LSL Property Services, the parent company of 12 brands including Your Move, Reeds Rains, Thomas Morris, Davis Tate and Marsh & Parsons, is to explore its ‘digital opportunities’ this year.
This morning it made the announcement, suggesting it could launch an online venture, while reporting a rise in pre-tax profits for last year.
In its preliminary results for the year to December 31, its pre-tax profits were £63.5m, up 65% from pre-tax profits in 2015 of £38.6m.
The firm made an “exceptional gain” of £32.9m on the sale of Zoopla shares.
Despite the pre-tax profit, however, its underlying profit actually slipped 19% – down to £34.6m, compared with £42.9m the year before, with the underlying operating margin slipping from 14.3% to 11.3%.
Group revenue was up 2% to £307.8m.
The results follow a warning issued last July when LSL said that its full-year profits would be lower than expected because of the impact of the Brexit vote on the housing market.
This morning, however, LSL said it had put in a “solid performance in a changing market”. It also revealed that in the second half of last year it completed exensive research and this year will explore LSL’s “digital opportunities”.
Its estate agency division had 3% growth, while lettings income grew 9%. However, residential sales income fell 10%, to £83.8m, down from £92.9m the year before), with exchange volumes down by 8%. There was a slight – 2% – fall in fees, reflecting “increased competitive pressure” in the second half of the year.
At flagship brand Marsh & Parsons, revenue fell by 5% and profits slid 36%, to £4.4m, down from £6.9m in 2015.
The group in general reported a year of two halves: it said that it had a strong first half, with a notable first quarter acceleration of transactions in the run-up to the change in Stamp Duty on April 1.
In the second half, LSL “reacted decisively” to the changing market conditions, ceasing acquisitions, cutting costs and closing branches, and protecting the balance sheet by selling its shareholding in Zoopla.
LSL chairman Simon Embley said: “Following a strong first half performance, the Group delivered a resilient second half performance given the changing market conditions. I am pleased that we maintained revenue growth in both the Estate Agency and Surveying Divisions.
“The Group reacted decisively to the changing market conditions in the second half by taking selective cost measures and strengthening the balance sheet.”
LSL said that it had started this year positively in both its estate agency and surveying divisions. Where there remains a shortage of stock, “our sales conversion remains strong,” it said. However, it expects to see a reduced volume in house purchase transactions this year. Nevertheless it is sticking to its strategic ambition, to dirve operating profit per branch to between £80,000 and £100,000, and to grow the number of Marsh & Parsons branches to 36.