REG - Belvoir Group PLC - Interim Results
04/09/2023 07:00
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RNS Number : 1997L Belvoir Group PLC 04 September 2023
4 September 2023
BELVOIR GROUP PLC
(the "Company", "Group" or "Belvoir")
Interim Results for the six months ended 30 June 2023
Successful growth strategy underpins strong results
Belvoir Group PLC (AIM: BLV), a leading UK property franchise and financial
services Group, is pleased to announce its Interim Results for the six months
ended 30 June 2023.
Financial Highlights
· 3% increase in revenue to £15.9m (H1 2022: £15.4m)
· 4% increase in Management Service Fees (MSF), the main revenue stream
from franchisees, to £5.5m (H1 2022: £5.3m) with lettings up 8% and sales
down 9%
· 11% increase in Financial Services revenue to £8.6m (H1 2022:
£7.7m)
· Gross profit split of 58% lettings: 15% sales: 21% financial
services: 6% other (H1 2022: 60%, 17%, 19%, 4%) continuing to demonstrate a
strong contribution from recurring lettings income
· Administrative costs down 7% to £5.0m (H1 2022: £5.4m) mainly
resulting from the net impact of changes in the number of corporate-owned
offices and acquisitions
· 10% increase in profit before tax to £4.4m (H1 2022: £4.0m)
· Basic earnings per share up 3% to 9.0p (2022: 8.7p)
· 25% increase in interim dividend to 5.0p per share (H1 2022: 4.0p)
payable on 27 October 2023
· H1 results comfortably in line with management's expectations
Operational Highlights
· A strong performance achieved from Belvoir's successful franchise
model, despite continuing challenging market conditions
· Acquisition of BMA Bristol Ltd, a financial services business
comprising 21 self-employed advisers and a lead-generating website, for £1.0m
net cash on 6 June 2023, funded from existing cash reserves
· Successful franchising out of Nicholas Humphreys Derby on 1 March
2023 to the branch manager
· 13 (H1 2022: 9) franchisee assisted acquisitions completed
adding £3.5m (H1 2022: £2.2m) of acquired franchisee turnover
· Portfolio of managed properties increased 2% to 75,000 (H1 2022:
73,300)
Post Period End Events
· Acquisition of MAB (South West) Ltd, a financial services business
comprising 20 self-employed advisers for £1.0m net cash on 25 August 2023,
funded from existing cash reserves
Dorian Gonsalves, Chief Executive Officer of Belvoir Group, commenting on the
performance and outlook, said:
"The outperformance of our business model continues to reflect the
entrepreneurial nature of our franchisees and self-employed financial services
advisers, who remain entirely focused on maximising the opportunities
presented in all market conditions. With 58% of their revenue derived from a
strong recurring lettings market, our property franchisees have been able to
offset the impact of the reduction in UK housing transactions. Meanwhile our
financial advisers are mitigating the lower level of new purchase mortgages by
servicing demand for remortgages and other related products from their
substantial client banks.
"Our resilient business model and our proven growth strategy underpin the
ongoing success of the Group's performance and consequently, the Board
confirms that the Group is trading comfortably in line with management's
expectations for the year ending 31 December 2023."
Retail investor presentation
Dorian Gonsalves, CEO, and Louise George, CFO, will present live to retail
investors reporting on the Group's Interim Results via the Investor Meet
Company platform today at 4.30pm. Investors can sign up for free and
register to participate via:
https://www.investormeetcompany.com/belvoir-group-plc/register-investor
(https://www.investormeetcompany.com/belvoir-group-plc/register-investor)
For further details:
Belvoir Group PLC 01476 584900
Dorian Gonsalves, Chief Executive Officer investorrelations@belvoirgroup.com (mailto:investorrelations@belvoirgroup.com)
Louise George, Chief Financial Officer
www.belvoirgroup.com (https://www.belvoirgroup.com/)
finnCap +44 (0) 20 7220 0500
Julian Blunt & Teddy Whiley (Corporate Finance)
Tim Redfern & Charlotte Sutcliffe (ECM)
www.finncap.com (http://www.finncap.com)
Buchanan +44 (0) 20 7466 5000
Charles Ryland & Jack Devoy
Notes:
About Belvoir Group PLC
Founded in 1995 and listed on AIM in 2012 (BLV.L), Belvoir operates a
nationwide property franchise group with 487 offices across seven brands
specialising in residential lettings, property management, residential sales
and property-related financial services. With its Central Office in Grantham,
Lincolnshire, the Group manages 75,000 properties and reported record revenue
of £33.7m in 2022 marking Belvoir's 26(th) year of unbroken profit growth.
Chief Executive's Report
It gives me great pleasure to report on the Group's Interim Results for the
six months ended 30 June 2023.
Performance
There was a significant degree of uncertainty around the property sector at
the start of 2023 with the impact of interest rate increases on housing
transactions still to be felt. Despite the challenging economic conditions,
Belvoir outperformed the market in all three areas of its operations:
lettings, sales and financial services.
Group revenue increased by 3% to £15,921,000 (H1 2022: £15,403,000) and
profit before tax was up 10% to £4,396,000 (H1 2022: £3,995,000), largely
thanks to Belvoir's successful acquisition strategy and the strength of its
core lettings business.
Property division
Revenue from the property division was 4% lower at £7,323,000 (H1 2022:
£7,666,000) having successfully franchised out two of the Nicholas Humphreys
corporate-owned offices as planned in line with the Group's franchise business
model. Revenue growth in the underlying business was 2% with the impact of
increasing rents helping to mitigate the lower level of sales transactions.
Activity under Belvoir's assisted acquisitions programme is continuing to
rebuild post-Covid with 13 (H1 2022: 9) of our franchise owners having
completed the acquisition of a local competitor adding 2,010 (H1 2022: 1,817)
properties under management. The pipeline of assisted acquisitions currently
exceeds £1.0m and there are a further £4.9m of opportunities under
consideration with franchisees. Meanwhile, ten franchise offices changed hands
under our resales programme, five of which were acquired by new franchise
owners joining the Group, and five by existing, adjacent franchisees.
The property division totals 335 offices, including twelve partners and
associates operating as personal agents under the Mr and Mrs Clarke brand. In
H1 2023, the Group reported a total of 4,177 (H1 2022: 4,889) house sales and
now has a portfolio of 75,000 (H1 2022: 73,300) managed properties.
Whilst the headlines continued to predict doom and gloom for the property
sector, the market actually proved to be fairly resilient in the face of the
dual headwinds of high inflation and rising interest rates. UK house sales
transactions in H1 2023 were down 18% on H1 2022, broadly as anticipated, with
68% of all properties listed having been sold so far in 2023. Meanwhile, house
prices have also remained fairly stable with the average price of a UK
property being 1.7% up on June 2022 and only 2.3% down on December 2022.
The private rental sector continued to be impacted by a perfect storm of an
undersupply of properties and strong demand from tenants, which has resulted
in the ONS rental index to June 2023 being 5.2% (H1 2022: 3.3%), up from 1.4%
pre-Covid.
Against this backdrop, MSF in the underlying business increased by 2% in H1
2023, with growth of 6% from lettings more than mitigating the 15% fall in
sales MSF. The Group's ratio of lettings to sales reverted to 80:20 in H1 2023
(H1 2022: 78:22) reflecting the strong recurring lettings business that
underpins the Group's performance.
Financial services division
Revenue from the financial services division increased by 11% to £8,598,000
(H1 2022: £7,737,000) with performance stronger than forecast at the start of
2023. The financial services businesses acquired in 2022 and 2023 accounted
for 19% revenue growth. Meanwhile revenue from the underlying financial
services business was 8% lower against a reduction of 26% in UK gross new
mortgage lending in H1 2023. The increase in the base rate slowed demand for
new purchase mortgages but stimulated demand for remortgages and product
transfers from clients seeking specialist advice on securing the best
available mortgage deals, along with advising on other associated products. In
H1 2023, the total number of mortgages written by Group advisers increased by
6% to 10,252 (H1 2022: 9,639) and the ratio of purchase mortgages to
remortgages/product transfers was 47:53 (H1 2022: 61:39) with advisers able to
service demand from Belvoir's extensive client bank.
At the end of June, Belvoir's network of advisers was 301 (H1 2022: 301). The
number of advisers reduced to 284 by the end of 2022 and there was a further
net reduction of 4 in H1 2023, most of which were advisers failing to meet the
minimum performance criteria and reflected a drive to ensure adviser quality
across the Group. The acquisition of BMA Bristol in June added 21 advisers
to bring the total back up to 301 by June 2023. The recent acquisition of
MAB (South West) brought on board a further 20 experienced advisers, such that
our financial services network now stands at 321 advisers.
Dividend
The Board has reviewed the Group's dividend policy and intends to increase the
proportion of earnings paid to shareholders in future. Accordingly, the
interim dividend has been increased by 25% to 5p (H1 2022: 4.0p) per share.
This reflects the Board's confidence in the business model and strong ongoing
cash generation and does not diminish the Group's appetite for further
corporate acquisitions.
Outlook
The high degree of uncertainty created in the property and mortgage markets
following the mini budget in September 2022 and subsequent interest rate
rises, resulted in a lower level of mortgage applications and house sales
instructions towards the end of 2022. This flowed through into the lower
levels of UK house transactions and gross mortgage lending in H1 2023, as
reported. Meanwhile, the impact on house prices has been fairly modest, with
further price falls forecast to be around only 2% from here.
It was anticipated that inflation would have fallen further and the increases
in the base rate would have peaked by mid-year, creating greater stability for
the mortgage market and by association, the housing market. There has been
some recent softening in the outlook for interest rates with the bank rate now
expected to peak at 5.5% compared to 6.5% back in July. This has led to
lenders reducing their rates for 5-year mortgage deals from the recent
highs.
Within the private rented sector, there is little likelihood of tenant demand
receding with higher mortgage rates deterring some would-be homeowners from
buying and seeing some homeowners returning to the lettings market. At the
same time the supply of rental properties has been tempered in recent years by
increased taxation, higher interest rates for buy-to-let mortgages and the
prospect of greater regulation, with this latter point being a factor in
steering landlords towards using a professional lettings agent.
The great upside of Belvoir's business model is that it relies on highly
motivated franchise owners and self-employed mortgage advisers who remain
entirely focused on maximising the opportunities presented in all market
conditions. The Group also benefits from its diversified revenue streams with
the rental market remaining strong during a slump in property sales, and
demand for remortgages from its substantial bank of mortgage customers
countering the lower demand for new purchase mortgages.
Current pipelines of agreed sales, the level of written mortgage business,
ongoing excess demand for rental properties and the incremental revenue from
the two recent acquisitions underpin the Board's confidence in Belvoir's
performance for the second half of the year.
Dorian Gonsalves
Chief Executive Officer
Financial Review
Revenue
Group revenue in the first six months of 2023 was up 3% to £15,921,000 (H1
2022: £15,403,000).
Revenue from our property franchise division was lower by 4% at £7,323,000
(H1 2022: £7,666,000), having franchised out the Nicholas Humphreys Burton
and Derby offices in September 2022 and March 2023 respectively. This
resulted in a net reduction in revenue of £530,000 as revenue from
corporate-owned offices was converted to Management Services Fees (MSF)
against which there was a corresponding reduction in overheads of £470,000.
Management Service Fees, our key underlying income stream from franchisees,
increased by 4% to £5,508,000 (H1 2022: £5,289,000) with an increase from
lettings of 8% to £4,529,000 (H1 2022: £4,212,000) offsetting 9% lower level
of MSF from sales of £979,000 (H1 2022: £1,077,000). The two newly
franchised Nicholas Humphreys offices and the impact of owning Mr and Mrs
Clarke for the full period increased lettings MSF by £70,000 and sales MSF by
£61,000. Lettings in the underlying franchise business increased by 6%, up
£247,000, more than mitigating a 15% reduction in sales MSF, down £159,000.
Revenue from our corporate-owned offices decreased by £732,000 to £1,237,000
(H1 2022: £1,969,000) of which £613,000 related to the franchising out of
the two Nicholas Humphreys offices. The Group now has three corporate-owned
offices; Belvoir Grantham, Newton Fallowell Grantham and Nicholas Humphreys
Leicester.
In the year to date, 13 (H1 2022: 9) existing franchise owners have completed
an acquisition of a local competitor under our assisted acquisitions
programme. The total deal value was £3,816,000 (H1 2022: £2,540,000) of
which £887,000 (H1 2022: £510,000) was funded by a Central Office loan.
Based on their historic results, these acquisitions should add approximately
£3.5m p.a. (H1 2022: £2.2m p.a.) to our franchisee network revenue, which
would increase Group revenue through annualised recurring MSF by around
£360,000 with a contribution of around £230,000 to MSF expected in 2023.
Franchise fees and other income, including insurance, conveyancing and other
commissions, and fees for other services to franchisees, contributed £578,000
(H1 2022: £408,000) with the increase arising from additional services being
offered to franchisees.
Revenue from our financial services division was up 11% to £8,598,000 (H1
2022: £7,737,000). The acquisitions of The TIME Group in May 2022 and BMA
Bristol in June 2023 added £1,443,000 in revenue. The underlying business was
down £582,000 being much less than expected at the start of the year based on
lower levels of written business in Q4 2022.
Gross profit
Gross profit was 1% lower to £9,295,000 (H1 2021: £9,404,000). Whilst gross
profit from the financial services division increased by £234,000, the
property division's contribution was down £343,000, primarily due to having
franchised two Nicholas Humphreys offices.
The franchising out of two corporate-owned offices and the recent financial
service acquisitions have changed the sales mix of property to financial
services to 46:54 (H1 2022: 50:50) resulting in a lower overall gross profit
margin of 58% (H1 2022: 61%). Within the property division 100% of revenue
falls through to gross profit whereas revenue from financial services is
subject to commission payable to advisers. The gross profit margin from
financial services was higher at 23% (H1 2021: 22%).
With a gross profit split of 58% lettings: 15% sales: 21% financial services:
6% other (H1 2022: 60%, 17%, 19%, 4%), the Group remains underpinned by a
strong recurring lettings revenue stream.
Administrative expenses
Administrative expenses decreased by £357,000 to £5,011,000 (H1 2022:
£5,368,000). The main changes in administration costs were:
· Reduction of £470,000 from having franchised out two Nicholas
Humphreys corporate-owned offices
· Reduction of £165,000 in professional fees associated with
acquisitions
· Increase of £185,000 in operational costs arising from businesses
acquired
· Increase of £94,000 in the share-based payment
The operating costs of the underlying business have remained broadly the same
as in H1 2022.
Profit before taxation
Profit before taxation for the period was up £401,000 to £4,396,000 (H1
2022: £3,995,000). An increase of 10% in profitability against the backdrop
of a challenging property market reflects the Group's resilient franchise
business model, acquisition strategy at both a corporate and franchise level
and the strong performance of the lettings market.
Taxation
The effective rate of corporation tax for the period was 24% (H1 2022: 19%)
which primarily reflects the increase in the rate of corporation tax from 19%
to 25% in April 2023.
Profit after taxation
Profit after taxation for the period was up 4% to £3,357,000 (H1 2022:
£3,226,000).
Earnings per share
Basic earnings per share was up 3% to 9.0p (H1 2022: 8.7p) based on an average
number of shares in issue in the period of 37,304,000 (H1 2022: 37,292,000).
Similarly, the diluted basic earnings per share was up 4% to 8.8p (H1 2022:
8.5p) based on an average number of shares in issue in the period of
38,323,000 (H1 2022: 37,922,000). See note 5 to the interim statements for
detailed EPS calculations.
Dividend
Now that the Group is operating from a position of net cash and given the
continuing increase in profitability, the Board is pleased to announce an
increase of 25% in the interim dividend to 5.0p (H1 2022: 4.0p). This is
payable to shareholders on 27 October 2023 based upon the register on 15
September 2023. The ex-dividend date will be 14 September 2023.
Cash flow
The Group continues to achieve a high conversion of cash from operations with
91% (H1 2022: 97%) of EBITDA converting to cash of £4,351,000 (H1 2022:
£4,379,000). Net cash inflow from operating activities after taxation was
£2,900,000 (H1 2022: £3,988,000). The higher level of cash generated in H1
2022 was a result of corporation tax relief from a share scheme deduction
relating to share options exercised in 2021.
On 6 June 2023 the Group completed on the acquisition of BMA Bristol Limited,
a small financial services business comprising 21 self-employed advisers, for
£1,023,000 net cash consideration.
During H1 2023, the Group extended loans to franchisees totalling £1,666,000
(H1 2022: £666,000) of which £513,000 was loaned to the branch manager of
Nicholas Humphreys Derby to enable him to acquire the office as a
franchisee. A further £887,000 was lent to franchisees under the assisted
acquisitions programme. Loan repayments from franchisees totalled £551,000
(H1 2022: £362,000).
Liquidity and capital resources
The Group had cash balances of £387,000 (H1 2022: £5,748,000) and no
outstanding loans (H1 2021: term loan of £8,297,000) leaving net cash of
£387,000 (H1 2022: net debt of £2,549,000). The term loan, the balance of
which was £2,000,000 at the end of 2022, was repaid in full in March 2023. An
overdraft facility of £2,000,000 has been arranged with HSBC plc to meet any
short-term cash requirements.
Post period end transaction
On 25 August 2023, the Group completed on the acquisition of a small financial
services business, MAB South West Ltd, comprising a network of 20
self-employed advisers, for £1,000,000 net cash consideration paid out of
existing cash reserves.
Financial position
As at the date of this report, the Group had net cash of £525,000. The
Group continues to operate from a sound financial platform generating
sufficient cash from the operations of the enlarged Group to both reward
shareholders through an increased dividend and to fund its acquisition
strategy.
The Group maintains a franchisee loan book, currently at £3,859,000 (H1 2022:
£2,902,000), which provides financial assistance to franchisees under the
assisted acquisitions programme to accelerate their growth and therein
contribute towards increased Group revenue.
The Group's operational and diversified business model underpinned by a strong
recurring lettings revenue stream has helped to deliver long term profit
growth. The Group's capital allocation policy provides a reliable dividend
with an attractive yield for investors, whilst retaining funding for the
Group's growth strategy.
Louise George
Chief Financial Officer
Condensed Group Statement of Comprehensive Income
For the six months ended 30 June 2023
Notes Unaudited Unaudited Audited
Six months
Six months
Year
ended
ended
ended
30 June
30 June
31 December
2023
2022
2022
£'000 £'000 £'000
Revenue 2 15,921 15,403 33,718
Cost of sales (6,626) (5,999) (13,449)
Gross profit 9,295 9,404 20,269
Administrative expenses (5,011) (5,368) (11,231)
Operating profit 4,284 4,036 9,038
Profit on disposal of corporate-owned offices - - 149
Finance costs (33) (123) (283)
Finance income 145 82 214
Profit before taxation 4,396 3,995 9,118
Taxation 4 (1,039) (769) (1,711)
Profit and total comprehensive income for the financial period 3,357 3,226 7,407
Profit for the period attributable to the equity holders of the parent company 3,357 3,226 7,407
Basic earnings per share from continuing operations 5 9.0 8.7 19.9p
Diluted basic earnings per share from continuing operations 5 8.8 8.5 19.6p
BELVOIR GROUP PLC Interim Accounts 2023
The accompanying notes form an integral part of these consolidated interim
financial statements
Consolidated Statement of Financial Position
As at 30 June 2023
Unaudited Unaudited Audited
At At At
30 June
30 June
31 December
2023
2022
2022
£'000 £'000 £'000
Assets
Non-current assets
Intangible assets 37,440 37,800 37,308
Property, plant and equipment 691 531 540
Right-of-use assets 485 596 539
Trade and other receivables 2,815 1,996 1,741
41,431 40,923 40,128
Current assets
Trade and other receivables 6,684 6,483 6,759
Cash and cash equivalents 387 5,748 3,217
7,071 12,231 9,976
Total assets 48,502 53,154 50,104
Liabilities
Non-current liabilities
Lease liabilities 324 434 378
Deferred tax 2,427 2,757 2,545
2,751 3,191 2,923
Current liabilities
Trade and other payables 4,949 5,306 5,755
Interest bearing loans and borrowings - 8,297 2,039
Lease liabilities 177 177 177
Tax payable 664 776 1,073
5,790 14,556 9,044
Total liabilities 8,541 17,747 11,967
Total net assets 39,961 35,407 38,137
Equity
Shareholders' equity
Share capital 373 373 373
Share premium 13,184 13,159 13,159
Share-based payment reserve 798 450 491
Other components of equity 162 162 162
Merger reserve (5,774) (5,774) (5,774)
Retained earnings 31,218 27,037 29,726
Total equity 39,961 35,407 38,137
BELVOIR GROUP PLC Interim Accounts 2023
The accompanying notes form an integral part of these consolidated interim
financial statements
Consolidated Statement of Changes in Shareholders' Equity
For the six months ended 30 June 2023
Share capital Share Share- based payment reserve Merger Other components of equity Retained Total
premium
reserve
earnings
equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2022 (Audited) 373 13,159 238 (5,774) 162 25,489 33,647
Share-based payments - - 212 - - - 212
Dividends - - - - - (1,678) (1,678)
Transactions with owners - - 212 - - (1,678) (1,466)
Profit and total comprehensive income for the six month period - - - - - 3,226 3,226
Balance at 30 June 2022 (Unaudited) 373 13,159 450 (5,774) 162 27,037 35,407
Share-based payments - - 41 - - - 41
Dividends - - - - - (1,492) (1,492)
Transactions with owners - - 41 - - (1,492) (1,451)
Profit and total comprehensive income for the six month period - - - - - 4,181 4,181
Balance at 31 December 2022 (Audited) 373 13,159 491 (5,774) 162 29,726 38,137
Share-based payments - - 307 - - - 307
Issue of share capital - 25 - - - - 25
Dividends - - - - - (1,865) (1,865)
Transactions with owners - 25 307 - - (1,865) (1,533)
Profit and total comprehensive income for the six month period - - - - - 3,357 3,357
Balance at 30 June 2023 (Unaudited) 373 13,184 798 (5,774) 162 31,218 39,961
BELVOIR GROUP PLC Interim Accounts 2023
The accompanying notes form an integral part of these consolidated interim
financial statements
Consolidated Statement of Cash Flows
For the six months ended 30 June 2023
Notes Unaudited Unaudited Audited
30 June 30 June 31 December
2023
2022
2022
( £'000 £'000 £'000
Operating activities
Cash generated from operating activities 6 4,351 4,379 10,828
Tax paid (1,451) (391) (1,226)
Net cash flows generated from operating activities 2,900 3,988 9,602
Investing activities
Capital expenditure on property, plant and equipment (188) (75) (144)
Capital expenditure on intangible trademark licenses - - (10)
Disposal of corporate-owned offices 468 - 691
Acquisitions net of cash acquired (1,023) (3,005) (4,044)
Franchisee loans granted (1,666) (666) (909)
Loans repaid by franchisees 551 362 771
Finance income 145 78 214
Net cash (used in)/from investing activities (1,713) (3,306) (3,431)
Financing activities
Finance costs (39) (113) (221)
Loan repayments (2,000) (445) (6,758)
Lease repayments (138) (111) (218)
Proceeds from share issue 25 - -
Equity dividends paid (1,865) (1,678) (3,170)
Net cash used in financing activities (4,017) (2,347) (10,367)
Net change in cash and cash equivalents (2,830) (1,665) (4,196)
Cash and cash equivalents at the beginning of the financial period 3,217 7,413 7,413
Cash and cash equivalents at the end of the period 387 5,748 3,217
BELVOIR GROUP PLC Interim Accounts 2023
The accompanying notes form an integral part of these consolidated interim
financial statements
Notes to the Interim Financial Statements
1 General information and basis of preparation
The financial information set out in these condensed consolidated interim
financial statements for the six months ended 30 June 2023 and the comparative
figures are unaudited.
They have been prepared taking into account the requirements of relevant
accounting standards and the AIM rules. They do not constitute statutory
accounts within the meaning of Section 434(3) of the Companies Act 2006 and do
not contain all the information required for full annual financial statements.
The statutory audited accounts for the year ended 31 December 2022 have been
delivered to the Registrar of Companies in England and Wales. The Auditor's
report on these accounts was unqualified and did not contain statements under
Section 498 of the Companies Act 2006.
The condensed consolidated interim financial statements are presented in
sterling, which is also the functional currency of the parent company.
Belvoir Group PLC is the group's ultimate parent company. The Company is a
Public Limited Company incorporated and domiciled in the United Kingdom.
The Group's registered office and principal place of business is The Old
Courthouse, 60a London Road, Grantham, Lincolnshire, NG31 6HR. Its shares are
listed on the AIM market of the London Stock Exchange.
The condensed interim financial statements for Belvoir Group PLC have been
approved for issue by the Board of Directors on 1 September 2023.
Significant accounting policies
The condensed consolidated interim financial statements have been prepared
under the historical cost convention. Being listed on AIM, the Company is
required to present its consolidated financial statements in accordance with
UK-adopted International Accounting Standards and with those parts of the
Companies Act 2006 applicable to companies reporting under International
Financial Reporting Standards (IFRS).
In preparing these interim financial statements, the Board have considered the
impact of new standards which will be applied in the 2023 Annual Report and
Accounts and there are not expected to be any changes in the accounting
policies compared to those applied at 31 December 2022.
2 Segmental information
The Executive Committee of the Board, as the chief operating decision maker,
reviews financial information for and makes decisions about the Group's
overall franchising business. In the six months ended 30 June 2023 the Board
identified two operating segments, that of franchisor of property agents,
comprising income from lettings and property sales, and property-related
financial services.
The Directors consider gross profit as the key performance measure. The
reported segments are consistent with the Group's internal reporting for
performance measurement and resources allocation.
Management does not report on a geographical basis and no customer represents
greater than 10% of total revenue in any of the periods reported. The
Directors believe there to be three material property franchise income
streams, which are management service fees, revenue from corporate-owned
offices and fees on the sale or resale of franchise territory fees; and one
material financial services income stream, which is commission receivable on
financial services. These revenue streams are split as follows:
Lettings Property sales
Total revenue
Unaudited Unaudited Audited Unaudited Unaudited Audited Unaudited Unaudited Audited
H1 H1 FY H1 H1 FY H1 H1 FY
2023
2022
2022
2023
2022
2022
2023
2022
2022
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Management service fees 4,529 4,212 8,629 979 1,077 2,329 5,508 5,289 10,958
Corporate-owned offices 865 1,442 2,572 372 527 973 1,237 1,969 3,545
5,394 5,654 11,201 1,351 1,604 3,302 6,745 7,258 14,503
Franchise fees 243 215 461
Other income 335 193 614
Franchise property division 7,323 7,666 15,578
Financial services division 8,598 7,737 18,140
Total revenue 15,921 15,403 33,718
Gross profit for the two divisions is split as follows:
Unaudited Unaudited Audited
H1 H1 FY
2023
2022
2022
£'000 £'000 £'000
Property franchise division 7,323 7,666 15,578
Financial services division 1,972 1,738 4,691
Total gross profit 9,295 9,404 20,269
3 Dividends
The Company will pay an interim dividend of 5.0 pence per share (H1 2022:
4.0p), a cost of £1,865,000 (H1 2022: £1,449,000), on 27 October 2023 to the
shareholders on the register on 15 September 2023. The ex-dividend date is
14 September 2023.
4 Taxation
The March 2021 Budget commitment to increase corporation tax to 25% with
effect from April 2023 was substantially enacted in May 2021. As a result,
deferred tax balances expected to reverse after April 2023 were remeasured at
25% in 2021. There are no temporary differences for which deferred tax
balances are unrecognised.
5 Earnings per share
Basic earnings per share is calculated by dividing the profit after tax for
the financial period by the weighted average number of ordinary shares deemed
to be in issue in the period. The calculation of diluted earnings per share is
derived from the basic earnings per share, adjusted to allow for the issue of
shares under share option plans.
Unaudited Unaudited Audited
six months
six months
Year
ended ended
Ended
30 June
30 June
31 December
2023
2022
2022
Profit for the financial period (£'000) 3,357 3,226 7,407
Weighted average number of ordinary shares - basic (#,000) 37,304 37,292 37,292
Weighted average number of ordinary shares - diluted (#,000) 38,323 37,922 37,803
Basic earnings per share (pence) 9.0p 8.7p 19.9p
Diluted earnings per share (pence) 8.8p 8.5p 19.6p
6 Reconciliation of profit before taxation to cash generated from operations
Unaudited Unaudited Audited
30 June 30 June 31 December
2023
2022
2022
£'000 £'000 £'000
Profit before taxation 4,396 3,995 9,118
Depreciation and amortisation charges 474 491 930
Impairment of intangibles and goodwill - - 121
Share-based payments 307 212 253
Profit on disposal of corporate-owned office - - (149)
Amortisation of debt costs 7 14 29
Finance costs 24 113 262
Interest paid on lease liabilities 9 10 21
Finance income (145) (82) (214)
5,072 4,753 10,371
116
(Increase)/decrease in trade and other receivables (778) (955)
Increase/(decrease) in trade and other payables (807) (77) 1,228
Trade and other receivables acquired 93 1,391 1,391
Trade and other payables acquired (123) (910) (1,207)
Cash generated from operations 4,351 4,379 10,828
7 Acquisitions
BMA Bristol Limited Acquisition
On 6 June 2023 Belvoir Group PLC acquired BMA Bristol Limited ("BMA"), a
network of 21 mortgage advisers.
Professional fees associated with the above acquisitions of £27,000 have been
expensed in H1 2023.
These transactions met the definition of a business combination and has been
accounted for using the acquisition method under IFRS 3. The assets and
liabilities below are shown at their provisional fair values at acquisition.
Total
£'000
Intangible assets
Tangible assets 25
Trade and other receivables 93
Cash and cash equivalents 113
Trade and other payables (185)
Identifiable net assets/(liabilities) acquired 46
Goodwill on acquisition 1,090
Consideration 1,136
Consideration settled in cash 1,136
Deferred consideration -
Total consideration 1,136
The goodwill represents the value attributable to the new businesses and the
assembled and trained workforce.
8 Borrowings
H1 2023 H1 2022 FY 2022
£'000 £'000 £'000
Bank loans - term loan
Bank loans - current - 8,297 2,039
Less: cash and cash equivalents (387) (5,748) (3,217)
(Net cash)/net debt (387) 2,549 (1,178)
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