North East estate agency LSL saw its full year revenues fall 4% after a major shake-up of its high street branch network.
The Newcastle firm owns and operates a number of well known brands across the 海角视频 including Your Move, Reeds Rains and Marsh & Parsons, but it last year announced a number of closures as it sought to reshape its portfolio.
During the first quarter of the year, the Your Move and Reeds Rains Estate Agency branch network was whittled down from 308 owned branches to 144, following the closure and merging of 81 neighbouring branches, the franchising of 39 and the closure of 44.
Now directors have released results for 2019, saying the firm put in a positive performance and was ahead of expectations, despite the financial impact of the shake-up and the scale and complexity of the project.
It said 2020 had started well, but sounded a note of caution over the coronavirus outbreak, saying it had recently seen a softening in sales indicators in its estate agency division.
During 2019 the firm posted a 22% fall in group operating profit, from 拢25.4m to 拢19.7m, but after stripping out the exceptional costs, amortisation of intangible assets and share-based payments, underlying operating profit actually rose 3% from 拢35.9m to 拢37m.
Group revenue fell 4% from 拢324.6m to 拢311.1m but on a like-for-like group revenues increased by 4%, which it said was 鈥渁 highly resilient performance in the context of challenging residential market conditions during 2019鈥.
Exceptional costs of 拢15.7m were recognised in the period, predominantly from the reshaping of the Your Move and Reeds Rains branch networks.
The publication of the accounts comes two weeks after the board of LSL confirmed it was in discussions with rival firm Countrywide, owner of Bairstow Eves and other brands, regarding a possible merger.
The talks 鈥 which come as the industry is being hugely disrupted by online technologies 鈥 have prompted fears of job losses, with the companies operating more than 1,000 branches between them and having more than 14,000 employees.
The firm said: 鈥淒iscussions between Countrywide and LSL are ongoing. At this stage, there can be no certainty that any offer will ultimately be made for Countrywide. Further announcements will be made in due course as appropriate.鈥
LSL has until 5pm on March 23 to announce a firm intention to make an offer for Countrywide or walk away.
Simon Embley, chairman of LSL, added: 鈥淭he group delivered a highly resilient revenue and underlying operating profit performance in 2019 in the context of challenging residential market conditions and the introduction of the tenant fee ban on 1st June 2019.
鈥淢arket conditions to date in 2020 have been encouraging, reflected by our estate agency sales pipeline at 29th February 2020 being 拢3.6m ahead of the Board鈥檚 prior expectations, benefiting from a favourable estate agency net sales performance during January and February.
鈥淲hilst we have been encouraged by the residential property market conditions to date in 2020, the situation regarding the COVID-19 virus is rapidly evolving and we have in recent days, seen some slight softening of our lead sales indicators in estate agency.
鈥淲e are monitoring the situation very closely as it may create headwinds for our business in 2020 if changes in consumer behaviour impact residential property market conditions. As and when any potential impact on the group becomes clearer, we will provide updates as necessary.鈥
