Belvoir witnesses 23rd year of uninterrupted profit growth

Belvoir Group, the Grantham-based property franchise, has witnessed its 23rd year of uninterrupted profit growth, according to a trading update for the financial year ended 31 December 2019.

Revenue at the group is up 43% to £19.5m (2018: £13.7m) and consequently the Board expects that the performance for the year, including profit before tax, will be comfortably ahead of management’s expectations.

The property division achieved 6% growth, overcoming the challenges of the tenant fee ban and a sales market subdued by the political and economic uncertainty around Brexit.

Management Service Fees (MSF), the Company’s core income from franchisees, increased by 4% to £8.8m (2018: £8.5m) with the firm’s networks mitigating the impact of the tenant fee ban by December 2019, ahead of management’s expectations. Part of the mitigation arose from the ongoing success of the assisted acquisitions programme which supported 24 franchisees to make a local portfolio acquisition, adding 4,500 managed properties.

At the year end Belvoir’s portfolio of managed properties was up 7% to 67,000, a record level.

The Group’s diversification into financial services delivered significant revenue growth of 148% in 2019 following the acquisition of MAB (Gloucester) in November 2018, and a 35% increase in the Group’s financial services network.

Belvoir now has 166 (2018: 123) financial advisers offering specialist high street mortgage advice both to Group franchisees and to independent agents. Additionally, towards the end of 2019 the Group announced an eight-year exclusivity agreement with Dacres, a 20 office estate agency network based in Yorkshire, to deliver financial services to their client base. This is expected to contribute around £0.1m to the Group’s operating profit in its first full year.

Subsequent to the year end, Belvoir completed on the acquisition of Lovelle, a 19 office estate agency network with operating profit of £0.5m, for a consideration of £2m.

Dorian Gonsalves, CEO of Belvoir said: “2019 was another very strong year for the Group and is testament to the resilience of the Belvoir franchise business model with our franchisees achieving growth in a year when they were expected to lose 10% of their lettings revenue from 1 June, and yet by Q4 2019 franchise network revenue was noticeably higher than it was in Q4 2018.

“We could not be more delighted by our strategy to invest in financial services in 2017.  At that time our number of advisers was just 13 servicing 20 of our Newton Fallowell offices, and now we have 166 financial advisers across the UK, all operating under the Mortgage Advice Bureau brand. Financial Services has been, and continues to be, a considerable success for Belvoir.

“The recent acquisition of Lovelle extends our franchise network and, as primarily a sales-focused estate agency, offers the opportunity to increase revenue streams from both lettings and financial services.

“The Board remains committed to its growth strategy of capitalising on further consolidation within the property sector and through diversification into other property-related services. With January 2020 signalling a marked improvement in both sales and mortgage transaction numbers, I am optimistic about the growth opportunities for Belvoir in the year ahead.”