significant impact of the
lockdown on sales MSF was partially mitigated by the exceptional
recovery in the sales market towards the end of H2, which together
with the acquisition of the Lovelle estate agency franchise network
helped to achieve 9% growth.
Revenue from the financial services division increased
significantly by 13% to GBP9.6m* (2019: GBP8.5m), having grown the
network of financial advisers by 22% to 202 (2019: 166). As with
estate agency, the financial services market was adversely impacted
by the lockdown of the property sector in Q2, but the shortfall in
new mortgage products was mitigated by shifting the focus to
remortgages and life protection products. However, the recovery in
the property sales market in H2 provided a significant boost to the
mortgage market, resulting in record levels of commission from
mortgages in Q4.
The swift and decisive action taken by the Board to reduce its
cost base at the start of the pandemic left overheads significantly
below the original budget, with some of those savings continuing
into 2021.
The Group's operating activities are highly cash generative and
are underpinned by 60% of gross profit arising from the recurring
lettings business. At the year end net debt had reduced
significantly to GBP3.7m* (2019: GBP6.9m), despite having deployed
GBP2.0m of cash in January to acquire the Lovelle network.
As a result of the strong trading performance in 2020, the Board
decided to reimburse staff for the salary sacrifice made during the
first lockdown and to fully repay the GBP260,000 of Government
Covid-19 support received in the form of furlough money and Small
Business Grants in relation to our corporate-owned offices. As
previously announced, in addition to the 2.0p catch-up dividend
paid with the 2020 interim dividend in October in relation to the
suspended 2019 final dividend, there will be a further catch-up
dividend of 1.3p per share to coincide with the final 2020
dividend. This brings the total reinstated 2019 dividend to 3.3p
per share.
Dorian Gonsalves, CEO, commented:
"The Group has once again demonstrated the incredible resilience
of the Belvoir franchise business model, having consistently
reported profit growth for 24 consecutive years, including through
the 2007 financial crash, the 2019 ban on tenant fees and now the
2020 Covid-19 pandemic.
"All parts of the business have performed exceptionally well
despite the backdrop of the pandemic. This has been largely thanks
to our employees, who have worked tirelessly to support our
networks, and to our property franchisees and financial services
advisers, who in turn have continued to deliver the best possible
service to their clients.
"The Board is mindful that we are not yet through the pandemic
and it is too early in 2021 to gauge the medium-term impact of
Covid-19. We are conscious that the stamp duty holiday is due to
end on 31 March 2021, however we are confident that having traded
successfully through 2020, we are well positioned to deal with any
further challenges in 2021.
"The Board remains focused on its successful growth strategy
that has ensured the expansion and the diversification of the
Belvoir Group from a single brand lettings franchise with 162
offices in 2014 to a multi-brand property franchise supporting a
network of over 400 individual businesses across five distinct
brands, specialising in residential lettings, property sales and
property-related financial services."
Notice of Full Year Results
The audited results for the financial year ended 31 December
2020 will be announced on Monday, 12 April 2021.
*unaudited
For further details:
Belvoir Group PLC 01476 584900
Dorian Gonsalves, Chief Executive Officer investorrelations@belvoirgroup.com
Louise George, Chief Financial Officer
www.belvoirgroup.co m
finnCap
Julian Blunt & Teddy Whiley (Corporate Finance)
Tim Redfern (ECM)
www.finncap.com +44 (0) 20 7220 0500
Buchanan +44 (0) 20 7466 5000
Charles Ryland, Kim Looringh-van Beeck
& Tilly Abraham
Notes for editors:
About Belvoir Group PLC
Founded in 1995 and listed on AIM in 2012 (BLV.L), Belvoir
operates a nationwide property franchise group with 410 offices
across five 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 68,550 properties and reported record revenues
of GBP19.3m in 2019 making Belvoir the largest property franchise
group in the UK.
For further information, please visit: www.belvoirgroup.com
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END
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