End of year financial results
Outstanding growth for Land operation
Continued growth for New Homes business
Growth in profits and market share signals strong year for Connells Group
End of year financial results
Connells Group today announces strong results for the year ended 31 December 2017 with pre-tax profits up from £73.4m to £104.2m over the year (up 42% on 2016), and outstanding performance in all of the following key measures of success:
- Total income up 9% to £457.2m;
- Revenue up 5% to £416.1m;
- Increased market share and, with the housing market experiencing a 14.7% decline in transactions compared to 2016*, Connells Group’s instructions were down just 2%, sales down 3% and exchanges down 4% - a good result in a tougher market;
- Despite the above reduction in UK house sales, Connells Group continued to increase its market share, marketing 6% of properties available for sale in the UK in 2017**, offering more houses for sale than any other agent in the UK;
- Mortgage Services income up 13%; 11% increase in number of mortgages arranged and total value of mortgages arranged up 17%, generating £9.5bn worth of lending;
- Lettings income up 9% and profits up 29%;
- A record 9,000 new homes sold;
- Land, professional and investment income up 20%;
- 5% rise in income from Connells Survey & Valuation; a number of major contracts won and existing ones retained, profits up 5.4%;
- Conveyancing income up 3% despite lower transaction numbers across the UK housing market;
- High street network expanded further to 591 branches as at 31 December 2017.
The results include a gain of £38.5m from the disposal of shares in ZPG Plc (2016: £17.0m). Financial results can be summarised as follows:
- Total pre-tax profits (PBT) increased by 42% to £104.2m (2016: £73.4m)
- Underlying PBT increased by 14% to £64.9m (2016: £57.1m)
- EBITDA increased by 12% to £80.1m (2016: £71.7m)
“Our results show another standout performance from Connells Group and, importantly, in the context of a more subdued marketplace,” says Connells Group CEO David Livesey. “2017 presented a number of challenges for the industry, but we thrive on challenge and, again, we proved our resilience and maintained our position as the most successful and profitable estate agency and property services group in the UK.
“With the level of expertise within our business, our diversity of disciplines and through a continued focus on providing the best service to our customers and clients, we have increased both our profits and our market share. This is a tremendous outcome,” continues David.
Connells Group continued to invest in the business with a number of new branch openings, lettings acquisitions and the opening of a further head office location – Houghton Place, Dunstable – to provide additional capacity for its planned long-term business growth. Connells Group remains acquisitive.
2018 has started positively with a sales pipeline that is up on the previous year, a 31% increase in the number of people looking to sell their home and a 25% increase in applicants, when compared to January 2017.
“We are pleased to see increased activity in the first month of 2018 and we are quietly optimistic for the year ahead,” says David.
“We will continue to grow our business and invest in our people – they are our most valuable differentiator and the reason for our success. In a highly competitive marketplace, our results speak volumes about the quality of service we offer customers – our people deserve all the credit for these exceptional results,” concludes David
* Based upon published Land Registry data available for England and Wales at the end of January 2018.
** Based on Rightmove property listing statistics: 01 January 2017 – 31 December 2017.