Profit at estate agency group LSL Property Services has plunged by almost a third, as merger talks with rival Countrywide continue.
Group revenue slipped by 4% year-on-year during 2019 to £311.1m, while pretax profit dropped by 31% to £16m.
LSL attributed both falls to the costs of “reshaping” the branch networks of its Your Move and Reeds Rain businesses.
The group’ bank debt rose by 30% over the year, to £41.9m.
Chairman Simon Embley described the revenue and underlying operating profit – which rose by 3% –as “highly resilient… in the context of challenging residential market conditions and the introduction of the tenant fee ban”.
Market conditions so far in 2020 have been “encouraging”, Embley said, although he noted: “The situation regarding the Covid-19 virus is rapidly evolving and we have in recent days seen some slight softening of our lead sales indicators in estate agency.”
He added: “We are monitoring the situation very closely as it may create headwinds for our business in 2020 if changes in consumer behaviour impact residential property market conditions.”
LSL said that merger talks with Countrywide, confirmed on 24 February, are ongoing. “At this stage, there can be no certainty that any offer will ultimately be made for Countrywide,” it added. “LSL reserves the right to introduce other forms of consideration and/or vary the mix or composition of consideration of any offer.”
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