The UK’s largest property franchise said results for the first half of 2020 were in line with the expectations management had before the coronavirus (COVID-19) crisis hit Britain.
The business was inevitably hit by the lockdown restrictions introduced in March but since constraints were eased in May, the group said it has seen property sales and financial services activities running at record levels in terms of instructions, sales agreed and written mortgages.
These are expected to convert to sales fees and banked mortgage income during the remainder of the year.
The latest lettings survey by the group currently points to only a minimal increase in rent arrears and management has every confidence that the recurring nature of lettings will continue to underpin trading throughout the remainder of 2020.
Despite the disruption caused by COVID-19, Belvoir saw revenue in the first half of 2020 rise by 8% to £9.77mln from £9.05mln the year before, and profit before tax jump 17% to £3.16mln from £2.70mln.
The group continued to achieve revenue growth across the three markets in which it operates with lettings up 8% year-on-year, property sales up 14% and financial services up 7%.
The group now has a portfolio of 69,000 managed properties, up from 64,650 at the end of June 2019, with eight franchise owners having completed on an assisted acquisition adding £1.47mln a year of franchisee network revenue in the year to date. The lettings to sales revenue ratio from Belvoir’s estate and lettings offices remains unchanged at 80%/20%.
Given the strong financial performance of the group, the dividend, which was suspended at the time of the company’s last set of full-year results, has been reinstated. An interim dividend of 3.40p has been proposed, with an additional 2.0p dividend on top of that to partially compensate for the absence of a final dividend last year.
The board is eyeing a further catch-up dividend payment when the full-year results are released, dependent on the board assessment of the prevailing circumstances at that time.
"The reliable and recurring nature of our lettings business, which underpins 62% of gross profit, was evident during H1 (first half] with lettings operating on par with 2019. A strong Q1 [first quarter] for property sales and financial services was followed by a lockdown on estate agency activity for half of Q2 during which time our franchisees focused on looking after their pipeline so as to safeguard sales post-lockdown, and our financial advisers switched to selling remortgage and income and life protection products,” Dorian Gonsalves, the chief executive officer of Belvoir said in the results statement.
"H2 started with further strategic progress through our alliance with The Nottingham Building Society. In addition to taking on their estate and lettings agency business, a number of our franchisees will also have the opportunity to offer The Nottingham members high-quality estate agency services from co-branded building society branches,” he added.
Our results and RNS released today at 7am. Explains how a “rollercoaster year” has affected our business and shows the resilience and tenacity of our incredible franchisees, staff and clients. Here’s a link to the facts and figures: https://t.co/dnbHyL7Zhy #AIM #uk #BLV pic.twitter.com/KxZGH6UJm6— Dorian - Belvoir! (@Dorian_Belvoir) September 7, 2020