What Belvoir does
The company also operates a financial services arm which provides its customers with mortgages and other property-related financial services products.
How it’s doing
Belvoir reported a jump in profits for the first half of its current 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.
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.
In November, Belvoir highlighted the growth in its finance arm business, with £1.9mln of gross contributions from mortgage broking in the first 10 months of the year.
An exclusivity agreement signed with Yorkshire-based Dacres is also expected to add around £100,000 to profits.
Belvoir increased its number of financial advisers by 30% to 160 so far this year and has written 7,961 mortgages for independent estate agencies and via its group franchisees.
What the boss says: Dorian Gonsalves:
"Financial services gives our franchisees a way to grow business within the business.
It is getting more difficult to obtain face-to-face high-quality whole of market mortgage advice on the high street because the number of agents has been falling over the last few years.
"We are a firm believer in outlets where clients can walk in and receive advice property advice and mortgage advice."
Executive interview – CEO Dorian Gonsalves
- Profits and revenues set to grow for 23rd consecutive year
- CEO says full benefits from the financial services only just beginning
- Tenant fee ban impact less than expected
What the broker says
In an August note initiating the firm with a target price of 190p, analysts at finnCap said while changes in the market, including the banning of tenants fees in June, were “squeezing” traditional and smaller players, Belvoir’s franchise model allowed it to harness entrepreneurial skills in the market without exposing it directly to the cost base or capital commitments of its franchisees.
“Belvoir’s growth strategy is underpinned by a highly professional network of franchisees with sound business ethics. This sounds like a bare minimum, but it is not necessarily true for the wider market, which is characterised by small, local agents. Tightening regulation is putting professional operators such as Belvoir at a competitive advantage”, said finnCap’s analysts.
The broker added that Belvoir’s financial services business presented a “major opportunity” to leverage its client base with a new service.
With the shares trading around 120p as of 5 September, Belvoir carries a market cap of £40.9mln.