Belvoir ready to ‘splash the cash’ on agency acquisitions

Belvoir is seeking more acquisitions this year, the agency franchise brand has revealed.

The company revealed in its annual results yesterday that the group continues to be “highly cash generative” and despite spending £4m on acquisitions during 2022, it now has a net cash position of £1.2m.

Jon Di-Stefano, non-executive chairman of Belvoir, said: “This is an excellent platform from which to assess further strategic acquisitions in 2023. The board remains focused on identifying opportunities of all sizes to enhance our diversified business model and to drive additional management service fees by adding to our portfolio of highly respected franchised brands.”

One of its major takeovers last year was the acquisition of Mr and Mrs Clarke, which Belvoir’s annual report said “provided the group with a new service offering, which will recognise the breadth of ways in which customers want to interact with their estate agent and the different ways in which potential new franchisees or partners want to operate.”

Belvoir said this network will require further investment in order to build momentum and said it intends to relaunch the Mr and Mrs Clarke brand at franchise exhibitions later this year. 
It said: “A combination of its strong branding and the expertise and credibility that the Belvoir Group can bring, will only strengthen the business' growth potential.”

Belvoir will also continue supporting its franchisees to purchase other branches, using its assisted acquisitions service.
 

The results showed group revenue increased 14% to £33.7m, with 12% attributable to acquired businesses.

Management service fees (MSF) grew by 2% to 11m but Belvoir’s pre-tax profit was 2% lower annually at £9.1m.

Its gross profits showed lettings continues to drive the business, making up 56%, with 16% coming from sales and 23% contributed by financial services.

Lettings revenue increased by 5% to £11.2m but sales revenue was lower by 10% to £3.3m.

Sales MSF from the underlying business also fell by just 9%.

Its traditional lettings franchise brands, Belvoir and Northwood, which have been building their residential sales business in previous years, reported a fall in sales revenue of just 4%.
Dorian Gonsalves, chief executive of Belvoir, said: “2022 was a much stronger year for the property market than many analysts had forecast. 

“However, the mini-Budget in September crystallised the general pressure on interest rates and created significant uncertainty in the financial markets, which in turn impacted on sales instructions and mortgage applications in the fourth quarter of 2022.”

He said the brand has seen a bounce-back in our mortgage activity for the year to date, up around 20% on the fourth quarter of 2022, adding: “With house transactions taking up to five months to complete from agreeing a purchase, the increased market activity so far in the first quarter will take until the second half of the year to flow through to our financial performance.”

Despite challenging market conditions, Gonsalves said, Belvoir remains confident that the resilience and diversity of its business model and multi-brand strategy will enable the group to perform well against the market as a whole during 2023 and beyond.