LSL Property Services Sees 3% Revenue Growth
The company's revenue increased to £92.3 million in the first half, with underlying operating profit rising 11% to £15.9 million, driven by resilient activity in remortgaging and lettings
LSL Property Services has reported a 3% revenue growth in the first half, with revenue increasing to £92.3 million. The company's underlying operating profit also rose 11% to £15.9 million, driven by resilient activity in remortgaging, lettings, and recurring revenue streams.
The company's underlying operating margin increased by 130 basis points to just over 17%, which is the group's highest first-half margin in more than 15 years. Adjusted diluted earnings per share increased 14% to £0.117, supported by higher after-tax profit and share buybacks.
Return on capital employed rose to a record 36% from 31%, while operating cash conversion over the past 12 months was 91%. Market changes contributed £0.7 million to operating profit, as stronger remortgaging and product-transfer activity more than offset lower housing transactions. Improved business performance added a further £1.7 million to operating profit.
## What drove the growth The growth was driven by the company's resilient activity in remortgaging, lettings, and recurring revenue streams, despite a modest decline in UK housing transactions. Group Chief Executive Adam Castleton said the company's markets developed broadly in line with expectations, with residential sales activity slightly lower year over year.
## Why it matters The company's performance is significant, given the current market conditions. The UK housing market has been experiencing a decline in transactions, but LSL Property Services has managed to maintain its growth momentum. The company's focus on remortgaging, lettings, and recurring revenue streams has helped it to navigate the challenging market conditions.
The company's investment in a financial-services technology platform and cost-management measures have also contributed to its growth. Despite £2 million of costs from salary inflation and higher national insurance, as well as a further £0.9 million of investment, the company has managed to deliver a strong performance.
## What happens next The company's performance in the first half sets a positive tone for the rest of the year. With its resilient activity in remortgaging, lettings, and recurring revenue streams, LSL Property Services is well-positioned to navigate the challenging market conditions. The company's focus on cost management and investment in technology will also help it to drive growth and improve profitability in the future.
