Sun continues to shine on LSL

LSL Property Services became the darling of city analysts this week as it revealed higher than expected profit growth for 2009.

The group’s trading statement for its 2009 full-year results reveals that it expects to be significantly ahead of expectations due to a stronger than anticipated level of housing transactions in the second half of last year. It reveals that group turnover increased 21% in the six months to December 31 2009 compared with the second half of 2008, with estate agency turnover having increased by 42% in the second half of the year and by 5% for the full year.

Numis Securities has consequently upgraded its 2009 estimates for the group, increasing its pre-tax profit estimate from £21.5m to £24.5m and its earnings per share estimate from 15.2p to 17.2p. The stockbroker also expects LSL’s year-end net debt to reduce from £33m to £29m. In their latest report on the group, Numis’ building and property analysts state: “Overall, this is a solid update and shows that December was a good month. We feel that the 2010 estimates have the potential for significant upgrades even if activity levels do not improve from here.”

The trading statement comes 10 days before the completion of LSL’s acquisition of Halifax Estate Agencies Limited, due on January 15. LSL agreed to buy HEAL for £1 in October. David Newnes, managing director of Your Move, one of the agency brands under the LSL group umbrella, claims that the integration projects, which include the transfer of staff and franchised offices, plus the migration of IT systems, are all on track.

As part of the deal, LSL acquired all 218 branches and 879 of the 1050 staff employed within the network, which Lloyds acquired as part of its £12.2bn acquisition of HBoS in September 2008.

Regional managers across both businesses were forced to apply for an undisclosed number of positions within the LSL group, as exclusively revealed by The Negotiator in October.

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