Estate Agency Division –
Estate Agency and Related Services
The Estate Agency Division performed exceptionally well
with all key income lines advancing strongly on a like-for-like
basis against a broadly flat market backdrop
23
+
LETTINGS INCOME 1
%
2011: + 18% Actual – including
Marsh & Parsons
Like-for-like – excluding
Marsh & Parsons
Financial 2012 £m 2011 £m % change 2012 £m 2011 £m % change
15
Exchange fees 72.0 56.7 27 58.1 54.8 6
Lettings income 48.0 29.5 63 35.8 29.1 23
+ %
Asset Management income
Financial Services income
14.3
31.8
13.9
27.6
2
15
14.3
31.8
13.9
27.6
2
15
FINANCIAL SERVICES INCOME1 2011: + 49% Other income1 15.5 14.1 10 14.4 13.8 4
Total income 181.6 141.8 28 154.4 139.2 11
6
Operating expenditure (157.2) (131.5) 20 (137.2) (129.5) 6
Underlying Operating Profit 24.4 10.3 138 17.2 9.7 78
+ % KPis
Exchange units 27,762 27,398 1 26,966 27,297 (1)
EXCHANGE FEES1 2011: + 5% Market Share (%) 4.55 4.62 (1) 4.42 4.60 (4)
Underlying Operating Margin (%) 13.5 7.2 86 11.1 7.0 60
Fee per unit 2,596 2,070 25 2,154 2,005 7
11.1
1
‘Other income’ includes franchising income, conveyancing services, EPCs, Home Reports, utilities and other products and
services to clients of the branch network.
% Estate Agency
UNDERLYING OPERATING MARGIN1 2011: 7%
Performance
1
Like-for-like (excluding Marsh & Parsons)
Estate Agency Division Performance
It has been a year of transformation for LSL Against this background, total Estate Agency
with the profitability of the Estate Agency Division income increased by 28% to £181.6m
Division, excluding Marsh & Parsons, growing (2011: £141.8m) and on a like-for-like basis by
to a level 31% higher than that delivered at the 11% to £154.4m (2011: £139.2m). Underlying
peak of the market in 2006 when transaction Operating Profit increased by 138% to £24.4m
volumes were more than twice the volume of (2011: £10.3m) and on a like-for-like basis by
2012. Furthermore the quality of the Estate 78% to £17.2m (2011: 9.7m).
Agency Division’s earnings has also significantly
improved over the period since 2007, given Estate Agency Division Branches
the extent to which profits are now driven by Your Move, Reeds Rains and the LSLi brands
counter cyclical and non cyclical income from all continued to perform well during the
Lettings, Asset Management and exposure year despite no significant improvement in
to the prime Central London market through transaction levels. Residential Sales income
Marsh & Parsons. increased by 6% to £58.1m (2011: £54.8m) on
The Estate Agency Division delivered a strong a like-for-like basis due mainly to an increase in
performance in 2012 with excellent growth in the average fee. Average fees increased by 7%
Lettings and Financial Services income streams. on a like-for-like basis to £2,154 (2011: £2,005).
The number of mortgage approvals for house The Estate Agency Division has identified a
purchases increased by 7% in the first half number of key initiatives including investment
of the year and then decreased by 1% in the in additional staff into the branches to
second half, resulting in a full year increase of continue to drive both market share growth
3% to 610,000 (2011: 593,000) which compares as well as average fee during 2013. We will
to historic normalised levels of 1.2m. continue to increase our market share of higher
14 ANNUAL REPORT AND ACCOUNTS 2012