LSL Property Services reported a 24% rise in underlying operating profit from its estate agency franchising division as acquisitions helped expand its branch network and lettings portfolio.
Underlying operating profit from the division increased to £3.9m during the first half of 2026, while revenue rose 2% to £13.2m.
Its underlying operating margin reached a record first-half level of 30%, supported by restructuring carried out last year.
The division’s franchise footprint increased by 13 branches, while seven lettings-book acquisitions added around 1,380 properties under management.
LETTINGS GROWTH
LSL ended the period with 38,660 properties under management, 4% more than a year earlier.
The group also acquired a small six-branch franchise network on the South Coast and said it had continued investing in its conveyancing proposition to provide additional services to franchisees.
LSL said lettings had remained resilient following the first phase of the Renters’ Rights Act, with underlying landlord activity stable across its network.
Significantly, the group said it had seen “no evidence of the material landlord withdrawal anticipated by some industry commentators”.
It believes the additional regulatory and administrative requirements facing landlords could create opportunities for its franchisees to attract more self-managing landlords and grow recurring revenue.
SALES MARKET
The wider residential sales market was more subdued, with transactions during the first half falling 4% year-on-year to 552,000.
LSL attributed much of that comparison to the acceleration in transactions ahead of the stamp duty changes introduced in April 2025.
It said London had been softer, although the group has limited exposure to the capital.
GROUP PROFITS RISE
Across LSL as a whole, revenue increased 3% to £92.3m, while underlying operating profit rose 11% to £15.9m.
Statutory operating profit increased 14% to £12.5m and the group ended June with net cash of £22m.
Adam Castleton (main picture, inset), Group Chief Executive Officer of LSL Property Services, said: “LSL performed well in the first half, delivering further profit and margin growth and strong cash generation. Our markets developed broadly as expected despite prevailing negative sentiment.
“We launched a Group-wide transformation programme expected to improve our structural cost-effectiveness and leverage our scale. The programme will simplify how we operate, strengthen our capabilities and support further structural improvement in margins.”
£5M TRANSFORMATION
The transformation programme is expected to generate at least £5m of annualised benefits as implementation progresses through 2027, at an exceptional implementation cost of £4m across 2026 and 2027.
LSL said trading since the end of June had been in line with expectations and it remained on track to deliver another increase in profit for the full year.
