LSL confident despite challenges in housing market

LSL PROPERTY Services today said that it had continued to perform in line with expectations against a “continued backdrop” of an extremely challenging housing market.

The group, which operates under the Your Move and Reeds Rains estate agency brands and has its executive management team based in York, said that turnover for the 10 months ended October 31 was down 22.4%.

Surveying also dropped by 6.4% while estate agency and financial services turnover slumped by 33.3%.

LSL said that the surveying division had continued to grow its market share in the face of market contraction but that the division had performed “slightly” behind expectations.

Transaction volumes in its estate agency division had stablilised in recent weeks however and were slightly ahead of projections.

“This, together with cost efficiencies commensurate with lower activity levels, gives us confidence that the division will perform slightly ahead of our expectations for 2008,” it said.

Similarly, financial services activity also levelled out despite obvious sector volatility.

LSL said that substantial cost efficiencies coupled with the identification of wider revenue opportunities particularly around protection and general insurance sales had made a positive contribution to the performance of the division.

“The group is well capitalised, with committed bank facilities until July 2011,” the group added.

“It continues to demonstrate an encouraging level of resilience in the face of extremely challenging market conditions, and as a consequence the board is confident that it will meet its full year expectations.

“The growth of the lettings and asset management businesses has helped to mitigate reductions elsewhere within the group.”

In August LSL reported that a major drop in mortgage approvals had contributed to it posting a half year loss.

The group said income generated through exchanges under its Your Move and Reeds Rains arms had been reduced by 48% over the first half of the year and said its estate agency and financial services operations had been “impacted by unprecedented market conditions”.

Pre-tax profits tumbled from £12.1m for the six months to June 30 2007, to a loss before tax of £0.8m this time as mortgage approvals were reduced by 54%.

Group profit before tax, amortisation and exceptional items also shrunk from £14.7m to £7.8m. The group paid exceptional restructuring costs of £3.4m over the period, while revenue was down by 10% to £93.1m.