Belvoir Group answers investor questions following the company’s presentation at the Proactive Investors One2One Virtual Forum on 3 June
Q: What do you intend to do with the significant free cash flow generated this year?
Belvoir: We have already invested £4.6m of cash into our acquisition of the Nicholas Humphreys property franchise network and Nottingham Mortgage Services. That will utilise much of the surplus cash after payment of our dividend.
Q: The shareprice went nowhere for years before 2020. Why was that?
Belvoir: There were a number of factors that contributed to the suppression of our share price. The Government announced the ban on tenant fees in November 2016 but didn’t legislate to introduce the ban until June 2019. This left an uncertainty hanging over the sector. Whilst we were confident that our franchises would make changes to mitigate the loss of trend as by fees, investors were understandably cautious. At the same time we had an overhang in relation to shares being sold at regular intervals by our founder Mike Goddard. Mike has now disposed of his holding all bar a few that he intends to keep long term. In 2019 the economic uncertainty of Brexit and the General election also keep our sector relatively subdued. During this period from 2016 to 2019 Belvoir continued to grow organically and by acquisition. We enlarged our property franchise networks and diversified into financial services. The property sector and our share price both reacted positively immediately after the 2019 election and through to February /March when the fears around COVID-19 emerged. After the initial shock that affected all shares, our price has recovered and grown steadily Our business demonstrated resilience during the first lockdown and has benefitted from the buoyant property market since last summer. We caught up on our missed 2019 final dividend and repaid all Government Covid-19 support money. Overall, investors have seen consistent growth underpinned by a resilient business model operated by an experienced management team.
Q: When will the company next announce results?
Belvoir: Our interims are out in the week commencing 6th September
Q: What financial metrics is management compensation based on?
Belvoir: A fixed basic salary plus annual bonus linked to performance and a longer term share option plan linked to growth.
Q: Could you explain more about the relationship with MAB?
Belvoir: Brook, a wholly owned subsidiary of Belvoir, is an appointed representative of MAB. Our advisers operate under the MAB system and MAB take a percentage of commission earned.
Q: I am a shareholder of Belvoir and Property Franchise Group. I feel they have an element in Ewemove which Belvoir would benefit from matching. Thoughts?
Belvoir: We have looked at other home-based models and feel that there is a higher failure rate than…
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