Newcastle based LSL Property Services shares rose 6% in early trading after unveiling a strong start to the year and a new banking facility.
The listed estate agency business – owner of e.surv Chartered Surveyors, Your Move and Reeds Rains – said it has continued to deliver strong financial performance throughout the first seven weeks of the year, building on the positive trading in 2020.
Shares rose 6.3% from its 239p closing price on Tuesday, to 254p this morning, February 24, after publishing the update to shareholders.
The company, which has its headquarters at Newcastle Business Park, said each of its three principal trading divisions reported growth in underlying operating profits in January, with highlights including growth in the number of its financial advisors, from 2,585 at the end of 2020 to a total of 2,613.
It said mortgage and protection completions have strengthened, with particularly strong year-on-year performance in the early weeks of February.
Profit within its financial services division and surveying division in January was ahead of comparative periods in 2019 and 2020, and exchange income was also strong as record year-end pipelines moved through to completion.
It said the trend is expected to continue throughout the first quarter and at the end of January, LSL’s residential sales exchange pipeline remained over 50% ahead of last year. Directors said the reshaping of its branch network had helped to drive up profit in the estate agency division, putting it ahead of profit for both 2019 and 2020.
The firm also announced its new banking facility, provided by Barclays Bank, Santander and NatWest Bank.
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It said: “LSL is pleased to announce a new banking facility, which will give the group long-term balance sheet flexibility to take advantage of a number of attractive opportunities, particularly in financial services. A £90m committed revolving credit facility, with a maturity date of May 2024, arranged on competitive terms, will replace the previous £100m facility that was due to mature in May 2022.
“LSL is highly cash generative, converting over 100% of group underlying operating profit to cash flow from operations. Net banking debt at 31 December 2020 was a historic low of £1.6m. In extending the facility, the board has taken the opportunity to review the group’s borrowing requirements in light of its strong cash generation, reducing the size of the committed facility and therefore the costs associated with the new facility.”
Meanwhile, the company, which recently announced two significant acquisitions, is also set to announce a new date for the publication of its full year results for 2020, to give it more time to reinstate guidance.
The trading update to shareholders concluded: “The outlook for the 海角视频 economy remains difficult to predict with confidence, as the country starts to emerge from the latest lockdown and the impact of the extraordinary measures taken by the Government since the initial onset of the Covid-19 virus become clearer.
“In light of this, the board considers it prudent to observe a longer period of trading prior to reinstating guidance. LSL will release its full year results before the end of April, by which time the board intends to reinstate guidance and provide a more detailed strategic update, and in particular its plans to capitalise further on its significant opportunities in financial services.”
LSL said it would announce a date for the results in due course.