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Belvoir on the prowl for more independent agent acquisitions

KREMER NS

Belvoir is on the hunt for more businesses to bring into its franchise model, as smaller independent agents look to exit.

The company is predicting that there will be more consolidation in the sector as independent rivals struggle with the complexities of increased regulation and the prospect of a ban on tenant fees in 2019.

It said it already has acquisitions in the pipeline and expects some to complete this quarter.

Chief executive Dorian Gonsalves made the observation as the company updated the City on its performance, which it said was in line with expectations, ahead of its audited results for the financial year ended December 31, 2017.

The results are due to be published on April 10.

The company said group revenue for 2017 was up 13% to £11.1m and that management service fees had increased by 22%.

The increased revenue reflected a full-year contribution from Northwood, which Belvoir acquired in June 2016.

It was also boosted by a mid-year contribution from Brook Financial Services, which it bought in July last year.

Brook Financial Services trades as Mortgage Advice Bureau.

However, Belvoir made no mention of its failed bid to merge with the Property Franchise Group, which it called off in November 2017.

The Group now represents over 58,000 managed properties, up from 55,756 in 2016, and is strongly biased towards lettings, with a lettings to sales ratio of 80%:20% (2016: 75%:25%).

Belvoir said its integration of the Northwood business resulted in £300,000 being shaved off its cost base.

Gonsalves said: “In 2017 Belvoir successfully supported franchise growth across all our brands through our Assisted Acquisitions programme and by promoting additional revenue streams such as property sales and property related financial services.

“The board is excited by the continued opportunities for consolidation within the sector with the Belvoir Group well placed to take advantage at both a local and national level.

“We anticipate that smaller independent agents will continue to look to exit following increased regulation and the prospect of the ban on tenant fees in 2019, and our acquisitions team is working closely with our entrepreneurial franchisees who are keen to invest to grow their business.”

Belvoir’s share price climbed nearly 10% yesterday to close at 99.5p.

TPFG’s share price was unchanged at 136.5p.

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Source:: Belvoir on the prowl for more independent agent acquisitions