BLV.L Regulatory News (BLV)

For Immediate Release 19 July 2016

BELVOIR LETTINGS PLC

(the "Group" or "Belvoir") 

Franchisee Acquisitions

Belvoir Lettings plc (AIM: BLV), the UK's largest property franchise, is pleased to provide an update on a number of franchisee-led acquisitions across the country.

The acquisitions were made by Belvoir franchisees in Solihull, Rochester, Bournemouth and St Helens, adding £850,000 p.a. to network revenue with the Group providing £353,000 of the funding required. Overall, the Group expects increased annual Management Service Fees (the Company's main revenue stream from its franchisees) of £102,000 and additional interest of £32,000, giving an overall return of 38% to the Group against monies deployed.

Part-funding franchisee-led acquisitions is key to achieving network growth and scale, and is a vital part of the Group's forward-looking strategy. As well as the recruitment of new franchisees into new regions, the Group is committed to increasing the footprint of its existing franchisees within their own territories. As is the case with these four recent acquisitions, a franchise can dramatically increase its reach and turnover by acquiring a competitor, which in turn will benefit the Group as a whole.

As part of the Group's efforts in providing support to its franchisees, Belvoir appointed an in-house team last year with responsibility for researching and expediting franchisee acquisitions. One of the recent acquisitions was the Group's first 'Hot Start', located in Bournemouth, where a newly recruited Belvoir franchisee was assisted by the Group through a part-funded acquisition, as opposed to the franchisee opening and building a business from scratch. As part of the Belvoir network, the Bournemouth Hot Start is expected to deliver £274,000 in turnover in its first year, a level of business which would otherwise take several years to achieve. Belvoir continues to actively pursue opportunities of these kind, where a suitable new recruit can be matched to a potential acquisition in their chosen territory, as the Group believes this will give them a strong start.

The past year has seen Belvoir grow in scale substantially from 162 to 301 outlets by embarking on a multi-brand strategy, acquiring Newton Fallowell, Goodchilds and Northwood. The Group is extending its part-funding offer to these recently acquired brands, which will increase the prospect of matching a suitable franchisee in the right location to any potential acquisitions. This opportunity has not been available to the recently acquired brands under their previous ownership, so is being well received and recognised as a benefit of being part of a larger franchised group.

Mike Goddard, Chairman and CEO of Belvoir commented;

"The Group is going from strength to strength and I continue to be impressed by the ambitions of our franchisees. The part-funding of acquisitions is a service we are very proud to provide to our network. There are over 10,000 potential independent lettings and estate agents acquisition targets around the country, giving us a route to further growth. I am excited to leverage the Group's expertise and to extend the possibility of franchisee-led acquisitions to our newly acquired brands."

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About Belvoir Lettings PLC

Founded in 1995, Belvoir is the UK's largest property franchise group, with 301 outlets nationwide.

Since listing on AIM in February 2012 (BLV.L), Belvoir has continued to diversify its core business offer in lettings by broadening into property sales. Operating from its Central Office in Grantham, Lincolnshire, the Group now offers a range of specialist services in property rental, property management, residential lettings, buy to let and property sales.

Belvoir's core revenue is derived from Management Service Fees (MSF); a reliable recurring revenue model which allows the Group to offer franchisees significant support and advice.

In 2015 Belvoir launched its multi-brand franchising strategy; acquiring Newton Fallowell Ltd, an East Midlands-based network of 31 outlets in July 2015 and Goodchilds Estate Agents and Lettings Limited, a West Midlands-based network of 14 outlets in October 2015. In June 2016 Belvoir acquired Northwood, a network of 86 residential lettings and property sales agents operating across the UK, making Belvoir the largest property franchise group in the UK.

Belvoir continues to grow organically by delivering award winning service, prioritising franchisee recruitment and supporting franchisee acquisitions. In recognition, Belvoir was awarded the "Best Lettings Agency Franchise Award" at the 2016 Agency of the Year Awards for the sixth time since the awards started seven years ago.

The Company remains committed to diversifying its brand portfolio, utilising the Group's strong franchising expertise and infrastructure, in order to capitalise on a consolidating market.