Major agency hits the acquisition trail with lettings focus

Spicerhaart is reigniting its acquisition strategy with a multi-million pound investment in its estate agency and lettings businesses after posting a pre-tax loss for 2023.

Founder and chairman Paul Smith has set out plans to use cash reserves to strategically acquire estate agencies with robust lettings portfolios over the next 18 months.

Smith said: ”Over the years, our focus on acquiring agencies with strong lettings portfolios has kept us competitive and ensured a steady revenue stream.

“We’ve invested heavily in our lettings and property management business over the past couple of years and will also be expanding our lettings hub-based partnership model into 32 new locations, complementing our growth in our estate agency partnerships.”

It comes as filed accounts for the year ending December 2023, show Spicerhaart reported a 9% increase in residential lettings turnover, driven by a 2% growth in properties under management and stronger average rental prices.

The Land and New Homes division also saw a 2% increase in turnover, reflecting heightened activity that resulted in a 42% higher exit pipeline compared to the previous year.

However, overall group turnover declined, mirroring the national trend in estate agency, with decreases in estate agency sales, surveying and financial services revenue.

The group reported a pre-tax loss of £3.4m but still delivered a turnover of £126m – even though there were 19% fewer transactions across the market, according to HMRC, and there was disruption caused by the effect of the mini-budget, with associated high interest rates.

Despite this, Spicerhaart's net assets stand at £21.9m and the group remains debt-free with cash reserves of £19.9m, slightly higher than the previous year. These reserves are earmarked to fund continued growth in key strategic areas.

Smith added: "We're looking to acquire businesses that share our vision and values and possess a high-performance culture.

”We also have ambitious plans to develop our training and career opportunities and further invest in technology, all of which are expected to drive significant improvements in operational performance.

“With a new Government in place, lower interest rates, and controlled inflation, Spicerhaart expects an upturn across all areas of our business. We’re committed to building a more competitive and resilient enterprise, well-positioned for medium-term growth.”