The estate agency business of LSL Property Services became loss making in the first half of the year as it was impacted by "extremely slow" house exchanges.
In results to the end of June, the Newcastle-based group said huge industry-wide conveyancing issues meant it missed out on £6m of profit thanks to a significant backlog in exchanges which it expects will continue for the rest of the year. LSL said its estate agency business - which includes brands such as Your Move and Reeds Rains - saw an operating loss of £1m, having posted profits of £12.5m in 2021.
Overall, group underlying operating profit fell 48% to £14.2m though LSL pointed to a bump in last year's results due to the stamp duty holiday and said profitability was ahead of pre-pandemic levels in 2019. The group has now revised down its full year expectations.
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Investors were told revenues across the group's financial services network and surveying and valuation arms were at record levels of £39.8m and £50.5m respectively. LSL's share of the total UK purchase and re-mortgage market was said to have increased from 9% to 10.1%.
Despite the challenges posed by conveyancing, sales levels remained high. Second half operating profits are expected to be "substantially stronger" as LSL said it would realise the benefits of its pipeline.
David Stewart, group chief executive, said: "These results show that our strategy is on track and that LSL continues to trade strongly. Our surveying and valuation and financial services businesses delivered record revenues and our estate agency division retained the market share gains made in 2021, in doing so building a strong residential sales pipeline as significant profits were delayed by the continuing slow speed of exchange experienced across the market.
"We are well placed to deliver a strong performance in the second half of the year and to grow in 2023 as we increasingly reap the benefits of our financial services led growth strategy."
In April the group launched a £10m share buyback programme which has been extended to the end of September. At June 30, the group said there were 504,273 shares being held in treasury for a total consideration of £1.8m.
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