Business Review
Directors’ Report and Business Review
value properties, which is challenging in the It has now increased by over 150% in the last Looking forward to 2013 we will continue with
prevailing market conditions. LSL has had some three years as a result of the successful roll out the same strategy focusing in particular on
success in this area already and it remains a of Financial Services to the ex HEAL branches investment in Lettings and Residential Sales,
major opportunity for the future. and the acquisition of new intermediary rolling out new branches in Marsh & Parsons
networks in 2010. In total the Group arranged and investment in Asset Management. We
counter cyclical income will continue to identify selective acquisitions
mortgage lending of £7.1bn during 2012 (2011:
The counter cyclical income streams funded from our strong cash flows.
£6.8bn) out of a total intermediary lending
of Lettings and Asset Management are
market estimated at £72bn1.
particularly important to LSL in current market Regulation
conditions. In 2012 LSL has continued to focus Marsh & Parsons First Complete and Advance Mortgage
on growing Lettings income an additional Marsh & Parsons delivered a good first full Funding are both directly authorised by the
101 employees have been recruited over the year contribution with revenue increasing by FSA in relation to the sale of mortgage, pure
last two years to help drive a 23% increase in 2% to £27.3m (2011: £26.6m2) and Underlying protection and general insurance products.
like-for-like Lettings income to £35.8m (2011: Operating Profit increasing by 6% to £7.2m Your Move, Reeds Rains Financial Services and
£29.1m). Excluding Marsh & Parsons, Lettings (2011: £6.8m2). Reeds Rains along with the LSLi subsidiaries are
income was 62% of the level of Residential all appointed representatives of First Complete,
Sales in 2012 and LSL’s objective is to raise During 2012, a new branch was opened in while Linear Mortgage Network is an appointed
Lettings income to a similar level to Residential Earls Court which is performing well. A second representative of Advance Mortgage Funding
Sales income, as has been achieved in Marsh & opening in Kensington, which was originally for mortgage and insurance business and also
Parsons where the ratio is 87%. planned for the fourth quarter of 2012, actually an appointed representative of Openwork
opened in January 2013. The group is targeting Limited (Openwork) (for investment business).
Additional Lettings consultants will continue
a further three new branch openings in 2013. Reeds Rains is also an appointed representative
to be recruited in 2013 to further drive Lettings
income. In addition, LSL’s call centre ‘The of Letsure Limited for the sale of rent indemnity
Developments
Bridge’ which was launched in January 2011 insurance.
The main Estate Agency developments during
to drive Residential Sales instructions, will As a result of Linear Mortgage Network’s
2012 were continued investment in Lettings,
be expanded in 2013 to also drive Lettings appointment by Openwork, LSL has a small
consolidating the success of ‘The Bridge’ call
instructions. indirect shareholding of Openwork.
centre in driving new instructions to branches
Despite the uncertain economic conditions and securing a strong first year performance
impacting the housing market, repossession from Marsh & Parsons while continuing the
volumes fell by 5% to 33,900 in 2012 (2011: branch roll out programme.
35,800). We are pleased that LSL’s market share
in Asset Management has increased during We have also invested significantly in
the year with revenue up by 2% to £14.3m Asset Management to win new property
(2011: £13.9m) in a declining market. LSL’s management contracts and successfully
Asset Management business is well positioned brought the first of these on stream
to capitalise on an increase in repossession during 2012.
volumes when they eventually occur. In addition we have grown Financial Services
The Group now benefits from total counter income across our intermediary networks,
cyclical income from Lettings and Asset trading as Pink, First Complete and Linear.
Management of £62.3m compared to £43.5m We are in the process of rolling out a new
in 2011 and only £12.8m in 2007 before the common platform across these businesses
launch of LSL’s Asset Management businesses. which will improve customer service and
increase operational efficiency.
Financial Services
Total Financial Services income delivered During 2012, the Group has continued to
through to the Estate Agency Division’s make selective acquisitions and have added to
our Estate Agency Division in the South East
1
Source: Council of Mortgage Lenders January 2013 – gross
branches and intermediary networks increased lending £143bn – based on company calculation intermediary
by 15% during 2012 to £31.8m (2011: £27.6m). through the acquisitions of Davis Tate and lending market is 50% of this.
Lauristons. 2
Includes the results prior to the acquisition in November 2011.
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