7 June 2016 – acquisition and fund raising

The group has conditionally agreed to acquire Northwood GB Limited, the largest remaining UK lettings franchise, which operates 86 outlets nationwide.  The acquisition is to cost up to £22m and assuming the deal is completed, Belvoir will be the largest property franchise group in the UK, with over 300 outlets and 54,000 properties under management. The initial consideration is £11.5m and will be funded through a mixture of cash and the issue of new shares.  The balance of the consideration is dependent on the performance of Northwood over the next two years depending on the performance of the company.  The acquisition appears to have been well-received by the market as the shares have been marked up on the news and with the deal expected to be earnings enhancing in the current financial year, we retain our recommendation of BUY.