Chairman’s Statement
“The Estate Agency Division has demonstrated
its significant organic growth potential, which
we will exploit through further investment.”
introduction Financial Results
GROUP REVENUE I am pleased to report that the Group made Group revenue increased by 12% to £243.8m
243.8
strong progress during 2012 with revenue up (2011: £218.4m) and Group Underlying
by 12%, Group Underlying Operating Profit up Operating Profit increased by 13% to £35.1m
by 13% and Adjusted Basic Earnings Per Share (2011: £31.1m). Group Underlying Operating
£ mmup 14%, despite there being no improvement
in market transaction levels. The Estate Agency
Margin increased from 14.2% to 14.4%. On a
like-for-like basis, excluding Marsh & Parsons,
2012 £243.8m Division had an excellent year as strong like- Group revenue increased slightly to £216.6m
for-like growth combined with a first full year (2011: £215.7m). On the same basis, Group
2011 £218.4m
contribution from Marsh & Parsons more than Underlying Operating Profit decreased by 9% to
offset a difficult year in the Surveying Division £27.9m (2011: £30.5m) due to contract renewals
GROUP UNDERLYING OPERATING PROFIT
due to the impact of major contract renewals. and the impact of a challenging market in the
35.1
Since the exceptional provision for PI claims Surveying Division.
of £17.3m was reported in the 2012 half year The Estate Agency Division delivered a 138.2%
accounts, the rate and average cost of claims increase in Underlying Operating Profit to
£ mm have run in line with expectations.
The business is extremely cash generative
£24.4m (2011: £10.3m). On a like-for-like
basis, excluding Marsh & Parsons, Underlying
2012 £35.1m and Net Bank Debt at 31st December 2012 Operating Profit increased by 78% to £17.2m
has been reduced by 25% to £26.6m (2011: (2011: £9.7m). This performance was delivered
2011 £31.1m
£35.7m). Investment to drive organic growth despite no significant improvement in
within the Estate Agency Division has transaction levels. House purchase approvals
continued during the year, particularly in increased by 7% in the first half of the year
Lettings, and two bolt-on acquisitions have and then decreased by 1% in the second half,
been made in the South East. resulting in a full year increase of 3% to 610,000
I am delighted to report an increase in our (2011: 593,000). Repossession volumes fell by
proposed final dividend of 8% to 6.4 pence per 5% to 33,900 in the year (2011: 35,800). The
share (2011: 5.9 pence). This increases the total Estate Agency Division benefitted from a strong
dividend for the year by 9% to 9.5 pence per full year contribution from Marsh & Parsons,
share (2011: 8.7 pence). excellent growth in Lettings and Financial
Services, exchange income fee growth and
The quality of the Group’s earnings has been
increased market share in Asset Management in
transformed since the sharp decline in the
a declining repossessions market.
housing market in 2007. This is evidenced by
the extent to which profits are now driven The Surveying Division revenue was impacted,
by counter cyclical and non cyclical income as expected, by key contract renewals and also
from Lettings and Asset Management. by continued decline in market transaction
Increasing income from these activities levels, compounded by further reduction in
remains a key strategic priority as well as market shares of certain key lender clients.
increasing the Group’s exposure to the Total mortgage approvals decreased by 6% to
prime Central London market. 1.16m (2011: 1.23m), including a 12% decrease
in remortgages to 340,000 (2011: 387,000).
In addition, the business is in a stronger
Surveying Division revenue decreased by 19%
position than a year ago. The Estate Agency
and Underlying Operating Profit was £13.9m
Division has demonstrated its significant
(2011: £23.7m) with Underlying Operating
organic growth potential, which we will exploit
Margin of 22.4% (2011: 31.0%). However,
through further investment. We will continue
the Surveying Division continues to provide
to strengthen our position in the prime Central
industry leading service levels to clients which
London market, where it is planned to open
together with excellent growth in revenue from
a number of new Marsh & Parsons branches
the provision of Surveying Services to private
during the year.
buyers, provides a sound platform for growth.
1 10 ANNUAL REPORT AND ACCOUNTS 2012