10 January 2019
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
BELVOIR LETTINGS PLC
(the 'Group' or 'Belvoir')
Assisted Acquisitions Update
Belvoir lettings plc (AIM: BLV), the UK's largest property franchise, is pleased to report that it exceeded its 2018 target for Assisted Acquisitions by its franchisees, a core part of Belvoir's growth strategy.
During 2018 franchisees completed on 26 transactions under the Belvoir Assisted Acquisitions programme, increasing the acquired annualised network revenue to £6.9 million which exceeded the ambitious £6.6 million target, double the 2017 level, set by the Board. These acquisitions are expected to add in excess of £600,000 p.a. of recurring Management Service Fees (MSF), the main revenue stream for the Group. It also adds over 4,400 managed properties, increasing the portfolio by 7%. The Belvoir Group now represents over 62,000 managed properties.
The Assisted Acquisitions programme has been embraced by all three networks within the Belvoir Group with 11 taken up by the Belvoir network, 13 by Northwood and 2 by Newton Fallowell. In comparison with 2017, the average size of the business acquired increased by 85% from £144,000 annual revenue in 2017 to £266,000 in 2018. This reflects a contraction of the number of agents in the sector not only amongst the smaller but also many of the larger independent agents, as the impact of the number of landlords selling their properties due to a less favourable tax regime and the increased regulation on lettings agents takes effect.
Belvoir has supported many of its franchise owners to take advantage of these changes within the sector, through its highly skilled in-house Acquisitions team and by providing internal funding of up to 30% where required. In 2018 the Group contributed £660,000, approximately 9% of the total consideration, by means of a loan; whilst 17 of the deals were funded entirely by franchisees utilising their own cash reserves or sourcing funds from other loan providers.
A more detailed pre-close trading update for the year ended 31 December 2018 will be provided on Thursday 31 January 2019.
Dorian Gonsalves, CEO of Belvoir, commented;
"The Assisted Acquisitions programme, now in its sixth year, has gone from strength to strength and continues to grow. Since 2014 we have provided both commercial and financial support to 70 of our franchise owners, many of whom have doubled the size of their business overnight.
We continue to witness consolidation within the sector, a trend which supports our 2018 prediction that there will be 20% fewer agents by the end of 2020. This is evidenced by our acquisition opportunities pipeline being far greater than in previous years. Our franchisees are professionally and financially equipped to take advantage of these opportunities and we currently have 83 franchise owners who are actively searching for a suitable match within their territory. Belvoir is here to support our franchisees' entrepreneurial growth ambitions, which will benefit the Group and our shareholders alike."
For further details:
Belvoir Lettings PLC
Dorian Gonsalves, Chief Executive Officer
Louise George, Chief Financial Officer
Cantor Fitzgerald Europe
Rick Thompson, Phil Davies, Will Goode
0207 894 7000
Charles Ryland, Victoria Hayns, Madeleine Seacombe
0207 466 5000
Note to Editors:
About Belvoir Lettings PLC
Founded in 1995 and listed on AIM in 2012 (BLV.L), Belvoir operates a nationwide property franchise group with 364 offices across four 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 61,000 properties and reported revenue of £11.3m in 2017 making Belvoir the largest property franchise group in the UK.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.