Belvoir Group PLC (AIM:BLV) said it is confident of achieving a strong trading performance for the full financial year after a very strong first half.
The UK property franchise and financial services group said revenue in the six months to the end of June was up 41% on the same period of 2020, when trading was hit by lockdown restrictions, and 42% higher on a like-for-like basis on the first half of (pre-pandemic) 2019.
The property division achieved revenue growth of 45% compared to two years earlier, of which 25% was organic growth with the rest coming from Belvoir’s investment in two additional franchise networks.
The financial services division’s revenues were 62% higher than in the first half of 2019.
Management service fees (MSF) from residential sales doubled year-on-year, reflecting the lower transaction level in the second quarter of last year due to the first national lockdown, whereas in the first half of this year the market had been juiced by the stamp duty holiday and the "race for space" by people compelled to work from home.
In comparison with the first half of 2019, like-for-like MSF from sales were up 68%.
MSF from lettings rose 13% from the first half of 2020, of which three percentage points were attributable to the acquisition of the Nicholas Humphreys network on 31 March 2021 and the franchising of certain previously corporate-owned Lovelle offices.
There are signs of more substantial rental increases on the horizon with the rental growth from new tenancies reportedly running at 5.9% UK-wide and 8.0% excluding London, Belvoir said.
Revenue growth from the financial services division, up 51% on the first half (H1) of 2020, clearly benefited from the demand for mortgages to fund house purchases, but also from a 21% increase in the Belvoir adviser network, which was up to 221 (H1 2020: 176) advisers at the end of June 2021.
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"We continue to see exceptionally strong trading across the group, well ahead of our expectations as at the start of the year. Our residential property sales hit a peak in June and pipelines remain strong. Lettings has achieved growth from increased rental activity and tenant demand creating an upward pressure on rents,” said Dorian Gonsalves, the chief executive officer of Belvoir.
"Our financial services division continues to go from strength to strength, benefiting from the strong sales market and our enlarged network of advisers.
"The board has continued to pursue its growth strategy in H1 through the acquisition of Nicholas Humphreys, increasing the footprint of our property franchise division, along with the strengthening of our long-term strategic partnership with The Nottingham Building Society through the acquisition of its mortgage business, Nottingham Mortgage Services Limited. Both acquisitions will be highly accretive in 2021 and demonstrate the board's commitment to enhancing shareholder value further,” Gonsalves concluded.