Surveying Division –
Surveying and Valuation Services
The Surveying Division revenue was impacted, as expected,
by key contract renewals and also by continued decline in
market transaction levels
+
2012
46 %
£4m
Financial
Revenue
Operating expenditure
Underlying Operating Profit
KPIs
2012 £m
62.2
(48.3)
13.9
2011 £m
76.6
(52.9)
23.7
% change
-19
-9
-41
2011 £2.8m Profit margin (%) 22.4 31.0
Jobs performed (000s) 408 500 -18
increase in revenue Revenue from private surveys (£m) 4.0 2.8 46
Income per job (£) 152 153 -1
delivered through PI insurance (balance sheet) provision at 31st December (£m) 24.2 9.6 150
the provision of Number of surveyors 378 425 -11
surveying services
for private buyers Surveying
Division Performance
Turnover fell by 19% to £62.2m (2011: £76.6m) towards the use of employed surveyors rather
with the total numbers of jobs performed than contractors though the total number
22.4
reducing by 18% to 408,000 (2011: 500,000). of employed surveyors decreased to 378
This was driven by a decline in total mortgage (2011: 425) as result of the expiry of the C&G
+ %
approvals during 2012 which decreased by 6% contract.
to 1.16m, further adverse changes in lender Since making the additional PI provision of
market share and the impact of key contract £17.3m at the 2012 half year, PI costs have
2012 22.4% renewals including the ending of a key tracked in line with expectations. The run
2011 31.0% contract in June 2012, due to a decision by a rates of new claims and costs per claim have
lender client to transfer their valuations and been consistent with the assumptions made
associated panel management instructions
operating profit margin back in-house. Turnover from this contract
in setting the ‘Incurred But Not Reported’
(IBNR) element of the total provision which
declined by £7.0m to £5.5m (2011: £12.5m). relates to costs estimated to be received in
Against this difficult backdrop the Surveying the future relating to valuations done during
Division has traded well. It has continued the 2004 to 2008 high risk lending period.
to provide industry leading service levels to Setting the correct level of IBNR provision is
clients and has made excellent progress in highly subjective as it is extremely sensitive to
developing surveying services for private small changes in assumptions relating to run
buyers which has delivered exceptional rates of new claims and costs per claim.
revenue growth of 46% to £4.0m in the year
(2011: £2.8m). This provides us with a strong Surveying Division Developments
platform for future growth in this area. The major growth initiative in the Surveying
Division has been the expansion of provision
Underlying Operating Profit was £13.9m
of surveying services for private buyers. This
(2011: £23.7m) and the Underlying Operating
key strategic programme was only started in
Profit Margin was 22.4% (2011: 31.0%) which
December 2010 and delivered an increase in
reflected both the overall revenue decline
revenue of 46% to £4.0m (2011: £2.8m) in the
and further investment in provision of high
year. The fourth quarter revenue run rate was
service levels for all lender clients. LSL has
£5.0m. The number of distribution channels
now successfully managed a difficult year
has been expanded during 2012 and will be
of legacy contract renewals. As part of the
developed further in 2013.
investment in the business there was a switch
18 ANNUAL REPORT AND ACCOUNTS 2012