Lsl Property Services Plc · LSE:LSL
Lsl Property Services — Investor Presentation (January 2011)
62 slides from Lsl Property Services's investor presentation, January 2011
Slide 1: Private Survey Market
Private Survey Market Alison Traversoni Executive Director – LSL Surveying Division 1
Slide 2: Agenda
Agenda • Private Survey Market Dynamics • New product • Developments to date • Planned promotion 2
Slide 3: UK Surveying Industry Market Dynamics
UK Surveying Industry Market Dynamics Valuation Market Private Survey Market <600,000 mortgage approvals *836,000 housing transactions – 2010 for house purchase - 2010 17% 3% 80% Other Surveying Firms Other Surveying Firms LSL Surveying Division LSL Surveying Division No Survey obtained *estimated S
Slide 4: Private Survey Market
Private Survey Market Opportunities: 17% • Greater market share of the existing survey market 3% • Increasing the size of the market through education Current Size of Market: 80% •20% = 167,000 surveys •20% = £50m revenue pa Other Surveying Firms Benefits: LSL Surveying Division No Survey obtained •
Slide 5: Current Survey Market
Current Survey Market <20% of buyers have a survey* 80% 70% • Customers confused 60% • Customers uninformed 50% 40% • Lenders disclose valuation 30% • Lack of customer choice 20% • Too expensive 10% 0% Valuation Home Buyer Building Survey & Valuation Survey *Source: Royal Institution of Chartered Su
Slide 6: Gap identified in survey market
Gap identified in survey market 70% • Valuations continue to dominate 60% market 50% 40% • Low priced entry level survey required 30% 20% 10% £800 0% £700 Valuation Home Buyer Building £600 Survey Survey Average Fees 2010 £500 50 £400 £7 Lender Customer £300 £200 40 £3 £100 85 40 £1 £1 40 £0 £3 Valu
Slide 7: RICS Condition Report
LSL Property Services plc RICS Condition Report 3 Hs Services Surveys eee Condition aoe ooo. 16th December 2010 Cambridge, CBT DO Condition (rics Surveying Division @.SUrV <> Chartered Surveyors CHAK EERLD SURVEYORS Barnwoods 7
Slide 8: Private Survey B2C launch
Private Survey “B2C” launch •Exclusive launch of RICS Condition Report •Launch of brand new website •Refresh of e.surv logo •POS marketing material produced •B2C Sales Team established in HO 8
Slide 9: December Total B2C Results
December Total B2C Results £50 £40 Condition Report £30 000’s HomeBuyer Survey £20 Building Survey £10 £0 • 92 Condition Reports sold 160 140 • 152 HomeBuyer Reports sold 120 100 80 • 40 Building Surveys sold 60 40 20 0 22 Nov - 31 Dec 9
Slide 10: RICS Condition Report Feedback
RICS Condition Report Feedback • Report Content – 90% said it met their expectations • Report well laid out • Traffic light system liked • Provides peace of mind • 'The report was very, very useful; it really helped clarify our feelings about going ahead with the purchase’ • 'Communication from e.su
Slide 11: Estate Agency campaign
Estate Agency campaign SOLD, subject to survey You wouldn’t buy a car without checking the service-log, so why buy a home without checking first that it’s in good condition? It’s an analogy that’s easy to understand when 96% of consumers recently surveyed said that information on the condition of th
Slide 12: A huge opportunity
Summary • Potential income opportunities • Gap filled in market – more choice • LSL unrivalled distribution • Lenders • The Bridge • Surveying Division • Agency Network A huge opportunity 12
Slide 13: Welcome David Newnes - Executive Director
Welcome David Newnes - Executive Director
Slide 14: Agenda
Agenda 1. Business benchmarks Market share growth investment Market segmentation Summary.
Slide 15: The Size of the Prize
The Size of the Prize YM/RR Benchmark LSLi Margin* 1% 17% 12% Per Branch Revenue* £238k £302k £375k Profit* £3k £53k £44k * 2009 - figures excl HEAL and Asset Management An extra circa £50k profit per branch Based on old network up to £15m 3 to 5 year build 3
Slide 16: 2009 Instructions per Branch Analysis
2009 Instructions per Branch Analysis YM/RR Benchmark LSLi Inst / Branch 103 150 140 Simple business - list another 50 houses / branch / annum. 4
Slide 17: Agenda
Agenda 1. Business benchmarks 2. Market share growth investment 3. Market segmentation 4. Summary.
Slide 18: Market Share Growth Strategy
Market Share Growth Strategy Staff Web numbers Upgrade Call Centre Management Train Segmentation Staff
Slide 19: Investment 2010 Including HEAL
Investment 2010 Including HEAL - £m Maintain Grow YM RR Capex Capex underinvested, branches in poor condition £4m Refurbs £2.2m £1.8m Brand Extra Staff £3.2m £2.1m Geared around new branches and one off £0.8m Brand £0.5m £0.3m Press Advertising Now largest agent in most towns £0.7m Advertising £0.5m
Slide 20: Refurbishment Before and After
Refurbishment Before…. ….and After 8
Slide 21: Market Share – Instructions vs Rightmove
Market Share – Instructions vs Rightmove Mkt Share LSL Total Original Instructions vs Rightmove 4.80% 4.30% 3.80% 3.30% 2.80% 2.30% Jan 2010 Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Slide 22: Comparison to Key Competitors
Comparison to Key Competitors Local Market Share H1 09 H1 10 % Growth/ Loss LSL excl HEA 6.85% 7.59% +11% Benchmark 1 8.82% 8.70% -1.4% Benchmark 2 8.80% 8.60% -1.9% Better data than we have ever had LSL improving picture, but lags some key competitors, particularly in South 10
Slide 23: Impact of Investment
Impact of Investment Like for like YM/RR moved forward in market share and volume H1 2009 H1 2010 % Instructions 14,678 21,468 146% Net Units 7,754 9,748 126% Turnover 29,765 36,736 123% Emols 17,584 21,535 122% Say 16% net growth relates to market share investment But early days - and further i
Slide 24: Market Share Growth - Exchanges
Market Share Growth - Exchanges BOE House Purchase Approvals vs LSL Total Original Exchanges 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2009 2010
Slide 25: Agenda
Agenda 1. Business benchmarks 2. Market share growth investment 3. Market segmentation 4. Summary.
Slide 26: Quality of Management - Improvement Plan
Quality of Management - Improvement Plan Assessed & reviewed all managers Management improvement key to success Quality recruitment big focus area Appointed dedicated recruitment resources Established market leaders - Vizzi / Rightmove Headhunting PR, building database Better use of
Slide 27: Web
Web Web presence and traffic important Long term focus across LSL YM Most visited EA website, RR not far behind Additional products on Rightmove – additional revenue Focus on SEO E marketing stepping up a gear Won’t replace traditional agency but will augment it.
Slide 28: LSL has good web presence
LSL has good web presence Right Fish4homes Look4apr Findap Zoopla Primeloca Google Globrix Property Zoomf Evening Vebra Property Mouse move operty roperty tion Maps Live (E4P) Standard News price (TDPG) (TDPG) Your Move l l l l l l l l l l l l Reeds Rains l l l l l l l l l l l l Intercounty l l l l
Slide 29: Web - LSL Brands feature on Hitwise ranking
Web - LSL Brands feature on Hitwise ranking Business and Finance - Property » All sites » W eekly rankings for the week ending 15/01/2011 » Ranks by 'Visits' Rank W ebsite Domain Market Share 08/01/2011 01/01/2011 25/12/2010 1 Rightmove www.rightmove.co.uk 25.99% 1 1 1 2 FindaProperty.com www.findap
Slide 30: Payback
Payback Investment in generating instructions Costs Annualised Running Costs from Jan 2011 = £2 million Income Opportunity 500,000 other agents’ instructions within LSL catchments Payback = 2,800 Instructions 0.56% penetration to other agents instructions. Build pipeline and income d
Slide 31: Agenda
Agenda 1. Business benchmarks 2. Market share growth investment 3. Market segmentation 4. Summary.
Slide 32: Market Segmentation - 2009
Market Segmentation - 2009 • LSL under-performs in mid to upper market (but not LSLi) 20
Slide 33: Market Segmentation - Investment
Market Segmentation - Investment Raising average sale fee Reeds Rains Cream Your Move Premier Top end properties Use alongside main brand Some branches rebranded jointly Piloting – Premier Manager Stretches brand - retains bottom end Works across area Lancashire demonstrates success
Slide 34: Market Segmentation - Reeds Rains City Living
Market Segmentation - Reeds Rains City Living
Slide 35: Reeds Rains
Reeds Rains Cred’
Slide 36: Premier Brochure Premier Window Card
Premier Brochure Premier Window Card and Tabliod Advert Premier Letterhead and Business Card Premier Canvassing Cards Premier Press Grid and Filler Advert Change, Challenge, Opportunity
Slide 37: Market Segmentation
Market Segmentation LSL under-performs in mid to upper market 50% network does 1 more listing per branch per month 2,500 additional instructions Average fee of £4,000 Sell half - say £5m+ opportunity within total £15ml. 25
Slide 38: Agenda
Agenda 1. Business benchmarks 2. Market share growth investment 3. Market segmentation 4. Summary.
Slide 39: Market Share Growth – Summary
Market Share Growth – Summary Web Staff Upgrade Call Centre Management Train Segmentation Staff
Slide 40: LSL Corporate Services
LSL Corporate Services 28th January 2011 David Brown Commercial Director
Slide 41: Agenda
Agenda • What is Asset Management? • Market statistics • Size • Share • Turnover • How have we achieved this? • Outlook • What’s next?
Slide 42: What is Asset Management?
What is Asset Management? epossession property sales art exchanged property sales ulk property disposal uction sales
Slide 43: Market Size
Market Size Mortgage Possessions 80,000 70,000 60,000 50,000 40,000 ™ Mortgage Possessions 30,000 ™ Forecast 20,000 10,000 + o 4 No oD 9 © A & BD OD oN Db D bh © HG A DD DP AN VOD & OO POS 8 PF PLP EP SFI FFF EFSF FGF SF FF 6 Change, Challenge, Opportunity
Slide 44: How have we achieved our results?
How have we achieved our results? •Leverage of relationship: Surveying and Lending •Market leading proposition •Innovation •Market leading software •Designed in partnership with lenders •Online Management Intelligence •Transparency
Slide 45: Example KPIs – Days to sale
Example KPIS — Days to sale Time (Calendar Days) 140 160 Possession to Market Market to Sale Agreed m Sale Agreed to Exchange ™ Exchange to Completion Change, Challenge, Opportunity
Slide 46: Sale Price as % of Estimated Value
Example KPIS – % price achieved 600 120% Sale Price as % of Estimated Value Volume Sale Price 115% 500 110% Volume of Sales 400 105% 300 100% 95% 200 90% 100 85% 0 80% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Time (Fortnightly Intervals)
Slide 47: Example KPIs – Stock turn
Example KPIS – Stock turn 456 Currently SSTC 437 425 Currently For Sale 404 401 403 382 Possessions 365 357 333 339 111 232 218 151 194 178 173 154 162 111 96 248 171 41 45 89 99 36 42 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Slide 48: How might the market change?
How might the market change? • •Mortgage arrears •Shelter in Jan 2011 said “2 million people pay rent/mortgage by credit card” •Interest rate rise? •Government spend review impact •Unemployment rise? •House price movement/forbearance
Slide 49: CML Arrears Graph
™>12 ™6-12 =3-6 2010H1 2009H2 Challenge 2009H1 2008H2 2008H1 2007 H2 2007H1 2006H2 2006H1 2005H2 2005H1 2004H2 2004H1 2003H2 2003H1 2002H2 2002H1 2001H2 2001H1 2000H2 2000H1 1999 H2 1999H1 1998H2 1998H1 1997 H2 > fe iS =) p ° Q a ) 1997H1 1996 H2 1996H1 1995 H2 1995H1 500000 400000 300000 > 200000 +
Slide 50: Market predictions?
Market predictions? Market Possesisons Predictions 75000 70000 AN 65000 LO \ 60000 / \ 55000 / \ — Low 50000 Medium 45000 a NN / wa 42000 N. 35000 30000 2008 Actual 2009 Actual 2010 2011 2012 2013 2014 Change, Challenge, Opportunity
Slide 51: What’s next?
What’s next? •Cyclical Possessions Market •How do we build sustainable profit margin? •Scalability and low fixed costs •Diversification into similar business •Development of Part Exchange proposition
Slide 52: Summary
Summary • •Until 2008 we were not in this sector •New start in Jan 2008 •Acquisition Jan 2010 •Has been a significant contributor to EA profit •Leveraging Lender Relationships •Market Leading Service Proposition •Sustainable with Part Exchange growth using same skills
Slide 53: Your Move
Your Move 28th January 2011 Valerie Bannister National Director, Your Move
Slide 54: Agenda
Agenda • Lettings Market • LSL operating model • Benefits of our model • Future Opportunities • Tour
Slide 55: Household Tenure Pattern (includes Social)
Household Tenure Pattern (includes Social)
Slide 56: Private Rented Sector only
Private Rented Sec Properties lated/RICs 17% Change, Challenge, Opportunity. C) YOUR MOVE
Slide 57: Group Portfolio Growth
Occupied Property Split by Standard and Managed = Standard m Managed 2006 2007 2008 2009 2010 Change, Challenge, Opportunity. C) YOUR MOVE
Slide 58: Group Check Ins Split by Standard and Managed
Check In's Split by Standard and Managed 12000 10000 8000 = Standard 6000 m™ Managed 4000 + 2000 + 2006 2007 2008 2009 2010 Change, Challenge, Opportunity. C) YOUR MOVE
Slide 59: LSL Operating Model
LSL Operating Model Offices Offices Offices Offices HUB Offices Offices Offices Offices
Slide 60: Operating Model Branches HUB
Operating Model Branches HUB • Free up residential branches to • Administer, maintain and concentrate on new business manage the portfolio • Provide correct legal • New landlord business documentation generation • Give legislative and technical • Marketing support • Finding potential tenants • Compl
Slide 61: Opportunities
Opportunities Households by Tenure, Actual and Projected with constant trend -7% NB: Projections are that by 2013 Private Rental Sector will have outstripped Social Rental Sector
Slide 62: Benefits of model
Benefits of model • Scalability • Maintain control and integrity of our lettings proposition • Better retention of customers • Easier measurement • More compliant • Model set up for Market Share Gains
LSL Property Services — Investor Presentation (January 2011) on 6ix