Slide 1: Preliminary Results Presentation
Preliminary Results Presentation Year Ended 31 December 2007 Simon Embley, Group Chief Executive Officer Dean Fielding, Group Finance Director February 2008
Slide 2: Key messages & delivery 2007
Key messages & delivery 2007 Exchange volumes down 11% Estate Agency profits* up 2.5% Continued expansion; C&G Surveyors Growing Surveying 72% of group profit Barclays Surveyors profitability of New surveying contract wins Small agencies estate agency & flexible model division Substantial Diversifie
Slide 3: Highlights
Highlights Record underlying operating profits* up 13% to £36.5m (2006: £32.3m) Adjusted Proforma Earnings per share up 17% to 23.3p (2006: 19.8p) Excellent cash generation with net cash from operating activities of £29.4m (2006: £30.3m) Final dividend of 3.86p per share (total dividend of 6
Slide 4: Financials at a glance
Financials at a glance A track record of growing profitability EBITA Full Year * Mortgage Approvals 4 3.534 40 20% 3.381 3.292 16.4% 16.7% 3.5 35 18% 13.9% 16% 3 30 EBITA margin Units (m) 14% EBITA (£m) 2.5 25 10.1% 12% 2 20 10% 36.5 1.5 15 32.3 8% 1 1.428 1.26 6% 1.196 10 18.7 13.4 4% 0.5 5 0.9% 1.
Slide 5: Strong Cash Flow
Strong Cash Flow Strong cash generation with minimal capex requirement…… £000 Normalised operating profit (£m) 36.5 32.3 Depreciation 2.3 2.7 Other 0.6 0.4 Capex (2.4) (2.1) Movement in working capital 4.2 5.3 Interest paid (3.4) (4.6) Interest received 0.4 0.7 Dividend received 0.4 - Tax paid (9.7)
Slide 6: Operational Performance: Surveying
Operational Performance: Surveying Continued growth in market share % e.surv Jobs Performed e.surv 2007 2006 Change Turnover (£m) 71.8 68.3 5% 2005 2006 HI 2007 Q3 2007 Q4 2007 Underlying Op. Profit (£m) 20.3 20.3 - Margin (%) 28.2 29.7 Jobs performed ('000s) 378 434 227 118 98 Jobs performed ('000s
Slide 7: Surveying: Acquisition of Barnwoods from C&G
Surveying: Acquisition of Barnwoods from C&G Half year presentation we said…. Barnwoods H2 Results Turnover £11.4m Turnover full year expected £20m Profit £5.4m Margins in excess of current margin Margin 48% Separation from C&G completed to plan, management have responded quickly to the
Slide 8: Operational Performance: Estate Agency
Operational Performance: Estate Agency Estate Agency Segment Your Move & Reeds Rains KPIs % % 2007 2006 Change 2007 2006 Change Exchange Units 31,277 35,255 -11.3% Turnover (£m) 107.1 103.1 3.9% Turnover (£m) 94.2 100.9 -6.5% Expenditure (£m) 80.5 86.3 -6.7% Profit* (£m) 13.7 13.4 2.5% Profit* (£m)
Slide 9: Operational Performance: Financial Services
Operational Performance: Financial Services Continued investment in Linear in 2007 Financial Services Segment Positive contribution to Estate Agency % 2007 2006 Change Investment supports: Lender relationships Turnover (£m) 22.6 20.8 8.2% Survey growth Expenditure (£m) (21.6) (20.0) -8.6%
Slide 10: Estate Agency & Financial Services: Consolidation
Estate Agency & Financial Services: Consolidation LSL Growth (Branches) LSLi 440 454 500 16 Acquired 16 branches 10 450 412 387 400 92 110 121 Growth opportunities 350 67 300 Sweat ‘IT assets’ 250 130 130 130 126 Strong brands, but sub scale 200 Group buying power 150 Financial services
Slide 11: Cost Savings: Key initiatives
Cost Savings: Key initiatives Staff numbers & splits Consultant costs (surveying) Reducing consultant usage on e.surv costs Staff numbers (ftes) 2006 £5.6m 3600 2007 £4.3m (H2: £1.8m) 3500 further reductions in 2008 3400 3300 3200 3100 Press advertising (estate agency) 3000 Saving £0.6m Ja
Slide 12: Market Outlook (short term)
Market Outlook (short term) Total Mortgage approvals Annual Second half year Quarter 4 2500 1000 5000 2000 800 4000 843 859 3000 1500 1754 1766 600 3650 3381 3534 660 1514 2000 1000 400 1000 500 200 0 0 2005 2006 2007 0 2005 2006 2007 2005 2006 2007 Difficult market conditions form September conti
Slide 13: Market Outlook and Current Trading
Market Outlook and Current Trading Scenarios for 2008 Short term market blip Prolonged downturn further interest rate falls lack of liquidity in banking market, shortage of “mortgage” product Drivers passed onto consumers lack of consumer confidence small movement in house prices potenti
Slide 14: Market Outlook (long term)
Market Outlook (long term) Fundamentals of the UK housing market remain strong Shortage of supply Growth in demand Source: Communities & Local Government / Housing statistics 2007 / published 7 Feb 08 Source: Communities & Local Government / Housing statistics 2007 / published 7 Feb 08 Supply and
Slide 15: Summary
Summary Business well placed - 2007 contract wins and flexible survey model will underpin Survey earnings in 2008 Consolidation opportunities potentially significant Survey Estate Agency Flexible panel management model Market volumes will impact “right sized” in Q4 2007 Timing of recover