Slide 1: Preliminary Results
Preliminary Results Year ended 31 December 2013
Slide 2: Agenda
Agenda 1 Executive Summary 2 Financial Performance 3 Market 4 Strategy and Outlook 5 Q&A 1 Year End Results Presentation March 2014
Slide 3: Executive Summary
Executive Summary Strong second half Group performance in a recovering market. • Excellent progress in Estate Agency. Group Underlying Group Revenue Operating Profit • Considerable improvement in Surveying during the second half of the year. £258.6m £37.1m • Significant investment in capacity across
Slide 4: Business Overview
Business Overview Group Agency Surveying Branches Asset Financial Management Services FY13 Revenue FY13 Operating Profit FY13 Average FTE £258.6m £37.1m 4,327 23% 18% 31% Surveying Surveying Surveying Agency Agency Agency 69% 77% 82% 3 Year End Results Presentation March 2014
Slide 5: Agenda
Agenda 1 Executive Summary 2 Financial Performance 3 Market 4 Strategy and Outlook 5 Q&A 4 Year End Results Presentation March 2013
Slide 6: Summary Group Financials
Summary Group Financials Dividend increase ahead of EPS growth, reflecting confidence in the future. £m Actual Like-for-Like(3) 2013 2012 2013 2012 P&L Revenue 258.6 243.8 6% 258.6 238.3 9% Underlying Group Operating Profit(1) 37.1 35.1 6% 37.1 32.6 14% Margin 14.3% 14.4% 14.3% 13.7% Exceptionals (1
Slide 7: Summary Group Financials
Summary Group Financials Group Operating Profit • Group Operating Profit at similar level to 2007, when house purchase transactions(1) were 70% higher. £m • Strong record of organic growth, selective 40 acquisitions and cash generation. 35 37.2 37.1 • Invested £62m in acquisitions less reverse 35.1
Slide 8: Financial Performance – Estate Agency
Financial Performance – Estate Agency 2013 2012 Inc/ (Dec) P&L (£m) Exchange Income 80.0 72.0 11% FS Income (incl intermediary networks) 35.8 31.8 13% Lettings Income 52.2 48.1 8% Asset Management Income 14.3 15.6 (9%) Other Income 15.9 14.1 13% Total Revenue 198.2 181.6 9% Expenditure (169.1) (157.
Slide 9: Financial Performance – Surveying
Financial Performance – Surveying Surveying Segment Actual Like-for-like(1) £m 2013 2012 2013 2012 Turnover 60.4 62.2 (3%) 60.4 56.7 7% Expenditure (47.3) (48.3) (2%) (47.3) (45.3) 4% Underlying Operating Profit 13.1 13.9 (6%) 13.1 11.4 15% Margin 21.7% 22.4% 21.7% 20.0% Operational Highlights • £2.
Slide 10: Professional Indemnity costs
Professional Indemnity costs • PI costs are a market issue – claims relate to the 2004 – 2008 high risk lending period. • Additional £12.0m PI provision, as announced in November 2013. • Claims rate is a function of the behaviour of individual lenders or owners of mortgage books. • Since November 20
Slide 11: Financials – Cash flow and Debt
Financials – Cash flow and Debt Continued Strong Operational Cash generation £m 2013 2012 • Operating cash flows Operating Cashflows Operating Profit 37.1 35.1 – Higher PI cash settlements. Depreciation 3.9 3.5 JV (1.7) (1.3) – Interest - £1.1m for new banking facility. Working Capital 3.1 4.1 5.3 6
Slide 12: Agenda
Agenda 1 Executive Summary 2 Financial Performance 3 Market 4 Strategy and Outlook 5 Q&A 11 Year End Results Presentation March 2014
Slide 13: Market overview – mortgage volumes
Market overview – mortgage volumes Mortgage and House Purchase Approvals(1) House Purchase Approvals 000’s • 736,000(1) 2013 up 21% on 2012. – Q1 down 2% on prior year. 3,000 – Q2 – Q4 up 27% on prior year. 2,000 1,000 • Based on 3 month lag, house purchases in 0 2013 up 14% to 687,000(1). 2007 2008
Slide 14: Market overview – house price trends
Market overview – house price trends England and Wales annual house changes(1) • In 2013 average house prices in England and Wales increased by 5.0% to £240k. 10.0% 5.0% 8% • Average house prices now 3.4% above 5% 2% 4% 5% the February 2008 peak. 0.0% 2007 2008 2009 2010 2011 2012 2013 -5.0% -1% • S
Slide 15: Agenda
Agenda 1 Executive Summary 2 Financial Performance 3 Market 4 Strategy and Outlook 5 Q&A 14 Year End Results Presentation March 2014
Slide 16: Strategy - Estate Agency – Executive Summary
Strategy - Estate Agency – Executive Summary Drive organic growth and selective acquisitions Agency Profit Transformation 2007 – 2013 • Organic growth: – Positive revenue growth across all income streams. £m – Development of resilient countercyclical 35.0 income streams. 30.0 29.1 • Selective acquis
Slide 17: Strategy - Estate Agency - Branches
Strategy - Estate Agency - Branches Profit per branch(1) 2007 – 2013 Your Move, Reeds Rains and LSLi • Profit per branch excluding Marsh & Parsons £000’s £32k in 2013. In 2011, the Board set a 50.0 medium term target to grow profit per branch to £30-£50k when it was only £5k. 40.0 42.5 Marsh & Parso
Slide 18: Strategy - Estate Agency – Countercyclical income
Strategy - Estate Agency – Countercyclical income Lettings Revenue Lettings £m • 2013: Lettings income of £52.2m, 8% growth. 60.0 50.0 • Ongoing investment in new staff and lettings 52.2 40.0 48.1 businesses. 30.0 20.0 29.5 • Implementation of new lettings software in 24.6 10.0 16.5 21.9 core brands
Slide 19: Strategy - Estate Agency – Financial Services
Strategy - Estate Agency – Financial Services Financial Services Revenue • 2013 Financial Services revenue £35.8m, up 13%. £m • 2013 LSL lending arranged £10.9bn, up 54%. 40 • Investment in new front and back office IT 35 35.8 systems to improve the customer experience, 30 31.8 enhance productivity
Slide 20: Zoopla
Zoopla • November 2013: LSL invests £0.8m in Zoopla, increasing its shareholding to 4.91%. • December 2013: Shareholding revalued to £35.1m in accounts. • February 2014: DMGT, the largest shareholder in Zoopla, announced that the Board of Zoopla is exploring various strategic options for the busines
Slide 21: Strategy - Surveying
Strategy - Surveying Further investment to increase capacity Surveying profit 2007 – 2013 • Strong profit performance in 2007-2010 during a period where the market declined by 64%. £m 30.0 • 2011-2012 pricing pressure on contract renewals and insourcing of C&G contract. 12.3 8.6 25.0 5.5 • 2013 mark
Slide 22: Capitalising on significant market growth in 2014
Capitalising on significant market growth in 2014 Estate Agency • Deliver strong organic growth and the benefit of operational gearing. • Ambition to double size of Marsh & Parsons estate by 2019. • Selective Estate Agency acquisitions – bolt on businesses and lettings books. Surveying • Continue to
Slide 23: Agenda
Agenda 1 Executive Summary 2 Financial Performance 3 Market 4 Strategy and Outlook 5 Q&A 22 Year End Results Presentation March 2014
Slide 24: 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
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