BLV.L Regulatory News (BLV)

BELVOIR GROUP PLC

(the "Group", or "Belvoir")

AGM Trading Update

Trading in line with management expectations

Belvoir Group PLC (AIM: BLV), a leading UK property franchise and financial services Group, provides the following update on current trading ahead of the Group's Annual General Meeting to be held at 10:00 a.m. today.

The Board is pleased to report that trading to date is in line with management's expectations for the year to 31 December 2023. 

The Group's performance continues to be very resilient despite the uncertainty in the housing market created by the mini budget in Q4 2022 and subsequent increases in interest rates. Growth in our recurring lettings income is benefiting from ongoing high levels of tenant demand with rents on new tenancies increasing by 9.9%1. Meanwhile, our successful assisted acquisitions strategy has seen our franchisees acquire both lettings portfolios and estate agency businesses. In 2023 to date, the Group has supported eight franchisees to acquire a local competitor with combined historic turnover of £2.4m and adding over 1,000 managed properties to the Group.

Management Service Fees ("MSF"), the Group's key underlying revenue stream from its property franchise division, was up 5% in the period to April 2023 against last year. MSF from lettings increased by 7% against the most recent ONS rental index of 4.9%2. Meanwhile MSF from sales was 4% lower than 2022, as forecast, compared with a 15%3 reduction in UK housing transactions in the first quarter of 2023. This reflects our traditional lettings franchise brands, Belvoir and Northwood, continuing to strengthen their estate agency offering.

Gross profit from the financial services division in the first four months of 2023 increased by 8% with growth of 20% attributable to The TIME Group, acquired May 2022, more than compensating for a fall of 12%, as forecast, in the underlying financial services business. Our financial services advisers continue to draw on their substantial client banks to sell remortgages and protection products during a period in which there has been a lower level of demand for new house purchase mortgages.

A degree of stability has returned to the mortgage market following the paralysis in the immediate aftermath of the mini budget. Mortgage rates have settled back down albeit reflecting the increased base rate and lenders have returned to the market with more competitive deals. Fixed term mortgage rates have eased down from their highs of October 2022 with pricing improving across the loan-to-value spectrum.

The lag in the home buying process means that the impact of the mini budget on market sentiment is still being felt given the reduction in vendor instructions and a lower level of homes available to buy during the first quarter of 2023. However, there are signs that the fall in demand for property triggered last Autumn might be bottoming out. Mortgage approvals rose in both February and March, and recent indices suggesting that house prices are stabilizing will improve buyer confidence as the market enters its crucial Spring/Summer season.

Dorian Gonsalves, CEO of Belvoir Group, commented:

"Our resilient performance in 2023 to date is in line with management expectations and reflects our continued focus on supporting our franchisee and mortgage adviser networks, alongside our acquisition led growth strategy. With the Group now in a net cash position, it is well-placed to secure good quality earnings accretive businesses that are complementary to the Group. The Board remains confident that its business model and its track record in delivering growth present a strong investment case to investors and will continue to deliver value to all stakeholders."

1 https://homelet.co.uk/homelet-rental-index

2 https://www.ons.gov.uk/economy/inflationandpriceindices/datasets/indexofprivatehousingrentalpricesreferencetables

3 https://www.gov.uk/government/statistics/monthly-property-transactions-completed-in-the-uk-with-value-40000-or-above

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About Belvoir Group PLC

Founded in 1995 and listed on AIM in 2012 (BLV.L), Belvoir operates a nationwide property franchise Group with 487 offices across seven brands specialising in residential lettings, property management, residential sales and property-related financial services. With its Central Office in Grantham, Lincolnshire, the Group manages 75,500 properties and reported record revenues of £33.7m in 2022 marking Belvoir's 26th year of unbroken profit growth.

For further information, please visit: www.belvoirgroup.com