One year after flotation on AIM, Belvoir this morning announced profits of £1.9m – a profit margin of 47.4%. Revenue of £4m during 2012 was 20.8% up on 2011 and was driven by a rise in the number of properties under management.
The company, which will be paying its shareholders their first dividend, also forecast a strong future. It predicts that the total rental bill across the UK will rise from £48bn to £70bn in 2016.
Belvoir floated on AIM last February, with shares priced at 75p. By the end of last year, they had shot up to 136p.
Belvoir also said that 78% of private rental properties are owned by landlords who use letting agents, and it expects this proportion to grow further.
The company currently has 151 franchise outlets, with three additional new offices about to open and several more in negotiation.
CEO Dorian Gonsalves said: "Belvoir Lettings has an exciting future ahead of us and the board is confident of continued good progress and that we will remain one of the major players in the growing lettings market. Our confidence is reflected in the final dividend of 2.9 pence announced today."
* There has been a huge rise in the number of rental properties on the London market, Kinleigh Folkard & Hayward has reported.
The firm is seeing a 51% increase in supply compared with this time a year ago.
Tenancy demand is also up, by 32%.
The firm, which says the current rent is now £1,512 per month, has also seen a 9% drop in renewals – caused by tenants tying into longer tenancies in the first place.
Carol Pawsey, group lettings director at Kinleigh Folkard & Hayward, said: “We’ve seen a remarkable change in the lettings market over the past twelve months.
“The market in 2012 was firmly in favour of the landlord and was largely led by a lack of stock and a greater pool of tenants, so competition was fierce and prices rose accordingly.
“The start of 2013 has however seen a shift and the market appears to be perfectly balanced with the right number of properties available for a good selection of tenants.
“Although competition is less prevalent, good-quality homes which are realistically priced are certainly in high demand and therefore don’t stay on the market for long.”
Comments
You miss the point. I'm not moaning and anyone who has made a good profit on the shares should sell. The share price is high because investors believe the growth story, I do not for the reasons given; simple.
How negative some peolple are when they have not done it themselves. Welldon Belvoir, wish I had bought in at 75p with the share price at 136p, its a decent return in anyones books, now that would really mean you could call yourself an investor not moaner.
Many people have done better. £4m turnover is unimpressive and the growth prospects are poor unless Belvoir start to buy back franchised businesses and benefit from 100% of the turnover not 10%. The current model will not deliver sustainable double digit growth. The biggest competitor to M&Co and indeed Belvoir are disenchanted franchisees who will close and phoenix their businesses in independent vehicles, attempting to bypass their franchise agreements. It’s sad but obvious, once a franchisee gets past the dependence stage they resent the pay away to the franchisor for what is perceived to be poor support. The only way to build embedded value is to be completely independent and sell out to the consolidators, something that franchisees cannot do, seriously limiting their exit value.
As a Martin & Co franchisee I consider Belvoir to be "the competition".
Nevertheless, credit where its due. Mike Goddard started a business from scratch which now turns over £4 million quid - of which nearly half is profit. Meanwhile 151 people have taken his business model and used it to build 151 businesses each turning over an average of nearly a quarter of a million quid (figure arrived at by back-calculating from what I believe their franchisees pay).
How many of those who scoffed at Belvoirs figures have done better than that I wonder?
@ Fred- 151 Franchises = each paying £2207.50 per month on average and not £1,000
Get real please....
£1.9 million = about five houses along our typical village street.
£4 million revenue = possibly nine houses along our street.
A profit of 50% on revenue = some one is getting screwed.
170 Franchises = £11,176 each. I hope the agents are getting value for money. £1,000 a month is a lot to take out of a shop on top of all the other costs.
Well done Belvoir. Good Customer Service, Professionalism and Specialism does pay dividends!!
£1.9m profit, this is a corner shop! £4m turnover on some 170 franchised offices; no point in being a franchised business, 10% of turnover will never amount to a serious sized business. Franchisee’s want to escape as soon as they are established. Not a good model….