The board is confident that the year will see further opportunities for growth, both organically and through sector consolidation, despite the tenant fee ban, which will come into effect in June. The chairman, Mike Goddard, said the group has taken steps to mitigate the impact of the tenant fee ban.
This year, the company is looking to build on a strong performance in 2018 when profit before tax rose 40% to £5.5mln from £3.9mln the year before, continuing an unbroken string of 22 years of profit growth.
Group revenue rose 21% to £13.7mln in 2018 from £11.3mln in 2017, while management service fees (MSF) improved by 7% to £8.5mln from £7.9mln against the backdrop of a flat property market.
The number of high street offices within Belvoir’s property network remains at 300 with the average MSF per franchise office up to £28,333 (2017: £26,333) compared to just £19,753 in 2014, noted chairman Mike Goddard.
Cash flow from operating activities was healthy at £4.6mln, up from £3.7mln the year before, and contributed to an increase in the year-end bank balance to £1.8mln from £1.4mln the year before.
Net debt rose to £9.6mln from £5.1mln a year earlier following the payment of £4.2mln in earn-out fees relating to the Northwood acquisition and the £4.0mln cash consideration for the acquisition of MAB Glos, the financial services firm.
The full-year dividend has been pumped up to 7.2p from 6.9p the year before as a result of the group declaring a final dividend of 3.8p (2017: 3.5p).
Dorian Gonsalves, the chief executive officer of Belvoir Lettings, said top-line growth outperformed both the sales and lettings elements of the housing market and the financial services market.
“The increase in our like-for-like lettings MSF of 2.6% outstripped the 1% rental index, and lettings were boosted further by a 4.5% uplift from our assisted acquisitions programme which performed ahead of our expectations,” W Gonsalves noted.
“Meanwhile, our sales MSF increased by 8.4% against the backdrop of a flat sales market in which a 2% fall in the number of UK property transactions was compensated by a modest increase of 2.5% in house prices. Revenue from Brook, our 2017 financial services acquisition, increased by 20%, on a full year basis, compared with a 3.7% increase in the value of gross mortgage advances,” he added.
“Belvoir is uniquely positioned within the property sector, benefiting from the agility of a franchise business model compared with the larger corporate players, whilst providing our networks with the Central Office systems and support, not available to the smaller independent agents.
“Belvoir is a strongly cash generative business with revenues underpinned by the recurring 'annuity-style' lettings income stream coupled with the diversification into complementary property-related services, which will enable the group to overcome changes and outperform in the sector over the coming year," Gonsalves said.
In early afternoon trading, shares in Belvoir Lettings were 2% higher at 102.50p.
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