LSL reports subdued Q1 results
House purchase approvals were 2.2% lower than quarter one 2012 which reflects the strong performance of housing market caused by the ending of the stamp duty holiday in March 2012 and the timing of Easter.
LSL group chief executive Simon Embley said: “Activity levels were constrained in line with the market during the first quarter but have since picked up considerably with underlying group revenue in the post Easter period up 7% year on year.
“The Group is well positioned to benefit from its significant operational gearing if market volumes continue to improve.”
Turnover for the three months ended 31 March 2013 and also for the four months ended 30 April 2013 compared with the same periods in 2012 declined by 9% and 6% respectively while underlying turnover dropped by 5% and 1% based on the same comparative period.
The estate agency division has traded well against the market backdrop with strong lettings growth up 10% year on year.
The division reported a significant increase in front end activity levels since mid April resulting in pipeline volumes up 7% year on year at 30 April.
And asset management has outperformed a difficult market where repossession volumes(3) were down 17% year on year during the first quarter.
The surveying and valuation services division reported a statisfactory performance relative to the market with underlying revenue for April up 8% year on year.
Overall the division posted a reduction in revenue year on year due to the in-sourcing of a major contract in June 2012.
In its outlook statement the group said: “Recent increases in activity levels in LSL’s businesses indicate that market transaction volumes are improving.
“These tentative signs of recovery are supported by key lender activity and renewed consumer confidence. In addition a further boost is expected from the Help to Buy Mortgage Guarantee Scheme in January 2014.
“Overall the board is cautiously optimistic that the recent increase in front-end activity levels will result in a sustained improvement in market volumes from the second quarter of 2013.”
The board had previously planned for a flat market in 2013 with a view to accelerating investment to increase market share in the estate agency sector as well as a increasing the rate of new branch openings in its Marsh & Parsons brand.
This plan is now being augmented to incorporate further investment across both the surveying and estate agency divisions to build capacity alongside market improvement.
The statement continued: “The Board is confident of delivering progress in line with our expectations for 2013 with profits being more weighted to the second half of the year.”