Revenue has hit record levels at Belvoir Group, the property franchise and financial services group with its central office in Grantham.
According to a pre-close trading update for the year ended 31 December 2022, group revenue increased 13% to £33.5m, up from £29.6m 2021.
The business noted that the housing sector performed better in 2022 than many commentators had forecast at the start of the year, with UK residential sales transactions down 15% on 2021, but around 6% ahead of pre-pandemic levels, and rents on new tenancies increasing by 10.8% during the year.
As a result, Belvoir’s financial performance for the year, including profit before tax, is anticipated to be slightly ahead of managements’ expectations.
Revenue from the financial services division increased by 24% to £17.9m, while revenue from the property division was up 1% to £15.5m.
During the year the Belvoir Group acquired TIME Mortgage Services and Mr and Mrs Clarke (MMC).
Dorian Gonsalves, CEO, said: “I am delighted to report that during 2022 our acquisition strategy both at group and at franchisee level enabled Belvoir to both extend its service offering and mitigate the lower level of activity in the housing market following the exceptionally strong conditions in 2021.
“Our property franchisees and financial services advisers are highly motivated entrepreneurs who continue to demonstrate the ability to make the most of the opportunities presented in all market conditions.
“Our property franchisees benefit from significant recurring lettings revenue that contributes around 56% of group gross profit and our financial services advisers have substantial client books from which to offer remortgages and other financial products, so are not entirely reliant on new mortgage business.
“Whilst we anticipate continuing challenging market conditions in 2023, we remain confident that the resilience and diversity of our business model will enable the group to perform well against the market as a whole. As always, the Board will continue to identify suitable acquisition targets to support continued growth and enhance shareholder value still further.”
Profitability in 2023 as a whole is anticipated to be slightly below 2022 and is expected to return to an upward trend in 2024. This is due in part to the mini budget in September 2022 creating a high degree of uncertainty within the property and related financial services markets.
Between August and December, base rates doubled from 1.75% to 3.5% which led to a rapid rise in mortgage lending rates, the withdrawal of many mortgage products by lenders and a tightening of mortgage criteria. This impacted on instruction levels for house sales and demand for mortgages in Q4 which will in turn impact trading in H1 of 2023.
While the Autumn statement reversed many of the fiscal initiatives proposed in the mini budget, which somewhat reassured borrowers and lenders, and the level of sales instructions and mortgage applications to date in 2023 have shown signs of improvement compared with Q4 2022, the recovery is expected to build slowly over the year.
Belvoir noted that given the lead time from instruction to completion of a house sale and from mortgage application to drawdown can be up to five months, the improvement in activity in H1 is not likely to flow through into financial performance until H2.
