Belvoir Group PLC Trading Update (1874H)
December 02 2020 - 1:00AM
UK Regulatory
TIDMBLV
RNS Number : 1874H
Belvoir Group PLC
02 December 2020
This announcement is deemed to constitute inside information
stipulated under the Market Abuse Regulation (EU) No. 596/2014
2 December 2020
BELVOIR!
BELVOIR GROUP PLC
(the "Company" or "Belvoir" or "Group")
Trading Update
Trading ahead of pre-Covid expectations
Belvoir Group PLC (AIM:BLV), the UK's largest property
franchise, is pleased to provide the following encouraging trading
update.
The Board is delighted to report that trading in the ten months
to the end of October 2020 was ahead of its pre-Covid expectations
with both the property and the financial services divisions
achieving year on year growth in gross profit of 10% and 11%
respectively.
Management services fee income (MSF) from lettings was up on
2019 and MSF from sales was level, with the impact of Covid
lockdown in Q2 being mitigated by the acquisition of the Lovelle
estate agency franchise network and the strong recovery in the
sales market in H2. The pipeline of agreed house sales is
significantly ahead of the previous record level so, whilst the
pipeline is slower to process than usual, franchisees are expected
to report strong sales revenue during the last two months of the
year.
The financial services division goes from strength to strength
with a 18% increase in the adviser network since the start of the
year. As with the property sales market, the pipeline of written
mortgages is at a record level of which a significant proportion is
expected to convert to banked income in the remainder of 2020.
The Group has continued to benefit from the prompt action taken
to reduce its cost base at the start of the pandemic, such that
overheads are now significantly below the original budget.
Consequently, the Board expects that the performance for the year,
in terms of profit before tax, will be comfortably ahead of
management's expectations.
The Group's operating activities are highly cash generative and
are underpinned by 62% of gross profit arising from the recurring
lettings business. Net debt is currently down to GBP4.3m (31
December 2019: GBP6.9m) having deployed GBP2.0m of cash in January
to acquire the Lovelle network and deferred payment of GBP0.5m
VAT.
During the UK's first period of lockdown the Belvoir Board and
all employees earning over GBP25,000 took a temporary pay reduction
of between 20% and 30%, depending on seniority; these reductions
were reversed in July 2020. In addition, the Group benefitted from
GBP250,000 of Government Covid support in the form of furlough
money and Small Business Grants in relation to our corporate-owned
offices. Given the unprecedented uncertainty at that time, the
Board was extremely grateful to all employees for the sacrifices
made and to the Government for its support; these measures
certainly enabled the Group to retain staff during this very
difficult period. The Board is also mindful of the short-term boost
to the property sector from the Government's decision to reduce
stamp duty until 31 March 2021.
Given the Group's continued resilient trading and in
anticipation of a strong end to the year the Board has decided to
reimburse staff in full for the salaries which were sacrificed and
to repay the Government in full the Covid furlough monies and
grants received.
The Board is also now pleased to announce that it intends to pay
a further catch-up dividend of 1.3p per share to coincide with the
final 2020 dividend. This additional dividend represents the last
payment in respect of the final dividend for 2019 which was
suspended in March 2020 and brings the total reinstated 2019
dividend to 3.3p per share.
Dorian Gonsalves, CEO, commented:
"This year has demonstrated beyond doubt the incredible
resilience of our franchise business model. In what has been a
rollercoaster of a year for Belvoir, the Group has performed well
across both divisions. I am immensely grateful to our all our
employees who have worked tirelessly to support our networks of
property franchisees and financial service advisers through this
challenging period.
"I am delighted that we are in a position to be able to
reimburse staff for their earlier sacrifice, to repay the
Government Covid subsidies and to make good the missed 2019
dividend for shareholders. The Board appreciates that we are not
through the pandemic and the longer term economic impact is
uncertain. 2021 will present further challenges, however, we will
start the year with strong sales and financial services pipelines,
and we have confidence in our business model and the
entrepreneurial spirit of our franchisees and advisers to continue
to deliver shareholder value."
For further details:
Belvoir Group PLC 01476 584900
Dorian Gonsalves, Chief Executive Officer investorrelations@belvoirgroup.com
Louise George, Chief Financial Officer
www.belvoirgroup.co m
finnCap
Julian Blunt & Teddy Whiley (Corporate
Finance)
Tim Redfern (ECM)
www.finncap.com +44 (0) 20 7220 0500
Buchanan +44 (0) 20 7466 5000
Charles Ryland, Kim Looringh-van Beeck
& Tilly Abraham
Notes for editors:
About Belvoir Group PLC
Founded in 1995 and listed on AIM in 2012 (BLV.L), Belvoir
operates a nationwide property franchise group with 396 offices
across five brands specialising in residential lettings, property
management, residential sales and property-related financial
services. With its Central Office in Grantham, Lincolnshire, the
Group manages over 68,550 properties and reported record revenues
of GBP19.3m in 2019 making Belvoir the largest property franchise
group in the UK.
For further information, please visit: www.belvoirgroup.com
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