LSL Property Services (LON: LSL) traded in line with expectations in the first half, but the second half will be tougher, and Zeus has cut its 2023 operating profit forecast by 63% to £8.5m. The share price fell 9.57% to 255p.
Previously most of the profit of the YourMove owner was expected in the second half, but it will not contribute as much as first anticipated. The tougher mortgage market will hit profitability.
LSL Property Services has been focusing on its core business. Surveying volumes fell by 27% in the first half, but the company gained market share. More recently, the decline has been 40%. Staff levels are being maintained in anticipation of a return to normal market levels.
The financial services division is recruiting additional advisers, but mortgage lending advice fell by 4%. That was still equivalent to a rise in market share from 10.1% to 10.4%.
Earnings are set to slump from 28.4p/share to 5.8p/share. The dividend is expected to be maintained at 11.4p/share despite being uncovered. A recovery in profit in 2024 could leave the dividend twice covered, but there is no guarantee that the figures will improve as significantly as forecast. Shore has not changed its 2024 forecasts and that may prove over optimistic.