Analysts at finnCap noted that interim results from property franchise and financial services group Belvoir Group PLC (AIM:BLV) showed continued benefits from its direct and indirect investments,
In a note to clients, they said: "Organic revenue growth in lettings of +3%, +6% in financial services and an 11% contribution from acquisitions combined to offset the natural decline in revenues from sales as the market normalised from very high levels, resulting in a +12% increase in group revenue."
The analysts added: "The benefits of continuing to invest both directly (by buying smaller competitors and diversifying into financial services) and indirectly (by loaning funds to franchisees to acquire – which yields both a financial return and increased franchisee fees) are clear, and we expect continued investment supported by low net debt and attractive ROCE (2022E: 22%)."
"With the outlook underpinned by strong pipelines in sales and mortgages and the defensive growth nature of lettings we make no changes to our full-year forecasts or target price (+71% upside based on a target 5% free cash flow yield)," the finnCap analysts concluded.
They maintained a 385p target price for Belvoir, with the shares currently changing hands at 217.50p.
Earlier today, Belvoir said its growth strategy remains on track despite households now facing an increase in headwinds.
The comments came as the company reported a 12% increase in revenue for the six months ended June 30, 2022, to £15.4mln compared to £13.8mln for the same period a year earlier.
However, Belvoir saw its first half 2022 profit before tax fall to £4.0mln, down from £4.8mln in the first half of 2021.