Connells reports £36.2m profits
Despite an almost static housing market Connells Group increased market share by almost 5% last year and improved on its second hand sales performance.
New homes sales also showed a year on year improvement with Q4 providing a 10% increase over the same period in 2011.
The company recorded an increase of 17% in mortgage business and 27% in survey and valuation transactions in 2012. Its auction division reported a 25% increase in sales in 2012 over 2011.
Group Chief Executive David Livesey said: “These superb results are even more impressive when considered alongside the scale of the investments the Group made in its business last year, particularly in mortgage services and lettings.
“To take advantage of the expanding rental market we established a significant number of cold start lettings agencies and have plans to open many more over the coming year. Our estate agency sales centre also grew substantially. Our pre-tax profits are after all these additional costs have been deducted.”
During 2012 Connells made an acquisition into Hearthstone Investments Ltd, the UK’s first FSA authorised residential property fund manager. Since then, with the support of Connells, Hearthstone has secured seed funding deals from Barratt Developments, Bovis Homes and Quintain. The fund was also chosen by Islington Council as the investment vehicle for £20 million of its pension fund.
In January 2013, the Connells Group has already recorded a 39% increase in mortgage applications, a 25% increase in the number of people looking to sell their homes, a 20% increase in sales and 14% increase in viewings when compared to January 2012.
Livesey added: “Every part of our core residential estate agency business has seen a week on week improvement on last year’s results.
“There is a definite feeling of more confidence in the market. Restrictions on mortgage funding are gradually easing, party due to the impact of the Government’s Funding for Lending programme and also because of more competition amongst lenders.
“Many more mortgage products are now available, including a larger range of 95% loan to value mortgages, which should make it easier for people to move. I believe the market will continue to improve during 2013. And with more transactions taking place meaning less stock on the market, I think we will see property prices starting to rise.
“The Connells Group encompasses a full range of market-leading estate agency and related property management services which have enabled us to thrive and grow in a difficult market. Our strategy over the coming year remains to be a strong market leader in our core estate agency activities whilst continuing to expand our successful business to business activities.”