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(BLV) Belvoir Group Share Chat

Discussion in 'General Share Chat (BLV)' started by Groucho, Aug 3, 2021.

  1. Groucho

    Groucho Member

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    3 August 2021


    BELVOIR!


    BELVOIR GROUP PLC

    (the "Group", or "Belvoir")


    Pre-Close Trading Update

    Ahead of Expectations


    Belvoir Group PLC (AIM:BLV), a leading UK property franchise and financial services Group, provides the following update ahead of publishing its Half Year results on 6 September 2021.

    Further to the update on 27 May, the Board is pleased to report that trading has continued to be exceptionally strong with Group revenue during the six months to 30 June 2021 up 41% on 2020, which had been impacted by the Covid-19 pandemic, and up 53% on 2019 (42% on a like-for-like basis), with substantial revenue growth across both divisions on the back of a very buoyant housing market. In comparison to H1 2019, the property division achieved revenue growth of 45%, of which 25% represented growth in the underlying business and 20% from the Group's investment in two additional franchise networks, Lovelle in January 2020 and Nicholas Humphreys on 31 March 2021. Meanwhile, the financial services division reported revenue up 62% on H1 2019 through organic growth of the adviser network.

    Management Service Fees ("MSF"), the core franchise revenue stream, from residential sales was up 100% on H1 2020 reflecting the lower transaction level in Q2 2020 due to the first national lockdown by contrast to the exceptional level of house sales in H1 2021 driven by the stamp duty holiday and the "race for space". By comparison to H1 2019 on a like-for-like basis, sales MSF was up 68%. The shortage of available property to meet current levels of demand has resulted in the UK house price index reaching 10.0% for the year to May 2021, compared with 2.2% at the end of 2019 prior to the start of the Covid-19 pandemic. Current pipelines and the ongoing demand for property suggests that the transitional approach to ending the stamp duty holiday, which finally ends on 30 September this year, has succeeded in avoiding the cliff edge feared at the start of 2021 with instead a gradual return to a more normal transaction level anticipated in Q4.

    Meanwhile, MSF from lettings, which had been much less impacted by the first national lockdown and operated on par with H1 2019, was up 13% on H1 2020. Of this, 3% was attributable to the acquisition of the Nicholas Humphreys network on 31 March 2021 and the franchising of certain previously corporate-owned Lovelle offices. The underlying growth of 10% compares favourably with the overall UK rental index to June 2021 of 1.2% which rose to 1.8% excluding London, and to 2.4% in the East and West Midlands, where the Belvoir Group is particularly strong. There are signs of more substantial rental increases on the horizon with the rental growth from new tenancies reportedly running at 5.9% UK-wide, and 8.0%, excluding London.

    Revenue growth from the financial services division, up 51% on H1 2020, clearly benefitted from the demand for mortgages to fund house purchases, but also from a 21% increase in the Belvoir adviser network, which was up to 221 (H1 2020: 176) advisers at the end of June 2021. The subsequent acquisition of Nottingham Mortgage Services Limited, the mortgage arm of the Nottingham Building Society ("The Nottingham"), completed on 30 July, has taken Belvoir's number of advisers up to 242. The strengthening of the strategic partnership with The Nottingham will extend the financial services division in the first instance from servicing The Nottingham's existing members and branch customers, and longer term from servicing their fast-growing base of over 50,000 Lifetime ISA online account holders through the Beehive Money app, many of whom are saving to buy their first home. Helping these future first-time buyers to access the right mortgage to meet their home-ownership aspirations has the prospect of generating significant mortgage opportunities in the coming years.

    The Group continues to achieve a high rate of cash conversion and maintains a strong balance sheet with cash balances of £5.1m (H1 2020: £4.3m) and bank loans of £9.1m (H1 2020: 10.0m) at the end of June 2021. Net debt of £4.0m (H1 2020: £5.7m), up £0.3m since the end of 2020, is after having acquired Nicholas Humphreys for £4.0m in cash.

    Given the Group's growth in H1 over both 2019 and 2020, its earnings enhancing investments to expand both the property and the financial services divisions, and the current market conditions reflecting a sustained underlying demand for homes and mortgages, the Board is confident of achieving a strong trading performance for the full financial year.


    Dorian Gonsalves, CEO of Belvoir Group, commented:

    "We continue to see exceptionally strong trading across the Group, well ahead of our expectations as at the start of the year. Our residential property sales hit a peak in June and pipelines remain strong. Lettings has achieved growth from increased rental activity and tenant demand creating an upward pressure on rents.

    "Our financial services division continues to go from strength to strength, benefitting from the strong sales market and our enlarged network of advisers.

    "The Board has continued to pursue its growth strategy in H1 through the acquisition of Nicholas Humphreys, increasing the footprint of our property franchise division, along with the strengthening of our long-term strategic partnership with The Nottingham Building Society through the acquisition of its mortgage business, Nottingham Mortgage Services Limited. Both acquisitions will be highly accretive in 2021 and demonstrate the Board's commitment to enhancing shareholder value further."


    Notice of Half Year Results

    Belvoir will announce its Half Year results for the six months to 30 June 2021 on Monday, 6 September 2021.

    An analyst briefing will be held via zoom at 9.00am on the morning of results, hosted by Dorian Gonsalves, Chief Executive Officer, and Louise George, Chief Financial Officer. To register your attendance please contact Buchanan on 0207 466 5000 or via belvoir@buchanan.uk.com.

    Management will be hosting a separate meeting for retail investors via the Investor Meet Company platform on 6 September 2021 at 4:30pm. The presentation is open to all existing and potential shareholders. Investors can register via the following link: https://www.investormeetcompany.com/belvoir-group-plc/register-investor
     
  2. Groucho

    Groucho Member

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  3. Groucho

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  4. Groucho

    Groucho Member

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    6 September 2021

    BELVOIR GROUP PLC

    (the "Company", "Group" or "Belvoir")


    Interim Results for the six months ended 30 June 2021

    Strong growth continues


    Belvoir Group PLC (AIM: BLV), a leading UK property franchise and financial services Group, is pleased to announce its Interim Results for the six months ended 30 June 2021.


    Financial Highlights

    · H1 results are significantly ahead of management's expectations as at the start of the year

    · 41% increase in revenue to £13.8m (H1 2020: £9.8m), of which 33% related to the underlying business and 8% to the acquired Nicholas Humphreys network

    · 26% increase in Management Service Fees (MSF) to £5.2m (H1 2020: £4.2m)

    · 51% increase in Financial Services revenue to £6.4m (H1 2020: £4.3m)

    · Gross profit split of 56% lettings: 21% sales: 18% financial services: 5% other (H1 2020: 62%, 15%, 18%, 5%) reflects the stronger sales market in H1 2021 compared to H1 2020

    · 51% increase in profit before tax to £4.8m (H1 2020: £3.2m) of which 42% arose from the underlying business and 9% from the acquired Nicholas Humphreys network

    · 36% increase in basic earnings per share to 9.9p (2020: 7.3p), having reflected the impact of the 2023 corporation tax increase on deferred tax

    · Highly cash generative with 119% (H1 2020: 113%) of operating profit converting into operating cash flow enabling strategic acquisitions to be funded from cash reserves

    · Increased interim dividend of 4.0p per share (H1 2020: 3.4p)


    Operational Highlights

    · Acquisition of the 20-office Nicholas Humphreys lettings and estate agency network for £4.4m on 31 March 2021, funded from existing cash reserves

    · Net increase of 47 financial services advisers bringing the total to 221 (H1 2020: 174) at the period end

    · Strengthened our strategic alliance with The Nottingham Building Society through the £0.7m acquisition of its financial services arm, Nottingham Mortgage Services Limited, which completed on 30 July 2021 and added a further 21 advisers



    Dorian Gonsalves, Chief Executive Officer of Belvoir Group, commenting on the results, said:

    "I am delighted to report another half year of both strategic and trading growth, having bought and integrated the Nicholas Humphreys network and increased revenue and profitability from the underlying business. The Group achieved substantial revenue growth across the three markets in which it operates with lettings up 21%, property sales up 78% and financial services up 51%.

    "Having demonstrated the resilience of the Group's business model throughout 2020, in H1 2021 the Group capitalised on the opportunities arising from the buoyant housing market, and demonstrated that the success of Belvoir's growth strategy has been unaffected by the pandemic.

    "Further strategic progress has been achieved early in H2 as our alliance with The Nottingham Building Society was strengthened further through the acquisition of The Nottingham's mortgage arm, Nottingham Mortgage Services Limited. Adding 21 advisers to our network to give a total of 242, we will be servicing The Nottingham's existing members and customers from within The Nottingham's branches. Additionally, our central adviser team will be helping many first-time buyers (currently saving through The Nottingham's Lifetime ISA online account) to access the right mortgage to meet their home-ownership aspirations. We believe that our relationship with The Nottingham has the prospect of generating significant opportunities in the coming years.

    "Having reported H1 profitability considerably ahead of our start of year expectations, and given the Group's further investment in earnings enhancing businesses to expand both the property and the financial services divisions, and high activity levels within all areas of our business at the start of H2, the Board is confident of achieving a strong trading performance for the full year."


    Retail investor presentation

    Dorian Gonsalves, CEO, and Louise George, CFO, will present live to retail investors reporting on the Group's interim results via the Investor Meet Company platform today at 4.30pm. Investors can sign up for free and register to participate via: https://www.investormeetcompany.com/belvoir-group-plc/register-investor


    Chief Executive's Report

    It gives me great pleasure to report on the Group's Interim Results for the six months ended 30 June 2021.


    Performance

    2021 is proving to be an exceptional year for the property and the mortgage markets with the Belvoir Group having been well-positioned to take advantage of these positive trading conditions. H1 revenue was up 41% to £13,810,000 (H1 2020: £9,774,000) and profit before tax was up 51% to £4,767,000 (H1 2020: £3,164,000) building on the 8% revenue growth and 18% profit growth reported in H1 2020 against H1 2019.

    The Group achieved substantial revenue growth across the three markets in which it operates with lettings up 21%, property sales up 78% and financial services up 51%.


    Property division

    Revenue from the property division increased by 34% to £7,389,000 (H1 2020: £5,521,000) of which 19% was attributable to organic growth. The Group has continued to invest in its franchise property network through the strategic acquisition of Nicholas Humphreys, a national brand specialising in student lettings through 17 franchised and three owned offices in mainly University towns. The acquisition completed in March for £4,400,000 (£4,146,000 net of cash acquired) and accounted for 15% of H1 2021 property revenue growth.

    The ratio of lettings to sales, which has been around 80:20 for several years, moved to 73:27 in H1 2021 reflecting the exceptionally high level of property sales transactions during the first half of 2021.

    The Group continues to attract new franchise owners to its property network, a testament to the strength of the Group and its franchise business model, with six new franchise owners joining in the year to date, all of whom acquired an existing franchise office. Meanwhile, two existing franchise owners opened a second office within their territory. The property division now totals 366 offices including 39 dual-branded Nottingham Building Society branches, and has a portfolio of 71,600 (H1 2020: 69,000) managed properties.

    The property sector has seen high levels of demand with the "race-for-space" driving both the rental and sales markets, and the latter fuelled further by the stamp duty holiday. The shortage of available property both to buy and to rent has resulted in annual UK house price inflation to June 2021 of 13.2% and rental growth on new tenancies reportedly up to 5.9% UK-wide, and 8.0% excluding London.


    Financial services division

    Revenue from the financial services division increased by 51% to £6,421,000 (H1 2020: £4,253,000), clearly benefitting from the high demand for mortgages to fund house purchases, but also from extending the adviser network by 27% to 221 (H1 2020: 174). The mix of mortgage products sold has changed with the ratio of purchase to remortages at 72:28 (H1 2020: 58:42). These changes reflect the resilience of our financial adviser network, as evidenced by its positive response to the very different prevailing market conditions during both periods under review. Our financial services division benefits from having a substantial client base, so during the first national lockdown in H1 2020, advisers turned their attention to advising existing clients on remortgages and life protection products. By contrast in H1 2021, the focus was on meeting the demand for new purchase mortgages.

    The Group's financial services division continues to achieve substantial growth through independent channels as well as through strengthening relationships within the Group's property franchise network. Building on this success, the Belvoir Group sees financial services as a key strategic long-term growth opportunity.

    The post-period end acquisition of Nottingham Mortgage Services Limited, the mortgage arm of the Nottingham Building Society ("The Nottingham"), completed on 30 July 2021 at a cost of £700,000 (£600,000 net of cash acquired). This increased Belvoir's number of advisers by 21 to 242. The strengthening of the strategic alliance with The Nottingham will extend the financial services division in the first instance from servicing The Nottingham's existing members and customers from within their local building society branch, and longer term from our central adviser team servicing their fast-growing base of over 50,000 Lifetime ISA ('LISA') online account holders, many of whom are saving to buy their first home. Furthermore, the launch of The Nottingham's Beehive Money app, scheduled for the Autumn 2021, is expected to accelerate growth in their number of LISA savers. Helping these future first-time buyers to access the right mortgage to meet their home-ownership aspirations has the prospect of generating significant mortgage opportunities in the coming years.


    Outlook

    Current pipelines of house sales and the ongoing demand for property suggests that the transitional approach to ending the stamp duty holiday, which ends on 30 September this year, has succeeded in avoiding the cliff edge feared at the start of 2021. Instead, a gradual return to a more normal transaction level is anticipated in Q4.

    The lettings market remains active with strong demand from tenants, as with homeowners, for more space. Meanwhile, the stamp duty holiday has provided a catalyst for landlord purchase activity over the past year, coupled, in recent months, with an influx of buy-to-let mortgage offers coming onto the market reducing the average rate for buy-to-let mortgages.

    The mortgage market still has a strong pipeline of written business and is expected to follow a similar trend to the sales market as it transitions towards a more normal level of house purchase transactions. Recent reductions in mortgage rates for two, three and five year fixed mortgages are expected to stimulate the remortgage market, whilst the increase in mortgage deals at a higher loan-to-value are likely to boost demand from borrowers with smaller deposits.

    To the extent that 2020 demonstrated the resilience of the Group's business model, 2021 has demonstrated the success of Belvoir's growth strategy that has been largely unaffected by the pandemic. The Group has continued to achieve growth in the underlying business whilst extending the reach of both divisions through acquisition. The highly cash generative nature of the Group has enabled these acquisitions to be funded from cash reserves, and as such, has avoided dilution for shareholders whilst adding highly accretive businesses to the Group. The Board remains committed to further investment in businesses that fit within its multi-brand franchise business model and are complimentary to existing property-related services.

    Having reported H1 profitability considerably ahead of our start of year expectations, and given the Group's further investment in earnings enhancing businesses to expand both the property and the financial services divisions, and high activity levels across all areas of our business at the start of H2, the Board is confident of achieving a strong trading performance for the full year. Due to this ongoing confidence, the Board has declared an increased interim dividend for shareholders.


    Dorian Gonsalves
    Chief Executive Officer

    Belvoir Group PLC - Interim Results for the 6 months ended 30 June 21 #BLV @BelvoirLetting https://www.voxmarkets.co.uk/rns/announcement/c0dd3be5-0c76-447a-ab68-0f2042dc7df4 #voxmarkets
     
    Last edited: Sep 6, 2021
  5. Groucho

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  6. Groucho

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    Increased interim dividend of 4.0p per share (H1 2020: 3.4p) - 17.6% increase
     

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