10th Jan 2019 12:05
LONDON (Alliance News) - Belvoir Lettings PLC on Thursday said it exceeded its target for assisted acquisitions by franchisees in 2018.
Belvoir operates a franchised network of high street residential lettings and estate agents. Under its assisted acquisitions programme, franchisees completed 26 acquisitions.
Through this programme, Belvoir finds potential businesses that its franchisees may wish to buy and helps fund and negotiate these acquisitions, providing internal funding of up to 30%.
These deals increased Belvoir's acquired annualised network revenue to GBP6.9 million, ahead of its GBP6.6 million target and more than doubling from GBP3.3 million in 2017.
Belvoir expects these acquisitions will add more than GBP600,000 per annum to its recurring management service fees. These fees are Belvoir's main revenue stream.
The acquisitions also add more than 4,400 managed properties to Belvoir's portfolio, increasing its size by 7% to more than 62,000.
The average size of the business acquired through the programme grew by 85% year-on-year to GBP266,000 in 2018 from GBP144,000 in 2017.
Belvoir said this is representative of the contraction in the number of estate agents due to increased regulation and a "less favourable tax regime" that diminished the number of property sales by landlords.
"The assisted acquisitions programme, now in its sixth year, has gone from strength to strength and continues to grow. Since 2014 we have provided both commercial and financial support to 70 of our franchise owners, many of whom have doubled the size of their business overnight," said Belvoir Chief Executive Dorian Gonsalves.
"We continue to witness consolidation within the sector, a trend which supports our 2018 prediction that there will be 20% fewer agents by the end of 2020. This is evidenced by our acquisition opportunities pipeline being far greater than in previous years," Gonsalves added.
Shares in Belvoir were up 3.8% at 95.00 pence on Thursday.
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