Connells profits shoot up despite tough market, helped by sale of Zoopla shares

Connells Group this morning revealed a stunning 42% rise in pre-tax profits. Last year, the group made pre-tax profits of £104.2m, up from £73.4m in 3016.

Total income rose 9%, to £457.2m.

The results included a gain of £38.5m from the sale of shares in ZPG. Last year’s disposal followed a sale of Connells shares in Zoopla during 2016, worth £17m.

The group also announced increased market share during a falling housing market. With a 14.7% overall decline in transactions last year, Connells ssaid its own instructions were just 2% down, with sales down 3% and exchanges down 4%. It described this as a good result in a tougher market, and puts its market share at 6%, saying that last year it offered more houses for sale than any other agent in the UK.

Its lettings income was up 9%, and profits in this part of the business up 29%.

Connells Group CEO David Livesey said last year’s results were ‘a standout performance’.

He said: “Last year presented a number of challenges for the industry, but we thrive on challenge and, again, we proved our resilience and maintained our position as the most successful and profitable estate agency and property services group in the UK.

“With the level of expertise within our business, our diversity of disciplines and through a continued focus on providing the best service to our customers and clients, we have increased both our profits and our market share.  This is a tremendous outcome.”

He said that Connells remains acquisitive and will be investing in new branch openings.

The group also said that 2018 has started positively with a sales pipeline up on this time a year ago, and a 25% increase in applicants.

Livesey said: “We will continue to grow our business and invest in our people – they are our most valuable differentiator and the reason for our success.

“In a highly competitive marketplace, our results speak volumes about the quality of service we offer customers – our people deserve all the credit for these exceptional results.”

 

 

 

 

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16 Comments

  1. Bless You

    In our town this shows exactly what was wrong with countrywide.

    We had a countrywide branch that lost managers all the time as their was no respect shown and the F.S. managers were 2 faced idiots who constantly got involved and demotivated the sales team.

    At connells they could always negotiate on fees and looked after their staff so the good ones stayed ( over 20 years) .

    End result was countrywide withdrew and connells now own the high street for mortgages.

     

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  2. cyberduck46

    Am I reading this correctly?

     

    Excluding the Zoopla sale gain, profits would have decreased from £73.4M to £65.7M?

     

    “The group also said that 2018 has started positively with a sales pipeline up on this time a year ago,and a 25% increase in applicants.”

     

    Strange that no percentage is given for the sales pipeline increase yet the increase in applicants percentage is provided.

     

     

     

     

     

     

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    1. Bless You

      dont worry cyber,, compared to PB trading trading statements this is crystal clear.  Also great news for agents who do things properly and get a fair fee for a fair service. 
       

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      1. cyberduck46

        Is it clear though?
         
        “Connells profits shoot up despite tough market, helped by sale of Zoopla shares”
         
        Without the sale of Zoopla shares there would have been a drop in profits. You would normally report a gain like this as an exceptional item.
         
        LSL will be reporting in a few days and they have a profit from a sale of an investment and this is how they commented on that “As reported in the Interims in August 2017, the Group completed the sale of its investment in the Guild of Professional Estate Agents (GPEA) on 12th July 2017 with consideration made up of cash (£3m) and ordinary shares in eProp Services plc. We expect to disclose a gain on disposal for this item of £5.6m as an exceptional item in the 2017 Financial Statements.”
         
         
         
         

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        1. Bless You

          Its all ballomy..only figure that matters is profit. I hate %’s . 
          LAst year i sold 1 house and this year i sold 2 houses.. i lost £100,000 but my sales are up 100%..can i have some more money now please hedgefund…  

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          1. cyberduck46

            >only figure that matters is profit.
             
            We’re talking about profit.
             
            “Last year, the group made pre-tax profits of £104.2m, up from £73.4m in 3016.”
             
            But excluding exceptionals, a reduction in profit, from £73.4M to £65.7M.
             
            Bless You, I’m not sure if you are following my point.
             
             
             
             
             

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            1. Bless You

              Probably not.. Iam trying to make my own profit. bless you

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  3. Daremeister81

    Cyberduck you must be going quackers! Either you haven’t read the article correctly or you want to talk down the result. Profit excluding exceptionals has actually risen from 56.4m to 65.7m.

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    1. cyberduck46

      Daremeister81, what am I missing?

       

      >Last year, the group made pre-tax profits of £104.2m, up from £73.4m in 3016.

       

      >The results included a gain of £38.5m from the sale of shares in ZPG

       

      The way I’m reading it is £104.2m less the £38.5m is £65.7m which is down from £73.4m in the previous year.

       

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      1. Daremeister81

        “Last year’s disposal followed a sale of Connells shares in Zoopla during 2016, worth £17m”

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        1. cyberduck46

          I’ve looked into it  http://www.connellsgroup.co.uk/media-centre/news/2017/03/01/a-strong-performance-from-connells-group. The 2016 figure appears to include an exceptional gain of £17m.
           
          “The pre-tax profit includes a gain of £17m from the part disposal of shares in ZPG Plc.”
           
          So excluding the 2016 and 2017 exceptional gains we have …
           
          2017 profit = 104.2 – 38.5 = 65.7 million pounds
          2016 profit = 73.4 – 17 = 56.4 million pounds.
           
          So excluding exceptionals they have increased profits by about 16% which is very good.
           
          For a clearer picture of 2017 performance see http://www.connellsgroup.co.uk/media-centre/news/2018/02/28/growth-in-profits-and-market-share-signals-strong-year-for-connells-group
           
          In regard to my earlier point about it being strange that no percentage increase for sellers was provided. Well it actually was provided by Connells…
           
          “2018 has started positively with a sales pipeline that is up on the previous year, a 31% increase in the number of people looking to sell their home and a 25% increase in applicants, when compared to January 2017.”
           
           
           
           
           

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  4. Homestead38

    Good job cyber duck isn’t FD as he can’t work out like for like profit comparison 17 v 16; my calculations are £57M profit in 16 excluding Zoopla share sales versus £65M in 17 excluding Zoopla share sales. So a 14% increase in profits not a decrease; pretty good when compared to the carnage elsewhere?

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    1. cyberduck46

      Homestead38,

       

      Thanks for the help but it was already cleared up before you posted.

       

      The article from PIE didn’t state whether the £17m was included or excluded in the 2016 profit figure. It also didn’t say it was a gain, just that they sold shares worth £17m so any conclusions from the PIE article were pure guesswork and this is why I stated “Am I reading this correctly?”

       

      To get to the bottom of it I checked Connells’ reporting which unlike PIE’s reporting was crystal clear. See my post from 15:33.

       

       

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    2. PeeBee

      This is ducky’s interpretation of “profit”:

      BIG Loss

      +

      WAAAAAAY BIGGER Loss

      +

      Tuppence

      =

      PAAAAARRRRTTTAAAAYYYY TIME!!!

       

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    3. Property Pundit

      The sort of figures you will never see from any call centre pay anyway listers.

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  5. Quickbrit

    Tea just came out of my nose…

    Bless You
    FEBRUARY 28, 2018 AT 11:07
    …Also great news for agents who do things properly and get a fair fee for a fair service.

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