Belvoir Group PLC (LON:BLV), the UK’s largest property franchise, said trading has been ahead of even its pre-COVID-19 expectations in the ten months of its financial year do far.
Gross profit in the property and the financial services divisions grew year-on-year by 10% and 11% respectively it said in a trading update.
Management services fee income (MSF) from its lettings arm rose on 2019 and level in sales with helped by the acquisition of the Lovelle chain and a strong bounce-back once the first lockdown ended.
Agreed house sales are running significantly ahead of the previous record level and strong sales revenue should continue during the last two months of the year.
In financial services, the pipeline of written mortgages is also at a record level.
Overheads have fallen significantly and as a result, Belvoir expects profit before tax, will be comfortably ahead of management’s expectations with 62% of gross profits coming from recurring revenues
Net debt has also fallen to £4.3m even with the expenditure of £2mln on the Lovelle network and a deferred £0.5mln VAT payment.
Belvoir added it is mindful of the short-term boost to the property sector from the Government’s decision to reduce stamp duty until 31 March 2021 but had decided to reimburse all salaries sacrificed during the COID-19 period and repay all furlough money.
In addition, there will be a catch- up dividend of 1.3p alongside the final dividend payment in respect of the final dividend for 2019, which was suspended in March.
The total reinstated 2019 dividend will be 3.3p per share as a result.
Dorian Gonsalves, chief executive, said: “This year has demonstrated beyond doubt the incredible resilience of our franchise business model.
“I am delighted that we are in a position to be able to reimburse staff for their earlier sacrifice, to repay the Government Covid subsidies and to make good the missed 2019 dividend for shareholders.
“2021 will present further challenges, however, we will start the year with strong sales and financial services pipelines, and we have confidence in our business model.”