LSL Property Services reported an 11% increase in underlying operating profit to £15.9m for the first half of 2026, despite a 4% decline in residential sales transactions compared to the previous year.
Group revenue rose 3% to £92.3m in the six months to 30 June 2026, up from £89.7m a year earlier. Statutory operating profit climbed 14% to £12.5m, while the group’s underlying operating margin increased from 16% to 17%.
The company attributed the lower transaction volumes partly to 2025’s elevated activity ahead of stamp duty changes. The London market showed particular weakness, though LSL noted its limited exposure to the capital.
Estate agency franchising reaches record margin
LSL’s Estate Agency Franchising division delivered the strongest performance, with underlying operating profit rising 24% to £3.9m. Revenue increased 2% to £13.2m, while the division’s underlying operating margin reached a record first-half level of 30%, supported by restructuring implemented in 2025.
The franchise network expanded by 13 branches during the period, following the acquisition of a small South Coast franchise network and growth among existing partners. The group supported franchisees through the acquisition of seven lettings books, helping increase properties under management by 4% to 38,660.
LSL also invested in developing an end-to-end conveyancing proposition, with plans to roll out services across the wider group. This follows recent market reforms in property transactions.
Surveying division shows growth
The Surveying & Valuation division increased revenue by 6% to £56.2m. Underlying operating profit rose 11% to £13.1m, with the margin increasing from 22% to 23%. Mortgage revenue increased 8%, with LSL maintaining an 8.9% share of total mortgage lending.
However, total Financial Services revenue declined from £23.5m to £22.8m, with underlying operating profit falling from £4.3m to £3.4m. LSL attributed this decline to its previous exit from several protection-only firms and continued investment in a new CRM system.
Transformation programme targets £5m savings
The company announced a group-wide transformation programme aimed at simplifying operations and reducing duplication. LSL expects the programme to deliver at least £5m in annualised benefits as implementation progresses through 2027, with £4m to be spent on implementing changes across 2026 and 2027.
Chief executive Adam Castleton 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.”
The group is targeting an underlying operating margin of more than 20%. After the period ended, LSL completed a small regional acquisition expected to add around 50 advisers to its PRIMIS network, reflecting industry consolidation trends.
LSL reported net cash of £22m at the end of June and maintained its interim dividend at 4p per share. The company’s £12m share buyback programme remains on course for completion by January 2027. The board stated that trading since June has developed as expected and anticipates another increase in profit for the full year 2026.
