Primis Network and TMA Club saw the number of protection cases completed and average premium rise slightly in the first half of 2023.
The firm saw pre-tax profits dip 20% as a result of the slower wider mortgage market but said it was still considering further mergers and acquisitions (M&A) activity.
In its interim results, parent company LSL Property services called protection sales by its advisers from January to the end of June “robust”.
“LSL’s network protection sales were robust despite the market conditions and the squeeze on household incomes, with revenue unchanged compared to H1 2022,” it said.
The firm added the performance was “encouraging” with cases completed by its network increasing by 1% to around 64,000 with average premium also up by 2%.
Profits, revenue and adviser numbers down
However, the tougher economy and mortgage market held the firm back as profit before tax dropped 20% to £7.1m from £8.9m during the same period last year.
Overall revenue for the whole group also dipped by 34% to £72.5m from £110.2m.
LSL said that the challenging market background led to caution by network members on adviser levels, with the number of advisers using its network down to 2,718 – this was down 5% from 2,867 in January and down 7% from 2,930 a year ago.
However, it added the recruitment pipeline at 30 June was the highest since September 2021, which will benefit future periods, as will the acquisition of TenetLime, following Financial Conduct Authority (FCA) approval.
LSL also noted the rise in mortgage rates has resulted in an increase in lower margin product transfer cases, as lenders remain conservative with respect to new borrowers, and this has had some impact on revenue and profits.
This echoed many market themes reported by Mortgage Advice Bureau in its interim results yesterday.
Considering more M&A activity
LSL Group chief executive David Stewart said: “During the period we have successfully executed the transition of estate agency to a franchise business.
“We have similarly focused our financial services division to become an exclusively business-to-business service provider, completing the transfer of each of our direct-to-consumer businesses to Pivotal Growth.
“In August, we also announced the acquisition of TenetLime, which adds up to 278 advisers to our network, subject to FCA approval.
“Our strong balance sheet continues to provide opportunities to consider value-enhancing M&A and invest in organic growth initiatives in our core segments, while maintaining our interim dividend at 4p per share.”
