LSL Property Services warns on profits amid slowdown in activity

25th Nov 2022 10:06

(Sharecast News) - LSL Property Services warned on full-year profits on Friday following a recent decline in housing market activity.

The company, which provides residential property services, now expects the overall group performance to be below its prior expectations, with full-year profit anticipated to be in a range just above or just below that reported in 2019, which included a £1.4m contribution from LMS and TM Group, which were sold in 2021.

LSL said that since the mini-Budget in September, there has been a marked slowdown in the market of purchase related front end sales activity. It also said that residential sales fall-throughs have trended higher in the past few weeks, mainly from more recently-agreed sales.

Chief executive David Stewart said: "As reported in our interim results, LSL traded strongly in the first half of the year, with our Surveying & Valuation and Financial Services businesses achieving record revenues.

"Since that time, market conditions have been more challenging than previously expected, with the mortgage and housing markets being disrupted by political uncertainty and sharply increasing interest rates. Across the market, this has given rise to a reduction in mortgage activity and new house sales, and an increase in fall-throughs of previously agreed sales.

"This challenging background means that there is a wider range of potential outcomes for the full year than previously expected."

For the 10 months to the end of October, LFL said revenues ticked up to £276.1m from £275.4m in the same period a year earlier. Revenues from Financial Services and Surveying were both ahead 9%, but the Estate Agency business saw a 6% decline.

At 1025 GMT, the shares were down 11% at 231.79p.