LSL, parent company of estate agency brands including Your Move, Reeds Rains and Marsh & Parsons, has warned that this year’s profits will be “significantly lower than previously anticipated”.
In an unexpected announcement to the City ahead of its interim results on August 2, this morning, LSL made it clear that the EU referendum result was partly to blame.
It said: “LSL expects to report strong interim results on 2nd August in-line with the Board’s expectations and ahead of the same period last year, delivering growth across all major revenue lines and demonstrating profit growth in both the estate agency and surveying divisions.
“The group performed strongly in quarter one as the well flagged changes to Stamp Duty, which took effect on 1st April 2016 resulted in an acceleration of market activity. Quarter two, as expected, saw a slowing of LSL’s trading performance in the run up to the EU referendum.
“The EU referendum outcome has led to further consumer uncertainty and LSL’s post-referendum trading performance has reflected these market conditions.
“Whilst it is difficult to accurately predict the market conditions and consumer sentiment for the remainder of calendar 2016, LSL does not expect market conditions to improve sufficiently to meet the Board’s expectations for the full year.
“Consequently, whilst still expecting growth in profitability in the second half of 2016 as compared to the first half of 2016, LSL now expects that full year Group operating profit will be significantly lower than previously anticipated.”
LSL chairman Simon Embley said: “Whilst the vote to leave the EU has created uncertainty in the property market, and has impacted consumer confidence, mortgage cost and availability remain positive for the UK housing market.
“LSL has very strong fundamentals, with a robust balance sheet and a balanced business portfolio including its counter-cyclical Asset Management business.
“The business is well positioned to adapt quickly to these changing market conditions and I am confident that it will continue to deliver long term value to shareholders.”
Comments (3)
Not surprised, Your Move and Reed Rains are poor agents. With the change in the market place those who recognise the changes early will continue to be successful. These bigger franchises employ people who’ve probably never worked through a changing market and will struggle.
I must admit that we have certainly seen a seed change in the market. The corporates around here have lost out big time with the local, independents very quickly gaining market share as vendors turn to experience and local expertise.
Rather a welcome surprise, unlike the unwelcome surprise three week’s ago!
This is what exactly expected aftermath of Brexit. There are plenty more on the way for us to surprise who don’t get what’s the link between BoPs and GDPs and their correlation with the real estate market!
Unfortunately, most of us are too busy to write property description than to detect the threats could be seen in our horizons and be prepared for that until its too late!
Good luck folks!