Belvoir trading ahead of pre-Covid expectations
By Sarah Wood | 2nd December 2020
Belvoir Group PLC, the UK's largest property franchise, has seen trading in 2020 ahead of pre-Covid expectations.
In the 10 months to the end of October 2020, the group, which has offices in Gloucester and Cheltenham, saw its property division achieve a 10 per cent year on year growth, while its financial services division achieved 11 per cent growth.
Management services fee income (MSF) from lettings was up on 2019 and MSF from sales was level. The impact of the first Covid national lockdown was offset by the acquisition of the Lovelle estate agency franchise network and the strong recovery in the sales market in the second half of the year.
Agreed house sales are significantly ahead of the previous record level so, whilst sales are slower to process than usual, franchisees are expected to report strong sales revenue during the last two months of the year.
The financial services division has gone from strength to strength, with an 18 per cent increase in the adviser network since the start of the year. The pipeline of written mortgages is at a record level, with a significant proportion expected to convert to banked income before the end of 2020.
The group has continued to benefit from the prompt action taken to reduce its cost base at the start of the pandemic, so that overheads are now significantly below the original budget.
During the UK's first period of lockdown, the Belvoir board and all employees earning over £25,000 took a temporary pay reduction of between 20 and 30 per cent, depending on seniority; these reductions were reversed in July 2020. In addition, the group benefitted from £250,000 of government Covid support in the form of furlough money and Small Business Grants in relation to its corporate-owned offices.
Given the group's continued resilient trading and, in anticipation of a strong end to the year, the board has decided to reimburse staff in full for the salaries which were sacrificed and to repay the government in full the Covid furlough monies and grants received.
Dorian Gonsalves, CEO, commented: "This year has demonstrated beyond doubt the incredible resilience of our franchise business model. In what has been a rollercoaster of a year for Belvoir, the group has performed well across both divisions. I am immensely grateful to our all our employees who have worked tirelessly to support our networks of property franchisees and financial service advisers through this challenging period.
"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 and the entrepreneurial spirit of our franchisees and advisers to continue to deliver shareholder value."
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