Belvoir Group PLC (LON: BLV) share price surged 8.79% after revealing that it expects to generate more revenues and profits than its initial forecasts during the current financial year.
The property franchise group noted that trading during the first ten months of the year to the end of October had surpassed its expectations driven by unprecedented demand for rental properties in the UK since 2007.
Belvoir Group noted that its property division, which accounts for 77% of the Group’s overall profits, had registered a 29% increase in profits driven by income from the lettings division, which was up 21%.
The property company revealed that rents had risen in all parts of the UK, driving its rental income higher. The acquisition of Nicholas Humphreys for £4 million in cash also contributed to the higher revenues as the company is focused on student lettings.
Belvoir confirmed that it expects its pre-tax profits to be “ahead of management’s expectations for 2021 and substantially ahead of 2020”.
The property group also saw a 65% surge in mortgage sales driven by the strong property market. As a result, it increased the number of mortgage advisers working for the company from 202 in January to 245 at the end of October.
Investors cheered the news, as evidenced by today’s rally higher. However, the company warned that it might face some challenges in 2022, but this could not dampen investor sentiment.
Dorian Gonsalves, Belvoir Group’s CEO, commented: “In 2021, we have seen our franchisees and mortgage advisers take advantage of an exceptionally strong sales market. The sector undoubtedly benefitted hugely from the Government’s decision to extend the stamp duty holiday until September 2021, following which we have seen a predictable slowing in the number of new instructions as the market normalises.”
Adding:
“We anticipate that given the ongoing pent-up demand from buyers, the market will return to more normal transaction levels in 2022. In the meantime, our current pipelines remain strong and support outperforming our end of year forecasts.”
Investors who missed out on today’s rally may be best served to wait for a pullback before jumping in.
*This is not investment advice. Always do your due diligence before making investment decisions.
Belvoir Group share price.
Belvoir Group share price surged 8.79% to trade at 260p, rising from Wednesday’s closing price of 239p.
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