13th Jan 2023 14:52
(Alliance News) - LSL Property Services PLC on Friday said it is selling its new build mortgage and protection brokerage assets to Pivotal Growth Ltd, its joint venture with Pollen Street Capital, which it established in 2021.
LSL Property, a Newcastle-based estate agency, is selling its interests in Group First Ltd and RSC New Homes Ltd for a consideration of seven times Group First and RSC earnings before interest, tax, depreciation and amortisation in calendar year 2024, capped at a maximum of GBP20 million. LSL noted it will receive payment during the first half of 2025.
LSL said the value of Group First's gross assets was GBP15.2 million in financial year 2021, when Group First posted a profit of GBP1.4 million.
Regarding a 30% interest in RSC New Homes which LSL did not own, LSL said it agreed to buy the remaining interest for GBP800,000 on Thursday to facilitate the sale of the whole company to Pivotal Growth.
LSL Property Chief Executive Officer David Stewart said: "These transactions help to simplify the group structure to allow us to focus on maximising these business-to-business opportunities, whilst also reducing exposure to housing market cycles. Pivotal Growth was established in 2021 to exploit the opportunities we had identified in the direct-to-consumer mortgage broking market, and growth in the new build sector is a strategic focus for Pivotal Growth."
LSL Property Services shares were 1.6% higher at 268.31 pence each in London on Friday afternoon.
By Tom Budszus, Alliance News reporter
Comments and questions to [email protected]
Copyright 2023 Alliance News Ltd. All Rights Reserved.