Lettings offset sales decline at Belvoir

Strong lettings business helped to offset a decline in income from house sales for franchised lettings and estate agency business Belvoir Group (LON: BLV) last year. There is cash to invest in further acquisitions.

In the year to December 2022, revenues were 14% ahead at £33.7m. That includes contributions from personal estate agency Mr and Mrs Clarke and financial adviser TIME Group. Like-for-like growth was 2%.

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Lettings revenues were 5% higher, which is slightly more than the average rent increase of 4.2%. The like-for-like income from housing sales fell by 15%. The financial services division generated like-for-like growth of 4%. There was an increased proportion of remortgages in the financial service business.

Underlying pre-tax profit dipped from £10.3m to £10.2m. The dividend is 6% higher at 9p a share, which is covered 2.4 times by earnings. Net cash was £1.2m at the end of 2022. That figure could exceed £5m by the end of 2023 if no acquisitions are made.


Belvoir continues to help to fund acquisitions by franchisees. There is also potential for more direct acquisitions. Belvoir has a good record of acquiring businesses that enhance growth. Management believes there are opportunities at sensible prices.

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Lettings revenues will continue to be resilient with growth opportunities from rising rents and regulation changes. A new software system will help the financial services business to identify more opportunities.

A further pre-tax profit decline to £9.4m is expected in 2023. This reflects the concerns about the effect of higher interest rates on the market.

At 166.5p, the shares are trading on nine times prospective 2023 earnings, with the prospect of longer-term profit growth. The forecast yield is 5.7%. Given the cash generation and forecast income, the shares are attractive.

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