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LSL Property Services reports pre-tax profits of £17.6m

LSL Property Services has reported a pre-tax profit of £17.6m for 2011, compared to £36m in 2010.

Group revenue increased by 6% to £218.4m, from £206.6m in 2010, while group underlying operating profit was £31.1m, compared to £31.9m in 2010.

The pre-tax profit includes a net exceptional cost of £2.4m arising from the acquisition of Marsh & Parsons estate agency in November 2011.

In its financial services division income increased by 49% in 2011 to £27.6m, compared with £18.6m in 2010. 

The results say this was due to a combination of increase in financial services income from the residential sales branches and also full year revenue benefit from the acquisition of the Home of Choice network, which was acquired by First Complete in May 2010 and Pink Home Loans, which was acquired in November 2010. 

Total gross mortgage lending arranged through its financial services network in 2011 was £6.8bn, compared to £2.6bn in 2010.

In its valuation and surveying business its Professional Indemnity claims have continued at high levels especially relating to valuations undertaken in the period between 2005 and 2007.

There has been a net reduction in the provision for inaccurate valuations to £9.6m, from £10.9m in 2010, as a result of the increase relating to new and possible expected claims being offset by the settlement of a number of existing claims.

During the year e.surv Chartered Surveyors successfully renewed its Barclays surveying and valuation services contract for a 30 month term commencing from January 1 2012. 

Roger Matthews, chairman of LSL, says: “In a market where transaction levels remained exceptionally low, 2011 was a year of investment for the future and one of strong progress for the group.

“We will continue to focus on growing market share and profitability in estate agency and on the retention of key lender clients for surveying and valuation services. There are also significant opportunities to build on the strong start made in providing surveying services to private buyers and to expand our presence in the prime central London market through Marsh & Parsons.

“The group is extremely cash generative and has a strong balance sheet. We will retain a prudent approach to leverage, which will place a premium on delivery of organic growth but with a scope for further acquisitions. The group is well placed to increase shareholder value through the execution of this strategy.”

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