Belvoir Lettings shares rise as it hails success of its assisted acquisitions programme

January 15, 2019

The assisted acquisitions programme has been embraced by all three networks within the Belvoir Group, with 11 taken up by the Belvoir network, 13 by Northwood and 2 by Newton Fallowell.

Belvoir Lettings PLC (LON:BLV) shares rose on Thursday after the UK’s largest property franchise group exceeded its 2018 target for assisted acquisitions by its franchisees.

The AIM-listed lettings agent said beefing up the assisted acquisitions programme is a core part of its growth strategy.

During 2018, franchisees completed on 26 transactions under the Belvoir-assisted acquisitions programme, increasing the acquired annualised network revenue to £6.9mln; the target for the year had been £6.6mln.

These acquisitions are expected to add in excess of £600,000 a year of recurring management service fees, which is the main revenue stream for the group. It also adds more than 4,400 managed properties, increasing the portfolio by 7%.

The Belvoir Group now represents over 62,000 managed properties.

In comparison with 2017, the average size of the business acquired increased by 85% to £266,000 in 2018 from £144,000 annual revenue in 2017. This reflects a contraction of the number of agents in the sector not only among the smaller operators but also many of the larger independent agents, as the impact of the number of landlords selling their properties due to a less favourable tax regime and the increased regulation on lettings agents took effect.

Belvoir provides funding of up to 30% of the purchase price through its assisted acquisitions team. In 2018, the group contributed £660,000 in total towards purchases, representing around 9% on average of the purchase price.

Related: Property and Estate Agent Franchises UK – What Buying an Estate Agency Franchise Means for UK Franchisees

CEO lauds franchise opportunities

“The Assisted Acquisitions programme, now in its sixth year, has gone from strength to strength and continues to grow. Since 2014 we have provided both commercial and financial support to 70 of our franchise owners, many of whom have doubled the size of their business overnight,” said Dorian Gonsalves, the chief executive officer of Belvoir Lettings.

Related: Belvoir Lettings Interim Earnings Rise, Declares Unchanged Dividend

“We continue to witness consolidation within the sector, a trend which supports our 2018 prediction that there will be 20% fewer agents by the end of 2020. This is evidenced by our acquisition opportunities pipeline being far greater than in previous years,” he added.

“Our franchisees are professionally and financially equipped to take advantage of these opportunities and we currently have 83 franchise owners who are actively searching for a suitable match within their territory. Belvoir is here to support our franchisees’ entrepreneurial growth ambitions, which will benefit the group and our shareholders alike,” Gonsalves concluded.

In afternoon trading, shares in Belvoir Lettings were up 1.1% at 92.50p.

Source: Proactive Investors

Property franchise giant reveals £3.6m deal

November 29, 2018

Lincolnshire-headquartered property franchise giant Belvoir Lettings has announced the acquisition of the Gloucester arm of Mortgage Advice Bureau for £3.6m.

The listed company has snapped up MAB (Gloucester) through its subsidiary Brook Financial Services.

MAB Glos, which trades as Mortgage Advice Bureau, is the largest appointed representative firm of the wholly owned subsidiary of AIM-listed, Derby-headquartered Mortgage Advice Bureau (Holdings).

MAB Glos provides mortgage and related financial services to clients through its network of 63 business partners.

Michelle Brook, managing director of Brook, will manage the whole financial services division overseen by Mark Newton, executive director of Belvoir Lettings.

Related: Property and Estate Agent Franchises UK – What Buying an Estate Agency Franchise Means for UK Franchisees

The financial services director, Tim Wood, and all four business development managers are to stay within the MAB Glos business.

For the year ended 31 December 2017, based on unaudited financial statements, MAB Glos generated revenue of £3m and pre-tax profits of £467,000.

Related: Belvoir boosts franchise support with three new hires

Belvoir chief executive Dorian Gonsalves said: “We are delighted to announce the acquisition of MAB Glos, whose network of 63 Business Partners will entirely complement our existing network of 300 property franchisees, both in terms of the management infrastructure and the cross-selling opportunities, creating a total of 364 offices, including Brook, operating under the Belvoir Group.

“We believe that the acquisition of MAB Glos will provide the basis for developing a network of financial advisers to support our franchisees at a local level, in addition to the existing mortgage advice services delivered centrally by Brook.

“This will give our existing property franchisees the ability to ‘build a business within a business’ by either utilising an existing MAB Glos mortgage adviser or taking on their own new adviser on-site.

“This will in turn achieve greater penetration of financial services to the group’s client base for the benefit of both individual franchisees and the group as a whole.”

Source: Insider Media

OnTheMarket Adds 6,000 Estate Agent Branches Since February Listing

November 5, 2018

OnTheMarket PLC said Thursday the number of UK estate agency branches covered by listing agreements with the property website was now above 11,500.

The company said it has added additional agent firms with more than 6,000 offices to its agreement list since its initial public offering earlier in the year.

In mid-February, On The Market raised GBP30.0 million after placing 18.2 million shares at 165 pence each. The initial public offering valued the firm at GBP100.0 million in market capitalisation.

In late October, OnTheMarket announced it had signed an agreement with the UK’s largest property franchise Belvoir Lettings PLC to advertise all its UK properties through the OnTheMarket site in a long-term agreement. Belvoir has 300 branches in its network across its Belvoir, Northwood and Newton Fallowell brands.

Related: Coup for OnTheMarket as it signs Britain’s biggest franchise agency

This followed a number of similar deals with 200-branch Hunters Property Group, 50-branch Chancellors Group of Estate Agents Ltd and 100-branch Arun Estates amongst others since it listed. The firm has also signed deals with “thousands” of smaller one to three branch agents.

“Our first stage of growth has been focussed on rapidly expanding our agent base and we are pleased that the latest increase to 11,500 offices highlights the strength of agent support for an agent-backed portal,” OnTheMarket Chief Executive Officer Ian Springett said. “With a scalable portal, strong funding and a progressive ramping-up of marketing activity, growth since IPO has accelerated and momentum is continuing. This gives us confidence as we look to the coming months.”

Related: Property and Estate Agent Franchises UK – What Buying an Estate Agency Franchise Means for UK Franchisees

Shares in OnTheMarket were 0.4% higher at 123.00 pence on Thursday.

Source: Morningstar

Coup for OnTheMarket as it signs Britain’s biggest franchise agency

October 23, 2018

OnTheMarket has this morning announced that franchise giant Belvoir will list all of its 300-plus branches on the challenger portal.

This includes the full range of Belvoir sales and lettings properties through its Belvoir, Northwood and Newton Fallowell brands.

“We have for some time believed that the property portals landscape was ripe for disruption. OnTheMarket is the first serious contender for several years to be injecting genuine competition in the interests of agents and property searchers alike” says Belvoir’s chief executive Dorian Gonsalves.

“It is agents who provide the portals with the majority of their content and income. It is also agents who serve their clients and property searchers on the ground in selling, letting, buying and renting property” he continues.

Related: OnTheMarket Adds 6,000 Estate Agent Branches Since February Listing

“I’m very pleased to be announcing our strategic support for OnTheMarket as an agent-backed business and am confident that with agent momentum building it will continue to go from strength to strength.”

Belvoir Franchise Support Team Raise Over £3000 for MS Society UK

October 2, 2018

Nine members of the Belvoir Central Office Franchise Support Team joined forces to complete the Yorkshire Three Peaks Challenge, raising over £3000 for the MS Society UK.

Chief Financial Officer, Louise George, who is a keen athlete, said: “This was a 25-mile walk that took on the peaks of Pen-y-ghent, Whernside and Ingleborough, and included 5,200ft of ascent. On the day there was a great team spirit, with everyone supporting each other to get over all the physical hills and mental barriers. It just shows what can be achieved when everyone works together; it was an amazing day and the Belvoir team was awesome.

“MS is an unpredictable condition, which affects more than 100,000 people in the UK. It’s different for everyone, but is often painful, exhausting and can cause many problems with walking, movement, sight, and mental health. The donations, which total over £3,000, have been overwhelming. We would like to thank everyone that has sponsored us.”

Related: Belvoir Lettings Interim Earnings Rise, Declares Unchanged Dividend

Caroline Kew, Area Fundraiser for the MS Society said:” I would like to offer a huge thank you to the staff of Belvoir’s Central Office, their customers and business contacts for raising over £3,000 through their Yorkshire Three Peaks Challenge. The amazing enthusiasm and commitment of everyone to support people who have been affected by multiple sclerosis is outstanding! The Belvoir team should be very proud of everything they have achieved.”

Belvoir has 300 High Street Offices across the UK, and encourages all franchisees to support local and national charities, recognising their efforts by awarding the title of Charity Champion to the office that raises the most money each year. Belvoir Warrington, run by Gary and Amanda Pemberton, won the Charity Champion Award for a record third consecutive year at Belvoir’s Annual Awards 2018 after raising thousands of pounds for the Children’s Adventure Farm Trust (CAFT) and Macmillan cancer support.

Source: Business Mole

Belvoir Lettings Interim Earnings Rise, Declares Unchanged Dividend

September 11, 2018

Estate agent franchisor Belvoir Lettings PLC held its dividend Tuesday as profit and revenue both rose as it outperformed its market.

For the six months ended June, pretax profit doubled to GBP2.9 million from GBP1.4 million the year prior. This was after revenue rose 17% to GBP6.1 million from GBP5.2 million the year before.

Profit performance was helped by a GBP800,000 gain associated with the reduction in contingent consideration payable in the period.

This is associated with its second tranche of the deferred consideration for its GBP22.0 million acquisition of independent UK lettings franchise Northwood GB Ltd announced in June 2016. Belvoir now expects the final settlement to be just GBP4.2 million rather than the initially expected GBP5.0 million.

“I am delighted to report another half year of further strategic progress for the group, which continues to outperform both the sales and lettings markets which together, with the addition of financial services, has helped to deliver a strong set of first half results,” Belvoir Chief Executive Officer Dorian Gonsalves said.

Related: Belvoir stocks up its acquisition war chest with a new £17m borrowing deal

“The continued extraordinary success of our assisted acquisitions programme during the six months under review reflects our considerable investment in a highly skilled in-house acquisitions team focused on enabling our franchisees to take advantage of the growth opportunities that a consolidating market presents,” Gonsalves added. “In addition, through our investment in Brook, we are seeing the benefits of diversifying into financial services for both our franchisees and for the group.”

During the period, the number of properties managed increased to 61,100 from 57,637 the year prior. Belvoir proposed a 3.4 pence per share interim dividend, flat on the year prior.

“Franchising lies at the heart of our group and the board continues to look for opportunities to build on its franchising expertise,” Gonsalves explained. “I am pleased to further report that, despite the tough market conditions, Belvoir has achieved a promising start to the second half, and as such the company is on track to meet management expectations for the year.”

Shares in Belvoir were 4.3% higher at 109.00 pence on Tuesday.

Source: Morningstar

Lettings franchise calls for incentives to prevent UK landlords selling up

August 28, 2018

More landlords are selling up, and less are investing in the Private Rental Sector (PRS) in the UK due to increased legislation and punitive taxation policies, it is claimed. National lettings franchise Belvoir is calling for the Government to take urgent remedial action in the Autumn Budget to incentivise landlords who thinking of leaving the sector.

It says that it should be remembered that they are providing much needed good quality accommodation for the UK’s growing tenant population.

‘Property supply and tenant demand is something that Lettings franchise Belvoir has been tracking closely, ever since the Government embarked on a flawed policy to try and reduce the number of investment landlords so that more first time buyers could enter the market,’ said Belvoir chief executive officer Dorian Gonsalves.

‘Lettings franchise Belvoir has continually warned that this policy would not work, as the UK’s rising population requires more homes across all tenures, including those people wishing to buy, people wanting to rent privately, and of course people requiring social housing,’ he added.

The latest Lettings franchise Belvoir rental index covering the second quarter of 2018 shows that more agents than ever before are reporting that landlords are selling up. A sample survey of Belvoir franchisees reveals that there has been a slight increase from 46% to 48% in the number of offices reporting that their landlords are selling up to three properties.

There was also an increase from 7% to 17% of landlords selling between six to 10 properties. One Belvoir office reported that they currently have 17 families on notice due to landlords putting their properties on the market.

The also shows a slight increase in average rental growth across the UK, with a similar number reporting static rents, but Gonsalves pointed out that if landlords continue to sell up because their business model in the PRS is being continually attacked, it will undoubtedly result in a further shortage of properties, and inevitable increases in rents.

Related: Belvoir boosts franchise support with three new hires

He also pointed out that there are concerns about the possibility of mandatory three year tenancies and this may also influence the decision of landlords, and there are real concerns that there could be an increase in homelessness, as there is insufficient social housing to accommodate people.

‘The majority of landlords are not actively against three year tenancies. Our survey shows that tenants are already remaining in their homes for longer, with 40% staying for 19 to 24 months, and 17% choosing to rent a property for over two years,’ Gonsalves explained.

‘One office reported that their average tenants are staying for over four years, with another reporting the average as 2.5 years. Should three year tenancies become mandatory, landlords need reassurance that they can gain possession of their property when needed, and will be protected against tenants who do not pay their rent, or abuse a property or indulge in anti-social behaviour,’ he said.

‘We are urging the Government to do more in the Autumn Budget to address stock shortages in the UK, by incentivising the new build sector with low maintenance homes through more Help to Buy and Buy to Rent schemes to provide more homes to own. Landlords also need rewards and incentives to encourage them to remain in the PRS, such as reversing current tax increases and introducing tax breaks, as well as initiatives such as tax incentives for landlords who buy large properties and turn them into several affordable and low maintenance flats suitable for the rental sector,’ he added.

‘It is anticipated that more landlords will make a decision about whether to retain their portfolio in 2019, when tax bills have been calculated and the true extent of any further erosion to their profits is seen. The Autumn Budget is the perfect time for the Government to introduce the incentives that landlords who offer good quality properties at a reasonable rent really need,’ he concluded.

Source: Property Wire

Grantham firm wants to take on more franchises and services

May 30, 2018

Belvoir Lettings is looking to grow further following an agreement with HSBC bank for an acquisition related loan facility of up to £17m.

The Grantham-based company operates the UK’s largest high street franchised network of residential lettings and estate agents and wants to grow the business by taking on more franchises and property-related service companies.

Following a number of acquisitions in recent years, Belvoir Lettings already has around 300 franchisee offices across the country.

The HSBC acquisition fund is part of a revolving credit facility, which extends up to £17m and includes £6.5m refinancing of existing borrowing.

Related: Property franchise giant reveals £3.6m deal

Louise George, Chief Financial Officer at Belvoir Lettings, said: “When it came to providing the funding to support our immediate and longer-term growth ambitions, HSBC stepped in and offered the necessary facilities that were both competitive and flexible enough to meet our needs.

“Phil Carr, our relationship director at HSBC, went out of his way to understand our company, our franchising business model, the sector in which we operate and our future plans. Phil’s team also guided us through the process of moving our banking to ensure that the onboarding was as streamlined as possible.”

Roger Pratt, HSBC area director for corporate banking in East Midlands, said: “The lettings industry is going through a period of consolidation with increasing regulations placing pressures on administrative tasks for smaller agencies. This is creating a greater need for a business like Belvoir Lettings. We’re delighted to welcome Belvoir to HSBC and look forward to supporting the business as it continues to push forward its ambitious acquisition strategy.”

The funding and bank refinance was supported by bank acting lawyer Oliver Morgan of Pinsent Masons, Belvoir acting lawyer Shaun McCabe of Browne Jacobson, and Simon Hall of BDO LLP.

Source: Grantham Journal

Belvoir stocks up its acquisition war chest with a new £17m borrowing deal

May 22, 2018

Franchising firm Belvoir has beefed up its growth strategy with an acquisition-related loan facility running into millions.

The agreement, part of a new deal with HSBC, will allow Belvoir to snap up other franchise firms and also letting agencies which decide to call it a day once the tenants’ fee ban comes in.

Altogether, the package is worth up to £17m, and includes £6.5m refinancing of existing borrowing.

The facility will allow Belvoir to accelerate its growth through acquisition, building on purchases made in recent years including that of Northwood.

Belvoir acquired Northwood two years ago, on June 7, 2016, for a total of £22m – £11.5m paid upfront, and the balance payable as a two-year earn-out, meaning that up to £10.5m could be due very shortly.

Belvoir, which currently has around 300 franchisee offices, recently made an unsuccessful bid to merge with competitor The Property Franchise Company.

Related: Belvoir Lettings Interim Earnings Rise, Declares Unchanged Dividend

Louise George, chief financial officer at Belvoir, said: “When it came to providing the funding to support our immediate and longer-term growth ambitions, HSBC stepped in and offered the necessary facilities that were both competitive and flexible enough to meet our needs.”

“Phil Carr, our relationship director at HSBC, went out of his way to understand our company, our franchising business model, the sector in which we operate and our future plans.”

Roger Pratt, HSBC area director for corporate banking in the east midlands, said: “The lettings industry is going through a period of consolidation with increasing regulations placing pressures on administrative tasks for smaller agencies.

“We’re delighted to welcome Belvoir to HSBC and look forward to supporting the business as it continues to push forward its ambitious acquisition strategy.”

Meanwhile, franchising firm Northwood’s latest accounts show it made a profit of almost £1.3m last year on gross income of £2.8m.

The figures are the first full-year accounts since Northwood was acquired by Belvoir in 2016 and the profit margin at over 40% looks to be a huge improvement since pre-acquisition.

In the accounts for the financial year to the end of last December, director Louise George spells out concerns over legislative changes affecting the lettings industry.

Recent tax changes on interest relief, plus higher Stamp Duty on the purchase of additional homes, have cooled buy-to-let landlord activity, she said.

The forthcoming ban on tenant fees “has led to uncertainty for both existing and potential new franchise owners”.

However, Northwood will encourage its franchisees to engage in upsale possibilities in the financial services sector, including the commission on insurances, conveyancing and mortgages.

It will also encourage local acquisitions to expand letting portfolios and proactively recruit new franchisees.

Source: Property Industry Eye

Belvoir boosts franchise support with three new hires

May 12, 2018

Belvoir has boosted its central office team with the recruitment of agents from Foxtons and Martin & Co as well as one of its own franchisees.

Former Foxtons branch manger Joe Ellis has been named head of franchise support and former Martin & Co agent Rowan Williams is now a business development mentor.

They are joined at the headquarters in Grantham, Lincolnshire by former Belvoir franchisee Gary Legge, who owned three offices for several years. He will work in the compliance department.

Dorian Gonsalves, chief executive of Belvoir, said: “Belvoir is currently experiencing levels of fantastic business growth, and we are very excited about the next few years.

Related: Belvoir stocks up its acquisition war chest with a new £17m borrowing deal

“As far as business development is concerned, having the right team of people with the right skills is critical to our future success.

“This is a people business and we have made every effort over the years to develop staff through the ranks into senior positions and all of our current senior managers have developed their careers in exactly this way.

“However, it is also important that we bring in new skills from individuals who have previously worked in high profile agency groups, such as people like Joe and Rowan.”

Source: Property Industry Eye