GCIBelvoir Group hails strong start to 2021
In a trading update for the four months to 30 April 2021, (BLV ), described the period as ‘exceptionally strong’ and materially ahead of management's expectations.
The UK property franchise group saw substantial revenue growth across all three markets. Management service fees ("MSF"), Belvoir’s key underlying income stream from its property franchise division, was up 22% on 2020, with lettings up 12% and MSF from sales up 81%.
Belvoir said the numbers from both lettings and sales reflect ‘the very active residential property sector’ which it said has been fueled by both pent-up demand following COVID-19 lockdowns and the Stamp Duty holiday which has now been extended to September 2021.
The financial services division also saw substantial growth with net income up 24% in part arising from an increase in its adviser network, up 12 since the year end to 214, and in part from the high demand for mortgages resulting from the increase in property transactions. Belvoir said it is confident of achieving an adviser network target of 250 by the end of 2021.
In addition, the group said it continues to identify “earnings accretive acquisition opportunities' ' as evidenced by its recent acquisition of the Nicholas Humphreys franchise network back in April 2021 which added a further 21 offices to its property division.
Shares in Belvoir Group have increased by 55% in value since the beginning of 2021. The stock was trading 5.79% higher this morning at 246.5p following the announcement.
In terms of strategy, the company outlined that its entrepreneurial franchisees and advisers are very focused on maximising the opportunities from such a buoyant property market.
The group explained that the level of activity is expected to remain strong until at least the end of June 2021, at which point the benefit of the Stamp Duty holiday is reduced by 50%, it noted, and probably through to the end of September when the Stamp Duty holiday ceases.
Due to the current market uncertainty, Belvoir said it is ‘quite possible’ that the pent-up demand will not all be met in that timescale, and the tapered approach to the tax break will avoid a cliff-edge, such that the property market remains busy for most of the year.
As a result of a strong performance to date, the Board confirmed that the Group is trading significantly ahead of management's expectations for the year ending December 2021.
"We have not seen activity in the residential property market at this level since early 2007. Even after a busy start to the year for completions, pipelines of agreed house sales are still almost double those of this time last year,” said Dorian Gonsalves, CEO of Belvoir.
He added, "Our investment in financial services has achieved more than we had hoped, with this division now becoming an important additional strand in our growth strategy.”
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