As with GMG’s other wholly owned companies, 2008/09 was a year of challenges and changes for our property services business.
Despite the major deterioration in the UK housing market, the division maintained its clear lead in the property software marketplace.
The business completed the acquisition of CFP Software, the leading property management software provider, in March 2008. This was a well-timed acquisition given that the property management market has always proved counter-cyclical to the residential property market.
Estate agents’ investment in staff, premises and technology ground to a halt during the year, which had a material impact on the division.
Many of GMG Property Services’ clients experienced significant trading difficulties in 2008/09. The company saw approximately 10% of its clients leave the residential estate agency marketplace. Those remaining in the UK property market continued to report extremely tough trading conditions.
The overall decline in the estate agency market was approximately 20%, meaning that GMG Property Services outperformed the trend. This can be attributed largely to its broad client mix and lack of dependency on any one single client group. Even after the decline in the number of clients, the business continued to serve over 6,500 estate agency branches with its software.
The company made an operating loss before exceptionals and amortisation of acquired intangibles of £1.9 million (2008 loss £0.2 million) on turnover of £10.7 million (2008 £7.7 million). The statutory operating loss for the division was £11.6 million (2008 £2.1 million).
During the year the thinkproperty.com consumer portal was repositioned as a business-to-business service with a free-to-list model. We expect that this repositioning will see GMG Property Services move into profit in 2009/10.
The division’s strategy of providing leading technology solutions to UK property professionals has not changed, but it has had to revise its approach in a number of areas to reflect the extremely tough market.
In addition to the change to thinkproperty.com, the division underwent a major restructuring, resulting in a number of job losses.
Despite market conditions, the business continued to launch new products and initiatives. CFP Software launched a new version of its Winman ADB product, while Vebra launched Vebra Live using a common technology platform first seen in the Encore Live product, which took the estate agency marketplace by storm in late 2007.
CFP Software received several nominations for leading business awards in 2008, making the final on each occasion – a real credit to the hard-working team. CFP Winman was accredited by the ICAEW for property management software, which was a first for the industry.
GMG Property Services moved to new premises in Luton during the year to allow for future growth of the business once the market recovers.