Slide 1: Interim Results
Interim Results Half year ended 30 June 2014
Slide 2: Agenda
Agenda 1 Executive Summary 2 Financial Performance 3 Market 4 Operational Review 5 Q&A 1 Half Year Results Presentation August 2014
Slide 3: Executive Summary
Executive Summary Strong performance with Group Underlying Operating Profit up 31% • Strong market growth in first quarter Group Underlying followed by more modest growth in quarter Group Revenue Operating Profit two. £139.8m £15.1m • Excellent performance from Agency division • Major contract secur
Slide 4: Business Overview
Business Overview Group Agency Surveying Branches Asset Financial Management Services H1 14 Revenue H1 14 Operating Profit H1 14 Average FTE £139.8m £15.1m 4,804 22% 17% 32% Surveying Surveying Surveying Agency Agency Agency 68% 78% 83% 3 Half Year Results Presentation August 2014
Slide 5: Agenda
Agenda 1 Executive Summary 2 Financial Performance 3 Market 4 Operational Review 5 Q&A 4 Half Year Results Presentation August 2014
Slide 6: Summary Group Financials
Summary Group Financials Strong growth in Group Underlying Operating Profit, Profit Before Tax and Adjusted EPS £m H1 2014 H1 2013 Inc/ (Dec) P&L Revenue 139.8 118.8 18% Underlying Group Operating Profit(1) 15.1 11.5 31% Margin 10.8% 9.7% Exceptionals 18.7 (1.7) Profit before tax 31.4 8.4 Underlying
Slide 7: Financial Performance – by Quarter
Financial Performance – by Quarter Strong market growth in the first quarter followed by more modest growth in quarter two % Growth 2014 vs 2013 Q1 Q2 Total Agency House Purchase approvals(1) 35% 7% 19% Total Agency Income 26% 15% 20% Surveying Total Mortgage Approvals(1) 25% (1%) 10% Total Surveyin
Slide 8: Financial Performance – Estate Agency
Financial Performance – Estate Agency H1 2014 H1 2013 Inc/ (Dec) Exchange volume 14,297 12,416 15% P&L (£m) Exchange Income 44.4 34.9 27% FS Income (incl intermediary networks) 19.9 15.7 27% Lettings Income 27.7 24.7 12% Asset Management Income 6.4 7.1 (10%) Other Income 10.2 7.9 29% Total Revenue 1
Slide 9: Financial Performance – Marsh & Parsons
Financial Performance – Marsh & Parsons H1 2014 H1 2013 Inc/ (Dec) P&L (£m) Total Revenue 16.1 13.5 19% Expenditure (12.9) (10.9) 19% Operating Profit 3.2 2.6 20% Operating Margin 19.6% 19.4% • Residential Sales Income up 16% year on year. • Lettings income up 22% year on year • On going investment
Slide 10: Financial Performance – Surveying
Financial Performance – Surveying H1 2014 H1 2013 Inc/ (Dec) Number of jobs (000’s) 196 198 (1%) P&L (£m) Total Revenue 31.3 28.5 10% Expenditure (25.6) (23.1) 11% Operating Profit 5.7 5.4 5% Margin 18.2% 19.0% • Revenue growth in line with market while continuing to build new capacity • Excluding £
Slide 11: Financial Performance – Operational Gearing
Financial Performance – Operational Gearing Year on Year change in revenue and Operating Profit for H1 (£m) Revenue Operating Profit Agency 18.3 3.8 Surveying 2.8 0.3 Adjustments 1) Investment in graduates 1.1 2) Acquisitions (2.0) (0.2) 3) M&P LFL (1.2) 0.1 4) Asset Management 0.7 0.3 Adjusted 18.6
Slide 12: Financials – Cash flow and Debt
Financials – Cash flow and Debt Continued strong cash generation at the operational level £m H1 2014 H1 2013 • Cash from operations: Operating Cashflows Operating Profit 15.1 11.5 Depreciation, working capital – High PI cash settlements as expected. and JVs (4.2) (2.1) PI Payments (6.5) (5.0) – Incr
Slide 13: Agenda
Agenda 1 Executive Summary 2 Financial Performance 3 Market 4 Operational Review 5 Q&A 12 Half Year Results Presentation August 2014
Slide 14: Market overview – mortgage volumes
Market overview – mortgage volumes H1 Mortgage and House Purchase Approvals(1) House Purchase Approvals 000’s • 397,000(1) H1 2014 up 19% on H1 2013. 1,800 1,200 – Q1 2014 up 35% on prior year. 600 – Q2 2014 up 7% on prior year. 0 Total Mortgage Approvals 5 yr Avg 2010 2011 2012 2013 2014 2003-2007
Slide 15: Market overview – house price trends
Market overview – house price trends England and Wales annual house changes(1) • In year ended June 2014 average house prices in England and Wales increased by 12.0% 10.0% 10% to £269k. 8.0% 10% 10% 6.0% • Average house prices for England and Wales 4.0% are now 11% above the February 2008 peak. 5% 2
Slide 16: Agenda
Agenda 1 Executive Summary 2 Financial Performance 3 Market 4 Operational Review 5 Q&A 15 Year End Results Presentation March 2014
Slide 17: Operational Review – Estate Agency
Operational Review – Estate Agency H1 Agency Profit Transformation • Organic growth: – Positive revenue growth across all income £m streams except Asset Management. 14.0 – Development of resilient countercyclical 12.0 12.2 income streams. 10.0 – Drive benefit from operational gearing in 8.0 improved
Slide 18: Operational Review – Estate Agency: Selective Acquisitions
Operational Review – Estate Agency Selective Acquisitions at value accretive multiples Hawes & Co • Six branch South West London Estate Agency – New Malden – Raynes Park – Surbiton – Thames Ditton – Wimbledon – Wimbledon Village Lettings Books • Integrated into Your Move – Exeter – Plymouth – Telfor
Slide 19: Operational Review – Estate Agency Branches
Operational Review – Estate Agency Branches Profit per branch(1) year ended June Your Move, Reeds Rains and LSLi • £38k Profit per branch year ended Jun 14. £000’s The Board set a medium term target of £30k 40.0 to £50k profit per branch in 2011. 37.9 35.0 30.0 25.0 26.5 20.0 15.0 10.0 9.7 5.0 -0.2
Slide 20: Operational Review – Estate Agency Marsh & Parsons Branch openings
Operational Review – Estate Agency Marsh & Parsons Branch openings Marsh & Parsons • New branch openings performing in line with expectations • One new Marsh & Parsons branch opened in H1 2014 (Askew Road, W14). • Three further openings planned for H2 2014. • Ambition to double the size of the estat
Slide 21: Operational Review – Estate Agency Countercyclical income
Operational Review – Estate Agency Countercyclical income H1 Lettings Revenue Lettings £m • H1 2014: Lettings income of £27.7m, 12% 30.0 increase on H1 2013 driven primarily by 25.0 27.7 organic growth. 20.0 24.7 22.6 15.0 • Implementation of new lettings software in 10.0 11.4 13.6 core brands. 5.0
Slide 22: Operational Review – Estate Agency Financial Services
Operational Review – Estate Agency Financial Services H1 Financial Services Revenue • H1 2014 Financial Services revenue £19.9m, up 27% on H1 2013. £m • H1 2014 LSL lending arranged £5.0bn. 20.0 19.9 • Investment in new front and back office IT 18.0 systems to improve the customer experience, 16.0 e
Slide 23: Operational Review - Zoopla
Operational Review - Zoopla • Total valuation creation of £34.2m (net of tax) at 30 June 2014 • Profit on initial disposal of £18.0m • Cash received from disposals1 - £20.9m (£16.8m post tax) • Special dividend of 16.5p per share • Retained investment valued at £27.2m at 30 June 2014 1) Includes cas
Slide 24: Operational Review – Surveying
Operational Review – Surveying H1 Surveying profit 2010 – 20141 • Underlying profit growth 5% after continued investment to increase capacity. Excluding cost of investment profit growth was 25% £m 12.0 • Major contract secured in H1: 10.0 10.0 – Non-exclusive, multi-year term, started 1 9.1 8.0 July
Slide 25: Summary and Outlook
Summary and Outlook Estate Agency • Strong organic growth, driving benefit from operational gearing. • Significant progress with new Marsh & Parsons opening programme. • Selective Estate Agency acquisitions. Surveying • Return on investments in new graduates strategy to come through. • Successful 20
Slide 26: Agenda
Agenda 1 Executive Summary 2 Financial Performance 3 Market 4 Operational Review 5 Q&A 25 Half Year Results Presentation August 2014
Slide 27: Disclaimer
Disclaimer This Presentation and the Reports referred to therein, may contain forward-looking statements with respect to certain plans and current goals and expectations relating to the future financial condition, business performance and results of LSL. By their nature, all forward-looking statemen
Slide 28: LSL Property Services plc
roperty Services plc