22nd Jul 2016 07:55
LONDON (Alliance News) - LSL Property Services PLC on Friday said it does not expect to meet the board's expectations for 2016 due to consumer uncertainty surrounding the UK's decision to leave the EU, despite expecting to report strong results in the first half.
The residential property services provider said it delivered growth across all major revenue lines and increased profit in both the estate agency and surveying divisions in the first half of 2016, meaning it will achieve first-half results in line with the board's expectations and ahead of the first half of the prior year.
However, while it performed strongly in the first quarter as changes to stamp duty on April 1 resulted in an acceleration of market activity, the second quarter saw a slowdown in trading in the run up to the EU referendum.
The outcome of the referendum has now led to further consumer uncertainty, which has been reflected in the company's post-referendum trading performance, LSL said.
As a result, LSL does not expect market conditions to improve sufficiently to meet the board's expectations for the full year, and while it still anticipates second-half profit growth, group operating profit will be "significantly lower" than previously anticipated for the full year.
"Whilst the vote to leave the EU has created uncertainty in the property market, and has impacted consumer confidence, mortgage cost and availability remain positive for the UK housing market. LSL has very strong fundamentals, with a robust balance sheet and a balanced business portfolio including its counter-cyclical asset management business. The business is well-positioned to adapt quickly to these changing market conditions and I am confident that it will continue to deliver long-term value to shareholders," Chairman Simon Embley said in a statement.
LSL will report its first-half results on August 2.
Shares in LSL were trading down 12% at 217.46 pence on Friday morning following the announcement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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