Property portal Belvoir has said trading for the first quarter ended March 2020, which incorporated just one week of the Covid-19 lock-down, was “strong” and “in line” with management expectations.
The group said early indications for April trading, during which all of its offices were operating entirely under ‘lock-down’, have demonstrated the “considerable resilience of [its] franchise networks”.
The news comes after Belvoir announced that group revenue soared by 43% to £19.3m in its full-year ended 31 December 2019.
Profit before tax increased by £0.1m to £5.6m, while management service fees rose 4% to £8.8m.
The group also reported a “strong” lettings performance in the year, as well as an increased importance of financial services, which was reflected in its gross profit ratio of 61% lettings, 16% sales, 19% financial services and 4% other.
At the end of April, the group carried out a rent arrears survey of all franchisees which has shown that less than 5% of tenants are in arrears on their rent compared with the usual 2% experienced by our networks, only a small increase and which is considerably “less than the board had expected”.
The group revealed as of 13 May, restrictions on the housing sector have been lifted earlier than the group had anticipated and group franchisees have been able to resume operating from their offices and to carry out physical appraisals and viewings, enabling both home-owners and tenants to move home.
Dorian Gonsalves, CEO of Belvoir Group, said: “Having reported significant growth in 2019 and got off to a good start in Q1 2020, it has been hugely frustrating for the Group not to have been able to build further on this momentum due to Covid-19. However, the current climate has proved once again just how robust and resilient our franchise business model is.
“The board is encouraged that the restrictions on the housing sector were among the first to be lifted. Clearly time will tell as to the lasting impact of the current environment on the wider economy and on the UK housing sector more specifically.”
He added: “However, as a group, Belvoir benefits from a high degree of recurring revenue with 61% of gross profit derived from lettings and just 16% dependent on estate agency. Meanwhile, our financial services division has a substantial client base to which we sell a wide variety of financial products, with no excessive dependency on new mortgage sales alone.”
“Unlike a corporate model, Belvoir draws on the resolve and entrepreneurial spirit of 308 franchisees and 175 financial advisers, all of whom are motivated to sustain their business throughout this period, and to return to growth and succeed long term.”
He concluded: “Whilst 2020 will undoubtedly be a difficult year for the property market, our franchisees and advisers have the knowledge and resilience to overcome and indeed benefit from such challenges in the sector.”