Hello, and welcome to LSL's half-year results presentation. Thank you for joining us. I'm Adam Castleton, Group Chief Executive. I'm joined by David Tylak, our Group CFO. I'll start by taking you through the key highlights from the first half. David will then take you through the financial performance in more detail before I come back to talk about the opportunities ahead. So let's start with the highlights. I think there are three things to take from our first half results. Firstly, we delivered further profit and margin growth. And importantly, this was achieved in markets which developed broadly as we expected. They were not particularly strong, but nor have we seen the deterioration that some of the wider market commentary might suggest. Against that backdrop, the group has continued to perform well. Secondly, we launched our group-wide Transformation Programme, focused initially on finance and procurement. We expect this to deliver at least £5 million of annualised benefits, with the benefits building through 2027. Transformation will continue to be an important part of how we strengthen LSL. Looking ahead, technology is likely to become an increasingly important focus as we consider how we can use it more effectively to simplify processes, improve how we work and support our businesses we make these changes from a position of strength it is more than cost reduction it is about creating a simpler more effective lsl making better use of our scale and capabilities and providing a stronger platform for future growth and thirdly we remain on track for the full year trading since the period end has developed as anticipated and our expectations for 2026 remain unchanged. So overall a good first half, further financial progress, a significant transformation program now underway and confidence in our expectations for the year. What I think is important on this slide is not any of these numbers, it's the combination. Profits are growing, margins are expanding, cash conversion remains high and our return on capital employed has increased again to 36%, around twice the historic level for LSL. That reflects the very different shape of the group today. We are capital light, we have structurally stronger margins and the business generates significant cash. And importantly, our revenue mix is much more resilient than many people might assume. The majority of group income is not directly dependent on residential property transactions. given our significant income streams from lettings, remortgaging, platform fees and other recurring or repeatable revenue streams. Our resilient model means we can continue to invest selectively where we see attractive returns, while at the same time returning capital to shareholders. In the first half, we return more than £12 million through dividends and share buybacks while maintaining a strong balance sheet. And we still see further opportunity. Our group margin is now 17%, compared with 16% in the first half last year. And our transformation programme supports our ambition to move that above 20%. So for me, this is increasingly a high-return, cash-generative and resilient business, with further opportunity to improve its economics. That is a very attractive combination. Turning briefly to our markets, overall they developed broadly as we expected during the first half. The residential sales market was slightly smaller year-on-year, as expected, largely because of the stamp duty-related pull forward in the comparative period. Purchase transactions remaining around long-term averages, with some softeners in London where our exposure was relatively limited. The mortgage market continued to recover, and remortgaging was particularly strong as significant volumes of fixed-rate products reached maturity. That is important for LSL because remortgaging supports activity across both financial services and surveying. Lettings also remain resilient. We have successfully supported the implementation of the renters' rights changes across our network. Contrary to some of the more negative commentary, we have not seen evidence of significant landlord withdrawal. So overall fairly ordinary markets broadly as we expected and a backdrop against which we have continued to perform. Alongside the financial performance we've remained very active commercially across the group. In surveying we've renewed important lender contracts, acquired further allocation wins and continue to develop our AVM proposition. In estate agency franchising we've expanded the network, acquired letting books, added recurring income and invested further in areas such as conveyancing. We've also completed selective bolt-on acquisitions, also in financial services, where they improve our capability or strengthen our market position. And pivotal growth has continued to grow profitably, building scale through further acquisitions and self-financing. The common theme is discipline. We are investing where we can strengthen our businesses, deepen our relationships and generate attractive returns. So, even in fairly ordinary markets there has been a lot of meaningful commercial progress across LSL. We've also been changing how LSL operates. The transformation program is the most visible example. It is about simplifying the way we work, making better use of great capabilities, group capabilities and reducing unnecessary duplication. There was a broader change taking place as well. We're working more collaboratively across businesses which historically operated independently. We've strengthened management and expertise, we are improving communication across the group and continuing to develop a more accountable and connected culture. We've also worked hard to improve how LSL is understood externally. The business has changed significantly over recent years but market understanding had not always kept pace. We've increased engagement with both existing and prospective investors and we are seeing much greater interest in the group and in the opportunity ahead. So there's a lot happening beneath the headline financial performance commercially, organisationally and in how we operate as one group. I'll now hand over to David. David joined us at the beginning of the year and has settled into the business extremely quickly. His experience in transformation is already proving valuable with measurable benefits. He'll now take you through the financial performance in more detail including the economics of the transformation programme. David.
Thank you Adam. I will now take you through the group's financial performance and the results from each of our divisions. I'll then cover the transformation programme, cash generation, capital allocation and our outlook for the full year. Let me begin with the group's headline financial results. The group delivered well in the first half. Revenue increased by 3% to $92.3 million, our underlying operating profit increased by 11% to $15.9 million. Profit grew materially ahead of revenue, lifting our underlying operating margin by 130 basis points to just over 17%. This is our highest first-half margin for more than 15 years. The group also remains highly cash generative, with operating cash conversion of 91% over the last 12 months. Return on capital employed increased from 31% to a record 36%, demonstrating the attractive returns generated by our capital light business model. Adjusted diluted earnings per share increased by 14% to 11.7 pence, benefiting from higher profit after tax and our share buybacks. Taken together, these results show that stronger margins and disciplined capital allocation are translating into improved shareholder returns. I will now explain the principal movement in our underlying operating profit. We started with underlying operating profit of 14.4 million in the first half of 25 and delivered 15.9 million this year. That represents an increase of 1.5 million or 11%. Changes in in our underlying markets contributed 0.7 million with stronger remortgaging and product transfers more than offsetting lower housing transactions improved performance across our businesses contributed a further 1.7 million over and above the market impact and i'll explain these drivers as i take you through the divisions salary inflation and higher national insurance combined were $2 million of costs. We also invested a further $0.9 million, principally in the financial services technology platform. Cost management actions contributed $1.9 million, including a further half a million reduction in our central costs. The key point is that our operating actions absorb both wage inflation and investment, allowing us to deliver double-digit profit growth and significant margin expansion. I will now turn to the divisional performance, starting with Surveying and Valuation. Surveying and Valuation comprises three closely aligned businesses. These are our core B2B valuations operations, our B2C survey business and asset management, which provides property recovery and specialist receivership services to lenders. The division delivered another strong performance. Revenue increased by 6%, underlying operating profit increased by 11%, and margins improved to approximately 23%. Within B2B valuations, we successfully renewed every contract during the period, and secured additional allocations from two major lenders. The B2C survey business also continued to grow, with strong customer satisfaction reflected in its 4.8 Trustpilot score. Asset management was a standout performer, with revenue increasing by approximately 44% to 3.7 million and an operating margin of more than 50%. percent. Although it remains relatively small within the division today, it is already highly profitable and has clear potential for further growth. Alongside our proprietary data and automated valuation capabilities, it also gives the division several routes to further profitable growth. I will now turn to financial services. Mortgage lending performed well in the first half with revenues increasing by 8%, keeping pace with the market and maintaining or increasing our share across our principal mortgage channels. Advisor productivity also improved and overall revenue per advisor increased by 12%, although product mix reduced the average fee per completion. Revenue reduced by 3% and underlying operating profit reduced by 0.9 million, principally reflecting the investment in the new CRM and lower advisor numbers, including the departure of protection-only firms last year. There are clear areas for improvement, including increasing protection penetration and driving advisor productivity. With around 12% of all UK mortgages flowing through our advisor network, we have genuine scale and reach. At its core, this is a very good business and our priority is to translate that position into stronger growth and returns. Turning now to estate agency franchising. This division delivered an excellent set of results. UK housing transactions were 4% lower in the period versus the prior year which had benefited from stamp duty changes in April 25. Against that stronger comparator divisional revenue increased by 2% to $13.2 million. Underlying operating profit increased by 24%, with the margin expanding at approximately 6 percentage points to a record first half level of 30%. This demonstrates significant resilience and operating leverage. The managed lettings portfolio increased by 4%, while average income per managed property increased by 3%, strengthening the division a recurring revenue base. We are also investing selectively for future growth. Six new branches and seven supported letting book acquisitions expanded the network, while the purchase of the national search services and investment in collaborative conveyancing strengthened the conveyancing proposition. Having covered the three divisions, I will now turn to the Group Transformation Programme. When I look across LSL, I see a great deal of capability, but also a clear opportunity to bring the group closer together to make it work more effectively. Transformation is a key underpin of delivering OneLSL, a simpler, more connected and more profitable organisation. My immediate priority is our support functions, which have historically operated independently within each of the businesses. We are redesigning the underlying processes, removing duplication and creating better, broader roles for our colleagues. I am confident in our ability to deliver this. We have put together an experienced team that combines a deep understanding of LSL with specialist transformation expertise. And we remain on track to deliver 5 million of annualised savings progressively through 2027. Over the medium to long term, I believe there is a wider opportunity to use technology across our front office operations to improve productivity and bring us closer to our customers. We will pursue that opportunity with discipline and invest where we are confident that returns will be compelling. I will now turn to the group's cash generation. The group remains highly cash generative with operating cash conversion of 91% over the last 12 months. We begin the period with net cash of $27.8 million and cash from operations contributed just over $17 million. We invested $9 million in acquisitions and capital expenditure. Working capital and depreciation movements represented a further $6.4 million of outflow. The next line on the bridge combines the $10 million repayment of loan notes with $1.9 million of exceptional expenditure and $3.4 million of taxes paid. Together, these items produced a net cash inflow of $4.7 million, taking our cash before shareholder distributions to $34.2 million. We then returned just over $12 million to our shareholders. After these investments and distributions we ended the period with a net cash of 22 million. That cash generation and balance sheet strength support the capital allocation framework I will cover next. Our capital allocation framework remains unchanged. Our first priority is organic investment that can improve the performance and long-term value of our existing businesses. This includes investment in technology, capabilities and the transformation program. Our second priority is selective or inorganic investment through acquisitions and related opportunities that expand our existing businesses or add capabilities. Alongside investment for growth, we maintain an attractive and sustainable dividend. Our dividend policy is based on 30% of underlying operating profit. We have maintained the interim dividend at 4 pence per share. We also continue to return capital through share buybacks. We completed the previous £7 million programme in January and immediately commenced a new programme of up to £12 million, which remains on track to be completed by January 27. The balance between investing in the future of the Group and returning capital to shareholders will reflect the opportunities available rather than a fixed allocation formula. We will continue to assess each use of capital against its expected return, while preserving the balance sheet strength that gives us the capacity to act when an attractive opportunity arises. I will finish with our outlook for the year. Our businesses continue to perform in line with expectations. For 26, we expect increased revenue and another year of profit growth. This would represent the group's fourth consecutive year of profit growth. We continue to expect operating cash conversion between 75% and 100%, together with capital expenditure between 3 and 5 million. The group has strong market positions, high cash generation and a clear route to further margin improvement. these characteristics underpin our confidence in the outlook and our ability to generate attractive long-term returns with that i hand you back to adam and for the strategic and operational update thank you david what you've heard is a business that continues to deliver financially with strong cash generation and high returns and where we've now launched a transformation program that will improve the economics and capabilities of the group.
But I want to finish on why I remain excited about the opportunity ahead. LSL has a very distinct position across the UK residential property and mortgage ecosystem. We work with lenders, mortgage brokers, estate agencies, landlords, buyers, sellers and homeowners. We have strong relationships and capabilities across each of those areas. Historically, those businesses have been run independently. One MSL is about connecting them much more effectively, making better use of our relationships, our expertise, our data and technology across the group. We've already started that journey. The transformation programme is part of it, but it is broader than that. It is about getting more value from the strengths we already have. So, to finish, we've delivered another good first half, we remain on track for the year, and we're continuing to improve the quality and economics of the group. We have strong businesses, a highly cash-generative model and a growing opportunity to create more value by bringing those strengths together. My conviction in the opportunity for LSL remains very high. Thank you.
