Lsl Property Services Plc · LSE:LSL
Lsl Property Services — H1 2022 Earnings Presentation
29 slides from Lsl Property Services's earnings presentation, Aug 3, 2022
Slide 1: Interim Results for six months ended 30 June 2022
Growth. Focus. Execution. Technology. People. Interim Results for six months ended 30 June 2022 03 August 2022 1
Slide 2: Agenda
Agenda 01 Highlights Page 3 02 Financial and Operating Performance Page 9 03 Summary and Outlook Page 23 04 Appendix Page 26 2
Slide 3: Highlights
Highlights LSL
Slide 4: Headlines
Headlines Profits of over £6m in Estate Agency Resilient financial delayed by market- performance with wide slow residential profits materially up conversion, expected on pre COVID and to continue in H2 with substantial revenue impact on FY held in pipelines Benefits of strategy to H2 expected to be
Slide 5: Financial Highlights
Financial Highlights Revenue £160.9m (2021: £166.5m) Revenue (2021: £166.5m) Group Underlying Profit £14.2m £14.2m Net Cash (2021: £27.3m) Group Underlying Profit £30.7m £30.7m (2021: £27.3m) (2021: £17.0m) Net Cash (2021: £17.0m) 5
Slide 6: H1 Underlying Operating Profit in EA would have been £6m+ higher
H1 Underlying Operating Profit in EA would have been £6m+ higher if pipeline conversion had been as expected Group Residential Pipeline 30 June Profit Impact (£m) (£m) 6.2* 20.4* 26.7 21.2 14.2 16.5 2019 2021 2022 H1 H1 H1 2022 2022 2022 Effective Profit Impact Profit * Excludes Financial Services N
Slide 7: Progress in delivering our strategy
Progress in delivering our strategy Group LSL GROUP Launch of Living Responsibly report and strategy FINANCIAL SERVICES SURVEYING & VALUATION ESTATE AGENCY NETWORK BUSINESS Further growth in advisors to Further improvements in Retained market share gains 2,930 supporting highest ever capacity manage
Slide 8: Continued growth in Financial Services Network and Surveying & Valuation
Continued growth in Financial Services Network and Surveying & Valuation demonstrates benefits of strategy and reduced exposure to housing market cycles Group FINANCIAL SERVICES NETWORK SURVEYING & VALUATION ESTATE AGENCY BUSINESS OPERATING PROFIT OPERATING PROFIT OPERATING PROFIT 29% market reducti
Slide 9: Financial and Operating Performance
Financial and Operating Performance 9
Slide 10: Resilient results as benefits of diversification strategy demonstrated
Resilient results as benefits of diversification strategy demonstrated in reduced housing market Group ▪ Group Revenue just below H1 2021 record H1 Highlights (£m) 2022 2021 Variance ▪ H1 2021: exceptional volumes in run up to end of Group Revenue 160.9 166.5 -3% Stamp Duty holiday Group Underlying
Slide 11: Resilient performance with market share gains in each of the core businesses
Resilient performance with market share gains in each of the core businesses Group LSL GROUP FINANCIAL SERVICES SURVEYING & VALUATION ESTATE AGENCY NETWORK BUSINESS Record Mortgage 10.1% Most ever jobs 288,052 National Market 1.38% Market Share Performed Share of Exchanges +110bps +8% +15bps £20.5m
Slide 12: Pipeline and Associated Operating Profit
Pipeline and Associated Operating Profit Group 6.8 1.3 6.2 (0.7) 5.2 (0.3) (0.9) ▪ Record EA residential pipeline includes c.1,700 homes not exchanged versus expectation due to slow exchange conversion rate ▪ Whilst Pipeline is exchanging slower it is not ageing 22 23 ▪ Fall-throughs rates for H2 as
Slide 13: Resilient Network performance, further investment with positive outlook for H2
Resilient Network performance, further investment with positive outlook for H2 Financial Services ▪ Record mortgage lending outperformed the market H1 Financial Services P&L (£m) 2022 2021 Var. ▪ Record mortgage market share FS Network Gross Revenue 146.2 144.1 1% FS Network Net Revenue 20.5 18.7 10
Slide 14: Mortgage market returning to more normalised mix
Mortgage market returning to more normalised mix with continued market share growth Financial Services Mortgage Market (excluding Product Transfers) Total Gross Mortgage Lending (£bn) and LSL Market Share New Mortgage Remortgage and Other 44% 29% 41% 45% 48% 168 151 127 127 108 56% 71% 59% 55% 52% 2
Slide 15: Strengthening our position as the UK's largest AR mortgage and insurance network
Strengthening our position as the UK’s largest AR mortgage and insurance network Financial Services N , w L L’ I I Growth in advisers of 68% since 2017 as existing network, up 54% since end of 2017 firms grow 991 2,930 942 2,744 868 896 2,431 851 2,298 2,277 2018 2019 2020 2021 2022 2018 2019 2020 2
Slide 16: Extremely strong Surveying & Valuation performance
Extremely strong Surveying & Valuation performance Surveying & Valuation H1 S&V P&L (£m) 2022 2021 Var. ▪ Record H1 revenue B2B – Valuations 48.6 45.1 8% ▪ Highest H1 profit in over 10 years Private Survey and Data Income 1.9 1.1 73% Total Revenue 50.5 46.2 9% ▪ Strong growth from developing D2C and
Slide 17: Financial performance enhanced by operational capability
Financial performance enhanced by operational capability delivering market share growth Surveying & Valuation b j b (‘ ), b 86% Significant improvement in utilisation with a 20% since 2018 increase in jobs per surveyor compared to 2018 251 267 288 586 197 487 516 523 155 387 2018 2019 2020 2021 2022
Slide 18: Estate Agency traded well in a smaller market building record pipeline
Estate Agency traded well in a smaller market building record pipeline to carry forward Estate Agency ▪ 2021 boosted by exceptional volumes generated by H1 Estate Agency P&L (£m) 2022 2021 Variance Stamp Duty holiday. 2022 market volumes down 29% Residential Exchange Income 30.8 40.4 -24% ▪ LSL outp
Slide 19: Estate Agency increased national market share of housing transactions
Estate Agency increased national market share of housing transactions, building a record pipeline to carry into H2 Estate Agency Recurring lettings income remains a high proportion of Number of exchange units -21% (total UK market:-29%) EA revenue 3.7 5.5 43% 49% 4.1 4.3 53% 55% 60% 10.8 3.1 8.5 10.
Slide 20: Strong Balance Sheet providing flexibility to make further investments
Strong Balance Sheet providing flexibility to make further investments to support growth Group ▪ Record H1 Net Cash Balance Sheet extracts(£m) 2022 2021 ▪ Historic PI liabilities continue to reduce Net Cash 30.7 17.0 PI Costs Provision 3.9 5.5 ▪ Modest amount outstanding re previous acquisitions Def
Slide 21: Record half year net cash
Record half year net cash Group 70 14.2 60 48.5 50 (8.9) (0.3) (6.5) (1.0) 40 (7.7) 30.7 30 (2.2) (5.3) £m 20 10 0 Net Cash / Underlying Working PI Costs Treasury / EBT Investments Dividends Paid Capital Interest, Tax Net Cash / (Net Debt) at Operating Capital and share Expenditure and Other (Net De
Slide 22: Our Capital Allocation Policy is designed to support growth
Our Capital Allocation Policy is designed to support growth for the benefit of shareholders Group 1 FINANCIAL SERVICES SURVEYING & VALUATION ESTATE AGENCY Organic Growth Acquisitions to develop and Acquisitions to enhance D2C 2 grow FS Network and data capability No acquisitions planned (through LSL
Slide 23: Summary and Outlook
Summary and Outlook LSL
Slide 24: Summary and Outlook
Summary and Outlook Group ▪ Record Revenue in Surveying and Financial Services Network RESILIENT ▪ Record pipeline in Estate Agency with £6m+ profit delayed due to slow conversion FINANCIAL ▪ Financial Services Network and Surveying significantly ahead of 2019 (pre-COVID) PERFORMANCE ▪ Group Underly
Slide 25: Questions?
Questions? 25
Slide 26: Appendix
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Slide 27: Financial Highlights 2019 - 2022
Financial Highlights 2019 - 2022 Group H1 Highlights (£m) 2022 2021 2020 2019 Group Revenue 160.9 166.5 114.9 154.1 Group Underlying Operating Profit 14.2 27.3 9.7 12.2 Group Underlying Operating 9% 16% 8% 8% Margin Net Exceptional Gains / (Costs) (2.0) 2.7 (4.4) (12.8) Profit Before Tax 7.4 25.5 2.
Slide 28: Financial Highlights 2019 - 2022
Financial Highlights 2019 - 2022 Group H1 Highlights (£m) 2022 2021 2020 2019 Revenues Financial Services Network 20.5 18.7 14.4 16.4 Financial Services Other 19.3 20.4 13.7 18.0 Financial Services 39.8 39.1 28.1 34.3 Surveying & Valuation 50.5 46.2 31.1 42.7 Estate Agency 70.6 81.2 55.7 77.1 Group
Slide 29: Forward Looking Statements
FORWARD LOOKING STATEMENTS This document contains certain statements that are forward-looking statements. They appear in a number of places throughout this document and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees con
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