Slide 1: LSL Property Services plc Interim Results
LSL Property Services plc Interim Results Half year ended 30 June 2016
Slide 2: Agenda
Agenda 1. Executive Summary 2. Financial Performance 3. Market 4. Strategy 5. Outlook 6. Q&A 7. Appendix HALF YEAR RESULTS PRESENTATION AUGUST 2016 1
Slide 3: Strong first half Group financial performance in a changing market
Strong first half Group financial performance in a changing market • Strong Q1 market volumes ahead of Stamp Duty changes on 1 April Market • Q2 market volumes weaker in lead up to EU referendum • Post-referendum consumer uncertainty • Estate Agency revenue up 9%, operating profit up 10% • Double di
Slide 4: Agenda
Agenda 1. Executive Summary 2. Financial Performance 3. Market 4. Strategy 5. Outlook 6. Q&A 7. Appendix HALF YEAR RESULTS PRESENTATION AUGUST 2016 3
Slide 5: Group Financials
Group Financials Strong H1 growth in operating profit and improved cash from operations £m Actual 2016 2015 % growth P&L Revenue 151.4 140.2 8% Group Operating Profit1 11.3 10.3 10% 4.0 4.0 4.0 3.1 3.3 Margin 7.5% 7.4% Exceptionals - (0.1) Profit before tax 8.4 6.2 35% Adjusted EPS 8.6p 7.2p 19% 201
Slide 6: Group Financials
Group Financials 6 months to 30 June Group revenue (£m) Group Operating Profit (£m) 151.4 15.1 14.5 139.8 140.2 120.8 118.8 11.5 11.3 10.3 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 HALF YEAR RESULTS PRESENTATION AUGUST 2016 5
Slide 7: Financials – Cash flow and Debt
Financials – Cash flow and Debt Strong cash from operations – £100m banking facility extended to May 2020 for same amount with existing H1 2016 H1 2015 banking syndicate Operating Cashflows Operating Profit 11.3 10.3 – Net banking Debt £61.7m Depreciation, working capital and JVs (0.3) (2.9) • Geari
Slide 8: Financial Performance – Estate Agency
Financial Performance – Estate Agency H1 2016 H1 2015 % change – Residential £ fees per unit up 1.1% – Flat residential exchange units P&L (£m) – Continued strong Lettings & Financial Exchange Income 42.5 42.0 1% Services performance in the period Lettings Income 34.0 30.6 11% – Margins maintained F
Slide 9: Financial Performance – Marsh & Parsons
Financial Performance – Marsh & Parsons1 H1 2016 H1 2015 % change – Good performance with enhanced operating margin P&L (£m) – Residential sales income up 10% with a strong Q1 ahead of the Stamp Total Revenue 17.1 15.4 11% Duty changes and slowdown Expenditure (14.9) (13.9) (7%) thereafter Operating
Slide 10: Financial Performance – Surveying
Financial Performance – Surveying H1 2016 H1 2015 % change – Revenue per job up 8% reflecting a favourable mix across lenders and the types of jobs performed P&L (£m) – Surveyor headcount optimised to meet Total Revenue 32.5 31.1 5% business requirements Expenditure (24.4) (23.5) (4%) – Enhancement
Slide 11: Agenda
Agenda 1. Executive Summary 2. Financial Performance 3. Market 4. Strategy 5. Outlook 6. Q&A 7. Appendix HALF YEAR RESULTS PRESENTATION AUGUST 2016 10
Slide 12: Residential market context
Residential market context Pre-EU referendum market – Strong Q1 volumes driven by Stamp Duty changes on 1 April 2016 – Q2 volumes slowed in the run-up to the EU referendum Consumer behaviour post EU referendum – EU referendum outcome has led to further consumer uncertainty following Q2 slow-down – C
Slide 13: Market overview – historic trends
Market overview – historic trends H1 Mortgage and House Purchase Approvals1 House Purchase Approvals – 414,159 (1) H1 2016 up 7.9% on H1 2015 1,831 • Q1 2016 up 16.5% on prior year. 1,800 • Q2 2016 up 1.5% on prior year. 1,200 1,165 589 594 656 650 741 600 259 266 326 Total Mortgage Approvals 667 28
Slide 14: Market overview – historic house price trends
Market overview – historic house price trends England and Wales annual house changes1 – In year ended June 2016 average house prices in England and Wales increased by 12% 6.0% to £293k 9.6% 10% – Significant regional variations 8% 6.0% 6% 4.8% 4.1% 4% 2.6% 2% 0% 2012 2013 2014 2015 2016 House price
Slide 15: Agenda
Agenda 1. Executive Summary 2. Financial Performance 3. Market 4. Strategy 5. Outlook 6. Q&A 7. Appendix HALF YEAR RESULTS PRESENTATION AUGUST 2016 14
Slide 16: Group Strategy
Group Strategy LSL Strategy • LSL remains focused on the strategy communicated in March 2015 • Drive operating profit per branch to between £80k to £100k in the medium term Agency • Selective acquisitions Strategy • Grow recurring and counter cyclical income streams • Continued investment in Marsh &
Slide 17: Operating profit per branch
Operating profit per branch Break-down of operating profit per branch (2015 full year) Operating Operating Profit Profit £m per Branch Agency Branches (YM, RR, LSLi) Operating profit 16.97 Branch numbers 399 Operating profit per branch (£ 000’s) 42.5 M&P Operating profit 6.86 Branch numbers 23 Opera
Slide 18: Estate Agency Strategy – Your Move, Reeds Rains, LSLi
Estate Agency Strategy – Your Move, Reeds Rains, LSLi Strategy is to drive operating profit per branch in the medium term Operating profit per branch (£k) – (Full Year) Initiatives to drive branch profitability include: – Growth in Lettings revenue 45.6 – Growth in Financial Service revenue 42.5 Pro
Slide 19: Estate Agency Strategy – Marsh & Parsons
Estate Agency Strategy – Marsh & Parsons – Marsh & Parsons branch profitability is strong – Ambition is to expand by 2-4 branches per annum in Outer Prime Marsh & Parsons Award winning marketing new branch openings Awards 4 – Estate Agency of the Year Awards 2015, sponsored by The Times & 3 Sunday T
Slide 20: Estate Agency Strategy
Estate Agency Strategy Strategy is to drive incremental revenue and gross margin across all business streams H1 Exchange fees (£m) H1 Lettings fees (£m) H1 Financial Services Income (£m) 44.4 42.0 42.5 34.0 29.5 30.6 34.1 34.9 27.7 22.8 24.7 22.6 19.9 15.7 14.4 2012 2013 2014 2015 2016 2012 2013 201
Slide 21: Estate Agency Strategy
Estate Agency Strategy Strategy is to grow recurring and, where market conditions permit, the counter-cyclical revenue streams H1 Recurring revenue (Lettings) £m H1 Total Agency Revenue 10% 8% 6% 4% 3% CAGR 11% 25% 28% 29% 34.0 26% 27% 30.6 27.7 24.7 22.6 64% 65% 69% 68% 68% 2012 2013 2014 2015 2016
Slide 22: Estate Agency Strategy – Financial Services
Estate Agency Strategy – Financial Services Value of H1 LSL Financial Services mortgage completions (£bn) Strategy – Consistent delivery of appropriate CAGR 32% outcomes for consumers – Capitalise on mortgage market shift 8.3 towards intermediary distribution – Investment in additional mortgage advi
Slide 23: Estate Agency Strategy – Acquisitions – Lettings Books
Estate Agency Strategy – Acquisitions – Lettings Books The economics of lettings books acquisitions are very accretive. We will continue to evaluate lettings book acquisitions in H2 2016. Investment 2013 2014 2015 2016 H1 £0.5m £0.6m £3.9m £4.1m H2 £1.1m £1.2m £5.7m n/a Full Year £1.6m £1.8m £9.6m n
Slide 24: Estate Agency Strategy – Acquisitions – LSLi
Estate Agency Strategy – Acquisitions – LSLi LSLi has been a significant growth vehicle for LSL H1 Revenue (£m) CAGR 26% 2015 2014 2013 19.1 17.0 15.8 2012 2012 2010 10.2 7.5 2012 2013 2014 2015 2016 2007 2007 2007 HALF YEAR RESULTS PRESENTATION AUGUST 2016 23
Slide 25: Estate Agency Strategy – joint ventures, other investments and portals
Estate Agency Strategy – joint ventures, other investments and portals Joint Ventures and other investments Current Status investments Value of Zoopla shareholding at 30 June 2016 £30.1m. One million shares of Zoopla holding Zoopla sold during July 2016 for gross proceeds of £3.0m TM, LMS Positive p
Slide 26: Surveying Strategy
Surveying Strategy Total Approvals1 - % growth – Optimise contract performance from B2B customers – Achieve further improvement in efficiency and capacity utilisation and to 24% 23% 25% – Use technology to drive further customer 21% 21% enhancements and quality 16% improvements 12% 9% 8% -1% -5% -11
Slide 27: Agenda
Agenda 1. Executive Summary 2. Financial Performance 3. Market 4. Strategy 5. Outlook 6. Q&A 7. Appendix HALF YEAR RESULTS PRESENTATION AUGUST 2016 26
Slide 28: Outlook
Outlook The Group has a balanced business portfolio including Asset Management and the Letting and Financial Services businesses which are both proving more resilient to residential property market fluctuations and we will continue to benefit from the increasing proportion of our business represente
Slide 29: Agenda
Agenda 1. Executive Summary 2. Financial Performance 3. Market 4. Strategy 5. Outlook 6. Q&A 7. Appendix HALF YEAR RESULTS PRESENTATION AUGUST 2016 28
Slide 30: Agenda
Agenda 1. Executive Summary 2. Financial Performance 3. Market 4. Strategy 5. Outlook 6. Q&A 7. Appendix HALF YEAR RESULTS PRESENTATION AUGUST 2016 29
Slide 31: LSL Property Services plc – Overview
LSL Property Services plc – Overview Business Primary Geography Consumer Agency Revenue Split Channel brands Marsh & Parsons 17% London LSLi 19% London / SE Estate Agency B2C UK 12 Reeds Rains 22% Predominantly North Surveying B2B UK - Your Move 42% National coverage H1 16 Revenue H1 16 Operating Pr
Slide 32: Disclaimer
Disclaimer This Presentation and the statement and 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-lo
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