Belvoir Group specializes in rental properties, with a focus on the Midlands and the North.
The company, founded in the 1990s and listed on the AIM in 2012, manages hundreds of estate agents and rental offices and manages properties on behalf of landlords and tenants.
Group profits have risen consistently for 26 years and CEO Dorian Gonsalves is determined to maintain and exceed this performance.
In the beginning, Belvoir focused exclusively on rental properties. In recent years, sales and mortgage advice have been added to the roster.
This spread of businesses helps make Belvoir more resilient to economic ebbs and flows. When sales are moderate, rentals get the wind in their sails. When the number of new mortgage applications decreases, the demand for refinancing advice increases.
Hang on: Belvoir Group specializes in rental properties, with a focus on the Midlands and the North
The company also benefits from a franchise model, with 240 franchisees running 335 offices across the country. Each agent acts like a mini business owner and passes on a portion of their sales to Belvoir, in return for support in areas such as marketing, regulatory, compliance, training and IT.
The approach works. Franchisees can focus on developing their business, while Belvoir provides the administrative backbone to help them succeed. Franchisees also tend to be entrepreneurial because their rewards are directly related to the amount of sales they generate.
Belvoir applies a similar strategy in the financial field, with more than 300 independent advisors who operate through the Mortgage Advice Bureau, a network that provides independent guidance in the field of mortgages and home insurance.
A mix of different divisions and a judicious acquisition strategy have helped Belvoir weather some of the toughest economic conditions in decades. Gonsalves even upgraded the group’s dividend policy at its interim results in September, with a 25 percent increase in the half-yearly payout to 5p per share.
Brokers are looking for a full year dividend of 11p, rising to 11.5p next year and 12p in 2025. Profits of £10.1m are expected for 2023, up 13 per cent to £11.4m in the next two years.
Growth should come not only from an improving economic climate, but also from closer cooperation between real estate agents, rental agents and mortgage advisors. Most of the group’s financial services experts acquire customers independently of their colleagues, but Gonsalves is working on an IT tool that will encourage cross-sales between divisions.
Midas judgment: Midas recommended Belvoir in 2016 when the stock was at £1.21. Today the shares cost £2.40. The increase is notable compared to similar products, but the price is still down from the highs of two years ago. That should change, with agents targeting £3.75 within 12 months.
Demand for rental properties is at a record high, while sales are holding up better than many expected. Gonsalves is also a steady hand at the helm, having spent his entire career in the market, including a five-year stint as director of the Property Ombudsman. Hold these shares.
Traded on: GOAL ticker: BLV Contact: belvoirgroup.com or 01476 584 900