Belvoir Group raises full-year guidance as pent-up demand boosts revenues
Management service fees (MSF), the group’s key underlying income stream from its property franchise division, was up 22% on 2020, with MSF from lettings up 12% and MSF from sales up 81%.
Both reflect the very active residential property sector which has been fuelled by both pent-up demand following the coronavirus (COVID-19) lockdowns and the stamp duty holiday that has now been extended to September 2021, Belvoir.
Also, the financial services division continues to achieve substantial growth with net income up 24%, helped by an increase in Belvoir’s adviser network, with the division seeing high demand for mortgages resulting from the increase in property transactions.
“Our entrepreneurial franchisees and advisers are very focused on maximising the opportunities from such a buoyant property market,” the company said in a statement released ahead of its annual general meeting.
“The level of activity is expected to remain strong until at least the end of June, at which point the benefit of the stamp duty holiday is reduced by 50%, and probably through to the end of September when the stamp duty holiday ceases. In such unusual times, it is difficult to predict what might happen thereafter, but 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,” Belvoir said.
“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, the chief executive officer of Belvoir Group.
“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. With much of our financial services business drawn from outside of our property franchise network, which currently only accounts for around 7% of our mortgage business, there is scope for much further growth both from within our franchise networks and from developing third party lead sources.
“The group continues to identify earnings accretive acquisition opportunities as evidenced by our recent acquisition of the Nicholas Humphreys franchise network which added a further 21 offices to our property division. Meanwhile, our financial adviser network now stands at 214 and we are confident of achieving our target of 250 by the end of 2021,” Gonsalves said.
Shares in Belvoir were up 5.2% at 245p in early deals.