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Belvoir profits jump as it outperforms across key markets in first half

Revenues in the period were boosted by a significant increase in takings from the group's financial services arm following several mortgage broker acquisitions

Belvoir Group PLC - Belvoir profits jump as it outperforms across key markets in first half
The group's CEO said ongoing economic uncertainty was likely to boost rental activity

Belvoir Group PLC (LON:BLV) reported a jump in profits for the first half of the year as its three business lines continued to outperform their respective markets.

For the six months to 30 June, the property franchise group generated a 23% rise in adjusted pre-tax profits to around £3mln, while revenues were up 48% at £9mln.

WATCH: Belvoir 'continuing to outperform both UK lettings and sales markets'

Financial services revenues tripled to £3.9mln, boosted by the acquisition of mortgage broker MAB (Gloucester) in November last year.

The core property franchise division lifted management service fees 5% to £4.2mln.

The firm’s interim dividend was maintained at 3.4p per share.

On target for full year

Looking ahead, chief executive Dorian Gonsalves said the group had made a “promising start” to its second half and was trading in line with management expectations for the full year.

“Trading across lettings, sales and financial services continue to outperform their respective markets and deliver strong results”, he added.

Gonsalves told Proactive that the growth in the group’s results showed that its franchisees were “not only surviving but thriving” despite fears of a downturn in the property market.

The CEO said that if the property sales market began to shrink, rental activity among its lettings agents was likely to increase due to a reduced number of buyers and higher numbers of “accidental landlords”, property owners that hold off and selling and decide to rent while waiting for prices to improve.

“We’re holding all the cards in terms of the rental stock”, Gonsalves said, with the company having around 64,500 properties under management.

Franchise model “maximises potential”

In a note, analysts at Belvoir’s house broker finnCap reiterated their 190p target price on the firm, saying its franchise model “maximises entrepreneurial potential, flexibility and cash flow while minimising risk”.

The broker added that with the UK residential property market undergoing structural change alongside ongoing economic uncertainty, Belvoir had “significant potential” to gain market share, evidenced by the results.

Investors appeared to agree, with the shares jumping 6% to 117p in early trading on Tuesday.

Quick facts: Belvoir Group PLC

Price: 119.5 GBX

AIM:BLV
Market: AIM
Market Cap: £41.75 m
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Belvoir Group's diversification into financial services proving a 'win-win'

Belvoir Group PLC's (LON:BLV) Dorian Gonsalves speaks to Proactive London's Andrew Scott after reporting £1.9mln of gross contributions from mortgage broking in the first 10 months of the year. He's expecting a further profit boost from a new exclusivity agreement signed with Yorkshire-based...

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