LSL Property Services 2017 Profit Drops Due To Lack Of One-Off Gain

6th Mar 2018 11:42

LONDON (Alliance News) - LSL Property Services PLC said Tuesday it lifted its dividend despite a double digit drop in profit even with a slight rise in revenue due to subdued market conditions.

The residential property services provider reported pretax profit at GBP40.1 million, down 37% at GBP63.5 million the year before due to the lack of a one off gain of GBP32.9 million through the sale of 11.3 million Zoopla shares at an average price of 319.00 pence per share.

Stripping out exceptional charges, on an underlying basis operating profit rose by 8.0% to GBP37.5 million from GBP34.6 million.

Revenue rose by 1.0% to GBP311.5 million from GBP307.8 million the prior year, as growth in Estate Agency and Related Services slightly more than offset a drop in Surveying and Valuation services.

LSL Property Services said the residential property sales market was subdued in 2017, as approvals for house purchases were down by 1.5%, the drop in market transactions more pronounced in London and the south east region of England.

LSL has declared a final dividend of 7.3 pence per share, up 16% from 6.3p the prior year, bringing the total payout to 11.3 pence, up from 10.3p.

Market conditions in 2018 have so far been softer than the same period in 2017, with LSL's financial performance following management expectations more closely, leaving the well placed to make a solid performance.

LSL expects to see a modest reduction in the volume of house purchase transactions in 2018, with house price inflation outside of Greater London continuing to improve, along with mortgage costs remaining low and mortgage availability remaining good.

"The group delivered a robust financial performance given the subdued market conditions. I am pleased that the business delivered underlying operating profit growth in both the Estate Agency and Surveying Divisions," Chairman Simon Embley.

"The group has a strong balance sheet with relatively low levels of gearing and is very cash generative at an operational level. The business is well placed to capitalise on market conditions to increase shareholder value. LSL's financial performance in 2018 has tracked closely to the board's expectations and the group is well placed to deliver a solid performance during the year," Embley added.

Shares in LSL Property Services were up 0.4% at 273.00 pence on Monday.

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