17:04 PM, 9th January 2012, About 12 years ago
Lettings firm Belvoir intends to join the City’s Alternative Investment Market to raise capital for further expansion.
The specialist lettings agency runs 142 franchised offices – and wants to raise up to £8 million from floating on AIM.
Almost half the cash will go on adding another 60 branches to the network, bringing the number up to 200 by 2016.
The rest will cover business costs and a one-off payment to founder Stephanie Goddard, who is leaving the firm under the management of her husband Mike.
The couple started the lettings agency, based in Lincolnshire, in 1995.
Mr Goddard, 63, will keep a 65% stake and will stay on throughout the flotation as chairman.
The business is based on a franchise model that offers exclusive areas to investors in return for 12% commission on the gross turnover of each office.
“The formula works,” said Mr Goddard. “Moving to AIM will raise our profile and help us tap in to the huge growth in the lettings market. We’re a cash-generating business and have every intention of becoming a yield stock, paying out excellent dividends.”
Belvoir filed figures showing a £3.3 million turnover with a pre-tax profit of £1.4 million in 2010.
The firm has a 1.5% share of the UK lettings markets – rivals are LSL Property Services with around 570 branches, including the Your Move and Reeds Rains brands; Countrywide with 1,300 offices and another franchise firm, Martin & Co with 175 offices. These firms also act as estate agents.
“We are not a seasonal business – people need to rent a property all year round,” said Dorian Gonsalves, Belvoir’s managing director. “We also feel that we are a recession-proof business – we have grown through the housing boom and the downturn.”
Some of the capital raised in the float will aid new franchisees with loans to cover £100,000 start-up costs, including an initial £22,500 set-up fee to the firm.
AIM is the London Stock exchange market where smaller companies can seek the capital they need to expand.
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