LSL Property Services plc Annual Report 2023

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FY2023 Annual Report · LSL Property Services plc

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Annual Report and Accounts 2023

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Annual Report and Accounts 2023

Overview, Strategic Report and Directors’ Report

Overview
Financial Highlights
2024 Outlook
About LSL and Our Markets
Chair’s Statement

01
02
03
06
07 Group Chief Executive Officer’s Review

11
14
14
16
18
19
21
23

29
34

50
56

61
65

85
92

Strategic Report
Purpose, Strategy, Culture, Values and Business Model
Financial and Divisional Reviews:
– Financial Review
– Financial Services Division
– Surveying & Valuation Division
– Estate Agency Franchising Division
– Balance Sheet Review
Our Stakeholder Engagement Arrangements including
s172 Companies Act 2006 Statement
Principal Risks and Uncertainties
Non-Financial and Sustainability Information Statement
including TCFD and CFD reporting
Environmental, Social and Governance (ESG) Report
The Board and The Executive Committee

Directors’ Report (including Corporate Governance Reports
and Committee Reports)
Statement of Directors’ Responsibilities in Relation to the
Financial Statements
Report of the Directors
Corporate Governance Report including Nominations
Committee Report
Audit & Risk Committee Report
Directors’ Remuneration Report including Remuneration
Committee Report

Financial Statements
114

Independent Auditor’s Report to the Members of LSL
Property Services plc
123 Group Income Statement
124 Group Statement of Comprehensive Income
125 Group Balance Sheet
126 Group Statement of Cash Flows
127 Group Statement of Changes in Equity
128 Notes to the Group Financial Statements
181 Parent Company Balance Sheet
182 Parent Company Statement of Cash Flows
183 Parent Company Statement of Changes in Equity
184 Notes to the Parent Company Financial Statements

Other Information
198 Definitions
203

Shareholder Information (including forward-looking
statements information)

We are one of the largest providers of services to mortgage
intermediaries and estate agency franchisees. We also provide
surveying and valuation services to seven out of the eight
largest lenders in the UK.

For further information about our Group, please visit our
website: lslps.co.uk.

Forward‑looking statements

This Report may contain forward-looking statements with
respect to certain plans and current goals and expectations
relating to the future financial condition, business performance
and results of LSL. Further information about forward-looking
statements can be found in the Shareholder Information section
on page 203.

Financial Highlights
The Group’s strategic transformation means our 2023 financial results are less directly comparable to 2022.
Our key financial highlights are:

Group Revenue
(Continuing operations only)

Group Underlying
Operating Profit
(Continuing operations only)

£144.4m

£10.3m

(2022: £217.5m)

(2022: £29.9m)

Group exceptional costs
(Continuing operations only)

Net Cash

£(13.8)m

£35.0m

(2022: £(48.3)m)

(2022: £40.1m)

Full year financial metrics1

Group Revenue (£m)

Group Underlying Operating Profit from total
operations3 (£m)

Group Underlying Operating margin (%)

Group Underlying Operating Profit from
continuing operations4 (£m)

Exceptional gains (£m)

Exceptional costs (£m)

Group operating profit/(loss) (£m)

Profit/(loss) before tax (£m)

Loss from discontinued operations4 (£m)

Basic Earnings per Share5 (pence)

Adjusted Basic Earnings per Share5 (pence)

Net Cash6 at 31 December (£m)

Final dividend per share (pence)

Full year dividend per share (pence)

Restated2
2022

217.5

Var

(34)%

35.8

11%

(74)%

(600)bps

29.9

0.7

(48.3)

(21.7)

(23.8)

(36.5)

(26.0)

27.6

40.1

7.4

11.4

(66)%

71%

117%

121%

(26)%

130%

(72)%

(13)%

–

2023

144.4

9.3

10.3

9.3

(13.8)

3.7

4.9

(46.1)

7.9

7.6

35.0

7.4

11.4

Notes:
1 Stated on basis of continuing operations unless otherwise stated. Refer to notes 2 and 6 to the Financial Statements.
2 See note 36 to the Financial Statements for details regarding the restatement.
3 Group (and Divisional) Underlying Operating Profit is before exceptional items, contingent consideration assets and liabilities,

amortisation of intangible assets and share-based payments. Refer to note 5 to the Financial Statements for reconciliation of Group
and Divisional Underlying Operating Profit to statutory operating profit/(loss) for continuing, discontinued and total operations.
4 Following the conversion of the entire owned estate agency network to franchises in H1 2023, this was classified as a discontinued

operation and is now presented as such in the Financial Statements. Refer to notes 2 and 6 to the Financial Statements.

5 Refer to note 12 to the Financial Statements for the calculation.
6 Refer to note 35 to the Financial Statements for the calculation.

Other InformationFinancial StatementsStrategic ReportDirectors’ Report (including Corporate Governance Reports and Committee Reports)Overview

2024 Outlook

• 2024 has started strongly with improving sentiment and lower mortgage rates driving more activity across our core markets. We have seen
an increase in mortgage approvals as well as housing transactions and the start of a normalisation in product mix in our mortgage business.
These conditions have particularly benefited our Surveying & Valuation business, where there has been a very substantial increase in activity
and profits.

• It was against this background of improving activity and Group trading that we issued a trading update on 6 March, since which time trading
has remained ahead of expectations. At the end of Q1 2024, Group Underlying Operating Profit was materially ahead of the same period in
2023. This improved trading reflects better market conditions as well as the benefits of the new Estate Agency franchise model, improved
lender contracts, and our decision to retain surplus capacity throughout the second half of 2023 in our Surveying & Valuation business.

• Although we retain a degree of caution, inflation data still suggests that interest rates will reduce in 2024, which would help support our

markets. This, together with the strong performance since our recent trading update on 6 March, reinforces the Board’s confidence, and our
expectations for full year Underlying Operating Profit have increased further.

About LSL and Our Markets

About LSL

Unless stated otherwise, information in this section of the Report is as at 31 December 2023.

We are one of the largest providers of B2B services to the UK’s property and mortgage market. We provide services to mortgage intermediaries
and estate agency franchisees, and valuations to many of the UK’s largest lenders. Details of our business model are included in the Purpose,
Strategy, Culture, Values and Business Model section of this Report.

We have three Divisions:

• Financial Services

• Surveying & Valuation

• Estate Agency Franchising

Financial
Services

Surveying &
Valuation

Estate Agency
Franchising

One of the UK’s
largest mortgage and
insurance networks

One of the UK’s
largest surveying and
valuation businesses

One of the UK’s
largest providers of
estate agency
franchise services

Financial Services

One of the UK’s largest mortgage and insurance networks
We provide compliance and other services to members of our Financial Services Network. Together, the PRIMIS Mortgage Network and The
Mortgage Alliance (TMA) make up one of the UK’s largest mortgage and insurance networks. Following our acquisition of TenetLime Limited
in February 2024, PRIMIS increased its number of advisers to 2,913 and 1,153 firms, with a mortgage market share of more than one in ten UK
purchases and remortgages.

Pivotal Growth
Pivotal Growth is a joint venture established in 2021 with Pollen Street Capital to execute a ‘buy and build’ strategy of mortgage brokers. Pivotal
Growth has made a number of acquisitions and now has more than 400 mortgage advisers.

Surveying & Valuation
Our Surveying & Valuation Division includes e.surv, one of the UK’s largest surveying and valuation businesses, and Walker Fraser Steele
Chartered Surveyors, which services the Scottish market. e.surv is one of the UK’s biggest employers of Royal Institution of Chartered Surveyors
(RICS) registered surveyors, with 472 (FTE) surveyors, and counts seven of the UK’s eight largest lenders amongst its clients. e.surv is rated
Excellent on the review platform Trustpilot, with a score of 4.8 stars from over 5,000 verified reviews.

Since 1 April 2023, the Division also includes our asset management businesses, LSL Corporate Client Department and Templeton LPA, which
were previously included in the Estate Agency Division (now the Estate Agency Franchising Division). They specialise in managing the sale of
residential properties on behalf of corporate clients and property investors.

Estate Agency Franchising
We provide estate agency franchising services, such as brand marketing and commercial and IT support, to a network of over 300 territories
across the UK. These territories are independently managed and operated by Estate Agency franchisees under various brands, including Your
Move and Reeds Rains, as well as several local brands. All franchisees operating our brands won either Excellent or Exceptional status in Sales
and/or Lettings at the EA Masters Awards, for inclusion in the Best Estate Agency Guide 2024.

We also own other specialist businesses which support franchisees with related product services:

– LSL Land & New Homes provides a complete range of services for house builders, developers and investors of all sizes, which can be used by

all franchisees.

– Homefast provides conveyancing panel management and support services to our franchisees and their customers.

Other InformationFinancial StatementsStrategic ReportDirectors’ Report (including Corporate Governance Reports and Committee Reports)OverviewAbout LSL and Our Markets

Our customers’ end markets

Demand for our products and services is driven primarily by the UK mortgage market in the Financial Services and Surveying & Valuation
Divisions, and by the UK housing and lettings market in the Estate Agency Franchising Division. In addition, our Financial Services businesses
distribute significant numbers of protection assurance policies. There is some correlation between the UK housing and mortgage markets,
although remortgages, product transfers and assurance products are significant parts of the mortgage market and are often not correlated with
the housing market.

Mortgage market
Demand for mortgages reduced against a market backdrop of rising interest rates and higher mortgage costs in 2023, whilst the intermediary
share increased slightly2:

• Total gross mortgage lending1 in 2023 was £224bn, 29% lower than the prior year (2022: £314bn) with a continued shift towards refinancing.

Purchase mortgages accounted for only 59% of total lending (2022: 61%).

• The proportion of mortgage lending placed through financial advisers2 increased to 84% in 2023 (2022: 81%).

• Total mortgage approvals for house purchases3 were down 23% to 580,000 in 2023, with demand soft throughout the year due to affordability

issues.

• Remortgage (and other)3 approvals were down 34% on 2022, while remortgage and other lending was 25% behind as consumers faced

uncertainty in a volatile market throughout much of the year.

Housing market – residential sales and lettings
2023 saw a reduced housing market, with transactions at their lowest level for 11 years:

• UK housing transactions4 in 2023 were 1,019,000, down 19% (2022: 1,258,000).

• Transactions were down 18% in H1 2023 and 20% down year-on-year in H2 2023.

• At the end of 2023, average house prices in England and Wales5 were 3.9% lower than a year earlier.

• Private rental prices paid by tenants in the UK rose by 6.2% in the 12 months to December 2023, and increased by 5.8% excluding London6.

Total Mortgage Approvals for House Purchase
’000s

Remortgage (and other) Volumes
’000s

9
8
7

2019

1
0
8

2020

4
3
9

2021

5
5
7

2022

0
8
5

2023

1
6
7

2019

8
8
5

2020

7
2
6

2021

1
0
7

2022

5
4
4

2023

Total Mortgage Approvals
’000s

Total Gross Mortgage Lending
£bn

9
4
5
1

9
8
3
1

2
6
5
1

6
5
4
1

5
2
0
1

2019

2020

2021

2022

2023

9
6
2

2019

6
4
2

2020

8
0
3

2021

4
1
3

2022

4
2
2

2023

Sources:
1 New mortgage lending by purpose of loan, UK (Bank of England) – Table MM23 (30 January 2024).
2 New residential lending sold direct and via intermediaries (excluding product transfers), UK Finance – Table RL8 (16 February 2024).
3 Approvals for lending secured on dwellings, Bank of England – Table A5.4 (30 January 2024).
4 Number of residential property transaction completions with value £40,000 or above, HMRC (31 January 2024).
5 House price index, England and Wales, LSL Acadata (January 2024).
6 Index of Private Housing Rental Prices, UK, ONS (January 2024).

Other InformationFinancial StatementsStrategic ReportDirectors’ Report (including Corporate Governance Reports and Committee Reports)OverviewLooking forward
Market volumes remain below historic levels
and consumer confidence is fragile. The
recent downward move in mortgage rates is
helpful and we have seen some early signs of
improvement in our end markets. Profitability
should improve materially for 2024
compared to 2023, reflecting the significant
restructuring of the Group’s cost base, a full
year benefit of the new operating model
for Estate Agency and a market recovery in
Surveying & Valuation.

Our strong balance sheet provides the ability
and confidence to seize organic and inorganic
growth opportunities for the Group. Each
Division has exciting future plans and the
Board remains confident in LSL’s long-term
prospects.

Darrell Evans

Chair of the Board and the Nominations
Committee
24 April 2024

Chair's Statement

I’m pleased to present the Annual Report
and Accounts for the financial year 2023.
I was appointed as Interim Non Executive
Chair of the Board with effect from 26
February 2024 following the departure of
David Barral. I have been on the Board as
an independent Non Executive Director
since February 2019. In this Report, you
will find an in-depth review of the Group’s
financial performance together with details
of the significant strategic progress made to
reshape the business. While much has been
achieved to structurally improve the Group,
the market backdrop has been very difficult,
and this has had a material negative impact
on our financial performance which is very
disappointing and in no way reflects the
potential of LSL. Our performance showed
stability in the second half of 2023 and has
improved significantly in 2024 as the Group
captures the benefits of our transformation
as well as the recovery in the housing market
boosting demand.

Major strategy progress against very
challenging market conditions
The Executive and Senior Leadership Team
has delivered major strategic progress during
the year, with the radical restructure of both
the Financial Services Division and the Estate
Agency Division, with the previously owned
and managed Estate Agency Division partially
sold and the remainder fully converted into
a franchise operation. These businesses are
now business-to-business platforms with
strong market positions, with significantly
reduced costs, low capital requirements and
potential for high cash generation.

The intense amount of work to deliver this
transformation should not be underestimated
and has been achieved against a very
challenging market, where housing
transactions were almost a fifth lower than
prior years and new mortgage lending was
down 29% versus 2022. I want to thank the
entire team for their dedication, hard work

and commitment. I have no doubt that the
Group will see the financial and operational
benefits over the coming years.

Balance sheet strength and dividend
The financial strength of the Group has been
significantly improved during the year, with
cash disposal proceeds, new credit facilities
put in place and lower future organic capital
requirements following our restructuring.
The combination of these factors alongside
our regular review of our capital allocation
structure, mean the Board has concluded
the Group has excess capital and announce
the implementation of a share buy-back
programme of up to £7m. Furthermore with
an expected material increase in profitability
in 2024, and our improved financial strength,
the Board is proposing to maintain the final
dividend at 7.4 pence per share with total
dividend of 11.4 pence per share for the year.

Board changes
After nine years of fantastic service, Bill
Shannon retired from the Board on 25 May
2023. I would like to thank him for his hard
work and dedication during this time and the
rest of the Board appreciate his generosity
during his handover.

After year end, David Barral, who was
appointed as Chair to replace Bill Shannon on
25 May 2023 left the Board on 26 February
2024. I was appointed Interim Chair on
26 February 2024 with the search for a new
Chair underway.

Simon Embley, whose term expires at the
2024 AGM, will step down from the Board
on 1 May 2024 as he wants to focus his
time on the expansion of Pivotal Growth.
Simon has been a driving force behind the
Group for many years and has made a huge
contribution to its success. On behalf of the
Board, I would like to sincerely thank Simon
for his contribution and we wish him well.

Group Chief Executive Officer's Review

2023 was a year of significant progress
with the Group’s transformation to a
structurally higher margin, lower capital
intensity business now complete. We have
restructured both our Financial Services
Network and our Estate Agency Franchising
Division which are now exclusively focused
on business-to-business services, with a
materially lower cost base and the potential
for higher free cash flow generation. As a
result of the work we have done, LSL is now
well-positioned to driver greater shareholder
value and to perform more consistently
through market cycles, supported by a strong
balance sheet.

With the benefit of the restructuring and
transformation programmes complete, the
Board and management are focused now
on maximising the operational potential
in the business and ensuring that this
potential is appropriately reflected in the
wider perceptions of LSL. To that end, the
Board also remains actively engaged with
its shareholders with the common aim to
drive shareholder value, including return on
investment and capital management.

Our strategic progress has been delivered
against a difficult market backdrop. Rising
interest rates and higher mortgage costs
significantly impacted the size and product
mix in the mortgage market whilst reducing
housing transactions by 19%, impacting
the financial performance in each of our
Divisions. We ended the year with some
early signs of green shoots in the mortgage
and housing market as mortgage rates
started to come down. Our full year results
are slightly ahead of the Board’s previous
expectations, and I am pleased to report that
2024 has started strongly, with performance
significantly ahead of prior year.

Our transformation programme has delivered
material cost savings and reduced our
cost base by 50% on an annualised basis.
Combined with a new bank facility, disposal
proceeds and enhanced financial flexibility
due to the Group’s strategic progress, we
have strengthened our balance sheet further.
We ended the year with £35.0m of Net Cash1.

Following the completion of our restructuring
programme, the Board has reviewed
the Group’s capital structure and capital
allocation policies. Going forward the Board
expects the Group’s strong profit to cash

conversion dynamics it has historically
displayed to continue, and the Group to have
only small working capital requirements.

With a clear prioritisation of organic growth
in our existing three Divisions, the Group only
needs to hold a small net cash position, of up
to £10m. Cash above this level after dividends
and capex requirements, expected to be £3-
5m per annum, will be considered excess and
returned to shareholders.

Capital allocation will prioritise organic
growth measured against a risk adjusted
return above the Group’s cost of capital.
While not a priority, the Board will continue
to assess inorganic growth, using the same
criteria of risk adjusted returns above the
Group’s cost of capital.

Given this framework, the Board has
concluded that LSL currently has £7m
of excess capital at this time, reflecting
cash requirements for Pivotal, contingent
consideration for TenetLime, and Estate
Agency franchise restructuring costs as
previously disclosed. The Group plans
to return this through a share buy-back
programme which it intends to commence
imminently.

I would like to thank all my colleagues for
their continued hard work and exceptional
support in the transformation of the Group.

Group results
The Group’s performance was naturally
affected by the headwinds that impacted the
mortgage and housing markets whilst the
significant transformation activity completed
in the year does means that our 2023
financial results are less directly comparable
to 2022.

Group Revenue from continuing operations2
was £144.4m (2022: £217.5m). After adjusting
for disposals and discontinued operations
in Estate Agency2, revenue was 10%3 below
prior year in a new lending market that was
29% lower by value and a housing market
down 19%.

Group Underlying Operating Profit from
continuing operations2,4 was £10.3m
(2022: £29.9m) and Group Underlying
Operating Profit from total operations2,4 was
£9.3m (2022: £35.8m). These figures include
costs carried in Surveying & Valuation above
demand, losses in businesses disposed of

in the period and one-off cost-of-living
payments for lower-paid staff.

Strategic priorities and development
The Group has made substantial progress
implementing its strategy to simplify the
business, reduce earnings volatility, and focus
investment in high growth areas.

Following this restructuring the Group now
has a strong platform across all three of
its Divisions to further develop strategic
priorities for each business and leverage
our market-leading positions as lending and
housing activity recovers from a difficult
market in 2023.

Estate Agency franchising model
Perhaps the most significant development
came in May 2023 when we confirmed our
plans to convert our entire owned Estate
Agency network to a franchising model and
in doing so LSL has become one of the largest
providers of estate agency franchise services
in the UK. The execution of the change has
gone well, and we are ahead of the plans we
set for reducing costs and increasing margin.

With the completion of the conversion of our
Estate Agency business to a franchise model
during 2023, we are now focused on further
enhancing our franchising expertise to bring
on new partners and develop our services for
our franchisees.

Prior to the announcement of our
franchising programme, in January 2023, we
announced the sale of our London estate
agency business, Marsh & Parsons, for total
consideration of £26.1m5 at an attractive
multiple. Its profit in 2022 was £1.6m. We did
not consider Marsh & Parsons was suitable
for our franchising operation.

Focus on B2B in Financial Services
The first half of 2023 also saw us take the
last steps to focus financial services activity
exclusively on business-to-business services,
through our PRIMIS Network and TMA
mortgage club. The disposals announced in
April 2023 of our mortgage, protection, and
general insurance brokerage firms, Embrace
and First2Protect, to Pivotal Growth, followed
on from transactions in January 2023 when
we similarly sold our new build focused
brokerage businesses, RSC and Group First, to
Pivotal Growth. These transactions simplify
our Financial Services Division, reducing
costs and reducing earnings volatility, whilst

Other InformationFinancial StatementsStrategic ReportDirectors’ Report (including Corporate Governance Reports and Committee Reports)OverviewGroup Chief Executive Officer's Review

retaining LSL’s capability to capitalise on B2C
opportunities through our equity share in
Pivotal Growth.

Increasing scale in the Financial Services
Network
In August, we took the opportunity to add
further scale to our PRIMIS Network business,
announcing the acquisition of the TenetLime
mortgage and protection network. This deal,
which adds more than 250 advisers across
over 150 firms, completed on 2 February
2024, building on our share of over 10% of
the UK house purchase and remortgage
markets. The transaction will be earnings
enhancing in 2024.

We have already successfully carried out
the migration and onboarding of the firms,
and the current financial performance is in
line with our plan. We remain on track to
achieve our investment hurdle target for this
acquisition.

The consideration payable is expected to be
up to £11.6m consisting of an initial payment
of £5.7m, a further payment of up to £4.6m,
calculated by reference to the number and
turnover of appointed representative firms
12 months following completion and an
expected payment of £1.4m for assets which
form part of TenetLime’s regulatory capital.

Investment in management
Our Financial Services Division has welcomed
a new managing director bringing significant
experience in the mortgage network
market as well as a number of other senior
executives. These appointments follow the
retirement of long-standing colleagues,
and I would like to thank them for their
contribution to LSL.

Surveying & Valuation contract renewals
I am delighted to report that our Surveying
& Valuation Division extended its contract
to supply surveying and valuation services
to Lloyds Banking Group to September 2028,
underpinning our leading market position.
We also secured an improvement in terms
and allocation with another major lender
as well as contracts with a number of other
smaller players. We continue to explore new
business opportunities in data and direct-to-
consumer services.

Pivotal Growth joint venture
It is now three years since we launched
Pivotal Growth, our joint venture with Pollen

Street Capital (PSC), established to execute a
buy and build strategy in the mortgage and
protection intermediary markets. Working
with Pollen Street Capital allows the Group to
cap its maximum investment whilst benefiting
from Pollen Street’s considerable experience
of executing similar strategies in related
markets. Our joint aim is to build the business
together with a view to an exit event over
a three-to-six-year period after launch. All
major strategic decisions require agreement
by both LSL and PSC.

The advantages of a buy and build strategy
include economies of scale, synergies
between acquired companies, deployment of
integrated technology and the potential for a
larger and scalable business to benefit from
enhanced multiples on exit.

Following a slower than expected start, as
Pivotal maintained a disciplined approach
to deal price, it has acquired 12 businesses
and currently has over 400 advisers, making
it one of the largest mortgage brokers in the
UK. This includes three acquisitions made in
2024, including that of John Charcol, a firm
with 150 advisers. Pivotal’s scale improves its
ability to win new distribution agreements,
drive synergies and make it a more
compelling proposition for future acquisition
partners. The acquisitions made to date have
integrated and synergies are being delivered.

We have invested £11m in Pivotal since 2021
and we estimate that we could make further
investment of up to £15m over the next three
years by way of equity and loan notes, subject
to the timing and size of deal flows and the
introduction of any external debt.

We continue to closely monitor Pivotal’s
performance to maximise returns for
shareholders and it remains on track to
deliver returns comfortably ahead of the
Group’s WACC.

In addition, Pivotal offers further potential
opportunities for our PRIMIS mortgage
network, including developing services for
larger brokers and assisting other PRIMIS
members to capitalise on additional new
business opportunities, for example in some
specialist mortgage sectors.

Pivotal’s financial performance has steadily
improved as it has increased in scale and
moved out of its establishment phase. Pivotal
is expected to be profitable in 2024.

Capital structure and capital allocation
An Investment Committee is in place to
review investment proposals and the
performance of previous investments against
the original businesses cases and Group
hurdle rate and to identify any learnings for
future capital allocation decisions. The work
of the Investment Committee allows the
Board to assess the Group’s projected near
and medium-term capital requirements. This
facilitates an appropriate capital structure
and capital allocation policy, taking into
account economic conditions, the Group’s
improved resilience to market cycles and
organic and inorganic opportunities.

Following the completion of the major
strategic programmes by the business
in 2023, the Investment Committee has
reviewed the Group’s capital structure and
capital allocation policies.

The Board has held a cash balance for some
time given recent uncertain markets and to
provide financial flexibility to take advantage
of any material inorganic opportunities. After
reviewing its cash flow requirements and the
high cash generating nature of our business
model, the Board has concluded the Group
requires up to £10m of net cash.

The Board prioritises organic growth
investments that deliver risk adjusted returns
above the Group cost of capital and paying
an attractive dividend to shareholders.
Our end markets are large, and the Board
sees significant attractive organic growth
opportunities over the medium term. While
not a priority today, inorganic investments
are assessed against the same criteria. The
Group’s WACC is 12% (post tax). Today, the
Board’s focus is on optimising returns in our
core businesses and driving organic growth
in our large addressable markets. This will
require modest capital expenditure that
will be funded by free cash flow generation.
Other cash requirements such as contingent
consideration for TenetLime, Estate Agency
restructuring costs, and further investment
in Pivotal Growth, will also be funded by free
cash flow generation. Any excess capital will
be distributed to shareholders.

Capital expenditure and investments
We remain committed to investing in
the business to support growth. During
the year, we deployed capital in the
Divisional restructuring and transformation

programmes, capital expenditure which
was focused on capability and technology
to support future organic growth and the
settlement of contingent consideration in RSC
ahead of its disposal and further investment
in Pivotal Growth. Following the year end we
invested an initial consideration of £5.7m for
the acquisition of TenetLime.

The new Group operating model is less
capital intensive, which is reflected in lower
capital expenditure requirements, typically
expected to be in the region of £3-5m per
annum. The Group also expects to invest
up to £15m in Pivotal Growth over the next
three years. In addition, the Group expects
one-off cash investments of up to £6m
for further contingent consideration on
TenetLime and up to £7m for restructuring
costs relating to Estate Agency franchising, as
previously disclosed.

Dividend
The Board has reviewed the final dividend,
considering the Group’s policy to pay out
30% of Group Underlying Operating Profit
after finance and normalised tax charges, so
that dividend cover is held at approximately
three times earnings over the business
cycle. This policy was designed to provide
clarity to shareholders and ensure the Group
retained a strong balance sheet for all market
conditions.

The strategic progress made by the Group in
2023 has underpinned the Board’s confidence
in the future. We have secured material cost
savings and now operate a higher margin and
lower capital-intensive business following the
restructuring in Financial Services and Estate
Agency. The Group balance sheet is robust
with Net Cash1 of £35.0m at 31 December
2023, boosted by disposal proceeds.

This strong cash position, the anticipated
significant increase in profit in 2024 and the
Board’s confidence in the Group’s prospects,
allows the Board to declare a final dividend
of 7.4 pence per share, unchanged on last

year, making a total dividend of 11.4 pence
per share.

The ex-dividend date for the final dividend
is 9 May 2024, with a record date of 10 May
2024 and a payment date of 28 June 2024.
Shareholders can elect to reinvest their cash
dividend and purchase additional shares in
LSL through a dividend reinvestment plan.
The election date is 24 May 2024.

Living Responsibly and ESG
‘Living Responsibly’ is at the heart of our
business and is how we deliver our ESG
programme. I am clear that LSL’s success
needs to be measured not only in the profits
we generate, but the impact we have on the
communities in which we operate.

In our ESG and our Living Responsibly
reports published in April 2023, we set out
some of the steps we have taken to reduce
our environmental impact, help ensure LSL
is a supportive and inclusive workplace,
and provide support to good causes. A
further updated report will be published
shortly. In this update, we will describe the
very significant progress made to embed
Living Responsibly throughout the Group.
In the past year, this included establishing
LSL Voices, a colleague-driven initiative
to provide help and support to staff from
diverse backgrounds. I am also pleased to
report that all colleagues receive at least the
Real Living Wage. We have continued to focus
on volunteering and fund-raising for good
causes via our Communities Forum, whilst
progress against our environmental targets
will also be set out in this Report.

I am very grateful for the incredible support
provided by colleagues, not only to our Living
Responsibly work but also in delivering such
significant transformation during what has
been a highly challenging period. Their hard
work and commitment have put LSL in a
much stronger position to take advantage of
future opportunities.

Current trading and outlook
2024 has started strongly with improving
sentiment and lower mortgage rates driving
more activity across our core markets. We
have seen an increase in mortgage approvals
as well as housing transactions and the
start of a normalisation in product mix in
our mortgage business. These conditions
have particularly benefited our Surveying &
Valuation business, where there has been
a very substantial increase in activity and
profits.

It was against this background of improving
activity and Group trading that we issued a
trading update on 6 March, since which time
trading has remained ahead of expectations.
At the end of Q1 2024, Group Underlying
Operating Profit was materially ahead of the
same period in 2023. This improved trading
reflects better market conditions as well
as the benefits of the new Estate Agency
franchise model, improved lender contracts,
and our decision to retain surplus capacity
throughout the second half of 2023 in our
Surveying & Valuation business.

Although we retain a degree of caution,
inflation data still suggests that interest
rates will reduce in 2024, which would help
support our markets. This, together with the
strong performance since our recent trading
update on 6 March, reinforces the Board’s
confidence, and our expectations for full year
Underlying Operating Profit have increased
further.

David Stewart
Group Chief Executive Officer
24 April 2024

Notes:
1 Refer to note 35 to the Financial Statements for the calculation.
2 Following the conversion of the entire owned estate agency network to franchises in H1 2023, this was classified as a discontinued operation and is now

presented as such in the Financial Statements. Refer to notes 2 and 6 to the Financial Statements.

3 Revenue: £138.1m in 2023 with statutory revenue of £144.4m less £6.2m revenue from businesses disposed in 2023, as compared to £154.1m in 2022 with

statutory revenue of £217.5m less £63.4m revenue from businesses disposed in 2023.

4 Group (and Divisional) Underlying Operating Profit is before exceptional items, contingent consideration assets and liabilities, amortisation of intangible assets

and share-based payments. Refer to note 5 to the Financial Statements for reconciliation of Group and Divisional Underlying Operating Profit to statutory
operating (loss)/profit for continuing, discontinued and total operations.

5 Refer to note 9 to the Financial Statements.

Other InformationFinancial StatementsStrategic ReportDirectors’ Report (including Corporate Governance Reports and Committee Reports)OverviewIn this section:

14
14
16
18
19
21
23

29
34

50
56

Purpose, Strategy, Culture, Values and Business
Model
Financial and Divisional Reviews:
– Financial Review
– Financial Services Division
– Surveying & Valuation Division
– Estate Agency Franchising Division
– Balance Sheet Review
Stakeholder Engagement Arrangements including
s172 Companies Act 2006 Statement
Principal Risks and Uncertainties
Non-Financial and Sustainability Information
Statement including TCFD and CFD reporting
Environmental, Social and Governance (ESG) Report
The Board and The Executive Committee

Strategic Report

Purpose, Strategy, Culture, Values and
Business Model

All information in this section of the
Report is, unless stated otherwise, as at
31 December 2023.

The Board has established our Group
purpose, culture, values and strategy. Our

strategy is aligned to our purpose, culture
and values, which together provide an anchor
point for risk management and articulate
what joins our three Divisions and our Group
companies together.

Our purpose
To provide first class services to mortgage and
insurance advisers, Estate Agency franchisees,
lenders and their customers, to create long
term benefits for external stakeholders and
our people.

Set out below is what our purpose means to our key stakeholders.

Our customers

Mortgage and insurance advisers

Technology, compliance, marketing and business development services to help
them safely grow their businesses through delivering excellent customer service
ensuring good customer outcomes.

Access to a national network of highly-skilled Chartered Surveyors, plus our market-
leading knowledge of property risk, to help them make safe lending decisions and
deliver excellent customer service.

Technology and business development services to help them safely grow their
businesses through delivering good customer service.

Delivering an improving colleague experience through an increasingly diverse,
inclusive culture which puts colleague feedback at its heart.

Providing access to market-leading, growth-orientated assets in the UK mortgage
and property market with a focus on a lower fixed cost, leading business-to-
business services.

A commitment to doing the right thing and being responsible with the communities
and environment in which we work.

Lenders

Estate Agency franchisees

Our people

Our shareholders

Our communities and the environment

Our strategy
Our strategy aims to deliver sustainable,
resilient and profitable growth through
business-to-business services to businesses
which operate in the UK housing and
mortgage markets.

• Enhance the productivity of our mortgage
intermediary and estate agency partners.

c. In the right way: being open, challenging
of themselves and supporting others.

• Focus on our Living Responsibly ESG

programme.

• Retain, develop and attract talented

We believe that this culture aligns with our
purpose and supports our strategy, including
Living Responsibly.

Our strategic objectives are to:

people.

Our values

• Enhance our market-leading positions in

each of our three core businesses.

• Reduce earnings volatility and manage our
exposure to mortgage and housing market
cycles.

• Generate new and more non-cyclical

revenue streams.

• Create scalable platforms.

• Increase operating process efficiency.

For details of the steps we have taken to
deliver our strategy during 2023, see the
Group Chief Executive Officer’s Report
(page 07) and the Business Reviews (page 14).

Our culture
Our desired culture for our colleagues is:

a. Having the right people: who accept

accountability for their actions.

b. Doing the right things: which deliver

customer expectations.

Our values, which underpin our culture, are:

• People focused.

• Market leaders.

• Honesty.

• Delivering on promises.

• Teamwork.

• Innovation.

Directors’ Report (including Corporate Governance Reports and Committee Reports)Other InformationFinancial Statements Strategic ReportOverview Strategic ReportOverviewPurpose, Strategy, Culture, Values and Business Model

Our business model (as at the date of this Report)

Talented and
committed
people
Talented and
committed
people

Services
to mortgage
intermediaries
Services
to mortgage
intermediaries
Mortgage and
insurance
intermediaries
Mortgage and
insurance
intermediaries

Leading
technology

Group
infrastructure

Group
capital

Valuation
and surveys

Valuation
and surveys
Lenders

Retail customers
Lenders

Retail customers

Estate agency
franchising services

Franchisees

Shareholders

Colleagues

Customers

Suppliers

Shareholders

Colleagues

Customers

Suppliers

Through a number
of key resources...

...we provide a range
of ﬁrst class products
and services...
...we provide a range
of ﬁrst class products
and services...

...to our customers...

...for the beneﬁt of
all our stakeholders...

...for the beneﬁt of
Key
all our stakeholders...

Group

Key

Financial Services

Group
Surveying & Valuation

Financial Services
Estate Agency Franchising

Surveying & Valuation

Estate Agency Franchising

Each Division is operated by its own management team, which is tasked to develop and implement plans to support the delivery of the Group’s
Our three Divisions are complementary but diﬀerent. Each is operated by a Divisional Management Team, in accordance with Group policies and procedures. Our Divisions'
scale, reputations, brands and people are important sources of competitive strength.
strategy. Each Division is a leading player in the markets in which they operate and this scale, strong reputation, people and brands represent
important sources of competitive strength.
Our three Divisions are complementary but diﬀerent. Each is operated by a Divisional Management Team, in accordance with Group policies and procedures. Our Divisions'
scale, reputations, brands and people are important sources of competitive strength.

Source of income

Growth drivers

Proposition

Division

Financial Services
Division
Network Business

Financial Services
Network Business
Surveying &
Valuation

Surveying &
Valuation
Estate Agency
Franchising

Estate Agency
Franchising

UK’s largest mortgage and
Proposition
insurance network with 2,700+
advisers and further growth from
TenetLime acquisition
UK’s largest mortgage and
insurance network with 2,700+
Market-leading Surveying &
advisers and further growth from
Valuation business, serving seven
TenetLime acquisition
of the ten largest lenders, including all
of Lloyds Banking Group
Market-leading Surveying &
Valuation business, serving seven
One of UK’s largest franchise estate
of the ten largest lenders, including all
agency groups with 300+ territories,
of Lloyds Banking Group
including Your Move/Reeds Rains

One of UK’s largest franchise estate
agency groups with 300+ territories,
including Your Move/Reeds Rains

Broker fees and procuration and
Source of income
commissions shares from
product providers

Broker fees and procuration and
commissions shares from
Payments from lenders and
product providers
consumers for services

Payments from lenders and
consumers for services
Franchisee fees for services

Franchisee fees for services

Adviser growth
Growth drivers
Productivity growth
New products and services
Consider network acquisitions
Adviser growth
Productivity growth
Surveyor capacity and
New products and services
optimisation
Consider network acquisitions
New products and services
Development of D2C
Surveyor capacity and
optimisation
New products and services
New products and services
Territory growth
Development of D2C
Lettings market share growth

New products and services
Territory growth
Lettings market share growth

Estate Agency Franchising
In 2023, we converted our entire owned
Estate Agency branch network to a franchise
model. In doing so reducing its cost base
materially and its exposure to housing market
cycles. Similar to our Financial Services
Network business, the majority of costs are
now incurred by the independent franchisees
reducing financial risk and improving
performance in adverse market conditions.

Surveying & Valuation
In Surveying & Valuation, physical and
remote valuations remain an integral
part of many mortgage transactions, and
focus on prudential risk by lenders and
regulators mean that they are likely to remain
integral in the long term. We continue to
develop adjacent propositions, for example
offering surveys directly to consumers, to
complement this business line.

LSL has in place contracts with most of the
UK’s major lenders, typically of a three-year
duration. This provides security of income
stream over the planning cycle. The business
has remained profitable in all market cycles.

Business model resilience
We believe our business model is sustainable
in the long term, especially in light of the
progress made in recent years to materially
reduce the fixed cost base, reduce exposure
to housing market cycles in our Financial
Services and Estate Agency Franchising
Divisions.

Financial Services
Our Financial Services businesses provide
services to mortgage intermediaries which
distribute over 80% of regulated mortgages in
the UK, offering a large and stable market for
Group services. Our business model provides
platform services to these brokers with
limited financial risk due to its relatively small
cost base. With the majority of distribution
costs incurred within the mortgage broker
firms that are customers of LSL, our business
model is resilient to market downturns and
has remained profitable in all market cycles.

Group Income Statement
Group revenue from continuing operations1
was £144.4m (2022: £217.5m). After adjusting
for disposals and discontinued operations
in Estate Agency, revenue was 10%2 below
prior year in a housing market 19% lower
and in a smaller lending market. Including
discontinued operations in Estate Agency,
revenue from total operations was £176.8m
(2022: £321.7m), reflecting the previously
owned network revenues.

Group Underlying Operating Profit from
total operations1,3 of £9.3m (2022: £35.8m)
includes excess capacity costs carried in
Surveying & Valuation, £1m from losses in
businesses disposed of in the period and
a one-off cost-of-living payment totalling
£0.9m for lower-paid staff. Group Underlying
Operating Profit from continuing operations
was £10.3m (2022: £29.9m).

Group Operating Profit was £3.7m (2022:
loss of £21.7m), a material improvement
compared to the prior year which included an
exceptional impairment charge for goodwill
and other intangibles of £47.2m.

Adjusted operating expenditure4 comprises
Employee costs, Other operating costs, and
Depreciation and totalled £133.5m in 2023,
29% lower than prior year (2022: £188.4m),
with the movement comprising the net effect
of the following factors:

– Disposal of businesses during the period

– Reduction in depreciation due to the

disposal of businesses during the period
which led to the reclassification of IFRS 16
depreciation into other operating expenses
because of the franchising of the Estate
Agency branch network

– Reduced costs in Surveying & Valuation
through self-help measures and reduced
variable costs

– Increased costs in Financial Services

including those arising from emerging
regulatory requirements, inflationary salary
increases targeted at lower-paid employees
and executive team restructuring

– The amounts included for Estate Agency

represent those for the expanded continuing
franchising business

– Central (unallocated) costs of £7.7m

(2022: £7.3m) included staff restructure
costs and increased audit fees

The Group exited 2022 with costs over 50%
lower than 2022, reflecting an annualised total
operations cost reduction of c£140m.

Other (losses)/gains
Total other operating losses were £0.2m
(2022: gains of £1.3m). This primarily reflected
the movement in the fair value of units held in
The Openwork Partnership LLP (loss of £0.3m,
2022: gain £0.7m), having been reassessed at
31 December 2023 as £0.4m (31 December
2022: £0.7m). The prior year also included
external rental income of £0.7m, no longer
applicable following the wholesale franchising
of the Estate Agency branch network.

Share of losses from joint venture
Losses from our equity share of Pivotal
Growth reduced to £0.4m (2022: £0.5m loss).

Share‑based payments
The share-based payment credit of £0.2m in
2023 (2022: charge of £1.9m) comprises, a
charge in the period of £3.0m for LTIP, SAYE
and BAYE schemes granted in 2020 to 2023,
offset by a credit of £3.2m reflecting lapses
and adjustments for leavers, largely as a
result of the significant restructuring across
the Group. The prior year included a higher
charge of £1.9m, offset by lower lapse and
leaver adjustments.

Amortisation of intangible assets5
The amortisation charge for 2023 was
£2.3m (2022: £2.8m6), being amortisation of
intangible software investment and franchise
agreements. The year-on-year movement
comprises a reduction in both lettings books
and certain software intangibles as they
have been fully amortised, partly offset
by amortisation for the newly established
franchise intangibles.

Exceptional items7
The exceptional gain of £9.3m (2022: £0.7m)
relates primarily to the gain on disposal
during the period of the Embrace and
First2Protect businesses to Pivotal Growth
of £9.0m. Consideration of £9.3m was
received on completion of First2Protect,
with contingent consideration to be received
in 2025 estimated at £2.0m (undiscounted)
for Embrace based upon 7x 2024 EBITDA
performance. In addition, there was a £0.3m
release in relation to the historic exceptional
Surveying & Valuation IBNR PI Costs provision
(2022: £0.7m).

Exceptional costs of £13.8m (2022: £48.3m),
primarily related to restructuring activity
and corporate transaction costs of £5.8m,
a reduction in contingent consideration
assets of £4.1m for businesses sold to Pivotal
Growth, reflecting changes to estimates, the
net loss on disposals of Group First, RSC and
Marsh & Parsons of £1.7m and impairment
of Financial Services intangible software
assets of £2.2m. Prior year exceptional costs
related principally to the outcome of the
annual impairment review and prior year
restatements, which led to non-cash goodwill
and other intangibles impairment of £47.2m6.

Contingent consideration payable
There was £0.03m contingent consideration
charge recognised in the period (2022: £0.7m),
reflecting a small increase in DLPS liability
based on revisions to forecasts, subsequently
paid in February 2024. The credit to the
income statement in 2022 of £0.7m related to
the reduction of the contingent consideration
liability for RSC and DLPS, based on revisions
to profit forecasts.

Finance income increased to £2.8m (2022:
£0.1m) resulting mainly from increased
interest received on funds held on deposit
of £1.5m in 2023 (2022: £0.1m), reflecting
proactive management of funds across the
Group to optimise in the higher interest rate
environment, and the unwind of discounting
on contingent consideration receivable
balances as the differential in time to payment
date reduces, with income of £1.0m (2022:
£nil).

Finance costs amounted to £1.7m (2022:
£2.1m) and related principally to the
unwinding of discount on lease liabilities
of £0.5m (2022: £1.0m) which reduced
because of the disposal of Marsh & Parsons,
commitment and non-utilisation fees on the
revolving credit facility of £0.7m (2022: £1.0m)
and £0.5m for the unwinding of discount
on dilapidations provisions and a fair value
adjustment to loans receivable (2022: £nil).

Profit before tax
Profit before tax was £4.9m (2022: loss before
tax of £23.8m). The year-on-year movement
is primarily due to the materially higher net
exceptional cost in the prior period, and lower
Group Underlying Operating Profit during
2023.

Taxation
The tax credit of £3.2m (2022: charge of
£3.0m) represents an effective tax rate of
65.2% (2022: 12.7%), which is lower than
the headline UK tax rate of 23.5% as a result
of deferred tax balances written back on
the disposal of investments in subsidiary
undertakings, and non-taxable gains arising
from those disposals. Deferred tax assets

Earnings per Share8

and liabilities are measured at 25.0%
(2022: 25.0%), the tax rate that came into
effect from 1 April 2023.

Discontinued operations1 loss of £46.1m
(net of tax) in relation to the previously owned
Estate Agency branch network (2022: loss
of £36.5m). The discontinued operations in
Estate Agency Franchising contributed an

Underlying Operating Loss of £1.0m during
the period (2022: profit £6.0m) before
incurring exceptional restructuring costs
in relation to the conversion of the Estate
Agency network to a franchise operation
(£16.5m) and associated disposed goodwill
(£38.1m), offset in part by the exceptional
gain on recognition of intangible franchise
agreements of £10.7m.

2023

2022

Earnings per Share (pence)
Continuing
Discontinued
Total operations

Basic
7.9
(44.7)

Diluted
7.8
(44.7)

Adjusted
basic

Adjusted
basic
diluted

Adjusted
basic

Adjusted
basic
diluted

Basic
(26.0)
(35.6)

Diluted
(26.0)
(35.6)

7.6

7.5

27.6

27.2

Notes:
1 Following the conversion of the entire owned Estate Agency network to franchisees in H1 2023, this was classified as a discontinued operation and is now

presented as such in the Financial Statements. Refer to notes 2 and 6 to the Financial Statements.

2 Revenue: £138.1m in 2023 with statutory revenue of £144.4m less £6.2m revenue from businesses disposed in 2023, as compared to £154.1m in 2022 with

statutory revenue of £217.5m less £63.4m revenue from businesses disposed in 2023.

3 Refer to note 5 to the Financial Statements for reconciliation of Group and Divisional Underlying Operating Profit to statutory operating (loss)/profit for

continuing, discontinued and total operations.

4 Refer to note 35 to the Financial Statements.
5 Refer to note 17 to the Financial Statements.
6 Refer to note 36 to the Financial Statements.
7 Refer to note 9 to the Financial Statements.
8 Refer to note 12 to the Financial Statements.

Other InformationFinancial StatementsDirectors’ Report (including Corporate Governance Reports and Committee Reports) Strategic Report Strategic ReportOverview

Financial and Divisional Reviews
Financial Services Division

Financial Summary
P&L2 (£m)

Financial Services Network gross revenue

Financial Services Network

Financial Services Other

Total Net Revenue

Financial Services Network

Financial Services Other

Underlying Operating Profit3

Financial Services Network margin

Underlying Operating Margin3

Operating profit/(loss)

KPIs

LSL mortgage completion lending4 (£bn)

Total AR firms

Total advisers

Restated1
2022

2023

284.6

316.6

Var

(10)%

(5)%

(69)%

(37)%

(35)%

(13)%

(45)%

41.6

40.1

81.7

15.5

(2.6)

12.8

37.2%

(1190)bps

15.7%

(210)bps

(7.2)

170%

45.6

1,005

2,867

(8)%

(0)%

(7)%

39.5

12.2

51.7

10.0

(3.0)

7.0

25.3%

13.6%

5.0

41.7

1,000

2,661

Notes:
1 See note 36 to the Financial Statements for details regarding the restatement.
2 Financial Services is managed as one segment and for presentational purposes its results have been split between Network and Other.
3 Divisional Underlying Operating Profit and Divisional Underlying Operating Margin are stated on the same basis as Group (as set out in note 5 to the Financial

Statements).

4 LSL mortgage completion lending quoted includes product transfers.
5 Gross revenue per adviser is calculated as Financial Services Network gross revenue (excluding TMA mortgage club) per active adviser.

Highlights
• Financial Services division transformed
to focus exclusively on business‑to‑
business services with the disposal of four
businesses to Pivotal Growth, reducing
divisional costs by around £30m annualised

• Financial Services Network business
traded resiliently in difficult market
conditions, reporting Underlying Operating
Profit1 of £10.0m (2022: £15.5m)

• Increased market share of the UK purchase
and remortgage market2 of 10.7% (2022:
10.5%)

• LSL advisers responded effectively to

changes in mortgage market increasing
product transfer mortgage completions
by 41% resulting in a substantially increased
share of the product transfer market of
7.4% (2022: 6.4%)

• Resilient protection sales – Network

protection revenue increased by 2% to
£11.6m (2022: £11.3m)

• The number of Network firms remained
broadly flat at 1,000 on 31 December
2023 (31 December 2022: 1,005). Network
firms remained cautious on adviser levels
due to challenging market conditions and
adviser numbers reduced to 2,661 as at
31 December 2023 (31 December 2022:
2,867).

Overview
Our PRIMIS Network has maintained its
leading position in the provision of services
to independent mortgage brokers. It is in
more challenging market conditions that
the advantages of the small, independent,
client-focused broker business model is best
demonstrated, and in 2023 this was reflected
in our advisers’ strong market share.

The rise in mortgage rates has resulted in a
market-wide increase in lower margin product
transfer cases, as lenders remain conservative
with respect to new borrowers, and this has
naturally had some impact on revenue and
profits. Our members responded positively
to these market developments, with the
value of product transfer cases increasing by
41%. Total LSL mortgage lending reduced to
£41.7bn (2022: £45.6bn).

We increased our share of the purchase
and remortgage and of the product transfer
markets, with a record share of the purchase
and remortgage (10.7%2 up from 10.5%)
and the product transfer markets (7.4%
up from 6.4%). Protection performance
was also robust, with Network protection
revenue increasing by 2%. This performance
is reflected in Financial Services Network
revenue which fell by just 5.2% to £39.5m
(2022: £41.6m).

Network Underlying Operating Profit was
£10.0m (2022: £15.5m) reflecting the impact
on revenue of market dynamics as well

as increased costs including those arising
from emerging regulatory requirements,
inflationary salary increases targeted at
lower paid employees and executive team
restructuring.

Financial Services Other reported a loss
of £3.0m (2022: loss of £2.6m) which
was in line with our expectations, as we
continued to refocus our Mortgage Gym
and DLPS technology businesses towards
our core Network business, absorbing their
operations and commercial focus into the
Network business. To reflect this dynamic,
from 1 January 2024 we will report results
in our Financial Services Division in just two
business lines: our core Financial Services
Network business comprising PRIMIS and TMA
mortgage club, and our share of profit after
tax of Pivotal Growth.

Total Financial Services Division Underlying
Operating Profit1 was £7.0m (2022: £12.8m).
On a statutory basis, operating profit was
£5.0m (2022: loss of £7.2m).

Our PRIMIS Network retains a leading market
position which at the start of 2024 was
boosted by the completion of the TenetLime
acquisition. Our new senior management
team is focused on leveraging this strong
member base to deliver organic growth
whilst taking advantage of improving market
conditions in 2024.

Notes:
1 Divisional Underlying Operating Profit and Divisional Underlying Operating Margin are stated on the same basis as Group (as set out in note 5 to the Financial

Statements).

2 Mortgage lending excluding product transfers - New mortgage lending by purpose of loan, UK (BoE) – Table MM23 (Jan 2024).

Other InformationFinancial StatementsDirectors’ Report (including Corporate Governance Reports and Committee Reports) Strategic Report Strategic ReportOverviewFinancial and Divisional Reviews
Surveying & Valuation Division

Financial Summary
P&L (£m)

Total revenue

Underlying Operating Profit1

Underlying Operating Margin1

Operating profit

KPIs

Jobs performed (000’s)

Jobs per average surveyor

Revenue from private surveys and data services (£m)

Income per job (£)

Operational surveyors employed (FTE2)

2023

2022

Var

67.8

5.4

8.0%

2.0

389

782

3.8

174

472

93.2

20.4

(27)%

(74)%

21.9%

(1390)bps

20.8

(90)%

532

1,066

3.8

175

512

(27)%

(2)%

(1)%

(8)%

Notes:
1 Divisional Underlying Operating Profit and Divisional Underlying Operating Margin are stated on the same basis as Group (as set out in note 5 to the Financial

Statements).

2 Full-time equivalent (FTE).

Highlights
• Surveying & Valuation performance was
impacted by significant reductions in
valuation instructions across the market
and as a result Underlying Operating Profit1
fell to £5.4m (2022: £20.4m)

• Market share of valuation instructions2
increased slightly to 38% (2022: 37%)
• Early signs of market recovery in quarter

four of 2023, with significant further
improvement in 2024

• Contract with Lloyds Banking Group

extended to September 2028,
underpinning the Group’s leading market
position. Furthermore we also secured an
improvement in terms and allocation with
another major lender

• Retained contracts with all lending
customers with no loss in allocations
• Self‑help cost measures were taken in

2023, including a reduction in the number
of employed surveyors, achieved through
voluntary redundancy. Our principal focus
was to retain sufficient capacity to meet
the requirements of more normal market
conditions, and the business carried
material excess costs in 2023, over the
level of demand. All capacity is now fully
deployed in quarter one 2024, as the
market recovered earlier than expected

• Surveying profit in quarter one 2024

was greater than the whole of 2023 as
we benefited from recovering markets,
improved contract terms and renewals,

as well as the decision to retain excess
capacity during 2023

Overview
Our Surveying & Valuation business has
performed very strongly in recent years,
increasing market share, and in 2021 and 2022
it returned to operating margins above 20%.
We believe it to be the leading business in its
sector and we were pleased to confirm recently
that we have extended our contract with Lloyds
Banking Group until September 2028, further
enhancing our leading market position.
The mortgage market in 2023 was extremely
challenging for all valuation businesses. The
significant increase in product transfer cases,
where no valuation is needed, created a
major headwind as did reduced activity in the
purchase market as well as specialist equity
release and buy-to-let sectors, where both
supply and demand were reduced by the rapid
rise in interest rates. This resulted in surplus
capacity and a very competitive market for
new instructions, and it is testament to the
quality of service provided by our team that
we increased further our share of valuations
instructions.
Underlying Operating Profit1 was £5.4m
(2022: £20.4m) reflecting reduced activity
in our markets and our decision to retain
capacity to support a more normal level of
activity. Self-help cost measures were taken
in 2023, including a reduction in the number

of employed surveyors, achieved through
voluntary redundancy.
However, our principal focus was to retain
sufficient capacity to meet the requirements
of more normal market conditions, and the
business carried material excess costs in 2023,
over the level of demand. We have been
pleased to fully deploy the excess capacity in
quarter one 2024, with the market recovering
earlier than expected.
Surveying profit in quarter one 2024 was
greater than for the whole of 2023 as
we benefited from recovering markets,
contract renewals, and the decision to retain
excess capacity during 2023, with strong
performance continuing in April.
The much smaller overall market resulted in a
reduction in Surveying & Valuation revenue to
£67.8m (2022: £93.2m). On a statutory basis,
operating profit was £2.0m (2022: £20.8m).
We have identified medium-term
opportunities to increase our diversification
and reduce reliance on lender valuations and
our exposure to mortgage market cycles, with
the development of new revenue streams
providing data services to lenders and other
clients and by growing revenue from direct-
to-consumer (D2C) surveys. We have seen
good growth in D2C in recent years, with
revenues from this source having doubled
between 2019 and 2022. Despite the more
challenging conditions, 2023 revenue of
£3.6m was unchanged from 2022 (£3.8m).

Notes:
1 Divisional Underlying Operating Profit and Divisional Underlying Operating Margin are stated on the same basis as Group (as set out in note 5 to the Financial

Statements).

2 Approvals for lending secured on dwellings, Bank of England – Table A5.4 (30 January 2024).

Financial and Divisional Reviews
Estate Agency Franchising Division

Financial Summary
P&L2 (£m)

Continued operations

Discontinued operations

Total revenue

Continued operations

Discontinued operations

Underlying Operating Profit3

Continued operations

Discontinued operations

Underlying Operating Margin3

Operating profit/(loss) from continuing operations

Discontinued operations

Operating loss from total operations

Franchise KPIs

Exchange units4

Managed properties

Territories5

Restated1
2022

42.6

104.3

146.8

3.9

6.0

9.9

9.3%

5.7%

6.7%

(26.8)

(34.3)

(61.2)

23,969

37,177

308

2023

24.9

32.3

57.2

5.6

(1.0)

4.7

22.6%

(3.0)%

8.1%

4.4

(45.3)

(41.0)

18,603

37,502

308

Var

(42)%

(69)%

(61)%

43%

(117)%

(53)%

1330bps

(870)bps

140bps

116%

(32)%

33%

(22)%

–

Notes:
1 See note 36 to the Financial Statements for details regarding the restatement.
2 Following the conversion of the entire owned estate agency network to franchises in H1 2023, this was classified as a discontinued operation and is now

presented as such in the Financial Statements. Refer to notes 2 and 6 to the Financial Statements.

3 Divisional Underlying Operating Profit and Divisional Underlying Operating Margin are stated on the same basis as Group (as set out in note 5 to the Financial

Statements).

4 Excludes Marsh & Parsons disposed in January 2023.
5 Territories quoted for 2022 is from the commencement of the wholly owned franchised Estate Agency business in May 2023.

Highlights
• Estate Agency Franchising Division

transformation following the conversion
of owned branch network to franchisees
and disposal of Marsh & Parsons leading
to divisional annualised cost reductions
of c£110m and thereby reducing earnings
volatility

• Benefits of new business model were

reflected in an Underlying Operating Profit2
of around £5m in the eight-month period
since the franchising change in May 2023,
with operating margins of around 30%. This
compared to a loss of around £0.3m for the
first four months of the year under the old
business model. Total Underlying Operating
Profit2 for 2023 of £4.7m was delivered
during a period when there was a market-
wide reduction of 19% in house sales, to
the lowest level for 11 years

• In the first month of 2024, the Estate

Agency Division reported a profit for only
the second time in its history, reflecting the
more consistent earnings of the franchise
model

• The number of properties under

management increased by 1% to 37,502
(2022: 37,177) demonstrating the resilience
of lettings through market cycles

Overview
Before this year, most of the Group’s cost
base was incurred in operating a large
network of owned estate agency branches.
This meant that the Group was significantly
exposed to changes in the number of housing
transactions, whilst the capital required to
increase the number of branches represented
a barrier to growth. Furthermore, any
expansion in the branch network would have
increased our fixed cost base and consequent
exposure to housing market cycles further.

After an extensive strategic review, the Board
decided to transform our estate agency
operations, moving from a predominantly
owned model to one entirely focused on
the provision of franchise services. After an
extensive programme of work, we announced
on 4 May the conversion of our owned
network of 183 branches to franchisees.
This announcement followed the disposal in
January of our London estate agency business,
Marsh & Parsons, for total consideration of
£26.1m1 which did not form part of our overall
franchise strategy.

We are pleased to report that this
transformation programme was executed
smoothly, with the financial performance
since the change being ahead of our
expectations. We are also clear that it was a
significantly more profitable business model
under the market conditions that emerged in
2023 than the previous owned model.

Other InformationFinancial StatementsDirectors’ Report (including Corporate Governance Reports and Committee Reports) Strategic Report Strategic ReportOverview

Financial and Divisional Reviews

On a reported continuing basis, Estate
Agency Franchising business revenue was
£24.9m (2022: £42.6m), primarily reflecting
the disposal of Marsh & Parsons, and the
conversion of owned branches to franchises.

The benefits of the new business model were
reflected in an Underlying Operating Profit2
of around £5m in the eight-month period
since the franchising change in May 2023,
with operating margins in H2 above 25%. This
compares to a loss of around £0.3m for the
first four months of the year under the old
business model. Total Underlying Operating

Profit2 for 2023 of £4.7m was delivered during
a period when there was a market-wide
reduction of 19% in house sales, to the lowest
level for 11 years. The greater consistency
of the franchising model was demonstrated
further at the start of 2024 when the Division
reported a profit in January for only the
second time in its history.

Estate Agency and Franchising business
revenue including discontinued operations
was £57.2m (2022: £146.8m) and Underlying
Operating Profit from total Estate Agency
operations was £4.7m (2022: £9.9m profit). On

a statutory basis, Operating Loss from total
operations was £41.0m (2022: loss of £61.2m).

To reflect the change in the structure of
the Group, from 1 January 2024, our asset
management business which provides
repossession services to corporate clients and
is currently reported within the Estate Agency
Division, will be reported within the Surveying
& Valuation Division, as the key commercial
relationships for this business are with major
lenders. The profit generated by this business
was £1.3m in 2023.

Notes:
1 Refer to note 9 to the Financial Statements.
2 Divisional Underlying Operating Profit and Divisional Underlying Operating Margin are stated on the same basis as Group (as set out in note 5 to the Financial

Statements).

Financial and Divisional Reviews
Balance Sheet Review

Goodwill1
The carrying value of goodwill is £16.9m
(31 December 2022: £55.0m2). Following the
conversion of the entire owned Estate Agency
network to franchises during the period, the
goodwill associated with Your Move, Reeds
Rains and LSLi owned branches (£38.1m) has
been disposed and reduced to £nil. Goodwill
previously included within held for sale assets
of £15.3m was disposed as part of the sales
of Marsh & Parsons (£10.6m), Group First
(£3.6m) and RSC (£1.1m), which completed in
January 2023.

Other intangible assets1
Other intangible assets of £21.5m at 31
December 2023 (31 December 2022: £14.7m2).
New intangible franchise agreements of
£10.7m were recognised during the period
following the conversion of the entire owned
Estate Agency network to franchises. The
carrying value of all franchise agreements was
£11.7m at 31 December 2023 (31 December
2022: £1.5m2). Total amortisation including
discontinued operations of £2.7m was charged
in the year, with £2.1m of new intangible
software investment.

Intangibles disposed during the period as part
of the restructuring across the Group came to
£1.3m. During the period there has been an
impairment to other intangible assets of £2.2m
(2022: £0.1m). The charge relates to software
assets within the Financial Services division
where there has been a strategic shift to focus
development on the Group’s PRIMIS Connect
platform and a declining number of third party
software users. Please refer to note 17 for
further information. The Group has reviewed
its Software as a Service (SaaS) arrangements
and current policy during 2023 prompted by
the significant restructuring during the year.
The Group has concluded that the policy to
capitalise SaaS customisation costs, which was
considered appropriate at the time, should be
revised, and has determined that restatement
of the prior year financial information is
appropriate. The cumulative impact of the
historic adjustment on retained earnings on
1 January 2022 was a reduction of £1.8m2 and
was not cash adjusting.

Property, plant and equipment
Total capital expenditure in the year amounted
to £0.7m (2022: £2.0m), primarily reflecting
ongoing investment in Financial Services and
Surveying & Valuation, and a reduction in

Estate Agency Franchising with the operating
model transformation during the period.

Financial assets
Financial assets of £5.5m at 31 December
2023 (31 December 2022: £1.0m) comprise
contingent consideration assets and
investments in equity instruments in unlisted
companies.

During the period, the Group disposed
of the Group First, RSC and Embrace B2C
brokerage businesses to Pivotal Growth, with
contingent consideration receivable in the
first half of 2025 based upon 7x 2024 EBITDA
performance. As at 31 December 2023, this
asset is recorded at £4.8m (31 December
2022: £nil).

The fair value of units held in The Openwork
Partnership LLP was reassessed at
31 December 2023 as £0.4m (31 December
2022: £0.7m).

In January 2023, the Group agreed to sell
its shares in Yopa for £nil consideration,
which was in line with its carrying value as at
31 December 2022.

In March 2023, the Group agreed to sell
its shares in VEM for £0.2m consideration,
received on completion, which was in line with
its carrying value as at 31 December 2022.

Investment in joint venture
In April 2021 the Group established the
Pivotal Growth joint venture and holds a
47.8% interest at 31 December 2023. The
joint venture is accounted for using the equity
method and is held on the balance sheet at
£9.4m as at 31 December 2023 (31 December
2022: £5.1m), reflecting the Group’s equity
investment in Pivotal Growth during the
period (£4.7m), less our share of losses after
tax for the period.

Investment in sublease
Total current and non-current investment
in subleases were £3.3m as at 31 December
2023 (31 December 2022: £nil). This reflects
the situation whereby the Group is an
intermediate lessor, following the Estate
Agency conversion to a wholly franchised
model. As part of the franchising transition
the leases held by the Group in respect of the
previously owned network will be transferred
to the franchisees, and the investment in
sublease balance will reduce accordingly.

Loans to franchisees and appointed
representatives
Loans provided as at 31 December 2023 were
£2.1m (31 December 2022: £nil). As part
of the initial support provided to the new
franchisees of the previously owned Estate
Agency branches, working capital loan facility
agreements were put in place, of which £0.8m
had been drawn down as at 31 December
2023 (31 December 2022: £nil). Loans to
appointed representatives, which are granted
in certain circumstances to support brokers
during an onboarding period were £1.3m as at
31 December 2023 (31 December 2022: £nil,
having previously been included in trade and
other receivables).

Financial liabilities

Contingent consideration liabilities
Contingent consideration liabilities
at 31 December 2023 were £0.07m
(31 December 2022: £2.3m). Contingent
consideration liabilities relate solely to the
cost of acquiring the remaining shares in
Direct Life Quote Holdings Limited, which
was subsequently paid in February 2024.
The year-on-year reduction reflects the full
settlement of the contingent consideration
liability of £2.3m in RSC ahead of its disposal in
January 2023.

Prior year restatements2

Franchising of previously owned branches
During the current period, the Group
franchised its entire owned estate agency
network (183 branches). In accounting for this
significant transaction, the Group
re-examined the accounting treatment applied
to a much smaller transaction in the first
half of 2019, when 39 owned estate agency
branches were franchised. The impact of
this was to restate the goodwill associated
with these owned branches, de-recognising
£5.2m of goodwill, recognising a franchise
intangible net of amortisation of £1.7m and an
associated deferred tax liability of £0.4m, with
a cumulative non-cash impact on retained
earnings at 1 January 2022 of £4.0m.

Adjustments to assets held for sale
At 31 December 2022 the Group reported
Marsh & Parsons as held for sale. Marsh &
Parsons was written down to its fair value less
cost to sell, which was calculated as the initial
consideration received less transaction costs
(£28.9m). The Group has re-examined the

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judgements made and has determined that
an adjustment to consideration for debt-
like items of £2.0m could have been reliably
estimated at 31 December 2022. Rather than
recognising this adjustment as an increase in
the loss on disposal in 2023, the prior year
financial information has been restated, in
accordance with IAS 8.

Customisation costs in computing
arrangements
During the year, the Group revisited its
accounting policy in relation to customisation
costs incurred in implementing Software as
a Service (SaaS) arrangements. The Group
has reviewed its SaaS arrangements and
current policy during 2023 prompted by the
significant restructuring during the year.
The Group has concluded that the policy to
capitalise SaaS customisation costs, which was
considered appropriate at the time, should be
revised, and has determined that restatement
of the prior year financial information is
appropriate. The cumulative impact of the
historic adjustment on retained earnings on
1 January 2022 was a reduction of £1.8m and
was not cash adjusting.

Cash offsetting
The Group has a bank offset arrangement that
was previously recorded as part of cash and
cash equivalents. The Group has reviewed its
current arrangements and has concluded that
while the Group has a legally enforceable right
to offset, the Group did not intent to settle
the year-end balance net. As a result, the
overdraft balances included within the offset
arrangement should be separately presented
in the Group Balance Sheet. Consequently, a
restatement has been made to increase cash
and cash equivalents and bank overdrafts
as at 31 December 2022 by £23.1m (2021:
£24.4m). The restatement has no impact on
net assets, income statement or statement of
cash flows.

Group Statement of Cash Flows
Operating cash flows before movements in
working capital were £14.9m (2022: £47.6m)
reflecting lower profits generated in 2023.
Movements in working capital were an
outflow of £11.0m (2022: £14.5m). The
outflow in 2023 reflected higher Surveying
billing in the last months of 2023 compared

Notes:
1 Refer to note 17 to the Financial Statements.
2 Refer to note 36 to the Financial Statements.
3 Refer to note 35 to the Financial Statements.

to the prior year, and amounts paid on behalf
of franchisees ahead of rebilling. We expect
working capital outflows to be more modest
going forwards as the operating cycle of
working capital continues to settle following
the completion of significant restructuring
and transformation programmes during 2023.
The transformation has also resulted in a
less capital-intensive business, with capital
expenditure expected to be lower than in
previous years, reflecting the franchise model
in Estate Agency. The business is highly cash
generative and ordinarily achieves a cash flow
conversion rate3 of 75% to 100%. The ratio
in 2023 was (2.2)% reflecting the materially
lower Underlying Operating Profit, with a ratio
of 77% achieved in 2022.

At 31 December 2023, Net Cash3 was
£35.0m (31 December 2022: Net Cash
£40.1m). Movements in the year included
£4.7m further investment in Pivotal Growth
(2022: £4.0m), capital expenditure of £2.9m
(2022: £3.9m), exceptional costs in relation
to divisional restructure and transformation
programmes of £10.4m, payment of the
2022 final and 2023 interim dividends of
£11.7m (2022: £11.8m) and the settlement
of contingent consideration in RSC of £2.3m
ahead of its disposal to Pivotal Growth. With
the loss before tax of £40.6m (2022: £58.4m),
including discontinued operations, there was
no corporation tax paid.

Marsh & Parsons and First2Protect businesses
were sold for net consideration received
during the period of £26.1m and £9.3m
respectively, with contingent consideration for
the disposals of Group First, RSC and Embrace
receivable in 2025 based upon 7x 2024
EBITDA performance. Total cash balances in
the disposed businesses at the point of sale
were £8.3m.

Bank facilities/liquidity
In February 2023, we agreed an amendment
and restatement of our banking facility, with a
£60m committed revolving credit facility, and
a maturity date of May 2026, which replaced
the previous £90m facility due to mature in
May 2024. The terms of the facility, including
covenants, have remained materially the same
as the previous facility. The facility is provided
by the same syndicate members as before,

namely Barclays Bank plc, NatWest Bank plc
and Santander UK plc.

In arranging the banking facility, the Board
took the opportunity to review the Group’s
borrowing requirements, considering our
strong cash position and the Group’s aim
of reducing its reliance on the housing
market. We therefore reduced the size of the
committed facility and the costs associated
with it. To provide further flexibility to support
growth, the facility retains a £30m accordion,
to be requested by LSL at any time, subject to
bank approval.

Under the terms of the facility the Group
can operate bank accounts in surplus and
overdraft positions provided that the net
position under the arrangement is within the
facility limits. Overdraft balances included
within the bank offset arrangement are
presented separately from cash surplus
balances in the Group Balance Sheet, but
are considered to form part of cash and cash
equivalents in the Group statement of cash
flows as they are repayable on demand and
form an integral part of the Group’s cash
management.

The Financial Services Network business
has a regulatory capital requirement which
represents 2.5% of its regulated revenues.
The regulatory capital requirement was
£6.1m at 31 December 2023 (31 December
2022: £5.9m), with a surplus of £24.7m
(31 December 2022: £24.9m).

Treasury and risk management
LSL has an active debt management policy.
The Group does not hold or issue derivatives
or other financial instruments for trading
purposes. Further details on the Group’s
financial commitments, as well as the Group’s
treasury and risk management policies, are set
out in this Report.

International Accounting Standards (IAS)
The Financial Statements for the period
ended 31 December 2023 have been
prepared in accordance with international
accounting standards in conformity with the
requirements of the Companies Act 2006 and
UK-adopted IAS.

Our Stakeholder Engagement Arrangements

This section of the Report describes how we engage with our stakeholders and how the Board and its Committees consider stakeholder views in
their decision making, in accordance with their duty under section 172 of the Companies Act 2006.

We regularly review our arrangements with our stakeholders to ensure we are operating in line with best practice. This includes identifying any
stakeholder impacts when presenting proposals to the Board for approval. In this section we have included examples of how our stakeholders have
been engaged with or taken into consideration during the Board’s decision making in 2023.

Each year the Board also reviews the Group’s stakeholder engagement arrangements. As part of this review, the Board considers GC100 guidance
on directors’ duties under section 172 of the Companies Act 2006.

Our key stakeholders
The Purpose, Strategy, Culture, Values and Business Model section of this Report (page 11) includes a description of our business model. The
following are the key stakeholders on which our business model depends:

Group

Financial Services

Surveying & Valuation

Estate Agency Franchising

Shareholders

Colleagues

Mortgage and protection
brokers and their customers
(consumers)

Lenders and consumers

Franchise partners and their
customers (consumers)

Suppliers

UKLA, HMRC, FRC

Suppliers

FCA

Suppliers

RICS

Suppliers

TPO and NTSEAT

While we regularly consider other stakeholders such as other regulators, professional bodies, landlords of our leased premises and our banking
facility providers, this section of the Report focuses on our arrangements with the key stakeholders listed below.

1. Shareholders.

2. Colleagues.

3. Customers.

4. Suppliers.

5. Regulators.

Additional information on our stakeholder engagement is included in the Environmental, Social and Governance Report (page 50), the Corporate
Governance Report (page 65) and the Living Responsibly Report 2024.

Stakeholder engagement arrangements and 2023 activities
Shareholders

Institutional shareholders
Members of the Board regularly meet institutional shareholders, for example the Executive Directors will meet with shareholders usually after the
release of our full year or interim results or when we announce a significant project. Further, during 2023, the Chair engaged with shareholders as
part of our annual strategic review process and shared the feedback with the Board at its annual strategy meeting.

Meetings with shareholders following the announcement of our results typically include a review of Group strategy, performance and governance
matters, and obtain investor feedback. In addition, we arrange presentations for shareholders and analysts, including after the publication of the full
year and interim results.

The UK Corporate Governance Code requires company chairs to regularly engage with major shareholders, to understand their views on
governance and performance against strategy. We therefore offer our major shareholders the opportunity to attend meetings with all the Non
Executive Directors, including the Chair and the Senior Independent Director, as they require. From time to time, the Chair of the Board or of a
Committee will meet shareholders to discuss specific issues, such as Remuneration Policy or Board appointments.

We also ensure that shareholder meetings are factored into Director inductions as appropriate, especially for anyone appointed into one of the
senior Board roles (Chair, SID, Group CEO or Group CFO).

Other InformationFinancial StatementsDirectors’ Report (including Corporate Governance Reports and Committee Reports) Strategic Report Strategic ReportOverview

Our Stakeholder Engagement Arrangements

Following Darrell Evans’ appointment as Interim Chair on 26 February 2024, we wrote to our top 20 shareholders, including institutional and
individual shareholders and offered meetings with him. Many shareholders took up this offer and these meetings took place in the days following
the appointment. Some shareholders also met with the Executive Directors and the Non Executive Directors. Feedback from these meetings was
shared with the Board.

Throughout each year, we ensure that all Directors understand the views of significant shareholders, by sharing feedback received from the
corporate advisers or other members of the Board and by distributing analysts’ reports to the Board.

If any shareholder, shareholder representative groups or proxy advisers wish to discuss any issues or concerns with any Non Executive Directors,
they can be contacted through the Company Secretary’s office (see page 203 for contact details).

Individual shareholders
In addition to the above engagement processes, typically covering major institutional and target investors, questions from individual shareholders
are dealt with directly by the Executive Directors. Our AGM also provides an opportunity to interact with the Board. At our 2024 AGM our Directors
will be available to meet shareholders as usual.

In addition, we engage with our shareholders by:

• Publishing information on our website (lslps.co.uk). This includes all regulatory news announcements as well as copies of presentations, financial

reports, shareholder notices and our corporate sustainability reporting, which is set out in our Living Responsibly Report 2024.

• Holding a general meeting when required.

• Responding to email enquiries.

• Feedback received via our corporate brokers, Deutsche Numis and Zeus.

This reflects our aim to give shareholders fair and appropriate access. For example, while the Chair and Executive Directors have met with
significant shareholders as part of their induction, smaller shareholders can email us or attend the AGM to meet with them and other members of
the Board. Contact details can be found in the Shareholder Information section of this Report.

Colleagues
Colleague surveys are a key tool for engaging with our people. In 2023, we engaged a new survey provider to help us understand changes to our
workforce, following the reduction in colleague numbers due to the Group’s strategic projects. The 2023 survey received a 77% response rate
(2022: 60%) with an engagement score of 73%. The use of a new colleague survey process in 2023 means we do not have a comparable 2022
engagement score. The survey results are shared in detail with the Executive Committee, Divisional management teams, our Colleague Forums and
the Board. See the Environmental, Social and Governance Report (page 50) for further details.

Our Colleague Engagement, Inclusion and Diversity, and Communities forums (together the Colleague Forums) all revised their memberships
following the Group simplification. The chairs of each Colleague Forum report regularly to the Group CEO and the Living Responsibly Steering
Committee (SteerCo) on their discussions and activities, with onward reporting to the Board and its Committees. We also have Divisional colleague
forums, which report into Divisional management teams.

During 2023 Darrell Evans was our designated Non Executive Director for workforce engagement. During the year he met with the Colleague
Engagement Forum and contributed to Board discussions on colleague views, ensuring the Board can effectively consider colleagues in its
decision making. Following the Board changes in February 2024, Gaby Appleton took over as our designated Non Executive Director for workforce
engagement and she will meet with the Colleague Engagement Forum in 2024.

The Inclusion and Diversity, and Communities forums meet regularly online and in person and at least twice a year, one of those will be held as a
joint conference attended by the Group CEO and Executive Committee Sponsors. During 2023, the Inclusion and Diversity Forum launched three
Group-wide colleague affinity groups, covering cultural, LGBT+ and gender matters. We call the groups LSL Voices and hope to launch additional
Voices during 2024. For further details on the Inclusion and Diversity, and Communities forums, see the Environmental, Social and Governance
Report (page 50) and the Living Responsibly Report 2024.

Throughout 2023 we experimented with Group-wide webinars to provide updates on Group news to colleagues, including Q&A sessions with the
Group CEO and Group CFO. These were well received by colleagues and we plan to schedule more for 2024. We also keep colleagues informed
through emails from the Group CEO and Divisional managing directors, on matters such as business performance, supplemented by Divisional
communications and events, including updates on intranet sites and message boards. We publish a regular Group email newsletter (LSL Focus),
which includes a round-up of news, interviews, celebrations and updates from across the Group. In 2023 we rebranded the publication and moved
from quarterly to bi-monthly editions. All colleagues are invited to contribute.

In November 2023 we held our first Group-wide Senior Management conference since the Group simplification. The day included updates from the
Group CEO, Group CFO and the Divisional managing directors. The Chairs of our Inclusion and Diversity, and Communities forums were also invited
to present and challenge the attendees to think about how they can support the Forums.

We operate all-employee share schemes, such as the BAYE/SIP and SAYE, to provide a way for colleagues to acquire shares in LSL. The BAYE/
SIP scheme allows colleagues to save up to £150 per month and buy shares in LSL in a tax efficient manner. For every five shares bought through
the plan, we also award one matching share. Colleagues who participate in this plan also benefit from dividends which are reinvested in the plan,

aligning their interests with shareholders. The SAYE scheme enables colleagues to save monthly, with the opportunity to buy LSL shares at the end
of the saving period. During 2023, following the Group simplification, we launched our first SAYE since 2021 and 20% of our colleagues took up the
offer to start saving (2021: 16%).

In 2020, we awarded £500 of free shares to all colleagues, to recognise their contributions during the pandemic. These shares vested in 2023.
The awards we made in 2021 will vest in 2024. These free share awards also align colleague interests with our shareholders and help us to retain
colleagues within the Group.

LSL has whistleblowing arrangements to enable colleagues to raise concerns. Each year Group HR hosts a ‘Speak Up’ week, during which colleagues
are encouraged to raise serious concerns in confidence. With support from Internal Audit, any issues notified are investigated and addressed.

Customers
All Group businesses seek regular feedback from customers, which informs our decision making and the improvement and development of our
products and services.

The Group’s key customers are:

a. Financial Services Network: mortgage and protection brokers (appointed representatives and FCA authorised firms) and their customers.

b. Surveying & Valuation Services: lenders for valuations and data services; and consumers for private surveys.

c. Estate Agency Franchising: franchisees.

Each Division has arrangements to manage customer relations, which include obtaining customer feedback through relationship management
meetings, formal questionnaires, mystery shopping exercises and focus groups. e.surv also used Trustpilot to gather feedback from its B2C
customers.

Each Division monitors KPIs and management information relating to its customer service, including complaints information and adherence to
agreed service levels for corporate clients. We also have client relationship management arrangements. Additionally, e.surv monitors its Trustpilot
scores in relation to B2C customers.

Delivering high-quality services is important for customer satisfaction and retention, especially in the Financial Services Network and Surveying &
Valuation businesses, as customers can switch to an alternative supplier. In the franchise business, franchise partners enter into longer-term
contracts, which include post-termination restrictions to protect the franchisor’s interest.

Our predominately business-to-business service model means that, by delivering good-quality services to our customers, we also support the
delivery of their services to their customers which in turn generates revenue for the Group.

Division

LSL customer receives

LSL customers deliver

LSL financial impact

Financial Services Network

Compliance, technology, business
development and other business
support services

Mortgage, pure protection and
general insurance advice and sales
to their customers (consumers)

Receive payments directly from
brokers, plus procuration fees and
commission shares from product
providers

Surveying & Valuation

Valuation and data services which
support lenders’ origination and
management of mortgage assets

Consumers receive surveying and
home report services

Mortgages to consumers and
businesses

Payment for valuation and data
services

–

Payment for services

Estate Agency Franchising

Technology, brand and other
business support services

Estate agency and associated
services to consumers

Receive a franchise fee which is a
percentage of franchisee revenue

As part of regular and special business presentations from each Division during the year, the Board receives reports on customer feedback,
including consumer surveys and feedback from our key lender clients.

Below are some examples of how we engaged with our customers in 2023 and our plans for 2024:

Financial Services Network
• Feedback from brokers on product provider performance, as part of an annual awards structure and via an annual broker survey exercise.

• Informal feedback obtained through small group engagement meetings and on specific topics.

• Interactions with brokers via meetings with the Regional Sales Directors and via attendance at regional and national events, including the annual

PRIMIS Live Conference, which in 2024 was held at Wembley Stadium and in 2023 was held at the conference centre in Telford.

• During 2024, PRIMIS is setting up a Broker Council to further enhance the broker engagement arrangements.

Other InformationFinancial StatementsDirectors’ Report (including Corporate Governance Reports and Committee Reports) Strategic Report Strategic ReportOverviewOur Stakeholder Engagement Arrangements

Surveying & Valuation
• Relationship Managers support each lender relationship, with regular meetings to discuss service performance and any other issues relating to

services, including matters detailed in our agreement with the lender.

• Trustpilot scores are monitored for B2C customers. In 2023, e.surv significantly increased both the response rates and overall volume of Trustpilot

reviews for completed surveys, with 92% of reviews rated as 5 stars and an overall average TrustScore of 4.8 (excellent).

Estate Agency Franchising
• In 2023 we established a Franchise Advisory Council, made up of franchisees selected to represent all franchisees. Its purpose is to discuss topics

raised by the franchise partners or LSL and provide a feedback mechanism between Estate Agency Franchising and its franchise partners.

• We interact and seek regular franchisee feedback as part of our events programme, including the Annual National Conference which in 2023 was

held at the Belfry Hotel. We also held regional in person and a series of online events during the year.

Suppliers
Across the Group, we manage our key suppliers through supplier management protocols, which include reviews of contractual performance and
other KPIs. As part of Management’s reporting, including special business presentations, the Board also receives information on key supplier
engagements. As part of our Living Responsibly ESG programme, we had planned to develop a Group-wide supplier code of conduct which is based
on e.surv’s model (described below). This project was placed on hold while Group restructuring projects were progressed. During 2024, we intend
to progress towards establishing a Group-wide supplier code, as part of a supplier management framework, and taking into account best practices
already established within the Divisions.

Within e.surv, suppliers are managed via procurement and supplier policies which include commitments to ensure that our purchasing and
contracting activities are aligned with our values. We also risk rate our suppliers by reference to their levels of access to our data and systems.
Suppliers are also continually monitored to identify changes in service to monitor risk and evaluate the supplier’s security posture.

e.surv also appoints relationship managers which meet regularly with each supplier to manage its performance.

Details relating to our payment practices are included in the Environmental, Social and Governance Report (page 54).

See also below our Directors’ Duties Statement for examples of how shareholders, colleagues and customers were considered in the Board’s
decision making during 2023.

The Environmental, Social and Governance Report (page 50) also describes how our businesses communicate with customers and suppliers.

Directors’ Duties Statement (s172 Companies Act 2006 Statement and Provision 5 of the Code)
Section 172 of the Companies Act 2006 sets out certain matters company directors must consider when performing their duty to promote the
success of the company. These matters include the interests of stakeholders and the impact of decisions in the long term.

To support the Board, Management is required to identify the stakeholder groups impacted by any proposals submitted for approval and explain
those potential impacts. During 2023, as part of the review of the Remuneration Committee’s arrangements, we put the same protocol in place.

The following examples demonstrate how the Directors have considered stakeholders in their principal decisions during the year.

s172 examples
During the year we have significantly restructured both our Financial Services and our Estate Agency Divisions. Both are now focused on business-
to-business services and as a result our Financial Services and Estate Agency Franchising Divisions are less exposed to the housing market cycle. Set
out in the table below are three examples of how the Directors discharged their duties under s172 of the Companies Act 2006.

s172 Duty to promote the success
of the company for the benefit of its
members as a whole, and in doing so
have regard (amongst other matters)
to:

a. Likely consequence of any
decision in the long term.

b. The interests of our colleagues.

Example 1 – Disposal of D2C broker
businesses

Example 2 – Franchise of the Estate
Agency Networks

Example 3 – Acquisition of
TenetLime

We disposed of our D2C broker
businesses: RSC, Group First, Embrace
Financial Services and First2Protect.

We franchised our entire owned
estate agency network of 183
branches. This included entering into
long-term franchise agreements.
Following completion, we became
one of the largest providers of estate
agency franchise services in the UK.

We exchanged contracts to acquire
TenetLime, to add to the PRIMIS
Network. Completion was subject
to FCA approval, which we received
in November 2023, resulting in
the transaction completing in
February 2024.

The four D2C broker businesses have
been sold to Pivotal Growth, which is
our joint venture with Pollen Street
Capital. Pivotal Growth’s strategy is to
buy and build a D2C broker business,
and we believe that it is better placed
to grow these businesses for the
benefit of shareholders.

The owned branches were franchised
to existing franchisees and
experienced former members of the
Estate Agency management team.
The enlarged franchise network of
over 300 territories is operated by 62
franchisees.
Franchising the network resulted in
significant cost reductions and the
Estate Agency Franchising Division is
less capital intensive.

The addition of TenetLime significantly
expanded the PRIMIS Network, adding
over 250 mortgage and protection
advisers and 153 firms.
The acquisition enables us to leverage
our existing network infrastructure,
to deliver synergies and enhance the
Group’s margin.

Colleagues employed in these
businesses are no longer part of the
Group and, where they received
Group benefits (such as options under
employee share schemes), we have
put in place arrangements to protect
their benefits.

A small number of colleagues have
joined PRIMIS as a result of the
acquisition and they now benefit from
our employee arrangements. We also
ensured that we considered their
existing terms of employment as part
of their transfer into the Group.

c. The need to foster the company’s
business relationships with
customers.

Following the disposal of the D2C
broker businesses their customers
continue to be served by these
businesses under their new
ownership.

In developing our Financial Services
growth strategy, we have sought to
ensure that our now enlarged network
members and their customers benefit
from the services we provide.

In developing our franchise business
our franchisees are now our
customers and we are fostering our
relationships with the franchisees.
Our previous customers (people
buying/selling or renting homes) are
now customers of our franchisees
and continue to benefit from Group
services as they form part of the
services that our franchisees provide
to their customers.

d. The need to foster the company’s
business relationships with
suppliers.

We also sought to ensure there is
no adverse impact on our suppliers
arising from any disposals and, where
possible, we have sought to engage
with our suppliers where we have
identified an impact.

We also sought to ensure there is
no adverse impact on our suppliers
arising from the franchising of the
network and have engaged with our
suppliers, many of whom continue to
supply services to the network.

As part of the migration into the
PRIMIS Network we have sought a
smooth transition into the network
and this involved engaging with our
suppliers to ensure this is achieved.

e. The impact of the company’s
operations on the community and
environment.

As a result of the disposals, we no
longer provide services from locations
where the disposed businesses
operate. However, the impact on
local communities is mitigated as the
businesses are expected to continue
to operate from those locations.

The acquisition has had no impact
on the locations where PRIMIS
operations are based.

As a result of the franchising, we no
longer directly provide services from
the locations where the businesses
operate. However, we are still
supporting those communities by
appointing franchisees to operate
their business in the territory. Further,
the impact on local communities was
mitigated as the franchised businesses
continue to operate from those
locations.

f. The desirability of the company
maintaining a high standard of
business conduct.

The disposed D2C broker businesses
remain customers of the PRIMIS
Network, which provides services that
support the business continuing with
its high standards of conduct.

g. The need to act fairly between
members of the company.

The disposals deliver value to
shareholders, especially as it
reduces our exposure to market
cycles and focuses our investment
on high-growth areas, notably our
Financial Services Networks, while we
benefit from further growth by our
shareholding in Pivotal Growth.

The territories have been franchised
to existing franchisees and to previous
colleagues who had experience
and a track record of operating
estate agency businesses while
demonstrating high standards of
business conduct.
Further, as members of the LSL
franchise networks, they will continue
to operate in accordance with our
franchise standards.

The franchising of the networks
delivers value to all shareholders,
especially as it reduces our cost base
and our exposure to housing market
cycles. It also focuses our investment
on the delivery of business-to-
business services.

The TenetLime firms will be subject to
PRIMIS’s high standards of compliance
and business conduct standards.

The acquisition delivers value to all
shareholders as part of our growth
strategy.
The increase in membership will help
us to further invest in our service
offering to member firms, as well as
delivering scale economies to support
further growth.
The acquisition also underpins our
leading position in the mortgage and
protection network market.

Principal Risks and Uncertainties

Our risk framework
Effective risk management is critical to delivering our purpose. We adopt a prudent approach to risk management, taking only those risks which
support our strategy and managing them rigorously through effective governance.

Our risk management processes have been in place throughout 2023 and have continued to operate through to the date of this Report. Our risk
management processes ensure we appropriately manage the risks that arise from our activities by:

a. A rigorous assessment of our principal risks and uncertainties, including those that would threaten our business model or future performance, or
increase the potential for customer harm.

b. Robust decision making, ensuring we take the right risks in a considered way that supports the strategy and maintains our reputation for high
standards of business conduct.

c. Ensuring the risks we take are understood, controlled and managed appropriately.

We have adopted a ‘three lines of defence’ approach to risk management:

a. First line – line management are accountable for day-to-day operations and have responsibility for the management and ownership of risks and
controls within their business units.

b. Second line – risk and compliance teams are responsible for the oversight and challenge of the first line in its day-to-day management, control,
monitoring, and reporting of risks. Our risk and compliance teams are independent of the management personnel responsible for originating risk
exposures.

c. Third line – Internal Audit provides independent assurance to the Board, Audit & Risk Committee and senior management over the effectiveness
of our risk management control and governance processes.

Each of our Divisions has risk management arrangements, systems and controls which feed into the Group’s overall arrangements. Divisional Chief
Risk Officers (CROs), Heads of Risk, and governance forums oversee Divisional risk management frameworks, which involve the use of risk metrics,
policies, risk and control assessments, risk treatment plans and tracking of emerging risks.

The Group’s Audit & Risk Committee oversees Divisional risk management arrangements, including their top and emerging risks. The Committee
also regularly reviews the Group’s principal risks and uncertainties, including an annual review to confirm the effectiveness of risk management and
internal control systems, which involves considering emerging risks and the outputs of our stress testing routines.

For example, consideration has been given to recent FCA regulatory themes including vulnerable customers, diversity and inclusion and later life
lending in the Financial Services Division, as well as the embedding of the FCA’s new Appointed Representative Regime and the new Consumer
Duty requirements. In the other Divisions, the Management have monitored the progression of the Renters Reform Bill through Parliament and
monitored the management of capacity measures within e.surv following improvements in instruction levels.

The Group scrutinises and challenges Divisional risk management activities through a regular Internal Audit cycle and through risk-based governance
forums, attended by senior Group and Divisional representatives.

2023 risk framework and control environment developments
We continued to invest in and enhance our risk management arrangements across the Group. For example, outlined below are key risk management
developments completed during 2023 within our Financial Services Network:

a. To support new FCA consumer duty requirements, we introduced enhanced processes to assess and oversee the delivery of good outcomes.

b. We made changes to the Division’s people resourcing and governance arrangements, including appointing a new experienced managing director
and appointing an independent non executive chair together with introducing three further Divisional non executive director roles including the
movement of the previous managing director into a new non executive role with responsibilities for a Members Council.

c. We invested further in the Division’s risk and compliance capabilities, including enhancing the Enterprise Risk Management framework.

2024 risk framework and control environment development plan
Our risk plans for 2024 include:

a. An independent review of Group risk management framework initiated in the first quarter of 2024.

b. Further strengthening the Financial Services Network’s governance structure, with the rollout completed in January 2024 of new PRIMIS
combined board committees chaired by independent non executive directors (Audit & Compliance, and Risk & Customer Outcomes).

c. Enhancing Group governance routines which oversee the effectiveness of activities to manage information security, data protection and business
resilience risks.

d. Continued progression of our Living Responsibly ESG programmes, which includes managing ESG-related risks, promoting diversity and
inclusivity, and encouraging community and environmental initiatives.

e. Maintaining our horizon-scanning routines, reassessing our risk management resourcing and continuing to evaluate the effectiveness of linkages
between Group and Divisional risk frameworks.

Other InformationFinancial StatementsDirectors’ Report (including Corporate Governance Reports and Committee Reports) Strategic Report Strategic ReportOverviewPrincipal Risks and Uncertainties

Our risk profile
The Board has assessed our principal risks, including emergent areas. The Board performs this exercise twice yearly as part of its agenda,
incorporating insights obtained from the Audit & Risk Committee and routines involving the Executive Committee, Divisional CROs and Internal
Audit.

Our principal risks and uncertainties are outlined below. These are the most significant risks that may adversely affect our business strategy,
financial position or future performance. There have been no changes to our individual principal risks and uncertainties categories. We consider our
overall risk exposure to be stable. Increased risks have arisen from influences such as poor economic conditions, heightened IT security threats and
new regulatory requirements, whilst the execution of strategy initiatives and change programmes have resulted in less exposure to market cycles
in our Financial Services and Estate Agency Franchising Divisions, a lower cost base and focus on business-to-business services delivering good
customer outcomes.

Nature of principal risk and uncertainty

Mitigating actions

Gross trend
(pre-mitigating actions)

• Maintained strong capital and liquidity levels.

Stable

• Sale and franchising of estate agency services has resulted in a lower

fixed cost base, less exposure to housing market volatility and a revised
platform from which to grow a more resilient B2B client portfolio.

• Divestment of selected Financial Services units has lowered our cost

and capital base.

• Proactive management of the Surveying & Valuation Division’s cost
base, while maintaining capacity to meet lender long-term demand
with emphasis on expanding D2C channels and exploring new service
offerings.

• Ongoing focus on business efficiency and cost management.

• Ongoing monitoring of market disruptor activity, with consideration of

Stable

response plans for related threats and opportunities.

• Established governance arrangements to support new technology,

service and product initiatives.

• Regular assessment of strategy driven by Executive Committee

Decreasing

members, with oversight from the Group CEO, Group CFO and the
Board.

• Simplification of the Group makes the associated risks easier to

manage.

• Continuing to build on the Group’s new business model, post-

simplification.

• Financial Services Network has grown through acquisition (TenetLime).

EXTERNAL:

1. UK housing market

The cyclicality of the UK housing market exposes the
Group to volatility in housing transaction volumes.
The UK economic environment remains challenging
with fewer housing transactions, lower house-
price inflation, cost of living pressures and reduced
mortgage lending. Reduced product transfer volumes
also impact adversely on valuation volumes. The
effects of ongoing geopolitical tensions and future
elections further increase the levels of uncertainty in
the markets.

2. Market disruption

We may be exposed to competitive pressures from
market participants, including new entrants, disruptor
business models (including direct sales mediums),
artificial intelligence platforms and disintermediation
threats.

INTERNAL:

3. Execution of strategy

We might not effectively execute our strategic
initiatives and associated capital allocations, and
therefore fail to deliver the required levels of Group
growth.
Successful steps taken along these pathways in 2023
have restructured the Group, reduced our cost base
and simplified our activities. This has reduced levels of
gross risk for this category since last year.

4. Professional services

We may receive claims arising from systemic lapses in
the delivery of professional services across the Group.
Relevant risk factors include lending practices,
mortgage product types/mix, economic conditions
and the adequacy and availability of insurance to cover
potential claims.

5. Client contracts

Significant falls in business volume could arise from the
loss or withdrawal of key B2B clients, brokers and/or
franchisees.
We must maintain service delivery levels and
relationships with key profitable B2B clients, brokers
and/or franchisees.

6. Business infrastructure (including technology)

We may fail to maintain robust systems and
technology to promote our competitiveness and client
servicing.
The environment involves multiple change
management initiatives, integration of IT platforms and
maintenance of resilient ‘business as usual’ IT systems
for employees, appointed representatives, franchisees
and clients. Our customers rely upon our systems and
services being available when they need them.

• Governance routines ensure we monitor relevant claims trends and put

Stable

in place appropriate insurance arrangements.

• Limited exposure to products with higher risk features and

complexities. For example, our Financial Services Network businesses
do not supervise investment advice and the mortgage valuation
activities in the Surveying & Valuation Division are linked to
mainstream lending, rather than sub-prime.

• Following the franchising of our Estate Agency services, customer

claims exposure now principally lies with franchisees.

• Ongoing monitoring and renewal of key contracts, to reduce the risk of

Stable

volume shortfalls.

• Product and market diversification initiatives reduce any over-

dependencies.

• Benchmarking of product and service propositions, to ensure we are

delivering value versus market-leading standards.

• Ongoing rigorous oversight and delivery of service levels via dedicated

relationship managers.

• Ongoing monitoring of financial health of PRIMIS Network member

firms and Estate Agency franchisees.

• Prioritised strategic investment in our systems and technology

Stable

capability to promote efficiency and meet customers’ current and
future needs.

• Continue to strengthen our internal control environment to improve

resilience and proactively monitor service provision.

7. Information security (including data protection and cyber threats)

The threat of cyber-attacks continues to increase with
ongoing geopolitical tensions, advancement of threat
vectors (including artificial intelligence) and supplier
dependencies, all posing a threat to the Group, our
colleagues and our customers.
A cyber-attack could have a range of negative
consequences, including making our systems
unavailable, the loss of critical data or leaks of
confidential information about our business,
colleagues or customers. This in turn could lead to
loss of business, damage to our reputation and/or
regulatory fines.

• Continuous monitoring of the cyber threat level and investment in our

Increasing

cyber defences, to ensure we are able to respond appropriately.

• The Data and Information Security Committee (DISC), along with
dedicated Divisional information security specialists and Data
Protection Officers, oversee adherence to Group defined information
security minimum standards.

• System security is supported by penetration testing, intrusion

scanning, secure back-up routines, encryption of key data and a robust
access control framework.

• Ongoing investment in training and education ensures our colleagues

remain vigilant in everything they do.

Other InformationFinancial StatementsDirectors’ Report (including Corporate Governance Reports and Committee Reports) Strategic Report Strategic ReportOverviewPrincipal Risks and Uncertainties

8. Regulatory compliance

Our regulatory landscape includes FCA rules and
consumer protection laws. We embed a steady flow
of recent and emerging requirements, including
environmental standards, consumer duty, the
appointed representative regime and tenancy reforms.
Regulators have also focused recently on specific
product areas, such as general insurance and later-life
lending.
Changes to regulations can increase our compliance
costs. Failure to comply with regulations can lead to
fines, damage to our reputation and loss of business.

9. Environmental, social and governance (ESG)

• Executive and non executive risk management committees in place

Stable

supported by compliance and risk teams.

• Structured initiatives in place to identify and deliver relevant

regulatory changes promptly and proportionately.

• Engagement with all our regulators, to identify and appropriately

respond to regulatory requirements.

• Successful delivery of recent Consumer Duty and AR Regime

requirements.

• Reduced regulatory risk exposure in estate agency activities through
implementation of franchise model, with the franchisee retaining the
core compliance obligations.

Failure to identify and effectively manage sustainability
risks critical to our business could affect our
productivity, reputation, colleague engagement and
retention, and/or market value.

• Living Responsibly ESG programme promotes our business as a great
place to work, encouraging diversity and inclusion, ensuring effective
arrangements for colleague dialogue and feedback, minimising our
impact on the environment and promoting excellent governance.

Stable

Climate-related risks are an emerging area. Refer to
the TCFD and CFD reporting on pages 34 for further
details.

10. Colleague resources, talent and expertise

Failure to attract, develop and retain talented
colleagues may affect our ability to deliver our
strategic priorities.
The risks are influenced by the size of our colleague
population and external economic factors such as
labour supply shortages.

• The Group CEO sponsors our Living Responsibly ESG programme and

Chairs the Steering Committee, with Executive support.

• Standalone sustainability report (Living Responsibly) published

annually to ensure transparency of progress against targets and to
promote engagement with relevant stakeholders.

• Group Head of ESG appointed in 2023, following an internal promotion,

provides support to Group and Divisional arrangements.

• Engagement with colleagues via the Group’s colleague forums,

Divisional working groups, colleague surveys and training initiatives.

• Group governance routines, policies and initiatives, overseen by the
Remuneration and Nominations Committees, to recruit and retain
talent in key strategic roles.

• Simplification of the Group’s activities have reduced the scale and

associated risk of the employee cost base.

• Focused on strengthening senior governance and risk-related roles

within our Financial Services Network, including the appointment of a
new managing director and independent non executive appointments
supporting Divisional board and new committee structures.

• Colleague surveys, our Colleague Forums and welfare initiatives enable
us to identify and address colleague pressures and to promote an open
culture.

Decreasing

Our viability
The Directors have assessed the Group’s prospects and financial viability, taking into account its current and expected financial position, existing
banking facilities, actions available to Management and the potential impact of its principal risks and uncertainties.

Assessment of prospects
This section of the Report describes how the Directors have considered and reported on the Group’s prospects. Our purpose, business model and
strategy are central to understanding our prospects and are detailed earlier in this Report (page 11).

The Board assesses the Group’s prospects throughout the year and particularly during the strategic, three-year planning and budget processes. This
includes an annual review of our plans, which is led by the Group CEO and Group CFO, with input from Executive Committee members who run our
Divisions and Group functions.

The Directors participate in the annual planning processes. Part of the Board’s role is to consider whether our plans take appropriate account of the
changing environment, including macroeconomic, political and geopolitical, regulatory, technological and climate-related matters.

This process results in the Board adopting strategic objectives and detailed financial forecasts over a three-year period, which we refer to as the
three-year plan. The Board reviewed the latest updates to the three-year plan in November 2023 and, in assessing the Group’s viability, considered
our current position and our prospects of operating over the three-year period ending 31 December 2026.

Assessment of viability
The strategic plan reflects the Directors’ best estimate of the Group’s prospects in accordance with provision 31 of the Code. We have assessed
LSL’s viability over a longer period than the 12 months required by the going concern provision of the Code.

For the purposes of assessing the Group’s viability, we determined that a three-year period ending on 31 December 2026 was appropriate, as it was
consistent with the Board’s strategic planning cycle. Our assessment took into account the Group’s current position and prospects, the Board’s risk
management arrangements and the Group’s principal risks and uncertainties.

To make this assessment, we considered several severe but plausible scenarios that stress test our business performance. The scenarios modelled
are based on input from a functional group of senior managers, including representatives from the Divisional finance teams. The Group’s base
forecast and scenarios assume all three Divisions continue to operate.

The viability scenario modelled reflected the following risks:

• A severe downturn in our markets, in which housing market transactions decrease by an average of 30% versus 2023, 16% below the level seen

during the last recession in 2008, caused by economic conditions (such as high inflation and interest rates and reduced availability of debt
funding), or political or other uncertainties, or a combination of these issues.

• The loss of a major contract (top five lender, which has not occurred for over five years) and a PI risk event in the Surveying & Valuation Division,

reflecting a significant increase in valuation claims.

• A material one-off regulatory fine over £1m following a data breach, assuming any insurance recovery would not occur within the planning

window.

We modelled detailed assumptions by month across the three-year period. The models included both the individual and the aggregate impact of
the risks above, and measured the downside impact on revenue and the actions we would take to retain cash reserves and maintain our operations,
such as suspending capital expenditure. We have also considered climate-related impacts but our current assessment is that this would not be
material enough to impact our viability during the planning window.

We also made assumptions about the stability and potential growth of the Group’s recurring income and counter-cyclical businesses, notably
mortgage and insurance renewals, lettings (via our Estate Agency franchisees) and asset management, which account for c30% of Group Revenue,
and the extent to which we could quickly ramp up some activities, such as remote valuations, in extreme market conditions. The modelling and
assumptions took account of our broad range of services across the UK, which gives us some protection from the impact of stress scenarios.

The stress testing indicated that the Group would be able to withstand the financial and operational impact of each scenario and therefore continue
to operate and meet its liabilities, as they fall due, over the three-year period ending 31 December 2026. Under all the modelled scenarios, the
Group had sufficient liquidity throughout the going concern period and to the end of the planning period in December 2026. Funding for the
Group has been further strengthened with the restatement and amendment of the Group’s banking facility of £60m, which was completed in
February 2023 for a period up to May 2026, replacing the previous £90m facility. This includes the assumption that a successful renewal of the
£60m facility is achieved before the expiry of the current facility.

We also modelled a reverse stress scenario, to assess the level to which market conditions would have to deteriorate before we would breach our
banking covenant ratio of 2.75x Net Debt: adjusted EBITDA (with a ratio of 3.00x allowable for two consecutive test periods within the terms of
the current banking facility). Excluding any action we would take to retain cash reserves and maintain our operations, the modelling indicated that
UK housing market transaction activity would have to fall to a level 16% below the financial crisis of 2008 in the first year of assessment with no
material recovery, which is equivalent to a 30% fall in comparison to 2023. We consider the likelihood of this to be remote.

Directors’ viability statement
Based on their assessment of the Group’s prospects and viability, the Directors confirm that they have a reasonable expectation that the Group will
continue to operate and meet its liabilities, as they fall due, for the next three years, and that the likelihood of extreme scenarios which would lead
to a breach of banking covenants is remote.

The Directors also confirm that in making this statement they carried out an assessment of the principal and emerging risks and uncertainties facing
the Group, including those that would threaten its business model, future performance, solvency or liquidity.

The Board also considered it appropriate to prepare the Financial Statements on the going concern basis, as explained in the Basis of Accounting
paragraph in the Principal Accounting Policies section, within the Financial Statements of this Report.

During 2023, the Audit & Risk Committee oversaw the process by which the Directors reviewed and discussed Management’s assessment in
proposing this viability statement.

Other InformationFinancial StatementsDirectors’ Report (including Corporate Governance Reports and Committee Reports) Strategic Report Strategic ReportOverviewNon-Financial and Sustainability Information Statement
including TCFD and CFD reporting

Non-Financial and Sustainability Information Statement
The table below includes information required by section 414CB of the Companies Act 2006:

Reporting requirement

Cross reference/location of reporting

Climate-related financial disclosures

TCFD and CFD reporting below

• Environmental matters (including the impact of

Corporate Governance Report

our businesses on the environment)

Environmental, Social and Governance Report

• Our colleagues

• Social matters

• Respect of human rights

• Anti-bribery and corruption matters

Business Model

Non-financial policies

Principal risks relating to the non-financial matters and
how these are managed

Stakeholder Engagement Report

Living Responsibly Report 2024

Purpose, Strategy, Culture, Values and Business Model

The Environmental, Social and Governance (ESG) Report includes overviews of our
policies relating to:

• Human rights and modern slavery

• Anti-corruption and bribery

• Whistleblowing and speak-up arrangements

• Health and safety

• Colleague employment policies

Principal Risks and Uncertainties

Non-financial KPIs

Environmental, Social and Governance Report Report

Corporate Governance Report

Living Responsibly Report 2024

Page

See separate
report

Climate-related financial disclosures
The disclosures contained in this section of the Report have been prepared in accordance with the following reporting requirements:

1. The Companies Act (section 414CB(2A)).

2. Listing Rules (chapter 9).

3. Task Force on Climate-related Financial Disclosures (TCFD).

4. Companies (Climate-related Financial Disclosure) Regulations 2022 (CFD).

5. Streamlined Energy and Carbon Reporting (SECR) (specifically the requirements to disclose greenhouse gas emissions, energy consumption,

energy efficiency action are set out in Schedule 7 of SI2008/410).

TCFD and CFD
This section of the Report includes our disclosures against the TCFD recommendations, as well as the requirements of the CFD and the Listing Rules.

In the table below, we provide disclosures which are consistent with all 11 TCFD recommendations and we confirm our compliance with the CFD
disclosure requirements. The table also explains the steps we are taking during 2024 to improve our climate-related arrangements. During 2024,
the EWG will lead our climate-related risk and opportunity assessment approaches across our Group. Whilst we are compliant with all of the TCFD
disclosure requirements, we intend to focus and improve our reporting on strategy (2a) and risk management (3a).

Further information/cross-
references to sections within
this Report

Corporate Governance Report
(page 65)

Principal Risks and Uncertainties
(page 29)

About LSL and Business Model
(pages 03 and 11)

Directors’ Report (viability
statement) (page 33)

TCFD required disclosure

Reporting and compliance

1. Governance
Disclose the organisation’s governance around climate-related risks and opportunities

a. Describe the Board’s oversight
of climate-related risks and
opportunities

b. Describe Management’s role in
assessing and managing climate-
related risks and opportunities

Board oversight:

• Our governance arrangements for assessing and managing climate-related risks
and opportunities are described in the Climate-related Governance section
below.

• Reporting to the Board and to the Audit & Risk Committee includes reporting
on climate-related risks and opportunities. In 2023, the Board reporting was
submitted via the Living Responsibly ESG reporting, and the Audit & Risk
Committee also reviewed our TCFD and CFD reporting (including climate-related
risks) as part of the review of this Report. ESG risks are also included in our
Principal Risks and Uncertainties.

• In 2023 the Board received an update on the changing regulation and what this

meant for them within the Living Responsibly ESG update.

• Our arrangements reflect the Group’s operating model and describe how the

Board and the Audit & Risk Committee provide oversight of our climate-related
arrangements.

Management’s role:

• Our Living Responsibly ESG programme is sponsored by the Group CEO and it

includes our environmental programme.

• Further details on Management’s role in our arrangements is outlined in the

Climate-related Risk Assessment Methodology section below.

• Our arrangements in 2023 include establishing a climate-related working group
(CRWG), which has contributed to the assessment of climate-related risks and
opportunities.

• Management has also considered climate-related impacts and concluded that
the impact is not material enough to impact our viability during the planning
window – for further information see the viability statement (included in
Principal Risks and Uncertainties).

Reporting:

• We have during 2023 developed our climate-related reporting to ensure

compliance with both TCFD and CFD. We are where appropriate engaging with
professional advisers to support our reporting.

• Our climate-related reporting is led by the EWG with support from our Head of
ESG who is enrolled on a Business Sustainability Specialist Masters programme.
By upskilling our colleagues, we are strengthening our internal arrangements.

TCFD required disclosure

Reporting and compliance

2024 priorities

Development of Board and Audit & Risk Committee oversight arrangements:

Further information/cross-
references to sections within
this Report

• Review the processes and frequency for informing the Board and Audit & Risk

Committee about climate-related matters, including monitoring the meeting of
any targets, which will be recommended by the EWG.

• Review how the Board and Audit & Risk Committee consider climate-related

matters in its decision making including in relation to strategy and risk
management.

Development of management arrangements:
• Review, develop and support the roles of the EWG and CRWG within the

environmental strand of our Living Responsibly ESG programme, including how
the Group assess and manage climate-related risks within our Divisions.

• Ensure risk management frameworks fully integrate climate-related risks.

• Ensure business planning considers climate-related risks and opportunities.

Training and education:
• The EWG will monitor the delivery of colleague education and training as part of

our climate transition plans.

• We will develop this education and training based on the work e.surv have
undertaken in 2023, because their environmental programme is further
developed than the rest of the Group.

2. Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning where
such information is material

a. Describe the climate-related
risks and opportunities the
organisation has identified over
the short, medium, and long term

• Our key climate-related risks and opportunities are described in the climate-

related risks and opportunities section below.

• The time periods we applied to our assessment are:

– short term (0-3 years);

– medium term (4-9 years); and

– long term (10+ years).

• These time periods were chosen because they reflect best practice and they fit

in with our normal planning cycles:

– short term (0-3 years) aligns with our three-year planning cycle; and

– medium term (4-9 years) was selected to include 2030 due to the significance
of this date to UK transition plans and our lender clients. It also includes the
date for phasing out new petrol and diesel cars.

TCFD required disclosure

Reporting and compliance

b. Describe the impact of climate-
related risks and opportunities
on the organisation’s businesses,
strategy, and financial planning

• Following the restructuring completed during 2023, our Divisions are asset light,

resulting in limited exposure to physical climate-related risks.

• Our businesses provide B2B services which generate relatively low levels of

Scope 1 and 2 emissions. We report our Scope 3 emissions for the first time in
this Report.

• We have, in 2023, focused on progressing our environmental programme and

our climate-related reporting.

Further information/cross-
references to sections within
this Report

c. Describe the resilience of the
organisation’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower scenario

• Our strategic objectives include focusing on our Living Responsibly ESG

programme.

• We have performed scenario testing on the impact of the climate-related

Purpose, Strategy, Culture, Values
and Business Model (strategic
objectives) (page 11)

risks and opportunities. Impacts that we have identified, are described in the
resilience testing section below.

Scope 3 emissions reporting
(page 47)

2024 priorities

• Our assessment is that we have appropriate mitigations in place to ensure that
the climate-related risks and opportunities will not have a material impact
(including financial) on our business model or strategy. We will keep this under
review if our assessment of the risks and opportunities changes.

• Complete work to further understand and set targets for reducing Scope
3 emissions, including our net zero target, taking into account the Group
restructuring completed during 2023.

• We will also update our climate transition plan to reflect the Group

restructuring.

• Continue to develop our response to climate-related issues and our modelling

to assess different climate-related scenarios.

3. Risk management
Disclose how the organisation identifies, assesses, and manages climate-related risks.

a. Describe the organisation’s

• Our governance and risk management arrangements include Divisional risk

processes for identifying and
assessing climate-related risks

b. Describe the organisation’s

processes for managing climate-
related risks

c. Describe how processes for
identifying, assessing, and
managing climate-related
risks are integrated into the
organisation’s overall risk
management

frameworks. Each Division has a Chief Risk Officer or Head of Risk (referred to in
this Report as the CRO), who is part of each Division’s management team and is
the link between Group and the Divisional management teams when identifying
climate-related risks.

• During the year, the CROs participated in the CRWG to consider and review the
impact of climate scenarios on their Division. This resulted in the completion of
the risk assessment. Any risks emerging as material (using existing Divisional
risk frameworks) were included in each Division’s risk registers.

• The CROs are each responsible for ensuring climate-related risks are integrated

into Divisional risk management arrangements.

• Further information on materiality and the LSL response is included in the

climate-related risk assessment section below.

2024 priorities

• The EWG and the CRWG will work to further develop our arrangements for

assessing and managing climate-related risk and opportunities, building on the
work we completed in 2023.

• Continue to review climate-related risks and opportunities identified in 2023,
taking into account the Group’s restructuring, and update them if necessary.

• Ensure climate-related risks are included in the continued development of our

Group risk framework and arrangements.

Audit & Risk Committee Report
(page 85)

Principal Risks and Uncertainties
(page 29)

TCFD required disclosure

Reporting and compliance

Further information/cross-
references to sections within
this Report

4. Metrics and targets
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material

a. Disclose the metrics used by the
organisation to assess climate-
related risks and opportunities
in line with its strategy and risk
management process

b. Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse
gas (GHG) emissions, and the
related risks

• Our reporting on environmental metrics is set out in the climate-related metrics
and targets section below, which includes our Scope 1, 2 and 3 GHG emissions
reporting.

Living Responsibly Report 2024

• Our reporting on environmental metrics is set out in the climate-related metrics
and targets section below, which includes our Scope 1, 2 and 3 GHG emissions
reporting.

• Data collection and analysis has been a significant focus for us during 2023. Our
work has been supported by Energise (net zero consultancy and sustainability
expert).

• We report using a financial control methodology, in accordance with the GHG

protocol guidance and emissions factors.

• Pivotal Growth is not included in the 2023 figures, due to the lack of available

data, but will be included in future.

c. Describe the targets used by the
organisation to manage climate-
related risks and opportunities
and performance against targets

• We have reported against the targets contained within our climate transition

Living Responsibly Report 2024

plan (published in 2022).

• Additional environmental metrics, including the Group’s baseline emissions data
and Divisional emission breakdown data, are included in the Living Responsibly
Report 2024.

• We have not currently set any additional targets, metrics or KPIs relating to

climate-related risks and opportunities.

2024 priorities

• Review and update the period for benchmarking emissions data, following the

restructuring completed during 2023.

• As a result of the restructuring, we are not currently using any other data to

manage our climate-related risks and opportunities.

• Update our climate transition plan to reflect the Group’s restructure and full

carbon footprint, including resetting the benchmark period, taking into account
the new emissions data.

• EWG will continue its work to enhance our understanding of our environmental
impacts and to identify and agree additional KPIs, and metrics and targets, if
where appropriate/necessary.

• Following further assessment and understanding of our Scope 3 emissions
during 2024 the EWG will prioritise updating our climate transition plan.

Climate-related risk and opportunities governance:

Governance structure:
Within our governance structure, climate-related issues are assessed and managed as follows:

Body

Board

Role

Arrangements

Has overall oversight of the assessment
of climate-related risks and opportunities
within the Group.

Audit & Risk Committee

Oversees compliance with our corporate
sustainability and ESG strategies and
programme, ensures our risk framework
incorporates sustainability-related risks and
opportunities, and considers what is material
to the business.

• Each year as part of the Board’s meetings planning process, we schedule
a presentation on our Living Responsibly ESG programme, which includes
a report on the EWG’s work. Additional presentations, including updates
and progress reports, will be scheduled during each year as required.

• Environmental reporting is delivered by the Chief People Officer (CPO), the

Chair of the EWG and the Head of ESG, as appropriate.

• The Board receives reports from the Group CEO, Group CFO and each

Divisional managing director at Board meetings, which include a review of
financial and operational performance, including risk matters.

• The restructuring of the Group during 2023 has resulted in a need to

review and re-baseline our environmental data. The EWG is leading on
this work, and it will report to the Board.

• Each year, the Committee reviews the Group’s Principal Risks and

Uncertainties (see page 29), including our ESG risks.

• The Committee reviews the methodology and assessment of our climate-
related risks and opportunities and provides oversight and assurance to
the Board on our assessment and reporting of them.

• As part of its annual meeting cycle, the Committee invites each Divisional

managing director to present on all material risks, including climate-
related risks where applicable.

• Reporting to the Committee includes a review of TCFD and CFD and

more generally the impact of climate-related matters within our financial
reporting.

Remuneration Committee

Ensures that performance conditions for
incentive schemes are aligned with our
corporate sustainability and ESG strategies.

• The Committee considers ESG matters as part of setting the Executive
Director and Senior Management remuneration arrangements. (See
page 104 for more details).

Nominations Committee

Ensures consideration of our corporate
sustainability and ESG strategies when
reviewing Board and Senior Management
appointments.

• During the year the Committee considered the skills, expertise and

experience of the Board and, as part of its regular review of Non Executive
skills and experience, it noted that Sonya Ghobrial, independent Non
Executive Director, has expertise in ESG matters. She provides feedback
on our programme and strategy each year.

Executive Directors – Group
CEO

Has overall responsibility for our corporate
sustainability and ESG strategy.

• David has established a Living Responsibly Steering Committee (SteerCo)

which he is also a member of (see below).

Executive Directors – Group
CFO

Leads reporting on risks and internal
controls and is responsible for the three-year
planning and budget processes.

• Group Finance, with support from Internal Audit, leads the assessment

of the Group’s Principal Risks and Uncertainties, which takes into account
climate-related risks.

• Within the three-year planning process, the Divisions identify in their

business plans: (a) climate-related transition risks and related costs; (b)
climate-related physical risks and related costs; and (c) climate-related
opportunities and any associated revenue.

• During 2024 the Group CFO is joining the SteerCo to support the
development of our governance arrangements and reporting.

Body

Role

Arrangements

Living Responsibly Steering
Committee (SteerCo)

Responsible for guiding our Group-wide
ESG strategy, aligning it with our strategy
and business model, and implementing
arrangements to identify climate-related
risks and opportunities.

Environmental Working
Group (EWG)

Leads the development of our environmental
strategy and programme on SteerCo’s
behalf, including assessing and managing
Group and Divisional climate-related risks
and opportunities.

• The Group CEO has overall responsibility for our corporate sustainability

programme and he established the SteerCo to support its delivery,
including climate-related matters.

• SteerCo meets up to four times a year. It has also established the EWG and

the CRWG (see below).

• The SteerCo membership is kept under review and during 2024 the Group

CFO will join the SteerCo.

• During 2023 Executive Committee sponsorship of the environmental

programme moved to Paul Hardy (Managing Director — Estate Agency
Franchising).

• The EWG leads our environmental work and is chaired by Paul Hardy,
Managing Director of Estate Agency Franchising. It co-ordinates our
environmental strategy, programme and reporting, including climate-
related disclosures.

• The EWG works closely with the Divisions and Group functions, to ensure

Group-wide alignment of our environmental work.

• The EWG supports the identification of key stakeholders regarding

climate-related risks and opportunities and monitors how the Group and
the Divisions liaise with these stakeholders.

• The EWG facilitates collaboration between the Group and the Divisions to

share insights on climate-related risks and opportunities.

Climate‑related Working
Group (CRWG)

Identifies climate-related risks and
opportunities on behalf of the EWG and
reports into the EWG.

• The CRWG comprises:

– EWG Chair

– General Counsel and Company Secretary

– Group Financial Controller

– Head of ESG

– Head of Facilities Management

– Divisional CROs

– Divisional proposition leads

• The CRWG met twice in 2023, to lead the process for identifying and
assessing the Group’s climate-related risks and opportunities. This
was done in conjunction with the Divisional management teams via the
CROs.

• Meetings of the CRWG will be scheduled to take place at least twice a

year. The meetings will be scheduled to align with the Group’s annual and
three-year planning processes.

Body

Role

Arrangements

Divisional management
teams

Each Division has statutory boards and
Divisional management teams headed by a
managing director, who is also a member of
the Executive Committee which reports to
the Group CEO.

The climate-related risks and opportunities
we face arise within the Divisions and their
individual business units. This means the
success of the Divisional arrangements are
key to our assessment and management of
these risks and opportunities.

• The Estate Agency Franchising and Surveying & Valuation Divisions report
to the Group CEO and Group CFO and attend quarterly business reviews,
where they discuss financial and operational performance, including risk
management.

• The Financial Services Network has in place a combined board with
committees which the Group CEO and Group CFO attend to discuss
financial and operational performance, including risk management within
the Financial Services Network.

• The managing directors submit regular written reports to the Board and

deliver a risk presentation to the Audit & Risk Committee at least annually.

• In 2023, the CROs led discussions with the Divisional management teams,
to identify climate-related risks and ensured that this considered relevant
stakeholder feedback where available.

• The Divisional management teams include individuals responsible for
proposition development. Led by the proposition teams, in 2023 the
Divisional management teams were asked to identify climate-related
opportunities and to ensure that this considered stakeholder feedback
where this was available.

• During the year the Divisional management teams contributed to the
three-year planning process (see above) and the CRWG discussions.

• The Divisions have a variety of approaches to environmental programmes
and strategies, which are reported into the EWG. For details of Group
and Divisional environmental activities, see our Living Responsibly Report
2024.

• Divisional management teams undertake continuous monitoring and

horizon scanning of risks, including climate-related risks.

Group functions

Central functions, including HR, Legal and
Company Secretariat and Facilities provide
support to Group and Divisional businesses.

• The Divisions receive support from Group functions on climate-related
matters, in particular from the Group Finance, Legal and Company
Secretariat, HR (Head of ESG), and Facilities teams.

• In addition, the Group’s Internal Audit team will include reviews of

climate-related matters in its planning cycles. Internal Audit activities
provide assurance on Group arrangements to the Audit & Risk Committee
and the Board.

Climate-related risks and opportunities activities in 2023:
During 2023, we sought to advance our assessment and management of climate-related risks and opportunities including engaging with Energise
to calculate our Scope 3 emissions and review and refine our processes around Scope 1 and 2 emissions. Our progress was impacted and limited by
the Group’s restructuring and the focus of management on related activities. The section below details the actions we have completed in 2023.

During the year, we engaged a third party to provide support to management on the development of our reporting. This was included in our
reporting to the Board and the Audit & Risk Committee in relation to our compliance with TCFD and CFD. We have also factored the advice into the
arrangements we have in place to enable the SteerCo, the Board and the Audit & Risk Committee to monitor our progress towards our priorities.

As part of its review of this Report, the Audit & Risk Committee (on behalf of the Board) also reviewed the methodology and analysis used to assess
our climate-related risks and opportunities.

Climate-related risk assessment methodology
The CRWG led our assessment activities, providing a forum for identifying and sharing information on climate-related risks and opportunities. The
CRWG met twice in 2023 to lead the process for identifying and assessing the Group’s climate-related risks and opportunities. The CRWG’s approach
to this included using climate scenario modeling data from the Network for Greening the Financial System (NGFS) portal and applying these to the
exposure dimensions listed with the template. In each dimension, the teams assessed the scale of the impact in the short, medium and long term.

Overview of approach applied:

Established Climate
Risk Working Group
(CRWG)
• Divisional risk leads
and Group colleagues.
• Began with context
se(cid:6)ng/educa(cid:4)on
around legisla(cid:4)ve
changes and climate
change.

Created risk
assessment framework
• Created a template
including Divisional
proﬁles and impact
areas – customers,
colleagues and
environmental
footprint.
• Agreed (cid:4)me horizons
and the applica(cid:4)on of
two climate scenarios.

Business model tes(cid:3)ng
• Divisional risk leads
completed the risk
assessment of current
business model using
the template.
• Outputs were
combined into the
summary included in
this Report.

Risk framework
• Evalua(cid:4)on of each
emerging risk was
completed by
Divisional CROs in line
with wider risk
management
processes.

We group climate-related risks into two categories:

• physical risks including those related to the physical impacts of climate change; and

• transition risks – those relating to the transition to a lower carbon economy. This could be the introduction of legislation or the costs associated

with becoming net zero.

To undertake our scenario analysis, we selected two contrasting NGFS1 climate-change scenarios ‘net zero 2050’ and ‘current policies’. Under a
net zero 2050 scenario it was recognised that the transition to net zero will be more ordered, resulting in less significant physical risks, but more
transition-related risks as legislation is introduced to support the decarbonisation of the economy – particularly in the short to medium term.

Contrastingly under a ‘current policies’ scenario the impacts are likely to be more physical. Under this scenario the transition risks are likely to occur
later, and in a less ordered way (if at all).

After agreeing a template, our Divisions assessed the impact of each scenario on the current business model in the short, medium and long term.
The outputs of this work were centrally collated, including the Divisional assessment of the magnitude of the impact(s).

The risk assessment process concluded that the impact of climate change on our current business model has to date been assessed as low to
medium.

The outputs of our climate-risk assessment are included in the climate-related risks and opportunities section below, and this includes any actions
that are being taken during 2024 in response.

1 https://www.ngfs.net/ngfs-scenarios-portal/explore

Climate-related risks and opportunities:
The EWG is responsible for leading and supporting each Division with their ongoing review, assessment and monitoring of climate-related risks and
opportunities. This is in addition to other mitigation actions – the table below includes examples:

Type of risk

Climate‑related risk

Scope

Division
impacted

Actions

Customer choice driven by environmental
commitments.

Suppliers
Customers

Increased environmental administration
and B2B customer supply chain
expectations.

Suppliers
Customers

Costs associated with becoming net zero
across all emissions scopes.

Business
operations

Increased regulation in the property
sector to improve the environmental
impact of properties, which could affect
the availability and affordability of
housing.

Suppliers
Customers

Ban on new petrol and diesel cars from
2035.

Business
operations

All

• Engagement with customers to ensure our
services align with their environmental
priorities.

• Developing our environmental expertise

across the Group and especially within the
Surveying & Valuation Division in response to
lender client requirements.

• Working with Energise to assess Scope 3,
and we will review our net zero pathway
following this review.

• Surveying & Valuation Division is building
expertise in EPCs and valuation of energy
efficient properties.

All

• Transition our fleet to electric vehicles (EVs)

or hybrid.

• Promote salary sacrifice benefit for
colleagues to move to EVs or hybrid.

Increasing need to consider climate-
related impacts when assessing capital
allocation/approving investment
proposals.

Business
operations

All

• Created an Investment Committee to

oversee the Group’s capital allocation policy.

Transition risk

Physical risks

Increased regulatory costs or climate-
related taxes.

Impact of changing weather on colleagues
including health matters.

Properties impacted by climate conditions
(e.g. floods) uninsurable and potentially
unsuitable as security for a mortgage.

Business
operations

Business
operations
Colleagues

Suppliers
Customers

10.

11.

Increased delivery cost of supplies arising
from climate events.

Business
operations

Travel disruption affecting colleagues’
ability to complete their work (e.g. get
into offices or visit locations).

Business
operations
Colleagues

All

Financial
Services
Surveying &
Valuation

All

• Where relevant investment requests
will address climate-related risks and
opportunities.

• Monitor changing landscape.

• Additional monitoring via the Group HR

team.

• Monitor.

• Remote working arrangements in place to
enable continued delivery of services.

• Development of remote survey and valuation

services.

Other InformationFinancial StatementsDirectors’ Report (including Corporate Governance Reports and Committee Reports) Strategic Report Strategic ReportOverview
Non-Financial and Sustainability Information Statement
including TCFD and CFD reporting

Type of opportunity

Climate‑related opportunity

Scope

Division

Actions

Increased stakeholder interest in
understanding energy efficiency (e.g. via
the EPC).

‘Green valuation’ product offering –
promoting use of local surveyors (i.e.
reduce travelling distances).

Increased interest in data services from
B2B clients who are looking to mitigate
their own climate-related risks.

Suppliers
Customers

All

• Investment in data services and EPC training
within the Surveying & Valuation Division.

Suppliers
Customers

Surveying &
Valuation

Suppliers
Customers

Surveying &
Valuation

• Engagement with the Mortgage Climate
Action Group (MCAG) by the Financial
Services Network.

• Across the Group, supporting the

development of relevant colleague skills and
expertise in environmental sustainability
matters.

Proactive engagement and positive
responses from stakeholders as a result of
our improved environmental strategy and
reporting.

Suppliers
Customers

All

Increasing prevalence of ‘green’
mortgages and green property upgrades.

Suppliers
Customers

Financial
Services

Potential growth in retrofitting
environmental upgrades for consumer
homes.

Suppliers
Customers

Surveying &
Valuation

Impact assessment
In 2023, we continued to develop our approach and assessment tools to identify and assess our climate-related risks and opportunities. The CRWG
met twice in 2023 to lead the process for identifying and assessing the Group’s climate-related risks and opportunities. The CRWG’s approach to
identifying climate-related risks and opportunities included utilising market research data sources and outputs from Divisional management teams,
and in each case the likely impact on costs and revenues of each was assessed with reference to the three-year plan, and considered the materiality
of any impact. As we build our capacity and capability in this area, we will review our materiality assessment alongside this. The assessment also
took into consideration the gross and net (mitigated) risk impacts.

An example of our impact assessment is e.surv’s risk of not retaining or securing valuations business from lenders where it does not meet the
clients specific climate-related requirements. This risk is mitigated by e.surv putting in place arrangements to meet client requirements which in
turn reduces the materiality of the risk.

Our impact assessment also takes place at a Divisional level, whereby (as set out in the risks and opportunities table above) different responses
are required dependant on the potential gross impact in the Divisions to different climate-related risks and opportunities (i.e. commercial contract
requirements in e.surv which is monitored and managed by an internal Sustainability and Business Development Collaboration Group).

During 2024 we will continue to refine the processes and approach to materiality impact assessment with the aim that climate-related risks are
subject to the same identification, analysis and mitigation processes as all operational risks and that ongoing consideration is given to either one-off
or continual financial impacts on the Group’s businesses.

Scenario testing to assess resilience
In identifying and evaluating the Group’s resilience and response to climate-related risks and opportunities, we conducted our analysis under the
following climate scenarios:

i. ‘Net zero 2050’, where the rise in global temperature is limited to less than 2⁰C.

ii. ‘Current policies’, whereby temperatures are likely to rise by more than 3⁰C due to a higher emissions pathway.

Each scenario is presented below, with a summary of the climate-related risks and opportunities considered against the short, medium and long-
term horizons, and a materiality assessment that incorporates a combined view across the Divisions.

The scenario testing is completed on a net risk impact basis. Our process for assessing the impact of climate change on our strategy is in its early
stages and will be developed by our EWG and CRWG in 2024 alongside our net zero strategy. Only the risks in the table have been included in our
scenario planning to date. Our impact assessment currently focuses more fully on the physical impacts of climate change.

i. Net zero 2050: global temperature rise is limited to less than 2⁰C
The scenario is based on The Paris Agreement, under which countries have committed to limiting global temperature increases to below 2⁰C above
pre-industrial temperatures and to strive to limit it to no more than 1.5⁰C. This scenario assumes climate policies are introduced early and become
gradually more stringent across the globe. In this scenario, the transitional risks associated with moving to a low-carbon economy are a greater risk
to the Group than physical risks.

We believe our business model is resilient in this scenario because the physical impact is lower. We have mitigating actions in place to manage and
respond to potential impacts. For example, we regularly review our net zero pathway to understand the costs associated with becoming net zero.
In particular, as outlined below we have colleagues in the Group (especially within Surveying & Valuation) focused on sustainability and we are
engaging in industry-wide activity. Our EWG is looking to fully assess the costs associated with becoming net zero.

We expect the introduction of legislation and requirements to transition the economy to net zero to be delivered in an orderly manner and we are
positioning ourselves to identify and respond to any changes as they arise. This includes investing in relevant teams to support our horizon scanning
activities and ensure we identify emerging policy changes and their effect on our businesses early allowing us to factor these into our planning.

For example, the ESG team within e.surv supported by the Group’s Head of ESG, is responsible for monitoring and ensuring we are addressing
emerging environmental policy changes. In addition, through e.surv’s engagement with lender clients and PRIMIS’ engagement with the Mortgage
Climate Action Group (MCAG), we benefit from wider-sector insights which support us in identifying emerging transitional risks to our business.

Strategy impact assessment

Scenario: Net zero 2050

Risks:

Short term (0‑3 years)

Medium term (4-9 years)

Long term (10+ years)

Ongoing increasing transitional
risks.

Non‑material increase in physical
risks.

– The transition costs become
more widely applied across
industry and society.

– Reputational risk increases to

maintain the pace of change and
adoption, as momentum and
commitment increases.

Higher transitional risks for the
Group, as the markets in which
it operates move to a net zero
economy and our suppliers and
customers seek commitment to
net zero.

Examples:

– Transition costs to enable the
Group to achieve emissions
commitments

– Increased regulatory driven costs

or carbon tax applied

– The increased frequency of

extreme weather conditions,
resulting in business travel
disruption.

Risk impact assessment1:

Low

Assumptions:

– Exclusively UK-based operations, keeping temperature increase to 1.5⁰C minimises suggest physical impacts would

be in line with the current levels.

– Current operational locations geographically dispersed, therefore unlikely to experience significant disruption at

more than one location simultaneously (due to a climate event).

– Around 54% of our current workforce is home-based increasing the geographical spread of the workforce. The

largest group of colleagues are surveyors who are based at home but carry out property inspections meaning they
spend time travelling.

– Housing market will continue to operate at ten-year average activity levels.

Mitigating actions/commitments:

– We continue to work towards our environmental commitments, to achieve net zero on our emissions in our

operational control by 2040.

Opportunities:

Opportunity for the Group to develop new data services, in response to client demand as they seek to understand
environmental sustainability and the impact of climate change on their businesses.

Opportunity impact assessment1:

Low across all time horizons.

Note:
1 Impact materiality assessment thresholds: Low – below 5% of five-year average Underlying Operating Profit, Medium – 5-10% of Underlying Operating Profit,

High is above 10% of Underlying Operating Profit.

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ii. ‘Current policies’: a higher emissions pathway whereby temperatures rise by more than 3⁰C.
This is a more extreme scenario, where higher emissions are likely to lead to temperature increases of over 3⁰C compared to pre-industrial times by
the year 2100. As a result of the failure to transition, the physical impacts of climate change become increasingly severe. The increase in frequency
and severity of extreme weather and other physical hazards pose a greater risk. Whilst it is assumed transitional risks are lower in the shorter term
due to a lack of policy intervention, it may be that as the physical impacts become more prevalent, there are chaotic and uncoordinated policy
introductions by Government which create a disordered operating environment.

We believe our business model is resilient in this scenario because we are relatively asset light and our operations are geographically dispersed with
a high proportion of colleagues based at home, and we have mitigating actions in place to manage the potential harm caused by physical impacts.

Scenario: current policies

Risks:

Short term (0‑3 years)

Medium term (4-9 years) to long term (10+ years)

Increased frequency and severity of extreme
weather events.

– More extreme weather events lead
to increased business disruption for
colleagues travelling to workplaces and
seeing customers.

– Insurance costs increase for both the
business and homeowners, alongside
decreasing availability.

Medium/longer-term shift in weather patterns, causing increasingly
heavy rain and strong winds and temperature increases leading to higher
sea levels.

– More significant business disruption caused by adverse weather

conditions, requiring greater change in ways of working.

– Longer-term increases in frequency and severity of adverse weather

conditions change housing market fundamentals, leading to a potential
review of our operating model

Risk impact assessment:

Low

Assumptions:

– Exclusively UK-based operations, under the worst-case scenarios, the extreme physical impacts on the UK are

concentrated around coastal areas.

– Current operational locations geographically dispersed but due to frequency and severity may experience significant

disruption at more than one location simultaneously (due to a climate event).

– Around 54% of our workforce is home-based increasing the geographical spread of the workforce. The largest group of

colleagues are surveyors who are based at home but carrying out property inspections meaning they spend time travelling.

– Housing market will continue to operate at ten-year average activity levels.

Mitigating actions/commitments

– We continue to work towards our environmental commitments, achieving net zero on emissions in our operational control

by 2040.

Opportunities:

The Group can capitalise on opportunities in demand for energy efficiency drives from lenders and homeowners. We offer a
wide range of services to mortgage intermediaries, lenders and Estate Agency franchisees, and have a history of adapting our
products and services as demands change.

Opportunity impact assessment:

Low across all time horizons.

Climate-related metrics and targets:
As noted above, our assessment is that the climate-related risks and opportunities we face are not currently material to our business model or
strategy. However, we have identified the reduction of our environmental footprint as a priority within our Living Responsibly ESG programme. We
set targets for improving our reporting of emissions in 2023 including, for the first time, quantifying our Scope 3 emissions. During the year e.surv
piloted the use of a software platform to calculate and monitor emissions. We were also supported by Energise to support us in reviewing our
methodology for Scope 1 and 2 and calculating our Scope 3 emissions.

We have stated our 2022-23 emissions separately from previous years due to the change in scope and methodology. In addition, for the first time,
we are undertaking dual emissions reporting in line with recommendations by the Greenhouse Gas Protocol. Location-based emissions are reported
alongside market-based emissions, which reflect the certified renewable supply of purchased electricity in Scope 2.

This section includes our current climate-related metrics and reporting against previously set targets. We will review these in line with our climate-
related risk and opportunity work during 2024 to ensure we have an appropriate set of metrics and targets.

Streamlined Energy and Carbon Reporting (SECR)

The Greenhouse Gas (GHG) Emissions (Directors’ Reports) Regulations 2013 and Part 7 of the Companies Act 2006 (Strategic Report and
Directors’ Reports) Regulations 2013

Introduction
The Group recognises the importance of minimising its environmental impact and since 2021 this has been a priority in its Living Responsibly ESG
programme which is the Group’s sustainability strategy. As part of this commitment, the Group set targets to improve its emission reporting during

2023 including calculating Scope 3 emissions for the first time. Within the Group, e.surv is in scope of the SECR requirements which came into force
for financial years beginning on or after 1 April 2019. In accordance with these regulations LSL has reported a Group-wide disclosure and therefore
e.surv as the in-scope entity will not be making any separate disclosures.

Methodology
The Group has reported on all emission sources required under The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and
Carbon Report) Regulations 2018, which includes the SECR requirements. We have applied a financial control methodology, reporting emission
sources that fall within the Group Financial Statements (with the exception of Pivotal Growth – see below). We do not have responsibility for any
sources that sit outside this.

This section covers the seven main Greenhouse Gases (GHG) covered by the Kyoto Protocol which include carbon dioxide (CO2), methane (CH4),
nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3). It has used the
Greenhouse Gas (GHG) Protocol Corporate Accounting and Reporting Standard (Revised edition), and emission factors from the Government’s GHG
emission factors for Company Reporting.

GHG emissions data
Reporting period: The reporting period is 1 October to 30 September. This overlaps by nine months with the Group’s financial year and is used for
historical reporting reasons.

GHG emissions 2022-23 data summary table:

Tonnes CO2e

2022‑23 Group emissions

kWh

Market‑based

Location-based

Scope 1

Operation of facilities

Scope 2

Combustion

F-gas

Total

Purchased energy

Total Scope 2

Total Scope 1 and 2 emissions

Average colleague number

Group revenue (£m)

1,569,490

1,636,085

3,205,575

4,810,751

1,367.8

Intensity metrics

tCO2e (Scopes 1 and 2) per FTE employee

tCO2e (Scopes 1 and 2) per £m Revenue

7.9

Scope 3

Purchased goods and services

Capital goods

Fuel and energy-related activities

Upstream transportation and distribution

Waste generated in operations

Business travel

Colleague commuting (including homeworking)

Franchises

Total

287.1

395.5

47.8

730.4

637.4

2,923

0.5

10,391.0

39.3

415.9

120.4

13.3

1,315.9

1,823.3

341.4 (678
location-based)

14,460.6 (14,797.2
location-based)

15,828.4 (16,523.8
location-based)

Total Scope 1, 2 and 3

Note:

tCO2e (all scopes) per £m Revenue

–

89.5

287.1

395.5

47.8

730.4

996.3

1,726.7

176.8

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This disclosure is partial as we continue to work to improve our understanding of our Scope 3 emissions.
GHG emissions: previous year’s data

Corporate emissions

2021‑22

2020‑21

2019-20

2018-19

Combustion of fuel and operation of facilities (Scope 1)

Electricity, heat, steam and cooling purchased for our own use (Scope 2)

Total (Scope 1 and 2 including Grey Fleet)

tCO2e per FTE employee

tCO2e per £m revenue

Total kWh

Total (Scope 1 and 2)

1,998

2,022

0.50

2,125

2,165

0.52

6,287,001

7,684,216

2,517

1,139

3,656

0.94

3,420

1,535

4,955

1.17

2,022

2,165

3,656

4,955

Note:
Figures included in this table include car fuel emissions which are now reported in Scope 3 (emissions from colleague owned vehicles).

2022-23 emissions data notes:
As stated elsewhere, 2023 was a year of significant change for the Group including franchising the Estate Agency network, the sale of Marsh &
Parsons and sale of businesses to Pivotal Growth. The changes to our operations took place in stages throughout the year. The data presented
above includes emissions in our control up to the point of sale (and where relevant franchise). The emissions from franchises post-May are included
in the relevant Scope 3 category.

We have reported market and location-based emissions for our franchises due to the quality of the data we hold and our ability to report in this
way.

Greenhouse gas reporting assumptions and estimations: in some cases, missing data has been estimated using either extrapolation of available data
from the reporting period or estimated using CIBSE Guide F (2021) Building Benchmark and facility floor size. The methodology used to estimate the
supply chain emissions from purchased goods and services, upstream transportation and distribution, and capital goods is based on the Exiobase
environmentally extended input-output (EEIO) dataset. EEIO combines economic information about the trade between industrial sectors with
environmental information about the emissions arising directly from those sectors.

Data coverage and quality:
Emissions from water supply and water treatment for Financial Services and Estate Agency have been omitted from reporting due to data
inaccessibility.

Emissions from investments, which would include joint ventures with less than a 50% stake, such as the Pivotal Growth joint venture, have been
omitted from reporting due to data inaccessibility. These omissions are not believed to be material and are expected to consist of less than 1% of
overall emissions.

Employee commuting emissions have been estimated using a UK average benchmark estimated by consultants Energise on a per employee basis
under the assumption that office-based employees commute twice per week. The remainder of the week has included colleagues as home-based. It
is our understanding that in terms of data quality, we consider:

– Scope 1 = 80% good quality, 17% adequate quality and 3% poor quality data.

– Scope 2 = 100% good quality data.

– Scope 3 (business travel) = adequate/proxy data with 50% uncertainty.

Note:

Where good quality is defined as 10% margin of error, adequate 25% and poor quality a 50% or more margin of error.

Update against 2021 climate transition plan:
As noted above, comparing emissions to previous years is difficult due to the more accurate and granular approach to calculating our footprint.
However, we have sought to update on targets published in 2022 below, and as noted elsewhere, during 2024 we will publish an updated Climate
Transition Plan.

Scope

Target

Update

Limit emissions in line with The Paris Agreement 1.5⁰C emissions
trajectory.

Procure gas from renewable sources at 100% of Group locations.

Transition 57% of leased petrol and diesels to EVs or hybrid in a
phased approach by 2025.

Achieve net zero Scope 2 emissions by 2023 and maintain for the
foreseeable future.

Unable to update on progress in relation to previous reporting years
but have re-baselined data and set targets for our future emissions
reduction trajectory within our Living Responsibly Report 2024.

100% of Group locations under our control at the close of the year
procure gas from renewable sources.

42% of locations have no gas on site and 32% are landlord controlled.

Our fleet has reduced in size significantly due to the changes that
took place in 2023, reducing by 54% broadly in line with the
overall headcount reduction.

At 30 September 2023, 78% of our leased fleet is EVs or hybrid,
compared to 18% in 2021.

On a comparable basis, Scope 2 emissions are now 4.3 tonnes
(electricity use, market-based methodology). Improved
accounting methodology includes electricity for vehicle use in
Scope 2 which means Scope 2 is not zero.

Procure electricity from renewable sources at 100% of locations
where we have utility control.

Target has been achieved.

Quantify Scope 3 emissions.

Target has been achieved – eight categories were completed for
the 2022-23 reporting year. We have calculated upstream and
downstream categories, despite intention to only calculate upstream.

Additional actions in-year to reduce our emissions:
• Where the Group manages the electricity and/or gas supply for franchisees (i.e. as landlord of the premises) now our Scope 3 emissions, these

are also procured from certified renewable/green sources, 98% branches on renewable electricity tariffs and 99% on ‘green’ gas.

• Upgrades to LED lighting and air conditioning were paused during 2023 due to the restructuring activities as offices where we were planning

these upgrades moved into franchisee control.

• 55.9% recycling rate for operations included within Scope 1 and 2 emissions reporting boundaries.

Next steps and further analysis:
• As previously stated, we will be re-setting our benchmark year for emissions reporting to 2022-23.

• In addition to this we will review our net zero commitment and emissions reduction plan in 2024.

Stakeholder engagement reporting on environmental matters:
The Stakeholder Engagement section of this Report details how we engage with our stakeholders including our customers. In this section of the
Report, we describe some specific examples of how we have engaged with stakeholders in relation to environmental matters.

Surveying & Valuation:
During the year, a specific focus for our Surveying & Valuation business was the progression of environmental initiatives in conjunction with our
lender clients. The impact assessment also takes place at a Divisional level, whereby (as set out in the climate-related risks and opportunities
table above) different responses are required dependent on the potential gross impact in the Divisions to different climate-related risks and
opportunities. For example, the Surveying & Valuation Division has established a framework and mechanisms to ensure compliance with any
agreed contractual commitments around sustainability, and to mitigate against and reduce the risk of not achieving agreed environmental supplier
standards.

Financial Services Network:
The PRIMIS Network participates in the Mortgage Climate Action Group (MCAG). MCAG is an industry-wide group focusing on education and
collaboration in the transition to a net zero economy. Colleagues within PRIMIS are participating in work to create communication tools for brokers
and the wider sector.

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We deliver our ESG initiatives through our Living Responsibly ESG programme, which we report on in our Living Responsibly Report 2024 published
on our website. A summary of relevant progress and information is included in this Environmental, Social and Governance Report.

We continued to deliver our Living Responsibly ESG programme throughout 2023 and invested in our Group resources. Our Head of ESG supports
our Chief People Officer (CPO), to lead our Group-wide approach. The Board received presentations on the Living Responsibly ESG programme from
the CPO and Head of ESG during the year. The programme was also covered in the new Chair’s induction.

For further information on our:

a. Environmental matters – see the Non-Financial and Sustainability Information Statement including TCFD section at page 34.

b. Governance – see the Corporate Governance Report at page 65.

Living Responsibly Steering Committee (SteerCo)
Our programme aims are guided by the SteerCo, which is chaired by David Stewart. The Corporate Governance Report (page 65) explains how
the Living Responsibly ESG programme fits into our governance framework and details the SteerCo’s membership. Following a review, we made
some changes to its membership and we intend to include the Group CFO from 2024, to increase Executive Director oversight of our strategy and
commitments. During 2023, the SteerCo met three times.

Living Responsibly – our sustainability strategy
Our Group culture statement is at the heart of our Living Responsibly ESG programme:

The right people (becoming a better place to work), doing the right things (investing in communities), in the right way (reducing our environmental
impact and excellent governance).

The table below describes our sustainability strategy. For 2023 progress and details of our 2024 priorities, see the Living Responsibly Report 2024.

Our Group‑wide sustainability strategy

The right people, doing the right things, in the right way

PEOPLE

COMMUNITY

ENVIRONMENT

GOVERNANCE

Programme component

Responsible with our
people

Responsible with our
communities

Responsible with our
environment

Responsible in the way
we work

We are committed to…

…being a better place to
work

…supporting colleague
initiatives and giving back

…reducing our impact on
the environment

…excellent governance

Why?

People are our greatest
asset and central to
securing our sustainability

Executive Committee
sponsor

Debra Gardner,
Chief People Officer

We want to have a
positive and lasting impact
on the communities we
work in

We have a responsibility
to do this as a global
citizen and our
stakeholders are keen for
us to play our part

Our customers depend on
our excellent governance
to support them in their
business operations

Sapna B. FitzGerald,
General Counsel and
Company Secretary

Paul Hardy,
Managing Director –
Estate Agency Franchising

Sapna B. FitzGerald,
General Counsel and
Company Secretary

Responsible with our people

Colleagues

Gender
Colleagues are central to our success as a Group. The strategic projects we completed in 2023 have changed the composition of our workforce and
leadership. Changes to our Board and Executive Committee are included in our Corporate Governance Report (page 71).

Changes to our Senior Management Team and the wider Group are illustrated in the tables below:

31 December 2023

31 December 20222

Female

Male

Female

Male

Senior Management Team1
All colleagues3
Notes:
1 Our Executive Committee and their direct reports who are A1 and A2 grades (excluding Executive Directors).
2 We have revised our 2023 reporting to clarify our populations. The 2022 data is as we reported in our Annual Report and Accounts in 2022.
3 All colleagues.

16
2,364

67%
54%

33%
46%

28%
53%

15
792

30
932

72%
47%

41
2,088

Details of the ethnicity of the Board and the Executive Committee are included in our Corporate Governance Report (page 72). Details regarding our
Senior Management and wider Group are detailed below:

31 December 2023

31 December 20223

White
38
1172

95%
92%

Ethnic
minority

2
107

White

91%
94%

5%
8%

Ethnic
minority

9%
6%

Senior Management Team1
All colleagues2
Notes:
1

Our Executive Committee and their direct reports who are A1 and A2 grades (excluding Executive Directors). Non-disclosure rate is 11% (5 colleagues).
All colleagues. Ethnicity data obtained through the all-colleague survey. Non-disclosure rate is 5% (66 colleagues) which is the proportion of colleagues
completing the survey who chose not to disclose their ethnicity.
We have revised our 2023 reporting to clarify our populations. The 2022 data is as we reported in our Annual Report and Accounts in 2022.

As a result of the restructuring and simplification projects, our workforce at 31 December 2023 had reduced by 61% to 1,724 colleagues, from 4,452
colleagues a year earlier. We have seen an increase in the proportion of colleagues identifying as ethnic minority across the workforce but observe
lower representation in senior roles. We will continue to work with the I&D Forum and LSL Voices to improve diversity and inclusion across the
Group.

Total colleagues
Total voluntary turnover (%)
Male (%)
Female (%)

31 December
2023
1,724
18.2
47%
53%

31 December
2022
4,452
30.5
47%
53%

31 December
2021
4,617
28.1
47%
53%

31 December
2020
4,335
17.4
49%
51%

We are pleased to note that there was a reduction in our workforce turnover rate during 2023. Our workforce reduced in size by more than half
which included a significant amount of colleagues from the Estate Agency Division as we transitioned into the franchising business model. This
Division typically had higher voluntary attrition. We are still seeing slightly more movement among females and will continue to monitor this,
including reviewing for any differences in experience highlighted in our annual colleague survey. Analysis of data to date suggests that females are
more engaged than males within the Group.

Ethnicity
In 2022 we adopted the diversity targets emerging from the Hampton-Alexander review which have been incorporated into the Listing Rules. Our
progress towards these targets is reported in the Corporate Governance Report on page 80.

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Disability
Over the last two years, we have focused on being a better place to work for our colleagues who have a disability or long-term health condition. We
were awarded ʽDisability Confident’ employer status by the Department of Work and Pensions in 2022, and we have worked on a programme of
training with Disability Rights UK, to upskill colleagues on the Equality Act and its implications.

We reported last year on the development of ‘Accessibility Passports’ to support colleagues in transferring reasonable adjustments with them when
moving roles internally. We now have a programme of manager training to support this, which is ready for roll out.

We have continued to use our annual colleague survey to understand how many of our colleagues have a disability or long-term health condition,
and we are delighted that our colleagues felt more comfortable sharing this information with us via the survey in 2023. In total, 17% of our
workforce (2022: 6%) disclosed that they have a disability or long-term health condition, which is in line with national census data for the working
age population. Our non-disclosure rate has reduced from 7% to 4%, which is a positive indicator of increased trust. During 2024, we hope to launch
‘Disability Voices’ – our affinity group for colleagues interested in the challenges and opportunities for individuals with disabilities or long-term
health conditions but will keep this under review with the rest of LSL Voices.

Further information on the diversity demographics of our colleagues is reported within our Living Responsibly Report 2024.

Colleague dialogue
We have three Group-wide colleague forums to support our colleague engagement. Further details are included in our Stakeholder Engagement
Report (page 23).

Our forums are:

Forum

(previously the Employee
Engagement Forum)

This forum consists of 18 colleagues who have been
elected as representatives. Through the year, the
CEF has worked to build a collaborative forum where
colleague-related issues are raised by both our CPO
and forum members, facilitated (where appropriate)
by an elected proxy chair.

Darrell Evans is the Non Executive Director
representative for workforce engagement. Further
details about this role are included in the Corporate
Governance Report at page 71.

The I&D Forum is now in its fourth year. During
2023, the forum launched the first three LSL Voices
(cultural, LGBT+, and gender) which are colleague
affinity groups designed to provide a networking and
collaboration space for colleagues interested in the
opportunities and challenges faced by colleagues of
certain demographics.

Now also in its fourth year, this forum champions
opportunities for colleagues to support communities
and charities.

Examples of feedback and discussions

We sought colleague feedback on changes to the
appraisal and succession planning process. As a result
of this, we rolled out the new personal development
review process at the end of the year.

Forum members raised the need to review our
benefits offering and better communicate what is
available for colleagues, as well as wanting to see
greater celebration and acknowledgement of long-
service milestones. Our Group Head of Reward is
reviewing colleague benefits and will communicate
the outcomes in due course. We have integrated
long-service milestones into our new quarterly
colleague newsletter.

Forum members requested a focus on colleague
mental health and invited mental health first aiders
to one of the meetings. As a result, they are now
building a process to extend the support available
across the Group.

As with the CEF, the I&D Forum provides feedback to
the Group HR team. It is currently contributing to the
simplification of our colleague policies.

The forum identifies opportunities for colleagues
collectively to engage in community issues. More
detail of work in 2023 is reported in our Living
Responsibly Report 2024.

Annual colleague survey – ʽHave your Say’
During 2023, we engaged a new survey provider – People Insight – to support us in understanding the feedback and experiences of our colleagues.
While we have used some historical data here to illustrate the current position, due to Group restructuring and simplification and changes in the
way we collect the data, the engagement data has not been compared to previous years.

2023 colleague survey in numbers:
We are delighted that 77% (1,345) of our colleagues responded to our survey in October 2023, a 16% increase (2022: 61%). As this was our first year,
we compared our results to an external benchmark, comprising data that People Insight holds for companies like ours.

Overall, the survey revealed that:

• Colleagues responded particularly positively to questions relating to ʽPurpose’ (80% positive, 3 points above the external benchmark). Strongest
responses were to understanding business aims (91% positive), understanding own contribution to those aims (95% positive) and believing the
business is committed to high quality work (87% positive).

• Colleagues’ view of the components required to do their role such as communication, training and development, physical environment and

support (together the ʽEnablement’ theme) is notably above the benchmark (73% positive, 67% benchmark).

• Colleague engagement is below the benchmark (73% positive, 79% benchmark).

• Reward and benefits received less positive feedback than other themes (62% positive, 3 points below external benchmark). This is consistent with

the feedback received from our CEF.

As a result of the feedback, we identified three areas of focus for 2024:

1. Leadership and action – We will continue to build on work begun in 2023 around communicating strategy and progress across the Group,

including regular Senior Management conferences. We are using our Group-wide colleague forums (CEF and I&D) to address and communicate
actions in response to survey feedback.

2. Reward and recognition – During 2024, we are reviewing colleague benefits across the Group. We will also be launching an internal career page

and we are exploring the feasibility of a Group-wide competency framework.

3. Workload and flexibility – Colleague feedback in this area identified different experiences across the Group, with some colleagues reporting

appropriate flexibility and others seeking more. We will work alongside the CEF and with local management teams to ensure this works for the
business and colleagues. We will also take this opportunity to review and relaunch our Group-wide flexible working policy.

Sharesave
During quarter four 2023 we launched a colleague sharesave scheme. We were delighted with the take up, with 20% of colleagues signing up,
indicating their engagement with the Group. This compared to 16% signing up for the last scheme we launched in 2021.

Human rights and modern slavery
We create employment directly for our colleagues and indirectly within our supply chains. This means human rights and modern slavery are at
the core of our commitment to doing the right thing. We are committed to adhering to the UN Guiding Principles on Business and Human Rights,
promoting the highest standards of integrity, personal conduct, ethics and fairness, in line with the UK regulatory environment we operate in.

We protect and promote the human rights of our colleagues in the following ways:

1. Undertaking pre-employment checks on all new colleagues, confirming their identity and eligibility to work in the UK.

2. Providing clear and timely information to colleagues on their statutory rights, including sick pay, holiday pay and other benefits they are

entitled to.

3. Paying our colleagues fairly. During 2023, we undertook to ensure all colleagues across the Group are paid at least the Real Living Wage. During

2024, we will seek external validation of this through the Real Living Wage Foundation.

4. Maintaining regular communication with our colleague community, using the CEF and regular colleague surveys.

5. Regularly calculating and monitoring our gender pay gap within our Divisions and, for the first time, reviewing this Group-wide in 2023.

6. Completing annual compliance training on modern slavery and human trafficking.

7. Making available grievance and whistleblowing channels for colleagues and ensuring whistleblower protection.

Across the Group we expect all parts of our supply chain to adhere to international standards on human rights, including with respect to child and
forced labour, land rights and freedom of association. Our Surveying & Valuation Division includes a risk assessment as part of its supplier due
diligence processes. Further, during 2023 we also have implemented new procedures to comply with the FCA’s new consumer duty regime.

We are committed to taking active steps to identify human rights issues. During 2023, within our Surveying & Valuation Services Division we
made around 200 reports setting out safety or vulnerability concerns relating to our customers, and we will continue to take steps to ensure
our colleagues have the confidence and awareness to identify vulnerabilities, whether they be in relation to customers with particular needs or
concerns or to ensure we are proactive in protecting human rights and addressing any risks of modern slavery in our supply chain.

These procedures collectively help to address our ongoing commitment to protect our colleagues’ and stakeholder human rights and the
elimination of all forms of forced and compulsory labour.

Colleague policies
We have centralised colleague policies, as well as Divisional policies, which either supplement the central ones or are separate and specific to the
Division. For the following Group policies, the implementation and compliance of these policies, is the responsibility of the Divisional management
teams. We are establishing attestation processes, like those put in place by our DISC (see Audit & Risk Committee Report for further details) to
ensure continued compliance.

Central and local learning and development teams also publish training material to support colleague learning and compliance with the policies.

Combined ethics policy
Our Group-wide combined ethics policy outlines our approach to anti-corruption and bribery (including hospitality), anti-slavery and human
trafficking, conflicts of interest, tax evasion, whistleblowing and fraud. We have an annual programme of compliance training for colleagues that
includes anti-money laundering, financial crime and information security.

Whistleblowing – ʽSpeak Up’
Our Group-wide ʽSpeak Up’ policy outlines our colleague whistleblowing channel. During 2023, we again ran a ‘Speak Up’ week to raise awareness
of the channel and the protection offered to any whistleblowers. Our CPO regularly reports the outcomes to the Board. See the Corporate
Governance Report on page 83 for further information.

Health and safety
Adam Castleton (Group CFO) is responsible for health and safety across the Group.

We are committed to ensuring colleagues work in a safe and healthy working environment. Within e.surv, which is our largest employer, we are
certified to ISO 45001. The nature of the field work within the Surveying & Valuation Division underlines the importance of our health and safety
arrangements to us.

As part of our management of occupational health and safety, we monitor the identification of hazards, occurrence of accidents, and employer and
public liability claims. During 2023, there was one RIDDOR reportable incident (2022: 5) and no work-related fatalities. There were no employer
liability claims in 2023 (2022: 1). Group-wide health and safety reports go to the Board bi-annually. Internal Audit undertakes a rolling audit of
health and safety data and procedures and there are currently no high-priority actions outstanding.

In the annual survey, 67% of colleagues responded positively about being able to comfortably manage their workload (3% above sector benchmark)
which is a positive indicator of our colleagues’ ability to manage their wellbeing, health and safety at work.

Payment practices reporting
Your Move, Reeds Rains and e.surv annually submit their payment practices reports, which are available on the Government’s website for report
submissions (check-payment-practices.service.gov.uk).

Group HR colleague policies
Great policies provide the framework for colleagues to thrive. Following the Group’s restructuring and simplification, we have begun to review and
revise our colleague employment policies to ensure they are clear, transparent and supportive. We are planning to launch 18 refreshed colleague
policies in 2024. Colleagues from our forums have supported our review of these policies and we have a register of further developments.

Our colleague employment policies are contained in our Group HR system, which we upgraded during the last quarter of 2023. We also reviewed
our colleague employment policy signposting during the year, with this forming part of the Group-wide colleague induction launched in the same
period.

Policy

1. Family friendly

2. Equality and diversity in the workplace

3. Pregnancy loss

4. Fertility

5. Menopause

6. Stress and mental wellbeing

7. Environmental

8. Data information security framework

9. Combined ethics

Scope

Published/last reviewed

Parental pay and leave arrangement across
maternity, adoption, shared and additional
parental and emergency leave.

Revised and updated to ensure equality of
provision and language Q1 2024

Fairness and equal treatment for all
colleagues.

Updated Q1 2024

Supporting colleagues who suffer the loss of
their unborn child.

Updated Q1 2024

Supporting colleagues undergoing fertility
treatment.

Updated Q1 2024

Supporting colleagues to access appropriate
support when going through the menopause.

Updated Q1 2024

Promoting a healthy work environment for
colleagues.

Updated Q1 2024

Organisational approach and individuals’
roles in improving the environmental
sustainability of the Group and minimising
our environmental footprint.

Includes policies relating to colleague
data protection and information security
arrangements.

Includes the Group’s approach to anti-bribery
and corruption, modern slavery and human
trafficking, conflicts and personal interest, tax
evasion, whistleblowing and fraud.

April 2021

Updated Q1 2024

November 2023

Other InformationFinancial StatementsDirectors’ Report (including Corporate Governance Reports and Committee Reports) Strategic Report Strategic ReportOverviewThe Board

This section of the Report includes information on the Directors and the Company Secretary as at 24 April 2024.

Executive Directors

Adam Castleton, Group Chief Financial Officer

Adam was appointed Group Chief Financial Officer on 2 November 2015. He has broad financial skills and experience in
the retail and services sectors. Adam joined LSL from French Connection Group PLC, where he was the Group Finance
Director. He previously held leadership roles at several market-leading companies including O2 UK, eBay and The Walt
Disney Company. Adam has over 30 years’ experience in finance, having started his career with Price Waterhouse, where he
qualified as a Chartered Accountant in 1989.

David Stewart, Group Chief Executive Officer

David was appointed Group Chief Executive Officer on 1 May 2020 and has primary responsibility for LSL’s performance,
strategy and development. Prior to this David was a Non Executive Director, having joined the Board on 1 May 2015. He
was also Chair of the Audit & Risk Committee and a member of the Remuneration and Nominations Committees. David has
significant experience in finance, strategy, operations, risk and compliance, with particular expertise in financial services.
He was Chief Executive of Coventry Building Society from 2006 to 2014, having earlier served as Finance Director and
Operations Director. Prior to joining the Coventry, David spent ten years at DBS Management plc, holding several board
positions including Group Chief Executive and Group Finance Director. David qualified as a Chartered Accountant with Peat
Marwick (KPMG) and is a graduate of Warwick University.

Gaby Appleton, Independent Non Executive Director

Committees: Remuneration (Chair), Nominations, Audit & Risk

Other responsibilities: designated Non Executive Director for workforce engagement

Gaby joined LSL as an independent Non Executive Director on 1 September 2019. She has significant experience in strategy,
technology, operations and sales and marketing, particularly in the professional information solutions sector. This includes
her current appointment as Chief Digital Product Officer at Reed Exhibitions (a RELX Group plc company). Gaby previously
held several executive strategic digital and marketing roles including Global Director of Strategy and Director of Research
Strategy at Elsevier in Amsterdam. Before joining Elsevier, Gaby held operating positions at Sainsbury’s Supermarkets Ltd,
within the Procter & Gamble group of companies, and was a senior manager at McKinsey & Co. Gaby holds a BA from the
University of Cambridge.

Simon Embley, Non Executive Director

Simon was Non Executive Chair of LSL from 1 January 2015 until 28 April 2021, when he stepped down following his
appointment as Chief Executive of Pivotal Growth Limited, the joint venture between LSL and Pollen Street Capital. Simon
has remained on the Board so the Group can continue to benefit from his knowledge and experience, and the Board keeps
this position under review. Simon was Deputy Chair from 2014 to 2015 and Group Chief Executive Officer until 2014, a
role which he held at the time of the management buyout of e.surv and Your Move from Aviva (formerly Norwich Union
Life) in 2004. Simon was responsible for the strategic direction of these companies prior to the management buyout and
he subsequently led the turnaround of the initial Group. Simon’s other directorships include a small estate management
company, Eveclo Holdings Limited (an IT business) and Road to Health (a healthcare provider). He is also Non Executive Chair
at Global Property Ventures, a market-leading insurance-based tenant deposit company. Simon is stepping down from the
Board on 1 May 2024 to focus on executing Pivotal Growth’s growth plan.

Non Executive Directors

Darrell Evans, Interim Chair

Committees: Nominations (Interim Chair), Remuneration

Darrell was appointed as an independent Non Executive Director on 28 February 2019 and became Interim Chair from
26 February 2024. He has significant experience in financial services and he was previously Chief Commercial Officer at the
Co-Operative Bank plc. He spent the first part of his career at Royal Bank of Scotland plc, where he was Managing Director,
Mortgages, Loans and Retail Telephony in the retail banking division, responsible for all aspects of the Group’s mortgage
proposition. Prior to that he was Product Director for the RBS retail bank. Darrell has also held senior executive roles at Direct
Line Insurance Group plc, Virgin Money plc and The Consulting Consortium, where he was CEO.

Sonya Ghobrial, Independent Non Executive Director

Committees: Audit & Risk, Remuneration

Sonya was appointed as an independent Non Executive Director on 4 March 2022. She has significant experience in banking,
finance, strategy, investor relations, governance and ESG, which she has gained from her roles in the consumer sector,
including her current position as Head of Investor Relations at Haleon. Sonya was previously Head of Investor Relations at
Heineken and provided investor relations and consultancy services as Clear Giraffe IR. Her experience also includes senior
roles with investment banks, including Barclays Capital, Goldman Sachs and Morgan Stanley. She qualified as an accountant
with KPMG and holds a BAcc (Hons) in Accountancy and Economics.

James Mack, Senior Independent Director

Committees: Audit & Risk (Chair), Nominations

Other responsibilities: Senior Independent Director

James was appointed as an independent Non Executive Director on 27 September 2021. He has significant experience
in audit, risk and financial services, particularly in retail financial services. James was previously Chief Financial Officer at
Barclays Bank UK plc and Aldermore plc and acting Chief Financial Officer at the Co-operative Bank. His experience also
includes senior roles in finance and internal audit at Skipton Building Society. James qualified as an accountant with KPMG
and holds a BA from the University of Nottingham. James is deemed to have recent and relevant financial experience to Chair
the Audit & Risk Committee.

Company Secretary

Sapna B. FitzGerald, General Counsel and Company Secretary

Sapna qualified as a solicitor in 1998 and has been General Counsel and Company Secretary at LSL since 2004. Prior to the
management buyout of Your Move and e.surv, Sapna was a member of Aviva Life Legal Services and had, since 2001, been
part of the team that supported Your Move and e.surv Chartered Surveyors.

Other InformationFinancial StatementsDirectors’ Report (including Corporate Governance Reports and Committee Reports) Strategic Report Strategic ReportOverviewThe Executive Committee

This section of the Report includes information on the Executive Committee as at 24 April 2024.

David Stewart
Group Chief Executive Officer
Executive Director
Additional responsibilities:
Living Responsibly ESG programme sponsor
Executive responsible for colleague matters

Adam Castleton
Group Chief Financial Officer
Executive Director
Additional responsibilities:
Health and safety
Group risk

Debra Gardner
Chief People Officer
Additional responsibilities:
Living Responsibly ESG programme
͵ Programme owner
͵ Colleague I&D lead
͵ Executive Committee sponsor I&D

Forum

͵ Chair of DISC

Sapna B. FitzGerald
General Counsel and Company
Secretary
Additional responsibilities:
Living Responsibly ESG programme
͵ Governance lead (including Board

diversity)

͵ Executive Committee sponsor

Communities Forum

Richard Howells
Group Financial Services Director
PDMR

Steve Goodall
Managing Director
Surveying & Valuation
PDMR

Paul Hardy
Managing Director
Estate Agency
PDMR
Additional responsibilities:
Living Responsibly ESG programme
͵ Chair EWG

The Strategic Report is approved by and signed on behalf of the Board of Directors

David Stewart
Group Chief Executive Officer
24 April 2024

Adam Castleton
Group Chief Financial Officer
24 April 2024

Directors’ Report (including Corporate
Governance and Committee Reports)

In this section:
60

Statement of Directors’ Responsibilities in
Relation to the Financial Statements

Report of the Directors

Corporate Governance Report

Audit & Risk Committee Report

Directors’ Remuneration Report

Other InformationFinancial StatementsStrategic ReportDirectors’ Report (including Corporate Governance Reports and Committee Reports)Overview
Statement of Directors’
Responsibilities in Relation to
the Financial Statements

The Directors are responsible for preparing the Annual Report and the Financial Statements of the Group and the Company in accordance with
applicable UK law and regulations.

Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors have elected to prepare
the Group and the Company Financial Statements in accordance with UK adopted International Accounting Standards (IAS). Under company law the
Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group
and the Company and of the profit or loss of the Group and the Company for that period.

Under the FCA’s Disclosure Guidance and Transparency Rules, the Financial Statements are required to be prepared in accordance with UK adopted
IAS.

In preparing each of the Group and the Company Financial Statements the Directors are required to:

select suitable accounting policies in accordance with IAS 8 Accounting Policies, Change in Accounting Estimates and Errors and then apply them
consistently;

b. make judgements and accounting estimates that are reasonable and prudent;

c. present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

d. provide additional disclosures when compliance with the specific requirements in IAS is insufficient to enable users to understand the impact of

particular transactions, other events and conditions on the Group and/or Company’s financial position and financial performance;

in respect of the Group and the Company Financial Statements, state whether UK adopted IAS have been followed, subject to any material
departures disclosed and explained in the Financial Statements; and

f. prepare the Financial Statements on the going concern basis unless it is appropriate to presume that the Group and/or Company will not continue

in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company, and enable them to ensure that
the Group and the Company Financial Statements comply with UK adopted IAS. They are also responsible for safeguarding the assets of the Group
and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing the Strategic Report, Report of the Directors, Directors’
Remuneration Report and Corporate Governance Report that comply with that law and those regulations. The Directors are responsible for the
maintenance and integrity of the corporate and financial information included on the Company’s website.

Directors’ responsibility statement (DTR 4.1)
Each of the Directors as at the date of this Report confirm that, to the best of their knowledge:

that the consolidated Financial Statements, prepared in accordance with UK adopted International Accounting Standards, give a true and fair
view of the assets, liabilities, financial position and profit of the Parent Company and undertakings included in the consolidation taken as a whole;

that the Annual Report, including the Strategic Report, includes a fair review of the development and performance of the business and the
position of the Company and undertakings included in the consolidation taken as a whole, together with a description of the principal risks and
uncertainties that they face; and

that they consider the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company’s position, performance, business model and strategy.

•

Report of the Directors

Statutory information contained elsewhere in the Annual Report
Information required to be part of the Report of Directors can be found elsewhere in this Report and is incorporated into this section of the Report by
reference, as indicated below:

Reporting requirement and report section

Review of the Group’s business, including performance, developments and strategy, and likely future developments: Strategic Report

Corporate Governance Report

Financial results: Strategic Report and Financial Statements

Dividends: Strategic Report

Financial instruments: Strategic Report, and note 32 to the Financial Statements

Employees, suppliers, customers and other stakeholders: Stakeholder Engagement Arrangements, and Environmental, Social and
Governance Report

Greenhouse gas emissions: Strategic Report

Directors: Corporate Governance Report and The Board

Directors’ service contracts and letters of appointment: Directors’ Remuneration Report

Pages

14 and 113

21 and 169

23 and 50

65 and 56

101 and 102

Annual general meeting (AGM)
Our AGM will be held at a venue in London on Thursday 20 June 2024. It is expected to start at 10am with doors open at 9.45am. The Notice of
Meeting convening the AGM will be issued in a separate circular to shareholders prior to the AGM and this will confirm the location for the meeting.
The Notice of Meeting will also include a commentary on the business of the AGM and notes to help shareholders to attend, speak and vote at the
AGM. We will issue an announcement when the AGM Notice has been published confirming details for the meeting. For shareholders who have
elected to receive electronic communications, the AGM Notice will be available on our website. For all other shareholders, the AGM Notice will be
posted to them.

Going concern
The UK Corporate Governance Code requires the Board to assess and report on the prospects of the Group and whether the business is a going
concern. In considering this requirement, the Directors have prepared a going concern assessment which takes into account the Group’s current
financial position and future prospects for the period through to 30 June 2025 (‘the going concern period’). In preparing this assessment, the
Directors have considered the forecast cash flows and total liquidity available to the Group, including assessment of the availability of borrowing
facilities and the Group’s compliance with related covenants.

The Group expects to continue to meet its day-to-day working capital requirements through cash flows generated by its trading activities and
available cash resources (31 December 2023: £35.0m). The Group’s banking facility, a committed £60m revolving credit facility, has a maturity date of
May 2026 and is therefore available throughout the going concern period. As shown in note 25 to the Financial Statements, the Group had not utilised
any of this facility at 31 December 2023 and the Group has not drawn down upon this facility subsequent to the 2023 year end. The facility agreement
contains financial covenants, including a minimum net debt to EBITDA ratio. At the balance sheet date, the Group could have drawn a maximum of
c£50m from the facility and remain compliant with covenants. This provides the Group with significant liquidity at the balance sheet date.

The Directors have continued to run a variety of scenario models throughout the year to help the ongoing assessment of risks and opportunities. The
Directors’ forecasting demonstrates that the Group is expected to maintain sufficient liquidity throughout the going concern assessment period and
operate within the terms of its committed revolving credit facility.

In preparing their assessment, the Directors have also modelled a downside scenario under which inflation and interest rates remain higher than
external sources currently predict. This downside scenario as a result assumes a continuation of current trading throughout the going concern period
to 30 June 2025. Under this scenario the Group maintains sufficient liquidity and remains compliant with the terms of the revolving credit facility.

The Directors have performed a reverse stress test to determine the market and performance levels that would result in the Group having insufficient
liquidity to continue its operations. Such a scenario would require market transaction volumes to reduce to a level lower than those experienced
during the global financial crisis and in turn reduce Group annual revenue by over 25% compared to Group revenue forecasts through the going
concern period, which the Directors do not consider to be plausible. The scenario modelling includes certain mitigating actions within the Group’s
control; however there are further cost mitigations that could be applied in such a severe scenario. Underpinned by LSL’s strong balance sheet and
the actions taken in 2023 to simplify the Group and create a more focused business that will perform more consistently through market cycles, the
Directors consider a scenario in which the Group has insufficient liquidity to be remote.

The Directors are satisfied that the Group will continue to maintain sufficient liquidity and compliance with the terms of the revolving credit facility
throughout the going concern period to 30 June 2025. As such, the Directors conclude it is appropriate to continue to use the going concern basis of
preparation in preparing this Report.

Other InformationFinancial StatementsStrategic ReportDirectors’ Report (including Corporate Governance Reports and Committee Reports)Overview

Report of the Directors

Director appointment, election and re-election
Our articles provide that the Board may appoint a Director, who will then retire from office at the next AGM and seek election. Shareholders may by
ordinary resolution elect or re-elect any individual as a Director.

Our policy, as set out in the Nominations Committee’s terms of reference, is to have annual re-elections of our Directors. As a result, all of the
Directors are standing for election/re-election at the 2024 AGM.

Directors’ interests
LSL shares
The Directors’ interests as at 31 December 2023 are contained within the Directors’ Remuneration Report (page 108). During the period between
31 December 2023 and the date of this Report, there were no changes in the Directors’ interests, other than share purchases by David Stewart
(280 shares) and Adam Castleton (279 shares) as participants of our SIP/BAYE scheme. These shares were purchased by the Trust at the prevailing
market rate.

Conflicts
During 2023, the Board maintained its arrangements for managing and recording conflicts, in line with its policy. This includes observing an anti-
bribery and hospitality policy, to ensure compliance with section 176 of the Companies Act 2006.

During the year, no Director was materially interested in any contract that is or was significant to the business of the Group or any subsidiary
undertaking, other than Simon Embley, who has a direct interest in Pivotal Growth and indirect shareholding in Southern Home Move Ltd and Favsco
Limited (both are Estate Agency franchisees (see note 33 for further details).

Directors’ qualifying third‑party indemnity provisions
We had qualifying third-party indemnity provisions for the benefit of the Directors in force from the start of the financial period to the date of this
Report, subject to the conditions set out in the Companies Act 2006. We have put in place Directors’ and Officers’ liability insurance and indemnities
to cover this liability.

Compensation for loss of office – change of control
There are no agreements between LSL and its Directors or any colleagues providing for compensation for loss of office or employment (whether
through resignation, purported redundancy or otherwise) that occurs because of a takeover bid.

Auditor
Ernst & Young LLP, our external auditor, has advised of its willingness to continue in office. A resolution to reappoint it and to give the Directors the
authority to determine its remuneration will be proposed at the 2024 AGM. This is the penultimate year that Ernst & Young can be appointed as our
external auditor, as it has been our auditor since we listed in November 2006. During 2024, we intend to conduct a tendering exercise to identify and
appoint a new external auditor to take over the audit in 2025.

Further information on matters related to the external auditor is included in the Audit & Risk Committee Report on page 88.

Share capital
Our 0.2 pence ordinary shares are listed on the London Stock Exchange and are the only class of shares in issue. At 31 December 2023, our issued
share capital comprised 105,158,950 shares (2022: 105,158,950). The authorised share capital is 500,000,000 shares. Details of our share capital are
also set out in note 28 to the Financial Statements.

There are 1,179,439 ordinary shares held in treasury. These treasury shares are not entitled to dividends and have no voting rights at our general
meetings. As the issued share capital at the date of this Report is 105,158,950 shares, the total number of voting rights (excluding treasury shares) is
therefore 103,982,511.

While we did not make any market purchase of ordinary shares in 2023, the Directors have an authority under section 701 of the Companies Act 2006
to make market purchases, on such terms and in such a manner that they determine. The number of shares we can buy back is capped at 10% of our
issued ordinary share capital excluding the treasury shares, which is 10,392,511 ordinary shares. This authority will expire at the conclusion of the
2024 AGM, and we are seeking a renewal of this authority. Please see the Notice of Meeting for further details.

Rights and obligations attached to shares
Each issued share has the same rights attached to it. The rights of each shareholder include:

the right to vote at general meetings;

to appoint a proxy or proxies;

to receive dividends; and

to receive circulars from LSL.

We will seek shareholder approval to renew the Directors’ authority to allot unissued shares and to disapply statutory pre-emption rights at the 2024
AGM. We obtained shareholder approval to disapply pre-emption rights at the 2023 AGM.

Full details of the deadline for exercising voting rights in respect of the resolutions to be considered at the 2024 AGM are set out in the Notice of
Meeting.

On a show of hands at a general meeting, every holder of ordinary shares present in person and entitled to vote shall have one vote and, on a poll,
every member present in person or by proxy and entitled to vote shall have one vote for every ordinary share they hold. The Notice of Meeting which
is published with this Report specifies deadlines for appointing a proxy in relation to resolutions to be passed at the AGM. Where the Chair of the
AGM is appointed as proxy, such proxy votes are counted and the numbers for, against or withheld in relation to each resolution are announced at the
AGM and published on our website after the meeting (lslps.co.uk).

There are no restrictions on transferring our ordinary shares, other than:

a. certain restrictions which may from time to time apply under applicable laws and regulations (for example, insider trading laws and market

requirements relating to closed periods); and

b. pursuant to the Listing Rules of the FCA/UKLA and our Share Dealing Policy, whereby certain employees require approval to deal in our securities.

Our articles of association may only be amended by way of a special resolution at a general meeting of our shareholders.

Employee share schemes
We have two employee benefit trusts. The first was established in 2006, prior to our flotation on the London Stock Exchange. We appointed Apex
Financial Services (Trust Company) Limited (formerly Capita Trustees Limited) (ESOT Trustees) to operate the LSL Property Services plc Employee
Share Scheme (ESOT). The ESOT is able to acquire and hold shares to satisfy options or awards granted under any discretionary share option scheme,
long-term incentive arrangement or Save As You Earn (SAYE) plan operated by us. Details of the shares acquired by the Trust are set out in note 15
to the Financial Statements. The ESOT Trustees have waived the right to any dividend payment in respect of each share held by them (including
future payments).

We also operate the LSL Property Services plc Employee Share Incentive Plan (BAYE or SIP) for our colleagues, which was established in 2007 and is
administered by Link Market Services (Trustees) Limited (formerly Capita IRG Trustees Limited) (Link). Link is the trustee of the LSL Property Services
Employee SIP Trust (Trust), in which shares are held on behalf of participants in the BAYE. The shares held in the Trust have dividend and voting rights
in line with the rules of the BAYE. At 31 December 2023, the Trust held 0.94% (2022: 1.01%) of the issued share capital in trust for the benefit of
employees of the Group and their dependents. The voting rights in relation to these shares are exercised by the Trustees.

Significant agreements – change of control
Some of our subsidiaries are party to agreements which take effect, alter or terminate upon a change of control of the subsidiary company, following
a takeover bid. The majority of our income from surveying, valuation and asset management is derived from specific contracts. Any termination of
such contracts on the change of control of the relevant subsidiary company will have a significant impact on those income streams.

The Group is party to a number of banking agreements, which are terminable by the bank upon a change of control of the Group and all outstanding
amounts become immediately due.

Events after the reporting period
On 2 February 2024, the Group acquired the entire issued share capital of TenetLime Limited (TenetLime), a subsidiary of Tenet Group Limited (Tenet
Group). TenetLime operates a network providing services to mortgage and protection advisers operating within appointed representative (AR) firms.
Following completion TenetLime became part of the PRIMIS Network and the Financial Services Network acquired 153 AR firms. The transaction also
includes the transfer of AR firms from Tenet Connect Limited (Tenet Connect) into other parts of the PRIMIS Network.

The Group did not acquire TenetLime’s network platform and only a small number of Tenet Group compliance staff were transferred to the Group
through the operation of TUPE. No other staff or assets were transferred in connection with the transaction. The Group has therefore determined
that the purchase was an asset acquisition and not a business combination on the basis that no substantive process was acquired. The primary asset
acquired is the contractual relationship with each of the individual AR firms acquired.

The Group has paid initial consideration of £5.7m and will pay further consideration of up to c£4.6m in the first half of 2025, calculated by reference
to the number of AR firms who remain in the PRIMIS Network 12 months following completion and calculated by reference to the turnover of these
firms in 2022 and an expected payment of £1.4m for assets which form part of TenetLime’s regulatory capital.

Other InformationFinancial StatementsStrategic ReportDirectors’ Report (including Corporate Governance Reports and Committee Reports)OverviewReport of the Directors

Substantial shareholdings
At 31 December 2023 and as at 24 April 2024, the shareholders set out below have notified LSL of their interest under DTR 5:

Institution
FMR LLC
Kinney Asset Management, LLC
Setanta Asset Management Limited
SMF UK Management LLP
Liontrust Asset Management plc
Harris L.P
Brandes Investment Partners L.P
FIL Limited
Utah State Retirement Systems
Franklin Templeton Institutional LLC

Nature of
shareholding
Beneficial
Beneficial
Beneficial
Beneficial
Beneficial
Beneficial
Beneficial
Beneficial
Beneficial
Beneficial

Number of
ordinary
shares
9,901,380
9,298,489
6,288,162
5,523,218
5,485,475
5,220,081
5,218,057
5,161,887
3,356,555
3,211,900

31 December 2023

% of ordinary shares
(excluding treasury
shares1)
9.52
8.94
6.05
5.31
5.28
5.02
5.02
4.96
3.23
3.09

Individual shareholders (excluding Directors):
David Newnes
Note:
1 Treasury shares are not entitled to dividends and have no voting rights at the Company's general meetings.

3,479,910

Beneficial

3.35

Number of
ordinary
shares
9,901,380
9,298,489
6,288,162
5,523,218
5,485,475
5,220,081
5,218,057
5,161,887
3,356,555
3,211,900

24 April 2024

% of ordinary shares
(excluding treasury
shares1)
9.52
8.94
6.05
5.31
5.28
5.02
5.02
4.96
3.23
3.09

3,479,910

3.35

Political donations
We do not make any monetary contributions to political campaigns or to any political organisations or other tax-exempt groups. We may from time
to time engage the services of a lobbying organisation in relation to a specific issue. Group companies may also join trade associations which may
be involved in political or lobbying activities. We do not consider that these activities amount to our companies being engaged in or contributing to
political activities.

Directors’ responsibility statement
Each of the Directors confirm, to the best of their knowledge:

a. That the consolidated Financial Statements, prepared in accordance with UK adopted International Accounting Standards, give a true and fair

view of the assets, liabilities, financial position and profit of the Parent Company and undertakings included in the consolidation taken as a whole.

b. That this Report, including the Strategic Report, includes a fair review of the development and performance of the business and the position of

the Company and undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties
that they face.

c. That they consider this Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to

assess the Company’s position, performance, business model and strategy.

Disclosure of information to the auditor
Having made enquiries of fellow Directors and of the external auditor, each of the Directors on the Board at the date of this Report confirm that:

a. To the best of his/her knowledge and belief, there is no information (as defined in the Companies Act 2006) relevant to the preparation of this

Report of which the external auditor is unaware.

b. He/she has taken all the steps a Director might reasonably be expected to have taken to be aware of relevant audit information and to establish

that the external auditor is aware of that information.

The Report of the Directors has been approved by and is signed on behalf of the Board of Directors

Sapna B. FitzGerald
Company Secretary
24 April 2024

Corporate Governance Report
including Nominations Committee Report

Dear Shareholder,

It gives me great pleasure to introduce our Corporate Governance Report for 2023. I was appointed as Interim Non Executive Chair of the Board
with effect from 26 February 2024 and I have been on the Board as an independent Non Executive since February 2019. We are currently in a
process to appoint an independent Chair and I will continue in the role of Interim Chair until then.

The Corporate Governance Report sets out our corporate governance framework and explains how we have applied the principles and
complied with the provisions of the UK Corporate Governance Code 2018 (Code) during the year. During 2023, we complied with all aspects
of the provisions of the Code, including commencing a Board and Committee evaluation process which we intend to update once we have
appointed a new Chair. This will also consider undertaking an externally facilitated evaluation.

The Board is committed to good corporate governance and as Interim Chair, I am ensuring that our discussions are focused on the key topics of
strategy, financial and operational performance, customers, colleagues, risk and governance. I am also responsible for ensuring that all of our
decisions take our shareholders and other stakeholders into account. Further details on this are set out in our Stakeholder Engagement Report,
which explains how as Directors we have complied with our duties under s172 Companies Act 2006. Since my appointment as Interim Chair I,
and other Directors, have met a number of our shareholders and we continue to maintain an open dialogue with our investors.

Key governance activities during 2023
Board and its Committees
During the year, we reviewed the composition of our Remuneration and Nominations Committees, which resulted in changes to their
memberships in November 2023. In March 2024 we again reviewed the composition of all three Committees following the February 2024 Board
changes.

Following the revisions to our Committees, our Committees are operating in line with best practice, by not having the same individuals
attending all of the Committees, and by promoting efficiency through sharing the Committees’ work amongst the independent Non Executive
Directors. In addition, I have stepped down from the Audit & Risk Committee and as Chair of the Remuneration Committee to ensure we
continue to operate in compliance with the Code.

Financial Services Network
During the year, we also continued to review our governance arrangements within the Financial Services Network, building on the work
completed in 2022 which led to John Lowe’s appointment as Non Executive chair of PRIMIS. During 2023 we conducted a search for two
additional independent Non Executive directors to join the PRIMIS Board and at the end of the year, we appointed Bryce Glover and Lynzi
Harrison. Both have significant experience in retail financial services businesses. Since the beginning of 2024, the Financial Services Network
has also established two new committees: Risk & Customer Outcomes and Audit & Compliance, which will be chaired by Bryce and Lynzi
respectively. Bryce has also been appointed as the PRIMIS Consumer Duty Champion.

Board evaluation
During the year, we undertook an internally facilitated evaluation process which, due to the Board changes announced on 27 February 2024, we
intend to update once we have appointed a new Chair. The responses to the questionnaire supported the evaluation of each Director who is on
the Board at the date of this Report. Further details of this the evaluation process, including our reasons for not proceeding with an externally
facilitated evaluation, are included in the Corporate Governance Report.

AGM
I will be available at the 2024 AGM, along with my fellow Directors, to answer shareholders’ questions relating to the Board and our
Committees, and how we discharged our roles and responsibilities during 2023.

Darrell Evans
Chair of the Board and the Nominations Committee
24 April 2024

Other InformationFinancial StatementsStrategic ReportDirectors’ Report (including Corporate Governance Reports and Committee Reports)Overview
Corporate Governance Report including Nominations Committee Report

LSL has a premium listing on the London Stock Exchange. As a result, we are subject to the 2018 edition of the UK Corporate Governance Code and
the Financial Conduct Authority’s (FCA) requirements under the Listing Rules. A copy of the Code can be obtained from frc.org.uk.

We note the publication of the updated Code and Guidance in January 2024, which will apply to us from 1 January 2025. During 2024, we will review
the new Code and implement measures where needed to comply with it.

Compliance with the Code in 2023
Throughout the year we complied with the provisions of the Code in all respects.

This Code compliance statement has been prepared in accordance with the principles of the Code and the following pages explain how we apply the
principles.

Code principle

Details of how we apply

Board leadership
and company
purposes

• Board is led by an independent Chair, who drives strategic focus and robust debate.

• Diverse Board, with a strong mix of knowledge and experience.

• 2023 focus on strategic transformation.

Further information in
this Report

Purpose, Strategy,
Culture, Values and
Business Model

Division of
responsibilities

Composition,
succession and
evaluation

Audit, risk and
internal control

• Company purpose, culture and values align to the Group strategy, provide an anchor
point for risk management and articulate what joins our three Divisions together.

• Board’s responsibilities include:

Д the ongoing process for identifying, evaluating, and managing the principal risks faced

by the company;

Д that the systems have been in place for the year under review and up to the date of

approval of the annual report and accounts; and

Д that the systems are regularly reviewed by the Board.

• Arrangements in place for Board, Executive and Senior Management engagement,

including a Matters Reserved for the Board policy which supports Board decision making.

• Diverse Board with breadth of experience, knowledge and skills.

• Board and its Committees are led by experienced Chairs.

Stakeholder
Engagement Report

• Board, Executive and Senior Management succession arrangements in place.

• Annual evaluation exercise is undertaken, with tracking of actions during each year.

• Regular engagement with shareholders by Executive and Non Executive Directors, to

ensure Board understands their priorities.

• Audit & Risk Committee led by an independent Non Executive Chair, with recent and

relevant financial experience.

• Clear oversight of external and internal audit functions and planning.

• Effective oversight of internal control environment, with a programme of work

supporting compliance and governance changes.

• Detailed consideration of the development of our TCFD arrangements.

• Ensures adequacy of the Divisional risk management framework and process and

participates in risk reviews, including identifying emerging risk.

• Oversight of financial reporting, including judgements made in preparing financial

reporting.

Non-Financial
and Sustainability
Information Statement
including TCFD

Audit & Risk Committee
Report

Directors’
Remuneration Report

Remuneration

• Remuneration Committee led by an independent Non Executive Chair.

• Oversight of Remuneration Policy content and application.

• Reviewing incentive schemes to ensure the attraction and retention of talent, driving our

culture and values and create alignment with stakeholder interests.

Application of the Code and 2023 Compliance Statement
This section of the Report explains the main aspects of our governance arrangements and details how we apply the principles and comply with the
provisions in the Code. Other sections of this Report also contain details relating to the measures we have put in place to comply with the Code,
including:

Code principle

Subject

Further information

Principle C

Principle E

Principles F and H

Principles P, Q and R

Principles M, N
and O

The Principal Risks and Uncertainties section details our framework of prudent and effective
controls, which enable risks to be assessed and managed.

Principal Risks and
Uncertainties

This section of the Report, together with the Stakeholder Engagement and ESG sections,
detail how we seek to take into account the views of our workforce and ensure that our
workforce policies and practices are consistent with our values and support our long-term
sustainable success.

The roles of the Chair and the Non Executive Directors are central to our compliance with the
Code. The Chair leads the Board, providing oversight of its arrangements and promoting a
culture of openness and debate. The Non Executive Directors provide constructive challenge,
strategic guidance, offer specialist advice and hold Management to account.

Remuneration policies and practices should be designed to support strategy and promote
long-term sustainable success. Executive remuneration should be aligned to company
purpose and values, and be clearly linked to the successful delivery of the company’s
long-term strategy. A formal and transparent procedure for developing policy on executive
remuneration and determining director and senior management remuneration should be
established. No director should be involved in deciding their own remuneration outcome.
Directors should exercise independent judgement and discretion when authorising
remuneration outcomes, taking account of company and individual performance, and wider
circumstances.

The Board should establish formal and transparent policies and procedures to ensure the
independence and effectiveness of internal and external audit functions and satisfy itself on
the integrity of financial and narrative statements. The Board should present a fair, balanced
and understandable assessment of the company’s position and prospects. The Board should
establish procedures to manage risk, oversee the internal control framework, and determine
the nature and extent of the principal risks the company is willing to take in order to achieve
its long-term strategic objectives.

Stakeholder Engagement
Report

Environmental, Social and
Governance Report

Corporate Governance
Report

The Board

Directors Remuneration
Report

Audit & Risk Committee
Report

Code explanation: Bill Shannon extended term – explanation to confirm compliance with the Code

Provision 19 states that: The chair should not remain in post beyond nine years from the date of their first appointment to the board. To facilitate
effective succession planning and the development of a diverse board, this period can be extended for a limited time, particularly in those cases where
the chair was an existing non executive director on appointment. A clear explanation should be provided.

In January 2023, Bill Shannon’s term on the Board exceeded nine years and on 20 February 2023 we announced Bill’s intention to retire at the 2023
AGM. To support the succession process, the Board extended Bill’s term to expire at the end of December 2023. Notwithstanding this extension,
Bill retired from the Board at the end of the 2023 AGM (25 May) and David Barral, who joined the Board on 3 April 2023 as Chair Designate, was
appointed as Non Executive Chair on 25 May 2023. This limited extension of Bill’s term was in compliance with the Code as the Board felt it was
necessary to support the Chair appointment and succession arrangements.

Other InformationFinancial StatementsStrategic ReportDirectors’ Report (including Corporate Governance Reports and Committee Reports)OverviewCorporate Governance Report including Nominations Committee Report

Group governance structure
The Group’s governance structure provides the framework within which the Group operates and delivers on our strategy. The information in the table
below describes our governance arrangements as at the date of this Report.

Body

Board

Role and responsibilities

Members

• The Board is responsible for establishing the Group’s purpose, its overall management and

Chair

Audit & Risk
Committee¹

Remuneration
Committee1

for decisions on strategy.

• It also monitors financial and operational performance and, under the Group’s Matters

Reserved for the Board (MRB) policy, it also formulates the Group’s risk appetite
framework (see page 29).

• The Board has delegated matters to its Committees (detailed in their terms of reference)

and to the Executive Directors under the MRB policy.

• The Committee discharges governance responsibilities in respect of audit, risk and internal

controls, and reports to the Board as appropriate.

• It also oversees our arrangements with external auditors.

• The Committee determines the policy for Executive Director remuneration and sets
remuneration for the Chair, Executive Directors, Company Secretary and Senior
Management (with the definition of Senior Management for this purpose being
determined by the Board), in accordance with the principles and provisions of the Code.

• It also reviews workforce remuneration and related policies and the alignment of

incentives and rewards with culture, taking these into account when setting the policy for
Executive Director Remuneration.

Executive Directors

Non Executive Directors

Independent Non Executive
Directors

Chair and independent
Non Executive Directors

Nominations
Committee1

• The Nominations Committee leads the process for appointments to the Board and ensures

plans are in place for orderly succession to both the Board and Senior Management
positions.

Chair and independent
Non Executive Directors

Disclosure
Committee1

Executive
Committee

• It also oversees the development of a diverse pipeline for succession planning.

• Where requested by the Board, the Disclosure Committee oversees our compliance with

Chair

the disclosure and control of inside information obligations, as set out in the UKLA’s Listing
Rules (LR), Disclosure and Transparency Rules (DTR) and the UK Market Abuse Regulation
(UK MAR).

• The Executive Committee is established and chaired by the Group CEO and includes his

direct reports.

• It is responsible for co-ordination across the Group.

Executive Directors

Senior Independent
Director

Executive Directors (Group
CEO and Group CFO)

Divisional managing
directors

Chief People Officer

Group Chief Strategy Officer

General Counsel and
Company Secretary

Investment
Committee

• This Committee is established to consider investment decisions, in accordance with the

Group CEO

Group’s capital allocation policy.

Group CFO

• Where authority is delegated by the Board, the Committee can approve investment

requests, otherwise it will determine if a request is suitable for submission to the Board for
approval.

• The Committee will also monitor investments once approved, to ensure they deliver in

accordance with their business case.

• The Group CEO established the SteerCo to support our corporate sustainability and ESG

Group CEO

strategy and programme.

• The following sub-groups report into the SteerCo:

Д Environmental Working Group

Д Inclusion and Diversity Forum

Д Communities Forum

Chief People Officer

General Counsel and
Company Secretary

Chair Environmental
Working Group

Head of Environmental,
Social and Governance

Living Responsibly
Steering Committee
(SteerCo)

Divisional
management teams

• Each trading Division has statutory boards for each of its companies, and an executive

management team led by the Divisional managing director.

Divisional management
teams include:

• The Divisional management teams meet every quarter with the Group CEO and Group CFO

Managing directors

to review financial and operational performance and risks.

• The Divisional managing directors submit regular reports to the Board and are invited
to present to the Board and the Audit & Risk Committee during the year on a range of
matters, including financial and operational performance and risk.

• The Divisional governance arrangements include committees with specific roles and
responsibilities. The Audit & Risk Committee receives a report each year detailing the
committees within each Division.

• The Financial Services Network has established a combined board with an Audit &
Compliance Committee and a Risk & Customer Outcomes Committee. The PRIMIS
combined board and its committees are chaired by independent non executive directors.

Finance directors

Sales directors

Operations directors

Chief risk officers

Note:
¹ Further details about the roles and responsibilities of the Board’s Committees are set out below in The Board’s Committees section.

The Group’s governance arrangements are supported by Group Finance, LSL Legal (in-house legal team), Company Secretariat, Group HR and Internal
Audit.

Purpose, culture, values, strategy and business model
The diagram below explains how our Group purpose, culture, values, strategy and business model link with each other, how they interact with our
governance arrangements and how they deliver long-term value for our stakeholders.

Our purpose:
To provide ﬁrst class services to mortgage
and insurance advisers, estate agents,
lenders and their customers, to create
long-term beneﬁts for external
stakeholders and our people.

Purpose drives our business model and
shapes our strategic decisions

Culture and values:
The right people:
who accept accountability
for their ac(cid:127)ons.

Doing the right things:
which deliver customer
expecta(cid:127)ons.

In the right way: being
open, challenging of
themselves and suppor(cid:127)ng
others.

Culture aligned to
purpose, values and
strategy

Our commitment to
Living Responsibly:
Increase the diversity of our
Board and workforce.

Build an inclusive culture
where colleagues are
supported to develop and
thrive.

Support colleagues to
connect with our
communi(cid:127)es.

Minimise our environmental
footprint.

Ensure excellent
governance.

Become a more
sustainable
business

Strategy:
Financial Services is at the heart of
our strategy and we will con(cid:127)nue to
grow our Surveying & Valua(cid:127)on and
Estate Agency Franchising Divisions,
including a speciﬁc focus on
leveraging their capabili(cid:127)es to grow
the Financial Services Division.

Business model:
We leverage our technology,
infrastructure, capital and
people to provide ﬁrst class
products and services to
mortgage and insurance
intermediaries, franchisees,
lenders and consumers for the
beneﬁt of our shareholders,
colleagues, customers and
suppliers.

Our business model and
strategy generate value
for our stakeholders

Long-term value for our
stakeholders:
Long-term beneﬁts for our
external stakeholders, our
people and our surroundings.

Other InformationFinancial StatementsStrategic ReportDirectors’ Report (including Corporate Governance Reports and Committee Reports)OverviewCorporate Governance Report including Nominations Committee Report

Alongside these arrangements, the Divisions have also adopted Divisional purpose, culture and values which are aligned with the Divisional strategies
and business models. See the ESG section of this Report for further details on the Divisions’ purpose, culture and values.

During the year, the Board considers Group culture in a range of ways including an annual review presented by the CPO. If any issues are identified,
action plans will be put in place and monitored by the Board.

The Board’s Committees
The Board has established four Committees:

• Audit & Risk

• Nominations

• Remuneration

• Disclosure

The terms of reference for the Audit & Risk, Nominations and Remuneration Committees are available on our website: lslps.co.uk.

The Audit & Risk, Nominations and Remuneration Committees have meetings scheduled as part of the annual planning process, with other meetings
organised during the year as required. The Disclosure Committee only meets when required.

See below for details of the number of meetings for the Board and each of the Committees in 2023. During the year the Board reviewed and updated
the memberships of the Nominations, Remunerations and Disclosure Committees, to ensure our governance arrangements reflect best practice.
Further details are included in the Nominations Committee report later in this section of the Report.

Committee
Nominations1

Members as at
31 December 2023
David Barral2 (Chair)
Gaby Appleton
Darrell Evans

Members as at
5 March 2024
Darrell Evans (Interim
Chair)
Gaby Appleton
James Mack

Remuneration1

Darrell Evans (Chair)
Gaby Appleton
David Barral2

Gaby Appleton (Chair)
Darrell Evans
Sonya Ghobrial

Audit & Risk

Disclosure

James Mack (Chair)
Gaby Appleton
Darrell Evans
Sonya Ghobrial
David Barral2
Gaby Appleton
David Stewart
Adam Castleton

James Mack (Chair)
Gaby Appleton
Sonya Ghobrial

Darrell Evans
James Mack
David Stewart
Adam Castleton

Role and responsibilities
• Lead the process for appointments to the Board and its Committees.

• Oversee succession plans for the Directors and members of the
Senior Management Team (including the Executive Committee).

• Approve the Diversity Policy and targets, and monitor the Group’s

compliance with the Policy and targets.

• Determine the Policy for Executive Director remuneration and set the
remuneration for the Executive Directors, the Chair and members of
the Senior Management Team (including the Executive Committee),
together referred to as the RemCo Population.

• Review workforce remuneration and related policies and alignment

of incentives and rewards with culture, when setting Executive
Remuneration Policy.

• See the Directors’ Remuneration Report for further details on how
the Committee has discharged its roles and responsibilities in 2023
(page 92).

• Oversight of audit, risk and internal control arrangements. See the

Audit & Risk Committee Report (page 85) and the Principal Risks and
Uncertainties section (page 29) for further details, including details of
our internal controls and risk management arrangements.

• Ensuring compliance with the UKLA’s Listing Rules (LR), Disclosure and
Transparency Rules (DTR) and the UK Market Abuse Regulation (UK
MAR).

Notes:
1 James Mack and Sonya Ghobrial were also members of the Nominations Committee and Remuneration Committee until 13 November 2023. The memberships
of the Nominations and Remuneration Committees were reduced in 2023 following a review of Committee memberships. Sonya rejoined the Remuneration
Committee and James rejoined the Nominations Committee in March 2024 following the Board changes announced in February 2024. See Nominations
Committee Report for further information.

2 Bill Shannon was chair of the Nominations Committee and a member of the Remuneration Committee until he retired from the Board at the AGM on 25 May
2023. David Barral joined the Remuneration Committee and Nominations Committee on 3 April 2023 and was appointed chair of the Nominations Committee
when he took over the role of Chair of the Board on 25 May 2023. David also replaced Bill as a member of the Disclosure Committee with effect from 25 May
2023. David left the Board and its Committees on 26 February 2024. Following this Darrell was appointed as Interim Chair of the Board and Nominations
Committee. He also retired as Chair of the Remuneration Committee and as a member of the Audit & Risk Committee to ensure we continue to operate our
Committees in accordance with the Code.

Executive Committee
We have an Executive Committee, which is headed by David Stewart. At the date of this Report the team comprises:

Name
David Stewart
Adam Castleton
Richard Howells1
Steve Goodall
Paul Hardy2
Sapna B. FitzGerald
Debra Gardner
Notes:
1 Richard was appointed as Group Financial Services Director in February 2024. Jon Round held this position during 2023.
2 Paul was appointed as Managing Director – Estate Agency in March 2023. Prior to March 2023 Helen Buck was the Executive Director – Estate Agency.
3 Reference to ‘PDMR’ is to a ‘person discharging managerial responsibilities’ for the purposes of the UK Market Abuse Regulation.

Role
Group Chief Executive Officer (CEO)
Group Chief Financial Officer (CFO)
Group Director of Financial Services
Managing Director – Surveying & Valuation
Managing Director – Estate Agency Franchising
General Counsel and Company Secretary
Chief People Officer (CPO)

Other information
Executive Director
Executive Director
PDMR3
PDMR3
PDMR3
–
–

Executive Committee diversity
At the date of this Report, the Executive Committee comprises seven people, and includes two women and one person from a minority ethnic
background.

In this Report we have used the definition of minority ethnic background which has been implemented in the reporting requirements set out in
Listing Rules 9.8.6R and 14.3.33R(1). Minority ethnic background is defined by reference to the following ONS categories, excluding the category
‘White British or other White (including minority-white groups)’:

• Asian/Asian British.

• Black/African/Caribbean/Black British.

• Mixed/Multiple Ethnic Groups.

• Other Ethnic Group, including Arab.

For further details relating to the diversity of our colleagues, including the Senior Management Team, see the Environmental, Social and Governance
Report (page 50).

Board composition
The Directors at 31 December 2023 are shown in the table below. Biographical details of each person who was a member of the Board in 2023 and is
a member of the Board at the date of this Report are contained in The Board section of this Report (page 56).

The details include information relating to other directorships. The Board does not consider that any of the Directors’ other appointments interfere
with their role at LSL.

Name
David Stewart
Adam Castleton
David Barral1
Gaby Appleton

Role
Executive Director
Executive Director
Non Executive Director
Independent Non Executive
Director

Additional role during 2023
Group Chief Executive Officer (CEO)
Group Chief Financial Officer (CFO)
Chair
Senior Independent Director (SID)

Darrell Evans2

Independent Non Executive Director

James Mack

Independent Non Executive Director

Chair of the Remuneration
Committee and Non Executive
Director for workforce engagement
Chair of the Audit & Risk
Committee
-
-

Sonya Ghobrial
Simon Embley
Notes:
1 David Barral was considered to be independent prior to his appointment as a Director. David joined the Board as Chair Designate on 3 April 2023 and took over

Independent Non Executive Director
Non Executive Director

-
-

as Chair on 25 May 2023. He left the Board on 26 February 2024.

2 Darrell Evans was considered to be independent on his appointment as Interim Chair on 26 February 2024. We have commenced a search for a new independent

Chair.

3 As a result of the Board changes which took place on 26 February 2024, we have revised our Committee memberships.

Additional role from 5 March 20243
-
-
Left the Board on 26 February 2024
Chair of Remuneration Committee
Non Executive Director designated
for workforce engagement
Interim Chair of the Board
Chair of Nominations Committee

Chair of the Audit & Risk Committee
Senior Independent Director (SID)

Other InformationFinancial StatementsStrategic ReportDirectors’ Report (including Corporate Governance Reports and Committee Reports)OverviewCorporate Governance Report including Nominations Committee Report

Board diversity
At 31 December 2023, the Board included six male and two female Directors and it included one person from a minority ethnic background
(see above for definition of minority ethnic background). In relation to the Board’s senior roles, this included three males (Chair, Group CEO and Group
CFO) and one female (SID).

Following the Board changes announced on 27 February 2024 and 6 March 2024, the Board includes five male and two female Directors, with the
Board’s senior roles held by four males.

The Board’s composition does not meet all of the Group’s diversity targets, which are aligned to the diversity targets in the Listing Rules and detailed
in our Diversity Policy. See Board diversity and inclusion below for further details.

Board skills and experience
During 2023, the Board included skills and experience in the following areas:

Strategy
Technology and digital services
Financial services
Operations
Governance
Residential and commercial property
Entrepreneurship

ESG
Investor relations
Risk and compliance
Sales and marketing
Finance
Employment and human resources
Banking and treasury

Digital products
Strategic leadership
Value creation
Transformation
Audit
Professional information solutions
Financial controls

Independent Non Executive Directors
During the year and as at the date of this Report, each of the Directors identified above as independent continued to meet the criteria set out in
provision 10 of the Code.

Director elections/re-elections
All Directors will retire at the AGM and, except for Simon Embley who will step down on 1 May 2024, they will stand for election/re-election. Further
details relating to the Directors’ election will be included in the Notice of Meeting.

Director appointment arrangements
Each Executive Director has a service contract, and each Non Executive Director (including the Chair) has a letter of appointment. These documents
are available for inspection at our registered office and at our York office (location of Company Secretariat Team) during normal business hours and at
each AGM. Further details relating to the Directors’ appointments are contained in the Directors’ Remuneration Report.

Key Board roles
There is clear division of responsibilities between the key roles on the Board, details of which are set out on our website (lslps.co.uk) and are
summarised below.

Role
Chair

Responsibilities summary
• Leadership of the Board, including setting its agenda and overseeing its decision making processes

and arrangements.

• Shaping the culture, style and tone of discussions and promoting openness and debate.

• Leading regular Non Executive Director only meetings, to support the Board’s discussions.

• Overseeing our stakeholder engagement arrangements.

• Supporting the Group CEO and other Directors, including ensuring appropriate training and induction

arrangements are in place.

• Leading our annual Board and Committee evaluation exercise.
• Running the business, using delegated powers set by the Board.

• Proposing and delivering Group strategy.

• Overseeing Group culture and sustainability priorities (i.e. Living Responsibly/ESG).

• Supporting the Board’s decision making by providing appropriate information.
• Acting as a sounding board for the Chair.

• Leading the evaluation of the Chair.

• Providing an alternative point of contact for Directors and stakeholders (including shareholders).

Group CEO

Senior Independent Director

Board and Committee meetings in 2023
Each year, we put in place a schedule of meetings for the Board and our Committees, which are supplemented by additional meetings as required.
The Directors meet in person and virtually. The table below summarises the meetings for 2023 and each Director’s attendance. Where a Director is
not a member of a Committee, their attendance or non-attendance is not reported. We also schedule meetings for the Non Executive Directors to
meet without the Executive Directors. The Audit & Risk Committee also meets the auditor without the Executive Directors.

The Disclosure Committee did not meet during 2023.

2023 Board Member
Gaby Appleton
David Barral1
Helen Buck2
Adam Castleton
Simon Embley
Darrell Evans3
Sonya Ghobrial3/5
James Mack3/5
Bill Shannon3
David Stewart

Attendance at Board
meetings (including
strategy meetings)
(total 13 held in the year)
13
8
4
13
13
11
12
12
8
13

Attendance at Audit
& Risk Committee
meetings (total 4 held in
the year)
4

Attendance at
Remuneration
Committee meetings
(total 4 held in the year)
3
2

Attendance at
Nominations Committee
meetings
(total 3 held in the year)
3
1

4
4
4

4
3
3
2

3
3
3
2

Notes:
1 David Barral joined the Board on 3 April 2023 and the table records his attendance following his appointment.
2 Helen retired from the Board on 31 March 2023 and the table records her attendance prior to her retirement.
3 Bill retired from the Board and the Nominations, Remuneration and Disclosure Committees on 25 May 2023 and the table records his attendance prior to his

retirement.

4 James and Sonya each missed one Board meeting during the year and Darrell missed two. Ahead of the meeting they each received the papers and were able to

provide feedback for the other Directors to consider at the meeting.

5 Sonya and James retired from the Nominations and Remuneration Committee in November 2023 following a review of the membership of these Committees.

Board meeting and decision‑making arrangements
At the start of each year, we create a schedule of matters for discussion, which includes special business as well as standing items. This ensures
the Board’s sessions focus on material matters and strategy. At the end of each meeting during the year, the Board discusses and agrees items for
inclusion in the agenda for the next meeting(s).

The Board also has a MRB policy, which identifies matters that require Board approval, matters that are delegated to the Group CEO and Group
CFO for approval, and matters which the Board will receive for information. During 2023 the Board reviewed its MRB policy, with the exercise also
considering governance best practice, including guidance published by the Chartered Governance Institute. No amendments were identified as being
required.

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For each scheduled meeting the Directors receive regular reports that may include the following:

Report
Group CEO’s report

Content
• Strategy

• Key project updates

• Commentary on the Group’s performance

• Material risk issues

• Colleague report (detailing colleague matters and KPIs including staff turnover data and whistleblowing reporting)

Group CFO’s report
Division’s report

• Living Responsibly ESG KPIs
Group financial performance review and other financial and operational matters
Each managing director provides a report on:
• Financial performance

• Risk

• Operational matters

Governance report

Shareholder report
Board planner

• KPIs
Legal and MRB policy reporting (being either information which is required to be given to the Board or proposals
requiring Board approval).
Report detailing changes to our investor register.
Record of meetings conducted during the year, together with agenda items scheduled for future meetings.

During the year, each member of the Executive Committee submitted a report to each scheduled Board meeting, focusing on key matters and risks
relevant to the Division or team. In months with no scheduled meetings, the Group CEO and Group CFO continued to report on Group performance
and strategic projects.

The Board will also receive special business presentations, which could relate to a particular aspect of strategy, business area, investment opportunity
or initiative.

The meeting arrangements ensure we effectively manage the volume of Board reporting. The quality of Board reporting and meeting arrangements
are topics specifically covered in the annual Board and Committee evaluation exercise, as we seek to continuously improve our reporting and
decision-making arrangements. Further details of our annual evaluation exercise is included below.

The Directors, the Board and the Committees are all supported by the Company Secretary (Sapna B. FitzGerald), who is responsible for ensuring
adherence to governance requirements. All Directors have access to the advice of the Company Secretary on governance matters. The Company
Secretary’s duties include managing meeting arrangements and supporting Director induction and training.

The Directors ensure Board decisions promote the success of LSL for the benefit of our shareholders, taking into account our stakeholders, in
accordance with s172 of the Companies Act 2006. Details of how we do this is included in our s172 Statement, which is within the Stakeholder
Engagement section of this Report (page 26).

Board decisions in 2023
Set out below is a summary of some of the Board’s key decisions during 2023, together with how any relate to our strategy and our key stakeholders:

Key topic

Link to strategy

Group simplification through divestments:

Relevant stakeholder(s)

The Board approved the disposal of assets which are not core to the Group’s strategy. These disposals are in line
with our strategy to simplify the Group, focus on developing our B2B business, and reduce exposure to market
cycles.

Disposal of Marsh & Parsons

Marsh & Parsons, while part of the Estate Agency Division, had operated
autonomously from other parts of the Division.

After evaluation it was not considered suitable for inclusion in the Group's
Estate Agency Franchising business and the opportunity was taken to
dispose of for cash at an attractive earnings multiple.

The disposal provided the Group with capital and balance sheet flexibility
to take advantage of opportunities to support investment in our strategy
and reduce our exposure to housing market cycles.

Franchising of the entire Estate
Agency networks

The restructuring of Estate Agency into the Franchising Division involved
the franchising of the Your Move, Reeds Rains and LSLi brands.

Operating a franchise network offers significant advantages, including:

•

A higher-margin business with a significantly smaller fixed cost base,
resulting in improved and substantially less-volatile earnings through
housing market cycles.

The continued distribution of related products and services, including
long-term provision of financial services.

The potential to grow network footprint without significant additional
investment, by supporting the expansion of franchisees and recruiting
new franchisees.

The opportunity to benefit from the entrepreneurship and agility of
independent franchisees, resulting in a more productive, flexible, and
resilient business model.

The divestments of the Financial Services D2C broker businesses simplified
the Group structure, and our strategy is now focused on growing our
Financial Services Network business (B2B).

The businesses were acquired by our joint venture, Pivotal Growth, which
is better placed to increase their value. LSL retains the ability to capitalise
on opportunities in D2C financial services through its equity share in
Pivotal Growth.

The Group operated a small private rented sector property management
business (PRSim), which was subscale in the market. Its divestment has
simplified the Group structure.

Disposal of D2C broker businesses to
Pivotal Growth

Disposal of PRSim property
management business

Acquisition to grow the Financial Services Network

Acquisition of TenetLime

The acquisition of the directly authorised network expands our Financial
Services Network business with the addition of appointed representative
firms and advisers to the PRIMIS Network. This increases the scale of
PRIMIS providing opportunities for scale economies.

• Shareholders

• Colleagues

• Customers

• Suppliers

• Shareholders

• Colleagues

• Customers

• Suppliers

• Shareholders

• Colleagues

• Customers

• Suppliers

• Shareholders

• Colleagues

• Customers

• Suppliers

• Shareholders

• Colleagues

• Customers

• Suppliers

• Shareholders

• Colleagues

• Customers

• Suppliers

• Regulator (FCA)

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Key topic

Customer contracts

Renewal of lender valuation services
contracts

Capital

Group’s banking facility

Capital allocation policy

Corporate sustainability

ESG: The Board considered the
development of the Group’s
sustainability programme

Link to strategy

Relevant stakeholder(s)

e.surv successfully renewed contracts with key lenders, including our
contract with the Lloyds Banking Group (which due to its significance falls
within our MRB policy). The renewal of these contracts underpins e.surv's
strong market position and provides increased security over medium-term
income streams.

• Shareholders

• Colleagues

• Customers

During the year, the Board approved the amendment and restatement
of the Group’s banking arrangements. The revised facility provides the
Group with capital and balance sheet flexibility, to take advantage of
opportunities to support and invest in our strategy.

• Shareholders

The Board has approved the establishment of an Investment Committee
and, during the year, reviewed our capital allocation policy. The
Investment Committee is responsible for receiving and reviewing
investment requests and making recommendations to the Board, in
accordance with the capital allocation policy.

• Shareholders

We have focused on developing our Living Responsibly ESG programme
and environmental reporting, especially in relation to our reporting under
the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD).

• Shareholders

• Colleagues

• Customers

As a result of the Group simplification programme, we have reviewed
our purpose statement and the updates are included in this Report. See
the Purpose, Strategy, Culture, Values and Business Model section of this
Report for the updates to our purpose, strategy and business model.

Governance matters (not directly linked to strategy)

Review of Financial Services
Network governance arrangements

We have focused during the year on the development of the governance
arrangements within the Financial Services Network business. This
included a third-party review, resulting in a number of recommendations
which are being implemented. The actions taken include recruiting two
additional independent non executive directors onto the PRIMIS Board
and the creation of two new committees within the PRIMIS Network
(Audit & Compliance and Risk & Customer Outcomes). Together with the
two new independent non executive directors, the PRIMIS combined
board has three independent non executive directors and one non
executive director who was previously the managing director.

• Shareholders

• Colleagues

• Customers

• Suppliers

Directors’ conflicts of interest
We have arrangements to manage any conflict of interest that may arise in relation to a Director. We maintain a register of Directors’ interests
and ensure that where a conflict is declared, the Director is either excluded from discussions or obtains the Board’s approval to participate.
Notwithstanding this, no Director is permitted to participate in any decision relating to their appointment, including their remuneration.

Director induction and training
Induction plans are tailored for each Director when they join. During 2023, Sonya Ghobrial and David Barral both completed their induction plans
(Sonya’s started in 2022 and her induction was completed in 2023). Inductions include receiving previous meeting papers, and meetings with
members of the Board and the Executive Committee, our corporate brokers and our internal and external auditors. Induction plans also include
meetings with significant shareholders and customers (as appropriate), to discuss a range of issues.

For existing Directors, training is arranged as required. This could be triggered by a change in regulation which impacts LSL or by a Director or the
Board requesting training or information on a particular subject.

Board and Committee evaluation
Each year, the Directors review the performance of the Board and the Committees in respect of the reporting year, and this was completed in respect
of 2023. However, due to the recent Board changes we intend to update the exercise once we have completed our search for a new independent
Chair.

For 2023, we chose to undertake the exercise as in previous years using a questionnaire which was completed by all Directors. We decided not to use
an external facilitator due to the significant changes to the Group and the Board that took place in the year, because we felt we needed to embed
the changes before embarking on an external evaluation, in order to ensure we are getting the best value from the exercise. The responses to the
questionnaires were shared with the Board and they contributed to the Board’s assessments with regards to the effectiveness of the Directors who
are on the Board at the date of this Report. As we are outside of the FTSE 350 companies, we are not required by the Code to undertake an externally
facilitated evaluation.

Based on the responses to the questionnaire, the Board has identified the following actions to be completed in 2024 to further enhance our
governance arrangements. Our priority is to appoint a new Chair and once this happens, we will update our evaluation exercise, and these actions
(if required):

1. Reporting: building on the improvements made in 2023, further develop reporting including the development of existing and additional KPIs and

ensuring papers and meeting arrangements support continued Board effectiveness.

2. Succession: develop the Board’s succession planning arrangements with a focus on diversity and ensuring the Board is equipped with the right

mix of skills to support the Group’s strategy, taking into account the restructuring which has occurred in 2023, and prioritise the development of
succession planning arrangements for the Executive Committee, especially in relation to the key roles of Group CEO and Group CFO.

3. Risk and governance: develop the Group’s arrangements in relation to both Group risk management and climate-related risk and opportunity

arrangements ensuring compliance with TCFD. This will include a review of the Audit & Risk Committee composition and its meeting
arrangements.

4. Stakeholder engagement: continue with the shareholder engagement arrangements ensuring we maintain an open dialogue with our

stakeholders, especially our shareholders.

5. Evaluation/performance: consider use of an externally facilitated evaluation in the next few years with the new Chair.

In addition to the above actions identified by the annual exercise, we are also looking to appointment three additional independent non executive
directors to the Board including two into the roles of non executive chair and senior independent director.

Board and Committee composition
The Board and the Nominations Committee each year review the Board’s composition and this is an important part of the Board’s succession
planning, as it provides an opportunity to review skills and expertise and to agree plans for filling any gaps in and developing the Board’s diversity.
Further details relating to succession planning, diversity and recruitment are set out below, within the Nominations Committee Report.

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Actions in response to the 2022 evaluation exercise
As part of the Board’s 2023 year-end review, the Directors assessed the completion of actions identified during the previous year and confirmed that
the actions were either completed or deferred for completion in 2024.

These included:

Agreed action

a. Continue the Board’s succession planning with a focus on improving its diversity

of skills, gender, ethnicity, experience and social background and, in relation to
the NEDs, seek to have a mix of portfolio NEDs and NEDs with executive roles.

Progress report
Continuing to progress

b. Continue to improve Board reporting, meeting arrangements and

Continuing to progress

communication of Board expectations to the Divisional management teams, to
support continued Board effectiveness.

c. Consider an externally-facilitated evaluation for 2024.

Deferred – the Board decided to defer this, as discussed
above.

Nominations Committee Report
During 2023, Bill Shannon chaired the Nominations Committee until he retired on 25 May, with David Barral taking over the role. From 1 January to
13 November 2023, the Committee’s other members were Gaby Appleton, Darrell Evans, James Mack and Sonya Ghobrial. On 13 November 2023,
following a review of Committee membership, James Mack and Sonya Ghobrial retired from the Committee.

Since 26 February 2024, the Nominations Committee is being Chaired by Darrell Evans and its other members are Gaby Appleton and James Mack.
James Mack, as SID, is leading in the search for a new Chair on behalf of the Nominations Committee.

2023 highlights
The Nominations Committee met three times in 2023 and its discussions and decisions included:

a. Bill Shannon’s retirement and the appointment of David Barral as Chair Designate and then Non Executive Chair.

Extensions of Simon Embley’s Non Executive term from 31 December 2023 to the conclusion of the 2024 AGM.

Review of the Executive and Senior Management Teams (including the Executive Committee). This included considering the Divisional leadership
teams and appointments to senior management roles across the Group, including:

Jon Round moving into the role Non Executive Director of PRIMIS.

ii.

Richard Howells being appointed as the Group Financial Services Director.

Review of Board composition, including the Non Executive Directors’ skills, experience, expertise, diversity and recruitment.

Consideration of the Group’s diversity and inclusion projects, and the FCA consultation on the diversity of listed company boards, committees,
and senior management teams. The Committee also reviewed and reapproved the Diversity Policy (including the existing targets). See below for
further details.

Oversight of Senior Management succession planning arrangements, which are being led by the CPO and Group CEO.

Annual review of its terms of reference.

Non Executive Director Appointments
Appointment of David Barral as Non Executive Chair
During 2022, following a tender process, we selected and appointed Heidrick & Struggles to assist with the recruitment of a Non Executive Chair to
succeed Bill Shannon, which resulted in the appointment of David Barral. This search started in 2022 and was completed in 2023.

We sought to ensure that Heidrick & Struggles presented the Nominations Committee with a diverse longlist from which it could make its selection.
From this longlist, Board members selected a shortlist of appointable candidates for interview, following which David Barral was appointed as Chair
Designate and then Chair. Bill Shannon did not participate in the search or selection process, which was led by Gaby Appleton.

Whilst we believe that all appointments should be on merit, we recognise the imbalance that exists and the role that we can play in improving
diversity and inclusion. We also recognise the benefits that diversity has on decision making and on the Group’s performance and this is supported
by our Diversity Policy (see below). In all of our Director searches, we are clear that the Board is committed to improving its diversity (including
gender, ethnicity and expertise) and this was a very important consideration for the Board and the Nominations Committee in 2023.

Appointment of independent non executive directors into the Financial Services Network
During 2023, as a result of the review of governance arrangements within the Financial Services Network, we sought to recruit two additional
independent non executive directors to join the PRIMIS Board. To support us, we selected and appointed HW Global and set it a target in respect of
female candidates on the shortlist. For more details, see below.

Voluntary Code of Conduct for Executive Search Firms
Heidrick & Struggles and HW Global are both signatories to the Government’s Standard Voluntary Code of Conduct for Executive Search Firms*.
We chose this code of conduct because signatories are actively committed to helping clients increase the effectiveness of their boards and senior
executive teams and acknowledge the value that diversity brings. Neither firm has any connection to the Group, other than the provision of these
services.

Appointment of new Chair and search for additional independent Non Executive Director
Since the Board changes announced on 27 February 2024, we have commenced a process to appoint a new Non Executive Chair, an experienced
Senior Independent Director and an additional independent Non Executive Director to strengthen the Board. We have instructed Miles Advisory to
assist us with these searches.

Board diversity and inclusion
The Nominations Committee and the Board received presentations on the Group’s initiatives to promote diversity and inclusion. Details of these
initiatives in relation to colleagues are included in the Environmental, Social and Governance Report (page 50).

The Board has adopted its Diversity Policy, which relates to the diversity of the Board, its Committees and our Senior Management Team (including
the Executive Committee). This followed the FCA’s publication of the final rules in 2022 and the recommendation of the Nominations Committee.
The Policy sits alongside other Group employment policies, which also seek to promote diversity and inclusion across the Group. A copy of the
Policy is available at lslps.co.uk.

Summary of the Diversity Policy:

Topic

Policy summary

Importance of
diversity

The Board recognises the benefits of diversity. Through its recruitment, appointment and succession planning arrangements,
LSL seeks to promote diversity including professional skills, experience, social backgrounds, gender and ethnicity, in addition
to individual cognitive and personal strengths.

In relation to the Board, LSL believes that diversity has a positive effect on decision making and benefits shareholders
and other stakeholders. The Directors recognise that the Board and Committees set the tone for diversity and inclusion
throughout the Group and that by actively reviewing, monitoring and engaging with discussions of diversity and inclusion, the
Board is best able to drive a positive impact to the advantage of all stakeholders.

While the Policy includes targets in relation to gender and ethnicity, LSL recognises that other types of diversity exist,
including sexual orientation, disability, neurodiversity and socio-economic background.

Role of the
Nominations
Committee

Role of the
Remuneration
Committee

The Committee leads the process for appointments to the Board and its Committees, and ensures that plans are in place for
orderly succession to both the Board and Senior Management positions. In discharging its duties, the Committee oversees the
development of a diverse pipeline for succession.

The Committee is responsible for the Remuneration Policy relating to the Chair, the Executive Directors and Senior
Management (including the Company Secretary). The Remuneration Committee also reviews workforce remuneration and
related policies and the alignment of incentives and rewards with culture and the promotion of diversity and inclusion in the
LSL Group.

Annual evaluation As part of the annual evaluation exercise, the Directors consider the Board and each Committee’s composition, diversity and

how effectively the members work together to achieve LSL’s objectives.

Diversity targets

The Board has adopted measurable objectives for diversity of the Board and the Senior Management, which align with the
FCA’s final rules (see below).

Annual reporting

LSL will report annually in the Corporate Governance Report on whether it has met its targets and if not, the reasons for not
meeting the targets. The reporting will also include details of the processes used in relation to appointments to the Board, its
Committees and Senior Management, and their succession plans. It will detail any changes to the Board between the year end
and the date that the annual report and accounts are approved by the Board. Finally, the reporting will include an explanation
of LSL’s approach to collecting data used in the disclosures required by the Listing Rules.

Policy review

The Policy is subject to an annual review by the Nominations Committee on behalf of the Board.

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Diversity targets (adopted since April 2022):

Board
Gender diversity:
a. At least 40% women
b. At least one woman in the role of Chair, Group CEO, Group CFO or

SID

Ethnic diversity: at least one director who is from a minority ethnic1
background
Senior Management Team
Gender diversity: by 1 January 2023, at least 33% are women and at
least 33% are men

Ethnic diversity: by 1 January 2023, at least 11% are from a minority
ethnic1 background

31 December 2023

24 April 2024

No change

Target not met: 33%
Target met: Gaby Appleton is the SID Target not met: the roles of Chair,
Group CEO, Group CFO and SID are
held by males
Target met: One

Target met: One

Female target met: 33% female

No change

Male target met: 67% male
Target not met: 5%

No change

Note:
1 Minority ethnic background is defined as from one of the following categories of ethnic background, as set out in the tables in LR 9 Annex 2.1R(b) and LR 14

Annex 1.1R(b), excluding the category ‘White British or other White (including minority-white groups)’:
• Asian/Asian British.
• Black/African/Caribbean/Black British.
• Mixed/Multiple Ethnic Groups.
• Other Ethnic Group, including Arab.

Changes to the Board or Senior Management diversity between 31 December 2023 and the date of this Report are included in the table above. The
definition of Senior Management is determined by the Board and includes members of the Executive Committee and their direct reports who are
A1 and A2 grades (excluding Executive Directors).

Our Board and Senior Management targets will be reviewed during 2024 and may be adjusted by the Board, on the recommendation of the
Nominations Committee. We would not adopt targets lower than those stipulated in the Listing Rules.

We have not to date met all of our targets relating to Board or Senior Management level diversity. This has been due to limited movement at these
levels since the Policy was first adopted in 2022. The limited movement and the Group restructuring mean that there has been limited opportunities
to promote or recruit diverse candidates onto the Board or into the Senior Management Team. In relation to the Board, see above for the process
we followed in the appointment of David Barral as Chair, including ensuring the selection process was diverse.

In relation to recruitment, the Nominations Committee is focused on ensuring the inclusion of women and individuals from minority ethnic
backgrounds in searches for the Board and Senior Management (including Executive Committee). We have reviewed our engagement with
recruitment partners for senior roles and ensured that they have signed up to the Voluntary Code of Conduct for Executive Search Firms.* As part
of any exercise, we brief our recruitment/search partners on the importance of diversity and inclusion and are also working to ensure the lists they
provide meet their commitments in the code of conduct.

By way of example, when selecting the two independent non executive directors for the PRIMIS board, we set HW Global a target for the shortlist
to be at least 30% women. HW Global’s approach included advertising the roles on prominent platforms such as ‘Women on Boards’ and ‘Dynamic
Boards’ job board portals, to maximize visibility and attract a diverse range of candidates.

The PRIMIS board also intends to designate one of the new non executive directors to focus on and support workforce engagement within the
Financial Services Division. This will include inclusion and diversity initiatives, strategic oversight, and ensuring that diversity and inclusion efforts
align with the LSL Group’s overall goals and objectives.

During 2024, we will continue to promote diversity and develop our approach (including setting targets where appropriate) when engaging
recruitment/search partners, to ensure the promotion of our diversity and inclusion priorities for prospective applicants.

* https://www.gov.uk/government/publications/standard-voluntary-code-of-conduct-executive-search-firms/the-standard-voluntary-code-of-conduct-for-
executive-search-firms

Diversity metrics and targets
The data set out below related to the Board and Executive Committee as at 31 December 2023 (2022: 4 March 2023) and the date of this Report:

Table 1 reporting on sex/gender representation

Number
of Board
members1

6
(2022: 7)
5

% of Board

75
(2022: 78)
71

Number
of senior
positions on
the Board2

Number in
Executive
Committee3

% of Executive
Committee

3
(2022: 3)
4

6
(2022: 7)
5

67
(2022: 78)
71

Gender
Men
31 December 2023

24 April 2024
Women
31 December 2023

2
(2022: 2)
2

25
(2022: 22)
29

1
(2022: 1)
0

2
(2022: 2)
2

33
(2022: 22)
29

24 April 2024
Other categories
31 December 2023
24 April 2024
Not specified/prefer not to say
31 December 2023
24 April 2024
Notes:
1 LSL Board includes all Executive and Non Executive Directors.
2 Senior positions are the Group CEO, Group CFO, Chair of the LSL Board and Senior Independent Director.
3 Executive Committee includes all colleagues with a direct reporting line to the Group CEO that attend Executive Committee meetings and provide leadership to

-
-

the Group (excluding Executive Directors).

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Table 2 reporting on minority ethnic background2 representation

Ethnicity
White British or other White (including minority white groups)
31 December 2023

24 April 2024
Mixed/Multiple Ethnic Groups
31 December 2023

24 April 2024
Asian/Asian British
31 December 2023

24 April 2024
Black/African/Caribbean/Black British
31 December 2023

Number
of Board
members

7
(2022: 8)
6

1
(2022: 1)
1

% of Board

88
(2022: 89)
86

12
(2022: 11)
14

Number
of senior
positions on
the Board1

Number in
Executive
Committee

% of Executive
Committee

4
(2022: 4)
4

7
(2022: 7)
6

88
(2022: 78)
86

1
(2022: 1)
1

12
(2022: 11)
14

-
(2022: 1)
-

-
(2022: 11)
-

24 April 2024
Other Ethnic Group, including Arab
31 December 2023
24 April 2024
Not specified/prefer not to say
31 December 2023
24 April 2024
Notes:
1 Senior positions are the Chair, Group CEO, Group CFO and Senior Independent Director.
2 Minority ethnic background is defined as from one of the following categories of ethnic background, as set out in the tables in LR 9 Annex 2.1R(b) and LR 14

-
-

The 2022 reporting on minority ethnic background incorrectly reported that we had no member of the Board who is from a minority ethnic
background. This arose due to an error in our data collection which has been rectified and the reporting has been corrected in the table above.

Further details relating to colleague diversity matters are included in the Enviromental, Social and Governance Report (page 50), including our
reporting on gender pay and gender and ethnic diversity in our Senior Management Team and the wider workforce.

The Living Responsibly Report 2024, which is published at the same time as this Report and is available on our website (lslps.co.uk), also contains
further details of our diversity and inclusion initiatives.

Culture
The Board is mindful that it has the ultimate responsibility for our culture. The right culture provides the foundation to drive purpose and the
delivery of strategy, and therefore plays a key role in our long-term success. The Group’s desired culture is to be:

a. Having the right people: who accept accountability for their actions.

b. Doing the right things: which deliver customer expectations.

c. In the right way: being open, challenging of themselves and supporting others.

In addition to the Group culture, the following two Divisions have also established and published culture and value statements, which sit alongside
the Group culture and are monitored within the Divisional governance structures. The Estate Agency Franchising Division, having undergone a
significant restructuring in the year, will establish and publish its culture and value statements in 2024.

Division
PRIMIS Network

e.surv

Culture
At PRIMIS we are passionate about doing the right thing for all stakeholders: brokers, customers, partners and our
employees.
Our purpose, vision and values underpin everything we do at e.surv, every day. They define us and set the tone for the
way we work and because we believe that success comes from within, we’ve developed an honest and open culture
that empowers our people to do their best, and enables our business to deliver results.

Further information on our culture is also included in our ESG reporting and our Living Responsibly Report 2024.

The Board has a range of mechanisms for monitoring our Group culture, including:

Monitoring employee engagement, as part of the Board engagement programme:

i. Results of the annual employee survey and regular pulse surveys are reported to the Board throughout the year.

ii.

The Group’s whistleblowing policy (including an updated ‘Speak Up’ policy) has been approved by the Board and is included within our MRB
policy. The Board also receives annual reporting on our whistleblowing arrangements.

iii. The Group held a Senior Management Conference in 2023 and the content of the conference was shared with the Board.

iv.

vi.

The Designated Non Executive Director for Workforce Engagement (Gaby Appleton with effect from 5 March 2024 and previously Darrell
Evans) attends meetings with the Employee Engagement Forum each year. The composition of the Employee Engagement Forum was
revised in 2023 to ensure it is more representative of the Group’s workforce, following the Group simplification which saw the total number
of employees reduce from c4,000 to 1,752.

The CPO reports and presents regularly to the Board on Group HR matters, including colleague engagement and communication
arrangements.

The Board receives regular updates on the work of the Group’s Communities and Inclusion and Diversity forums, which are chaired by and
made up of colleagues from across the Group.

b. Receiving an annual presentation on the Group’s culture, from the Group HR Team.

c. Receiving regular reporting on our colleague diversity, equality and inclusion projects.

Conducting an annual deep dive on our people strategy, including metrics on colleague attrition, talent and succession for Senior Managers,
presented by the CPO.

e. Monitoring Senior Managers’ leadership capability, development and succession through the Nominations Committee.

f. Overseeing progress against Senior Managers’ non-financial measures, which form part of the annual bonus plan.

g. Regular updates on and annual reviews of our core Group compliance policies.

Share Dealing Code and Disclosure Committee
The Board may delegate responsibilities to a Disclosure Committee, which supports our compliance with the disclosure and control of inside
information obligations, as required by UK MAR. Notwithstanding this, the Board remains responsible for our compliance with all regulatory
disclosure obligations and the Disclosure Committee refers matters to the Board as it sees fit. The Disclosure Committee did not meet during 2023
and any determination of information of inside information was carried out by the Board.

We also have a Share Dealing Policy and Share Dealing Code to ensure compliance with UK MAR. The Share Dealing Policy and Share Dealing Code
apply to our Directors, our PDMRs (all listed on page 71) and other relevant employees of LSL.

Subsidiary governance
Day-to-day management of the Group’s subsidiary companies is delegated to the respective Divisional management committees and to the boards
of the subsidiary companies. We are continuing to work on the delivery of online remote training for Group directors and we have Group subsidiary
governance guidance in place.

During the year we improved our governance arrangements within our Financial Services Network business, as described earlier in this section of
the Report. Progress with some of our other governance initiatives was impacted by the Legal and Company Secretariat Teams being focused on
delivering the strategic projects.

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Corporate Governance Report including Nominations Committee Report

Colleague matters
Gender pay reporting
We published our gender pay reports for all Group companies with more than 250 employees in April 2023 and further reporting will be published
in 2024. The 2023 report is available to view at gender-pay-gap.service.gov.uk.

Ethnic pay reporting
We are continuing to monitor the Government’s reviews in relation to ethnic pay reporting and looking at what steps would need to be taken to
ensure compliance with any proposed future reporting.

We are also signed up to the CBI’s Change the Race Ratio charter which requires us to:

a. Set and publish targets for Board diversity – which we do.

Set and publish targets for the Executive Committee and the Senior Management Team – which we do. Publish ethnicity pay gap reporting
within two years of joining – we intend to complete this work during 2024.

For further details, see the Environmental, Social and Governance Report (page 50).

Whistleblowing, fraud and anti-bribery arrangements
The Board oversees our whistleblowing arrangements and the Audit & Risk Committee receives reports on fraud and anti-bribery matters, including
those reported through the Group’s whistleblowing procedures. The Audit & Risk Committee also receives reports on any matters which relate to
our internal controls and risk management arrangements, including those relating to any incidents of fraud or bribery. Further details are included
in the Audit & Risk Committee Report (page 85) and the Principal Risks and Uncertainties (page 29) sections of this Report.

The Environmental, Social and Governance Report (page 50) includes details of our whistleblowing arrangements, alongside other colleague policies
included within the governance workstream of our ESG programme.

The Corporate Governance Report is approved by and signed on behalf of the Board of Directors

Sapna B. FitzGerald
Company Secretary
24 April 2024

Audit & Risk Committee Report

Dear Shareholder

As Chair of this Committee, I am pleased to present our report for the year ended 31 December 2023.

In this section of the Report, we detail how the Committee discharged its roles and responsibilities during 2023, provide highlights from the
year and set out our priorities for 2024. We also provide an update on our 2023 priorities.

During the year, the Group has made substantial progress implementing our strategy to simplify the business, reduce our exposure to the
volatility of future housing cycles within our Financial Services and Estate Agency Franchising Divisions and focus our investment on high-
growth areas. We have also invested in the governance arrangements of our Financial Services Network and monitored the implementation of
the FCA’s new Consumer Duty and the Appointed Representatives Regime.

We have continued to manage our key risks and to identify emerging risks. However, due to the amount of change the Group underwent
in the year, we have deferred some of the enhancement of our internal controls and risk management arrangements, which we intend to
progress in 2024, taking the new Group structure and operating model into account.

The Committee has also started the process of tendering for external audit services, noting that Ernst & Young’s tenure cannot continue
beyond the full year 2025 audit.

The Group’s 2024 priorities include concluding the external audit tender process; embedding the new governance arrangements in the PRIMIS
Network and ensuring our control environment reflects strategic updates.

I will be available at the 2024 AGM, along with my fellow Directors, to answer shareholders’ questions relating to the Audit & Risk Committee
and how we discharged our roles and responsibilities during 2023.

James Mack
Chair of the Audit & Risk Committee

24 April 2024

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Audit & Risk Committee Report

Audit & Risk Committee
The Audit & Risk Committee discharges governance responsibilities in respect of audit, risk and internal controls and reports to the Board on its
work. The Committee’s roles and responsibilities are set out in its terms of reference, which are available at lslps.co.uk. The Corporate Governance
Report also summarises the Committee’s roles and responsibilities and describes how the Committee forms part of the Group’s governance
arrangements.

Membership
All of the Committee’s members are independent Non Executive Directors. James Mack has chaired the Committee since September 2021 and
during the annual Board and Committee evaluation, the Committee determined that James has relevant and recent financial experience to Chair
the Committee. The Committee also noted that Darrell Evans, who is a Committee member, has recent financial experience which is relevant to the
Committee.

The Committee holds three scheduled meetings each year and meets at other times as required. The Committee also ensures that it meets regularly
with both the external and internal auditors, independently of the Executive Directors. The Committee members’ attendance at its meetings in
2023 are set out in the Corporate Governance Report (page 65).

The remainder of this section of the Report is split as follows:

1. The Committee’s key discussions, decisions and activities in 2023.

2. The Committee’s work in relation to this Report.

3. An update on the Committee’s priorities for 2023, as set out in the 2022 report.

4. The Committee’s areas of focus for 2024.

Committee discussions, decisions and activities in 2023

Area

Activity

Financial reporting

• Provided assurance to the Board that the 2022 Annual Report and Accounts, taken as a whole, was fair, balanced and

Annual Report and
Accounts 2022
2023 Interim Results

understandable.

• Examined the integrity of the full year and half year Financial Statements and recommended their approval to the

Board.

• Considered:

• The accounting for the franchising of the entire owned estate agency network (183 branches). This resulted in

the Group re-examining the accounting treatment for a much smaller transaction in the first half of 2019, when
39 owned estate agency branches were franchised. This resulted in goodwill being written down by £5.2m and a
franchise intangible (net of amortisation and associated deferred tax) of £1.2m being recognised, with a cumulative
non-cash impact on retained earnings at 1 January 2022 of £4.0m.

• The prior-year restatement of the fair value less the disposal costs of Marsh & Parsons as at 31 December 2022,
which had been reported as held for sale. On re-examination of the judgements taken at that time, the Group
restated its prior-year financial statements to reduce this value by a further £2.0m.

Both restatements were included in our 2023 interim results and are included in these Financial Statements.

• For 2022 reporting, reviewed the annual goodwill impairment test and the carrying value of goodwill, and considered
whether a reasonably possible change to assumptions in the impairment test would result in a material impairment
and therefore require sensitivity disclosure in the Financial Statements.

• Reviewed Management’s application of revenue recognition policies and monitored compliance with financial
reporting and accounting controls linked to revenue recognition. The Committee also assessed the revenue
arrangements applied following the change in Estate Agency to a wholly franchised business model.

• Reviewed Management’s estimates of the commission refund liability provisions and considered the risk that revenue

is recognised in the wrong period, either due to cut-off errors, management bias and/or estimation uncertainty.

• Reviewed the Group’s Non-Financial and Sustainability Information disclosures, including TCFD.

• Assessed the Group’s capital structure and capital allocation policy, including the dividend policy.

• Considered the effectiveness of the wider control environment and underlying financial reporting systems.

• Considered outputs from the Divisional ‘three lines of defence’ audit, oversight and compliance routines.

• Reviewed control environment assessments prepared by Group Finance and the Divisional managing directors,

supported by their risk teams.

• Evaluated control benchmarks and compliance performance versus defined policy and procedural standards.

• Monitored the effectiveness of internal and external auditing processes and themes arising from their outputs.

Capital structure

Internal controls

Going concern and
viability

• Assessed the measures to ensure the Group maintains sufficient liquidity, together with the stress tests and financial
modelling assumptions used to conclude on the Group’s Going Concern Statement and Viability Statement in respect
of the 2022 Financial Statements.

• Reviewed the Viability Statement and Going Concern Statement and advised the Board that the Group is able to

continue in operation and meet its liabilities as they fall due for at least the next 12 months.

Internal Audit

• Oversaw the Group’s Internal Audit arrangements and ensured the function’s independence. The Director of Group

Internal Audit has a dotted reporting line into the Committee Chair.

• Approved the annual Internal Audit plan, including the wider three-year assurance cycle, the Internal Audit charter and

related resourcing assessments for the Internal Audit team.

• Considered the results of an extensive range of related thematic assurance reviews. Focus areas included FCA-led
regulatory changes, second-line effectiveness, information security and data protection arrangements, financial
controls, valuation controls, Group simplification and Pivotal Growth.

• Focused on Management’s closure of outstanding actions arising from Internal Audit reports and invited Divisional

managing directors to present to the Committee on outstanding actions.

• Assessed Internal Audit’s effectiveness through internal feedback and benchmarking against the Institute of Internal

Auditors professional standards, following an external quality assurance exercise the previous year.

• Focused on second-line effectiveness reviews and co-ordination of assurance plans across the lines of defence.

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Area

Activity

Financial Services
Network

• Monitored arrangements in the Financial Services Division relating to the implementation of the new Consumer Duty

and AR Regime requirements.

• Received a presentation from the managing director and chair of the PRIMIS board.

Risk

• Reviewed the Group’s principal risks and uncertainties and the disclosures in the 2022 Annual Report and Accounts and

2023 interim results.

• Reviewed Divisional risk presentations, including views on key and emerging risk, risk management frameworks and

consideration of Group matters not fully captured at Divisional level.

• Reviewed Divisional risk arrangements, including risk appetite themes, escalation routines and routines to define,

identify and respond to areas outside risk tolerance. This work included a focus on the development of risk
management structures and governance routines within PRIMIS. The Committee ensured the Divisions take a cautious
approach to risks relating to health and safety or sales conduct.

• Monitored the development of the risk framework and related governance structures within the Financial Services

Network, including the appointment of two independent non executive directors to the PRIMIS board and the creation
of new Audit & Compliance and Risk & Customer Outcomes committees, which are being chaired by the new non
executive directors.

• Reviewed the operation of our three lines of defence risk management structures across the Group and concluded that

the risk management frameworks are effective.

• Promoted a culture which is designed to ensure regulatory compliance, stakeholder safety and ‘speaking-up’ on any

External audit

• Considered the external auditor’s independence, specifically:

concerns.

• ensuring Ernst & Young had adequate processes to maintain its independence;

• compliance with our Audit Independence Policy, which includes our policy on the Group employing the auditor’s

former employees and our allocation of non-audit work; and

• Ernst & Young’s report on its independence arrangements and confirmation to the Committee that it considered

itself to be independent.

• Concluded that Ernst & Young continued to be independent.

• Oversaw the appointment of the new audit partner. David Wilson was appointed as the audit partner in 2023 but is

unable to continue beyond this year due to his previous period serving as the engagement quality control reviewer on
the audit. Mark Woodward has been appointed as our new audit partner for 2024.

• Reviewed the materiality and effectiveness of audit planning, including relevant risk-based focus areas and the

changing profile of profit contributions across relevant entities.

• Evaluated the audit findings, including resolution of any issues and feedback on the quality of interactions with relevant

Divisional senior management, including consideration of the prior-year restatements detailed above.

• Considered the auditor’s fee. The only fees incurred in respect of non-audit services were in relation to the interim

review, which included the prior-year restatement considerations (see note 11).

• Reviewed the effectiveness of the external audit process, taking into consideration applicable UK professional and
regulatory requirements, independence considerations and feedback from Divisional senior management and the
Group Finance team.

• Recommended Ernst & Young’s reappointment as external auditor at the 2023 AGM, following consideration of its

effectiveness and independence.

• Continued planning for an external audit tender exercise in 2024. Ernst & Young’s audit tenure began in 2004 and LSL
listed on the LSE in 2006. LSL and Ernst & Young have concluded that Ernst & Young’s 20-year term cannot exceed 20
years from our listing. This means 2024 is the last year it can provide audit services to the Group, as the audit of the
2025 financial statements will take place in 2026. A new external auditor will therefore be appointed before the 2025
audit. The last audit tender took place in 2016.

Area

Governance

Activity

• Discussed the Group’s whistleblowing arrangements and recommended that the Chief People Officer present to the

Board on the Group’s whistleblowing policy and processes, with the presentation taking place later in the year.

• Reviewed the Committee’s terms of reference and the CPO,taking into account the FRC’s review of the Code and its

associated guidance. The Committee also considered whether to adopt the Audit Standard early and decided to defer
its decision until the FRC completed its review of the Code.

• Received updates in relation to Group and Divisional governance structures.

• Tracked completion of Committee priorities for 2023 which were included in the 2022 Report (see update below).

• Confirmed the Committee is effective, as part of the annual Board and Committee evaluation process. This included

confirming that the skills and expertise of our members are appropriate and specifically that James (Chair) has recent
and necessary financial experience, in addition to Darrell (member).

• Tracked fraud-related suspicions across the Group and logged investigations, conclusions and remedies.

• Received updates on the FRC’s review of the Code in relation to matters relevant to the Committee’s role and

responsibilities including consideration of the Audit Committee and External Audit: Minimum Standard.

Activities in 2024 relating to this Report (see also note 2 to the Financial Statements for details of the significant issues which were considered in
relation to the Financial Statements and how these were addressed). The Committee has undertaken the following activities on behalf of the Board:

Area

Activity

Reporting balance

Considered whether this Report taken as a whole, is fair, balanced and understandable.

Significant issues

Examined the integrity of the full year Financial Statements and recommended their approval to the Board. This
included a review of significant issues in relation to the Financial Statements as outlined in note 2. These included
accounting for discontinued operations following the franchising of the Estate Agency Division and disposal accounting
for several non-core businesses in H1 2023. The committee also considered a number of prior-year restatements
relating to original accounting for a previous franchising transaction in 2019, adjustments to assets held for sale and
customisation costs in computing arrangements and cash offsetting, as set out in note 36.

Accounting policies

Assessed the appropriateness of key accounting policies and practices, judgements, estimates and compliance
with accounting standards and tax requirements, including recent developments. In particular, the Committee has
considered the appropriateness of revenue recognition, including commission refund liabilities provisions, and the
carrying value of goodwill.

Reviewed Management’s calculations and assumptions applied in the annual goodwill impairment test. Following the
disposal of goodwill of £38.1m in the year there was no impairment required upon assessment of the remaining balance
(see note 17).

Noting the reduction in goodwill and the current level of headroom, considered whether a reasonably possible change
to assumptions in the impairment test would result in a material impairment and therefore require sensitivity disclosure
in the Financial Statements (see note 17).

Reviewed Management’s application of revenue recognition policies and continued monitoring of compliance with
financial reporting and accounting controls linked to revenue recognition. The Committee also assessed the revenue
arrangements applied following the change in Estate Agency to a wholly franchised business model (see note 2).

Reviewed Management’s estimates of the commission refund liabilities provisions and considered the risk that revenue
is recognised in the wrong period, either due to cut-off errors, management bias and/or estimation uncertainty.

Going concern and
viability

Reviewed the Viability Statement and Going Concern Statement and assessments and their supporting material and
advised the Board that the Group is able to continue in operation and meet its liabilities as they fall due for at least the
next 12 months (see pages 29 to 33 of Principal Risks and Uncertainties).

Capital structure

Assessed the Group’s capital structure and capital allocation policy including the dividend policy.

ESG

Reviewed the Group’s Non-Financial and Sustainability Information disclosures including TCFD and the CFD.

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Updates on 2022 priorities
In the 2022 Report, the Committee listed the following areas of focus, which have been progressed in 2023:

Focus area

Continued focus area in 2023

Status

• Monitoring emerging areas affecting the Group’s risk profile,

• The Committee has continued to monitor emerging areas of risk.

including changes in the regulatory environment and clearly defining
our risk appetite.

• This includes monitoring arrangements for the implementation of

the FCA’s new Consumer Duty principle.

• The Committee monitored the Financial Services Network

successfully completing its implementation of arrangements relating
to the new FCA Consumer Duty and the AR Regime.

• Promoting ownership and alignment of robust risk management

• The Committee monitored the development of the risk management

routines across all of our businesses and lines of defence.

framework and governance arrangements within the Financial
Services Network.

• The Committee received Internal Audit reports including in relation to

Pivotal Growth (joint venture).

• Developing escalation and attestation routines from underlying

• The Committee monitored the development of the risk management

committee structures on risk and control matters.

• Ensuring robust and resilient cyber security controls. This will involve
feedback from the technology assurance routines driven by relevant
governance forums and oversight functions.

• Reviewing Internal Audit engagements covering the effectiveness of
financial controls, regulatory change management, technology risk
and second-line oversight routines.

New focus areas for 2023

framework and governance arrangements within the Financial
Services Network including escalation routines.

• The Committee monitored DISC’s continued operation of an

attestation process to confirm adherence to data protection and
information security minimum standards.

• The Committee noted Management’s review of cyber insurance

arrangements as part of the annual Group insurance renewal process.

• The Committee noted DISC continued to monitor IT security and

discussed risks associated with the use of AI (in particular ChatGPT).

• Internal Audit activities are reported to each Committee meeting.

• Each year the Committee also reviews the audit plan for the following

year and reviews the effectiveness of the team.

• Developing the Group risk framework and risk appetites, including a

review of risk management roles.

• Continuing to plan for the appointment of a new external auditor
ahead of 2026, including conducting the audit tender exercise.

• The focus this year has been on developing the Financial Services
Network risk management framework and governance structures.

• The audit tender process continued to progress during the year (see

above).

• Monitoring risks associated with delivery of the high-priority
projects and any related Group restructuring/simplification.

• The Group delivered on several strategic transactions during the 2023

projects, which were monitored through to their completion.

• Strengthening the Financial Services risk management

• An external review of the Financial Services Network’s governance

arrangements, reflecting the importance of the Division to our
strategy and the significant regulatory changes which are impacting
this part of our business.

arrangements was completed and recommendations reported to the
Board.

• This review led to the appointment of two additional independent
non executive directors on to the PRIMIS board and the creation of
two new committees (see above).

• Reviewing our participation in the Pivotal Growth joint venture,

• The annual strategy meeting and the Internal Audit plan in 2023 both

reflecting its part in the Group’s growth strategy.

included a review of Pivotal Growth.

Priorities for 2024
In relation to 2024, the Committee has identified the following priorities for their focus:

a. Completion of the audit tender process and the appointment of a new external auditor to conduct the 2025 full year audit.

b. Continued focus on second-line effectiveness and co-ordination of the assurance plans across all lines of defence.

c. Review of Divisional risks post-simplification of the Group in 2023, taking into account development of new strategic initiatives which are outlined

in our strategy report.

d. Continue to oversee the development of processes to support Management representations to the external auditor.

e. Review and update Group governance arrangements ahead of the new Code requirements which will apply to LSL from 1 January 2025 and 2026.

This will include a review of internal controls and associated reporting and consideration of the new Audit Committee Minimum Standard.

The Audit & Risk Committee Report is approved by and signed on behalf of the Board.

James Mack
Chair of the Audit & Risk Committee

24 April 2024

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Remuneration Committee Report

Annual Statement

Dear Shareholders

I am pleased to present the Directors’ Remuneration Report for 2023 following my appointment as Remuneration Committee Chair on
5 March 2024, with Darrell Evans (the Remuneration Committee Chair prior to this date) assuming the role of Interim Non Executive Chair of
the Board.

This Directors’ Remuneration Report is divided into the following sections:

• Annual Statement: summarising remuneration outcomes for 2023, explaining decisions made during the year and the operation of the

Directors’ Remuneration Policy for 2024.

• Directors’ Remuneration Policy (Policy): a summary of the main elements of the Policy that was approved by shareholders with 99.99% of
the votes cast at the 2023 AGM. The full Policy is included in the Directors’ Remuneration Report in the Annual Report and Accounts 2022.

• Annual Report on Remuneration: setting out details of the remuneration earned by Directors in 2023 and how the Policy will be

implemented during 2024.

The Annual Statement and the Annual Report on Remuneration are subject to a combined shareholder advisory vote at the 2024 AGM.

LSL’s performance in 2023
2023 has been a transformational year for the Group, with significant strategic progress made to simplify the Group and focus on business-
to-business services. This included the successful conversion of the Estate Agency Division into a franchise business, the disposals of Marsh &
Parsons and our direct-to-consumer financial services businesses and the agreement to the acquisition of the TenetLime mortgage network.
During the year, good progress was also made against our Living Responsibly ESG priorities which included increasing ethnic diversity across
our workforce, continuing to promote an inclusive culture through our Inclusion and Diversity Forum and investing in our local communities
through the work of our Communities Forum.

The Group’s financial performance over the year was, however, impacted by significant changes in the mortgage market and the increase
to the Bank of England’s base rate in June. As a result of these challenging market conditions, financial performance was lower than our
expectations at the start of the year, with revenue at £176.8m and Underlying Operating Profit of £9.3m. It is within this context that the
Committee has reviewed remuneration for the year.

Incentive outcomes

Annual bonus
The Executive Directors’ bonus scheme was based 70% on Underlying Operating Profit and 30% on the successful delivery of strategic
objectives, with the maximum bonus opportunity set at 100% of basic salary. The bonus targets were set at the start of 2023 and reflected
the market outlook at the time. As a result of market conditions that proved significantly more challenging than expected during the second
half of the year, when the Bank of England unexpectedly increased the base rate in June, the threshold Underlying Operating Profit target
was not met. The significant restructuring of the Group highlighted the good progress made against strategic objectives, with 65% for the
Group CEO and 62% for the Group CFO, demonstrating strong delivery against most objectives other than shareholder value, which was
naturally impacted by the reduced profitability. The impact on financial performance for the year resulted in only very limited bonuses
being made payable to colleagues more broadly and notwithstanding the strong progress made against the strategic targets, the Committee
concluded that it would not be appropriate for bonuses to be awarded to the Executive Directors. Both the Group CEO and Group CFO
also independently concluded that no bonus would be accepted and made this known to the Committee. As such the Committee exercised
discretion to reduce the formulaic bonus outcome to zero.

LTIP
As set out in last year’s Directors’ Remuneration Report, the 2020 LTIP was granted later than normal as the COVID-19 pandemic made it
difficult to set targets. This award was also scaled back from 125% to 104% of salary, to reflect the lower share price at grant compared to the
prior year. The TSR element, which was assessed exceptionally over a three-year period from grant to 8 November 2023, has now been tested,
with vesting at 41.1% of maximum. Combined with the EPS outcome of 47.2% of maximum, this provides an overall vesting level of 44.1% of
maximum. The Committee is comfortable there are no circumstances requiring a potential scale back as a result of ‘windfall gains’, noting the
share price on vesting was £2.39 and the grant price was £2.10, in addition to the scale back of the award on grant.

The 2021 LTIP was based 50% on adjusted EPS and 50% on relative TSR performance measures. Performance against the stretching EPS
targets was below threshold and as a result there is no payout under the EPS element. Performance between median and upper quartile
against the FTSE SmallCap (excluding investment trusts) resulted in 44.7% of maximum vesting under the TSR element. The award overall will

therefore vest at 22.4% of maximum. Again, the Committee is comfortable there are no windfall gains to consider, noting that the awards
were granted in May 2021, at a share price of £4.09 which is well above the current share price of £2.70.

Further details of performance against the targets for the annual bonus and LTIP awards are set out in the Annual Report on Remuneration
(page 104).

In determining whether the incentive outcomes for 2023 were appropriate and if the Policy had operated as intended, the Committee
considered the underlying performance of the Group’s businesses, workforce remuneration and incentive outcomes. The Committee also
considered whether there were any relevant ESG matters that needed to be taken account of and concluded that there were none. The
Committee concluded that the Policy has operated as intended, that it was appropriate to scale back the payment under the annual bonus to
zero given overall profitability for the year but that no adjustment to the formulaic outcomes of the 2020 and 2021 LTIPs vesting was required.
The Committee noted the moderate level of vesting against longer-term financial and relative TSR performance, as well as being comfortable
there were no circumstances resulting in windfall gains for the awards.

2023 LTIP award
The Annual Statement in 2022, set out the Committee’s intention to grant, at the normal time, the 2023 LTIP award of 125% of basic salary
to the Executive Directors. It was also noted that a further LTIP award of up to 75% of salary may be granted later in the year, depending on
progress against various strategic projects. The EPS targets which the Committee expected to set for the awards based on market conditions
at that time in relation to 50% of the normal LTIP award were included within the report.

We were prevented from granting the 2023 LTIP awards until November 2023, because of restrictions under the UK MAR connected to
financial reporting and the progression of our strategic projects. By the time the awards were granted in November, the economic outlook
and market expectations had significantly changed since we considered EPS targets in early 2023, with high inflation and significantly higher
interest rates impacting all aspects of our business. As a result, the EPS target range we set for the 2023 LTIP award is different to that set out
in the 2022 Report, at 16.0 pence to 24.0 pence compared to 25.4 pence to 33.0 pence. The Committee is aware that the range is significantly
reduced from that envisaged in early 2023. However, we consider the revised range to appropriately balance achievability at the lower end of
the range and stretch at the top end, taking into account the significant impact on our business of increased interest rates during 2023, and
various scenarios in terms of timing for rate reduction and the recovery of the business. We have not changed the TSR performance target
range.

Noting the lower target range and the lower share price determining the number of shares subject to the 2023 award compared to the 2022
award, the LTIP award for the Executive Directors was scaled back from the normal award of 125% of salary to 100% of salary. No additional
LTIP grant was made during the year.

Implementation of the Policy for 2024
The Executive Directors will receive salary increases of 3%, rounded to the nearest £250. This increase is at the lower end of the pay increases
awarded across the wider workforce which ranges from 3-10% of salary (with the exception of Real Living Wage increases). Colleagues in
the lowest pay grades will receive the highest increases, to help address ongoing cost of living challenges. In line with the Executive Director
awards, the Non Executive Directors and Chair of the Board will also receive fee increases of 3%, rounded to the nearest £250.

The annual bonus opportunity will be unchanged at 100% of salary. Performance will be measured 70% on Underlying Operating Profit and
30% on strategic objectives. The strategic objectives will be focused on driving growth within our three Divisions; Financial Services, Surveying
& Valuation and Estate Agency Franchising, in addition to progressing our ESG priorities. The strategic objectives will be disclosed in full in
next year’s report.

The Executive Directors will be granted LTIP awards in line with the normal award level of 125% of salary. Performance will be assessed 50%
against EPS and 50% against relative TSR. These performance conditions continue to be used for our LTIP awards with TSR rewarding the
delivery of long-term returns to our shareholders and EPS is a KPI for the Group measuring financial growth. Details of the targets applying
to these awards can be found later in this report. The EPS target range reflects the ongoing volatile market outlook and uncertain timing for
recovery of the business.

Colleague pay
The Committee continues to ensure it understands the workforce’s views on remuneration. Darrell Evans as our designated Non Executive
Director for Workforce Engagement during 2023, with the support of our Chief People Officer engaged with the Colleague Engagement
Forum. Topics discussed with the Forum during the year included the colleague engagement survey, a review of benefits, succession planning
and performance. I am assuming the role of Workforce Engagement Director and will be delighted to support our Colleague Engagement
Forum in the forthcoming year.

During 2023 we made significant progress towards becoming a Real Living Wage employer. We will continue to build on this progress in 2024
by embedding this into our 2024 Colleague Pay Review principles.

In October, we invited colleagues to take part in the 2023 Sharesave scheme, offering a 20% discount on the option price. Participation in
the scheme increased from previous years with 20% of the workforce applying to the scheme compared with 16% in 2021.

Committee arrangements and Board changes
Details about the Committee’s membership and its meetings during 2023 are included in the Corporate Governance Report.

As shareholders would have noted from our RNS released on 27 February 2024, David Barral left the Board as Non Executive Chair on
26 February and Darrell Evans was appointed as Non Executive Interim Chair thereafter. There have been some other consequential changes
as set out on page 71. The fees for the Non Executive Directors will be aligned to the new roles and within our shareholder approved policy.

Conclusion
While good progress has been made during 2023 with delivery of our strategic priorities, changes in the mortgage market largely as a result
of increased interest rates significantly impacted financial performance and this is reflected in our bonus and LTIP outcomes. The Committee
believes that the remuneration outcomes for the Executive Directors are aligned to performance, shareholder value and consistent with the
approach taken to colleagues more generally. In addition, the Committee is comfortable with targets set for the 2023 and 2024 LTIP awards,
taking into account the market and business outlook.

The Committee continues to welcome shareholder feedback and will proactively engage in relation to any changes to the Policy or significant
changes to the application of the Policy. During the year, there were no remuneration-related items that required engagement with
shareholders. I will be pleased to hear from you if you have any specific feedback or questions on our approach to remuneration. I look
forward to your support for the advisory resolution on the Directors’ Remuneration Report at our forthcoming Annual General Meeting.

Gaby Appleton
Chair of the Remuneration Committee

24 April 2024

Directors’ Remuneration Policy

Introduction
This part of the Directors’ Remuneration Report summarises the Policy for the Directors and has been prepared in accordance with The Large and
Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 and subsequent amendments.

The Policy was approved by shareholders at our AGM on 25 May 2023 and is intended to apply until the 2026 AGM. Full details of the Policy can be
found in the Directors’ Remuneration Report in the Annual Report and Accounts 2022.

Consideration of Code Provision 40
In determining the Policy and its operation, the Committee assessed the following six Code factors:

• Clarity – the Policy is well understood by our Senior Management Team and has been clearly explained to our shareholders through direct

engagement and our annual remuneration reporting. Engaging on all people-related matters, including remuneration, is a key responsibility for
Gaby, the Remuneration Committee Chair and designated Non Executive Director for Workforce Engagement, and for our Chief People Officer.
This engagement is conducted via meetings with our Employee Engagement Forum and our colleague surveys, the results of which are presented
to the Board. Further details on our colleague engagement are included in the Stakeholder Engagement section of this Report and the Living
Responsibly Report 2024.

• Simplicity – our focus is to ensure that our Policy and practices are simple and straightforward and that the objectives and deliverables are clear.
We only operate two incentive plans, an annual bonus and a long-term incentive scheme (LTIP). Targets are based on business KPIs and measure
performance against them, tracking and rewarding progress toward achieving our strategies and longer-term sustainable growth.

• Risk – the Policy is designed to ensure that reputational, behavioural and other risks are managed and will not be rewarded via (i) a balanced use
of fixed and variable pay, with both short and long-term incentive plans, which employ a blend of financial, non-financial and shareholder return
targets, (ii) the significant role played by equity in the incentive plans (together with executive shareholding guidelines in service and the post-
service policy) and (iii) the inclusion of malus/clawback provisions.

• Predictability – our incentive plans are subject to individual caps, with share plans also subject to market standard dilution limits. The scenario

charts illustrate how the rewards potentially receivable by the Executive Directors vary based on performance delivered and share price growth.
The Committee also has the discretion to adjust any vesting outcomes if they are not considered appropriate.

• Proportionality – there is a clear link between individual awards, delivery of strategy and our long-term performance. In addition, the significant
role played by incentive or ‘at-risk’ pay, together with the structure of the Executive Directors’ service contracts, ensures that poor performance
is not rewarded.

• Alignment to culture – the incentive schemes drive behaviours consistent with our purpose, values and strategy (including the Group’s ESG and

corporate sustainability strategies), by using metrics in both the annual bonus and the LTIP that underpin the delivery of our strategies. Colleague
personal success is directly linked to the success of our clients and businesses, through the short- and long-term incentive plans and targets
which we operate. See Purpose, Strategy, Culture, Values and Business Model for further details.

Performance metrics
and period

• Not applicable.

How this component supports LSL
strategies

Operation

Maximum

• Reflects the value of the
individual and their role.

• Reflects skills and experience

over time.

• Provides an appropriate

level of basic fixed income,
avoiding excessive risk
arising from over reliance on
variable income.

• Reviewed annually, normally effective 1
January (with effect from 2024 moved
to 1 April to align with workforce review
date).

• Periodic comparison to companies

with similar characteristics and sector
comparators.

• There is no prescribed
maximum annual basic
salary increase.

• The Committee is

guided by the general
increase for employees
but may decide
to award a lower
increase for Executive
Directors, or a higher
increase to recognise,
for example, an
increase in the scale,
scope or responsibility
of the role and/
or to take account
of relevant market
movements.

• Current basic salary
levels are set out in
the Annual Report on
Remuneration.

Policy

Element of
remuneration
arrangements

Basic salary

Element of
remuneration
arrangements

Annual bonus

How this component supports LSL
strategies

Operation

Maximum

Performance metrics
and period

• Incentivises annual delivery
of financial and strategic
goals.

• Maximum bonus only
payable for achieving
demanding targets.

• Targets reviewed annually.

• Maximum

opportunity: 100% of
basic salary with the
ability to increase to
125% of basic salary*.

*Maximum opportunity
will not be increased
above 100% of basic
salary without significant
shareholder consultation.

• Bonus level is determined by the

Committee after the end of the financial
year, subject to performance against
targets set at the start of the financial
year.

• The Committee has the discretion to

adjust or override formulaic outcomes
for the annual bonus payment, if the
Committee considers it does not reflect
the Group’s underlying performance,
taking into account amongst other
things, the quality of earnings that
underlie the pay and vesting outcomes,
which may put at risk future cash flows,
as well as investor experience and the
employee reward outcome.

• The Group CEO is required to purchase
and hold shares equivalent to 33% of
any bonus earned, net of tax, for a
period of two years. The other Executive
Director(s) is required to purchase and
hold shares equivalent to 25% of any
bonus earned net of tax, for a period
of two years, which will in normal
circumstances continue post-cessation
of employment. For all Executive
Directors on cessation of employment,
these shares will not be forfeited for
any reason. However clawback and the
holding period will continue to apply.

• Not pensionable.

• Bonus awards are subject to clawback

and malus for six years from payment, in
circumstances of: material misstatement
of financial results, corporate failure,
failure of risk management, reputational
damage, error, inaccurate or
misleading information in determining
a performance condition or any other
matter determining the vesting of an
award, breach of relevant regulations,
an act or omission during the vesting
period to the significant detriment
of customers, or an act or omission
leading to gross misconduct. Recovery
can be made through scaling back
existing awards, reducing future awards,
including under the LTIP, and requesting
repayment as a cash sum.

• Performance

period of one year.

• Performance

metrics:

– a maximum of 30%
of the award will
be determined
by non-financial
measures and
a minimum of
70% by financial
measures; and

– not more than 20%
of the total bonus
will pay out at
threshold.

Element of
remuneration
arrangements

How this component supports LSL
strategies

Operation

Maximum

Performance metrics
and period

LTIP awards

• Aligned to Group key

• Awards of nil-cost or conditional

• Normal maximum

• Performance

performance indicators
that drive the strategies
and performance of the
businesses.

limit of 125% of basic
salary, with grants
of up to 200% of
basic salary being
made in exceptional
circumstances.

period: normally
three years.

• A two-year post-
vesting holding
period applies
and in normal
circumstances
continues to apply
post-cessation of
employment.

• Up to 30% of

the award may
be determined
by non-financial
measures such as
strategic measures
or ESG. The
remaining value
of the award will
be determined by
financial measures,
for example but
not limited to EPS
and TSR.

• 25% vests at

threshold for all
parts of the LTIP.

shares are made annually, with vesting
dependent on achieving performance
conditions over three years.

• The Committee reviews the quantum
of awards annually and monitors
the continuing suitability of the
performance measures.

• The Committee has the discretion to

adjust and override formulaic outcomes
of LTIP vesting, if it considers that it
does not reflect the Group’s underlying
performance, taking into account
amongst other things the quality of
earnings that underlie the vesting
outcomes, which may put at risk future
cash flows, as well as the investor
experience and the employee reward
outcome.

• The Committee has discretion to provide
for dividend equivalents in shares to
accrue from the date of award to the
vesting date or, if applicable, to the end
of any post-vesting holding period.

• LTIP awards are subject to clawback

and malus for six years from vesting, in
circumstances of: material misstatement
of financial results, corporate failure,
failure of risk management, reputational
damage, error, inaccurate or
misleading information in determining
a performance condition or any other
matter determining the vesting of an
award, breach of relevant regulations,
act or omission during the vesting
period to the significant detriment
of customers, or an act or omission
leading to gross misconduct. Recovery
can be made through scaling back
existing awards, reducing future awards,
including under the annual bonus and
requesting repayment as a cash sum.

Element of
remuneration
arrangements

All-employee
share schemes:
SAYE, SIP/BAYE
and CSOP

Executive share
ownership
guidelines

How this component supports LSL
strategies

Operation

Maximum

Performance metrics
and period

• Encourages long-term
shareholding in LSL.

• Invitations from the Remuneration

• As per HMRC limits.

• None.

Committee under the approved SAYE,
SIP/BAYE and CSOP.

• None.

• Minimum of 200% of
basic salary for Group
CEO and 150% of basic
salary for the other
Executive Director(s) –
no maximum.

• Aligns Executive Directors

• The Group CEO is required to build

and shareholders.

and maintain a minimum shareholding
equivalent to 200% of basic salary over
a period of five years from the later of
approval of the 2020 Policy and the date
of appointment.

• The other Executive Director(s) is
required to build and maintain a
minimum shareholding equivalent to
150% of basic salary over a period of
five years from the later of approval
of the 2020 Policy and the date of
appointment.

• All Executive Directors are expected to
retain all vested long-term incentive
awards (subject to any sales necessary
to meet tax liability on vesting or
exercise) and shares purchased from
annual bonus under the Policy, until the
guideline is met.

• A post-employment shareholding policy
applies as follows, with the Committee
retaining the discretion to amend the
Policy in exceptional circumstances:

– Directors to hold the lower of shares

with a value equivalent to 150% of salary
(200% for the Group CEO) and actual
shares held on cessation for two years.

– The two-year holding period for

annual bonus shares continues post-
employment.

– The two-year post-vesting holding

period for LTIP awards continues post-
employment.

How this component supports LSL
strategies

Operation

Maximum

Performance metrics
and period

• At cost.

• None.

• Directors receive
employer pension
contributions in line
with the contribution
for the majority of the
workforce at the time
of appointment.

• Existing Directors are
offered a pension in
accordance with auto
enrolment minimums.

• There is no prescribed
maximum annual fee
increase, although
there is a total fee cap
of £750,000 in LSL’s
articles of association.

• Fees are determined

and reviewed
taking into account
experience, time
commitment,
responsibility and
scope of role, as
well as the general
increase for employees
and market data
for similar roles in
other companies of
a similar size and
complexity. Current
fees are set out in
the Annual Report on
Remuneration.

Element of
remuneration
arrangements

Benefits

• Provides insured benefits
to support the Executive
Directors and their families
during periods of ill health,
or in the event of accident
or death.

• Car allowance facilitates

travel.

• Includes car allowance, life assurance
and private medical insurance. Other
benefits may be provided where
appropriate.

• Any reasonable business-related

expenses (including tax thereon) can
be reimbursed if determined to be a
taxable benefit.

Pension

• Provides modest retirement

• Defined contribution.

benefits.

• Opportunity for Executive
Directors to contribute to
their own retirement plan.

• HMRC approved arrangement.

Chair and
Non Executive
Directors

• To provide fees reflecting

• Cash fee paid monthly.

the time commitments and
responsibilities of each role,
in line with those provided by
similarly sized companies.

• Fees are normally reviewed annually.

• Any reasonable business-related

expenses can be reimbursed (including
tax thereon if determined to be a
taxable benefit).

100

Reward scenarios (illustration of application of the Policy for 2024)
The chart below shows how the composition of the remuneration packages for each of the Executive Directors varies at different levels of
performance under the Policy, both as a percentage of total remuneration opportunity and as a total value.

The graph also indicates the maximum remuneration under a scenario of 50% share price appreciation over the three-year performance period of
the LTIP award:

Notes to the reward scenarios:

Scenario

Salary, pension and benefits

Annual bonus outcome
(% of maximum)

LTIP outcome (% of maximum)

Minimum (fixed remuneration)
On‑plan performance (target
achievement)
Maximum performance (exceeds
target)
Maximum performance plus share
price appreciation

Basic salary as applicable from
1 April 2024.
Pension in line with Policy.
Benefits as reported for the
previous financial year.

Nil
50%

100%

Nil
50%

100%

100% + 50% share price growth

Service contracts for Executive Directors
The service contracts for the two Executive Directors are not fixed term and are terminable by either LSL or the Executive Director as detailed
below:

Director

Commencement of service contract

Notice period (from Executive Director and LSL)

David Stewart
Group Chief Executive Officer

Adam Castleton
Group Chief Financial Officer

1 May 2020

2 November 2015

Nine months

Copies of Directors’ service agreements are available for inspection at the Company Secretary’s office (see Shareholder Information at page 203 for
details).

At the Committee’s recommendation and at the Board’s discretion, an Executive Director’s service contract can be terminated early by payment of
basic salary and benefits in lieu of the required notice period.

101

Non Executive Directors
Non Executive Directors, including the Chair, have letters of appointment which set out their roles and responsibilities. The Non Executive Directors,
including the Chair, are not eligible to participate in incentive arrangements or receive pension provision. The following table shows details of the
terms of appointment of our Non Executive Directors who are on the Board at the date of this Report.

Director

Date original term commenced

Date current term commenced

Expiry date of current term

Gaby Appleton
Independent Non Executive Director,
Chair of the Remuneration Committee
Simon Embley
Non Executive Director
Darrell Evans
Non Executive Interim Chair and Interim
Chair of the Nominations Committee
James Mack
Independent Non Executive Director,
Senior Independent Director and Chair
of the Audit & Risk Committee
Sonya Ghobrial
Independent Non Executive Director

1 September 2019

1 September 2022

31 August 2025

1 January 2015

1 January 2021

2024 AGM

28 February 2019

28 February 2022

27 February 2025

27 September 2021

4 March 2022

–

26 September 2024

3 March 2025

Copies of Non Executive Director letters of appointment are available for inspection at the Company Secretary’s Office (see Shareholder Information
at page 203 for details).

Annual Report on Remuneration
Implementation of the Policy for the year ending 31 December 2024

Executive Directors

Remuneration element

Salary

Pension and benefits

Group CEO

3% increase

£493,000

Group CFO

3% increase

£333,000

Cash in lieu of 3% of banded earnings.

Benefits in line with Policy.

Pension contribution of 3% of banded
earnings.

Benefits in line with Policy.

Annual bonus opportunity

100% of salary

Annual bonus performance measures

LTIP award level

LTIP performance measures and targets

33% of any bonus earned, net of tax, will
be used to purchase shares which must
be held for two years.

25% of any bonus earned, net of tax, will
be used to purchase shares which must
be held for two years.

70% Group Underlying Operating Profit
30% strategic objectives

125% of salary
A two-year post-vesting holding period applies to vested shares.

50% adjusted EPS
50% relative TSR vs FTSE
Small Cap (excluding investment trusts)

EPS

TSR

Threshold

Maximum

26.5 pence

32.5 pence

Median

Upper
quartile

Shareholding guidelines

200% of salary

150% of salary

Post-cessation Executive Directors must hold the lower of shares with a value
equivalent to the in-service shareholding requirement and actual shares held on
cessation for two years.

102

Non Executive Directors
The fees for the Non Executive Directors are increased by 3% effective from 1 April 2024, aligned to the increase for Executive Directors. The fees
for 2024 are set out below.

Role

Chair of the Board

Independent Non Executive Director

Senior Independent Director

Chair of the Remuneration Committee

Chair of the Audit & Risk Committee

Designated Non Executive Director for workforce engagement

Directors’ remuneration payable in 2023 – audited information

Directors’ remuneration
The remuneration of the Directors for 2023 was as follows:

2024 (£)

159,750

52,000

8,750

9,250

2,000

2023 (£)

155,000

50,500

8,500

9,000

2,000

Basic salary
or fees
£

Benefits5
£

Pension
contributions6
£

Sub total –
fixed pay
£

Annual
bonus7
£

Share
awards8
£

Other9
£

Sub total –
variable pay
£

Grand total
£

Notes

Year

Chair

David Barral

Bill Shannon

Executive Directors

Helen Buck

Adam Castleton

David Stewart

Non Executive Directors

Gaby Appleton

Simon Embley

Darrell Evans

Sonya Ghobrial

James Mack

Total

2023
2022

2023

4,050
16,139

16,501
16,424

1,321
1,321

1,161
1,149

100,800

62,992
150,500

82,301
320,000

323,250
313,750

478,750
464,750

59,000
57,250

50,500
49,000

61,500
59,750

50,500
40,509

59,500
57,750

100,800

62,992
150,500

86,351
336,139

341,072
331,495

496,412
482,323

59,000
57,250

50,500
49,000

61,500
59,750

50,500
40,509

59,500
57,750

1,329,093

37,052

2,482

1,368,627

2022

1,513,259

48,987

2,469

1,564,715

0
0

33,015
129,619

50,648
157,781

75,065
233,809

121
1,361

1,095
1,474

531
932

33,136
130,980

51,743
159,255

75,596
234,741

100,800
0

62,992
150,500

119,487
467,119

392,815
490,750

572,008
717,063

59,000
57,250

50,500
49,000

61,500
59,750

50,500
40,509

59,500
57,750

158,728

521,209

1,747

3,767

160,475

1,529,102

524,976

2,089,691

Notes to Directors’ remuneration table:
1. David Barral joined the Board as an independent Non Executive Director (Chair Designate) on 3 April 2023. On 25 May 2023, he was appointed Chair of the Board

and Nominations Committee. David Barral left the Board on 26 February 2024.

2. Bill Shannon retired from the Board and his role as Chair of the Board and the Nominations Committee on 25 May 2023.
3. Helen Buck retired from the Board and as an Executive Director on 31 March 2023.
4. Sonya Ghobrial was appointed to the Board as an independent Non Executive Director on 4 March 2022.
5. Benefits comprise private medical cover and company car or car allowance.
6. David Stewart receives 3% of banded earnings in lieu of pension. Adam Castleton is part of the auto enrolment pension scheme and receives 3% of banded

earnings as an employer contribution.

7. The Group’s financial performance in 2022 and 2023 resulted in no bonuses being paid to Executive Directors.

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8. The share awards for 2022 have been restated to reflect the actual level of vesting for the 2020 LTIP award of 44.1% of maximum and the share price on vesting
on 13 November 2023 of 239 pence. The share awards for 2023 reflect the vesting level under the 2021 LTIP award of 22.4% of maximum. The value of these
awards is based on our closing share price over the last three months of the financial year to 31 December 2023 (240.3 pence). Share award values for Helen
Buck represent the pro-rated vesting level in line with good leaver treatment.

9. The ‘other’ column includes the value of matching shares, dividend shares and a free share award (2022) received through the SIP, at the date the shares were

awarded.

Annual bonus payments 2023 – audited information
The maximum bonus potential for the Group CEO and Group CFO was 100% of salary. Helen Buck was not eligible to receive a bonus in respect of
2023 given her retirement from the Board on 31 March 2023.

The table below summarises the annual bonus performance measures and targets, and performance for 2023. As set out in the Annual Statement,
taking into account overall performance during the year and the stakeholder experience, the Committee exercised discretion to reduce the bonus
outcome to zero.

Measure

Weighting

Group Underlying Operating Profit

70%

Threshold
(25% of max)

£26.3m

Maximum
(100% of max)

£41.9m

Actual

£9.3m

Outcome
(of element)

Non-financial measures

30%

See table below

Total formulaic outcome

Group CEO: 65.5%
Group CFO: 62%

Group CEO: 19.7%

Group CFO: 18.6%

The table below sets out the Executive Directors’ objectives under the non-financial measures and the outcome against each objective.

Group CEO – David Stewart

Focus area

Weighting

Objective

Performance assessment

Shareholder value

15%

Development of investor base.

Execution of Estate Agency strategy

20%

Execution of strategic plan for Estate Agency.

18%

Execution of Financial Services
strategy

25%

Execution of specific agreed aspects of Financial Services strategy
around leadership and financial performance.

12.5%

Execution of Surveying & Valuation
strategy

20%

Execution of specific agreed aspects of strategy to lay foundations for
future growth.

12%

Execution of ESG

20%

Driving aspects of the Living Responsibly ESG programme across the
Group, focused on embedding LSL culture and increasing colleague
engagement.

14%

104

Group CFO – Adam Castleton

Focus area

Shareholder value

Organisational design, financial
execution and deployment of
resources

Weighting

Objective

Performance assessment

25%

Development of investor base.

Lead organisational design changes, with clearly defined roles for the
Group and the Divisions.

Introduction and operation of new effective cost management systems
across the Group.

Enhance consolidated KPI and financial reporting, to support focus on
key strategic drivers to drive performance.

15%

21%

Risk management

25%

Enhance risk control framework, for the management of key controls.

12%

ESG strategy

25%

Driving aspects of the Living Responsibly ESG programme across the
Group focused on embedding LSL culture and increasing colleague
engagement.

14%

2020 LTIP award vesting
As disclosed in the Annual Report and Accounts 2022, the performance period for the TSR element of the 2020 LTIP award ended on 8 November
2023, with the final vesting outcome of the 2020 awards determined at that time. The table below sets out the performance targets and final level
of vesting.

Performance measure

Percentage of award
subject to condition

Adjusted basic EPS

50%

TSR (versus FTSE Small
Cap ex investment
trusts)

50%

Performance period

3 years ending
31 December 2022

3 years ending
8 November 2023

Threshold
performance level
(25% vesting)

Maximum
performance level
(100% vesting)

Actual performance

Percentage vesting

25.6 pence

35.1 pence or more

28.4 pence

Median
(50th percentile)

Upper quartile
(75th percentile)

55th percentile

Total

47.2%

41.1%

44.1%

The table below sets out details of the LTIP awards granted in 2020 and the number of shares vesting. A two-year post-vesting holding period
applies to vested shares.

Executive Director

Date of grant

Date of vesting2

Helen Buck1

Adam Castleton

David Stewart

9 November 2020

13 November 2023

Number of shares
under award

Vesting

Number of shares
vesting

Number of shares
lapsing

Total vesting3

122,980

149,700

221,833

44.1%

54,234

66,017

97,828

68,746

83,683

124,005

£129,619

£157,781

£233,809

Notes:
1. Helen Buck’s LTIP award has been pro-rated to reflect cessation of employment on 31 March 2023 as a good leaver.
2. The Committee approved the vesting of this award on 13 November 2023.
3. The value of vesting has been calculated using LSL’s share price on 13 November 2023 (239 pence).

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2021 LTIP award vesting
The performance period for the 2021 LTIP award ended on 31 December 2023. The table below sets out the performance targets and final level of
vesting for the 2021 LTIP award.

Percentage of award
subject to condition

Performance period

50%

3 years ending
31 December 2023

Threshold
performance level
(25% vesting)

28.6 pence

Median
(50th percentile)

Performance measure

Adjusted basic EPS

TSR (versus FTSE Small
Cap ex investment
trusts)

Maximum
performance level
(100% vesting)

Actual performance

Percentage vesting

40.5 pence or more

7.6 pence

Upper quartile
(75th percentile)

57th percentile

Total

44.7%

22.4%

The table below sets out details of the LTIP awards granted in 2021 and the number of shares vesting. A two-year post-vesting holding period
applies to vested shares.

Executive Director

Date of grant

Date of vesting

Helen Buck1

Adam Castleton

David Stewart

5 May 2021

5 May 2024

Number of shares
under award

61,337

94,094

139,458

Vesting

22.4%

Number of shares
vesting

Number of shares
lapsing

Total vesting2

13,739

21,077

31,238

47,598

73,017

108,220

£33,015

£50,648

£75,065

Notes:
1. Helen Buck’s LTIP award has been pro-rated to reflect cessation of employment on 31 March 2023 as a good leaver.
2. The value of vesting has been calculated using LSL’s average share price over the three months to 31 December 2023 (240.3 pence).

Share awards granted during 2023
Details of LTIP (nil cost option) awards granted in 2023 are as follows:

Executive Director

Adam Castleton

David Stewart

Date of grant

Date of vesting

Share price at
grant date1

Number of shares
under award

Face value of
award as % of
salary

Face value of
award £ at grant
date

7 November 2023

7 November 2026

246 pence

131,402

194,613

100%

£323,249

£478,748

Note:
1. The share price at grant was an average of the closing price three days prior.

The LTIP awards are subject to a two-year post-vesting holding period that continues post-cessation of employment.

The performance measures applicable to the 2023 LTIP grant are as follows:

Performance measure

Adjusted basic EPS

TSR (performance against FTSE Small Cap
excluding investment trusts)

Percentage of award subject to
condition

Performance period

Threshold performance level
(25% vesting)

Maximum performance level
(100% vesting)

50%

3 years ending 31 December
2025

16.0 pence

Median
(50th percentile)

24.0 pence

Upper quartile
(75th percentile)

External appointments
Neither of the Executive Directors holds Non Executive directorships of any other companies, other than to represent the Group’s investment
interests in those companies.

Payments to past Directors
No payments have been made to past Directors.

Payments for loss of office
The remuneration for Helen Buck for 2023 is included in the single figure table of remuneration. Full disclosure of Helen’s remuneration
arrangements on retiring from the Board were disclosed in our Annual Report and Accounts 2022.

David Barral left the Board on 26 February 2024 and will receive his fee in respect of his three month notice period.

106

Outstanding share awards
Options granted to Executive Directors to acquire shares are as follows:

Director
Helen Buck
Executive Director Estate
Agency

Adam Castleton
Group Chief Financial
Officer

LTIP

SAYE

LTIP

SAYE

LTIP

David Stewart
Group Chief Executive
Officer

LTIP

SAYE

LTIP

Award
type
LTIP

Date of grant
9 November 2020

Share price
on grant
210.50p

Exercise
price
Nil

As at
1 January
2023
152,665

Awards
granted
during year
–

Awards
lapsed
during year
98,431

Awards
exercised
during year
54,234

As at
31 December
2023
0

5 May 2021

408.50p

Nil

96,006

28 May 2021

468.00p

327.00p

2,388

29 March 2022

369.00p

Nil

108,401

9 November 2020

210.50p

Nil

149,700

5 May 2021

408.50p

Nil

94,094

28 May 2021

468.00p

327.00p

3,302

29 March 2022

369.00p

Nil

106,283

–

7 November 2023

246.00p

Nil

SAYE

10 November 2023

248.00p

199.00p

–

131,402

9,321

9 November 2020

210.50p

Nil

221,833

5 May 2021

408.50p

Nil

139,458

28 May 2021

468.00p

327.00p

3,302

29 March 2022

369.00p

Nil

157,435

–

7 November 2023

246.00p

Nil

SAYE

10 November 2023

248.00p

199.00p

–

194,613

3,728

34,669

2,388

72,267

–

61,337

36,134

83,683

66,017

–

3,302

–

124,005

97,828

–

94,094

106,283

131,402

9,321

139,458

3,302

157,435

194,613

3,728

Exercise period
13 November 2023 to
13 May 2024
5 May 2024 to
5 November 2024
31 March 2023 to
30 September 2023
29 March 2025 to
29 September 2025
9 November 2023 to
9 November 2030
5 May 2024 to
5 May 2031
1 July 2024 to
31 December 2024
29 March 2025 to
28 March 2032
7 November 2026 to
6 November 2033
1 December 2026 to
31 May 2026
9 November 2023 to
9 November 2030
5 May 2024 to
5 May 2031
1 July 2024 to
31 December 2024
29 March 2025 to
28 March 2032
7 November 2026 to
6 November 2033
1 December 2026 to
31 May 2026

Notes to outstanding share awards:
1. All of the above are scheme interests. Details of LTIP awards granted in 2023 are set out in this section of the Report, while details of previous outstanding

awards are presented in the previous year’s Directors’ Remuneration Report and are included in note 15 to the Financial Statements.

2. Following Helen Buck’s retirement in March 2023, because she had good leaver status she had six months within which to exercise her Sharesave 2021 and

therefore the expiry of the exercise period for the plan was in September 2023.

3. Adam Castleton terminated his Sharesave 2021 saving contract to enable him to contribute in the 2023 scheme as per the saving limits.
4. The aggregate gains made by Helen Buck, Adam Castleton and David Stewart on the exercise of awards during the year was £129,981, £140,800 and £208,647

respectively.

107

Directors’ interests in shares
The interests of the Directors who served on the Board during the year, including their connected persons, are set out in the table below.

The Executive Directors’ shareholdings reflect the limited vesting of LTIP awards and the impact of challenging market conditions on the amount
absent from the bonus in recent years. The Directors’ Remuneration Policy outlines executive share ownership guidelines which require the Group
CEO and Group CFO to purchase and hold shares equivalent to 33% and 25% respectively of any bonus earned, net of tax for a period of two years.
The Group CEO has committed to invest all of his bonus, net of tax for full year 2024 into shares.

The Committee is comfortable that the Executive Directors continue to build their shareholdings, with further increases as a result of the vesting
of the 2021 LTIP award, and will keep shareholding levels under review. The Policy supports the continued building of shareholdings through the
requirement to purchase shares with a proportion of bonus and through the retention of all vested LTIP awards.

Shareholdings
(number of shares)

Share awards
(number of shares)

31 December
2023

31 December
2022

219,259

–

Unvested and
subject to
performance
targets
–

Vested but
unexercised
31 December
2023
–

25,329

–

133,601

104,213

97,471

130,111

94,086

341,100

78,329

25,714

498,536

–

6,835,624

–

Director
David Barral3
Chair of the LSL Board
Bill Shannon4
Chair of the LSL Board
Helen Buck5
Executive Director – Estate
Agency
Adam Castleton
Group Chief Financial Officer
David Stewart
Group Chief Executive
Officer
Gaby Appleton
Non Executive Director
Simon Embley
Non Executive Director
Darrell Evans6
Non Executive Director
Sonya Ghobrial
Non Executive Director
James Mack
Non Executive Director

Total
(number of
shares)

31 December
2023

219,259

25,329

Shareholding
guideline

Executive Director
shareholding2

(% of basic salary)

–

N/A

133,601

150%

130,111

150%

103.8%

78,329

200%

42.2%

–

6,835,624

–

N/A

Notes on Directors’ interest in shares:
1. The shareholdings include matching shares, dividend shares and free share awards received under the SIP subject to a retention period. The total shares

received by Helen Buck, Adam Castleton and David Stewart is 1,277, 1,872 and 563 respectively.

2. The shareholdings are calculated based on shares owned and vested but unexercised awards, net of tax, as at 31 December 2023. Shareholding guideline

calculations are based on the share price at year end of 258 pence and the Executive Director’s basic salary at 31 December 2023. The unvested share awards
have been pro-rated for Helen Buck to reflect her unvested share awards as at the date stepping down.

3. David Barral joined the Board as an independent Non Executive Director (Chair Designate) on 3 April 2023 and left the Board on 26 February 2024.
4. Bill Shannon retired from the Board on 25 May 2023 and therefore his share interests represent the position at this date.
5. Helen Buck retired from the Board on 31 March 2023, her share interests as of this date were 104,417 shares.
6. Darrell Evans assumed the role of Interim Non Executive Chair on 5 March 2024.

All of the share interests detailed above are beneficial to the Directors. Apart from the interests disclosed above, no Directors held interests at any
time in the year in the share capital of any other Group company.

There have been no changes in the interests of any Director between 31 December 2023 and the date of this Report, other than the purchases of
shares by Adam Castleton (279 shares) and David Stewart (280 shares) as participants of LSL’s SIP/BAYE scheme (in January, February, March and
April 2024). These shares were purchased by the Trust at the prevailing market rate.

No Director has, or has had, any direct or indirect interest in any transaction, contract or arrangement (excluding service agreements), which is or
was unusual in its nature or conditions, or significant to the Group’s business, during the current or immediately preceding financial year.

108

Performance graph and table
The following graph shows the value, up to 31 December 2023, of £100 invested in LSL compared with the value of £100 invested in the FTSE Small
Cap (excluding investment trusts) Index on 31 December 2013. The FTSE Small Cap Index has been chosen because LSL is a constituent of the Index.

Group CEO’s total remuneration
The total remuneration figures for the role of Group CEO during each of the last ten financial years are shown in the table below. The total
remuneration figure includes the annual bonus based on that year’s performance and share awards based on three-year performance periods
ending in or just after the relevant year.

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Ian Crabb to 30 April 2020

David Stewart from 1 May 2020

Total remuneration

£571,500

£852,869

£499,000

£835,120

£774,629

£760,679

£161,214

£310,932

£859,207

£717,063

£571,685

Annual bonus

LTIP vesting

54%

N/A

93.30%

66.81%

16%

97%

79.80%

61.70%

N/A

84.70%

N/A

44.1%

22.4%

109

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Directors’ Remuneration Report including Remuneration Committee Report

Percentage change in Directors’ remuneration
The table below shows the annual percentage change in salary/fees, benefits and bonus for each of the Directors in 2023, compared to the average
for our wider workforce over the last five financial years.

2023 vs 2022

% change
in taxable
benefits
(excluding
pension)

% Change in
salary/fees

% change
in bonus
(includes
commission)

% Change in
salary/fees

2022 vs 2021

% change
in taxable
benefits
(excluding
pension)

% change
in bonus
(includes
commission)

% Change in
salary/fees

2021 vs 2020

% change
in taxable
benefits
(excluding
pension)

% change
in bonus
(includes
commission)

% Change in
salary/fees

2020 vs 2019

% change
in taxable
benefits
(excluding
pension)

% change
in bonus
(includes
commission)

Chairman
Bill Shannon1

David Barral2

Executive
Directors
Helen Buck3

Adam Castleton

David Stewart

Non Executive
Directors

Gaby Appleton

Simon Embley

Darrell Evans

Sonya Ghobrial4

James Mack

All employees

Median of LSL
workforce5

N/A

3.0

3.1

2.9

N/A

3.0

N/A

0.5

N/A

21.5

N/A

2.0

13.6

-36.5

11.3

N/A

0.7

0.8

N/A

-100.0

N/A

1.5

N/A

14.5

N/A

16.7

N/A

-0.6

-0.8

N/A

-13.2

N/A

-1.2

-1.7

N/A

-100.0

N/A

447

-92

5.0

186.2

19.0

1.9

-71.8

-7.0

2.1

67.8

5.2

Notes on percentage change in Directors’ remuneration for the period 2023 vs 2022:
1. Bill Shannon retired from the Board on 25 May 2023 and therefore a change from the prior year has not been provided.
2. David Barral joined the Board as an independent Non Executive Director (Chair Designate) on 3 April 2023 and was appointed Non Executive Chair of the Board

on 25 May 2023 and therefore a change from the prior year has not been provided. David Barral left the Board on 26 February 2024.

3. Helen Buck retired from the Board and as an Executive Director on 31 March 2023 and therefore a change from the prior year has not been provided.
4. Sonya Ghobrial was appointed to the Board during 2022 and therefore a change from the prior year has not been provided.
5. The median full-time equivalent pay of all employees in the LSL Group and still in employment as at 31 December has been provided as an appropriate

comparator. This excludes employees who joined the business during December but received their first pay in January 2024. The high percentage change for
employee salary, benefits and bonus is due to a reduction in the workforce, as a result of our Estate Agency Division moving to a franchise mode, disposal of B2C
Financial Services businesses and disposal of Marsh & Parsons.

6. For notes of changes in previous years, please refer to previous Annual Reports and Accounts.

Group CEO to employee pay ratio
The table below discloses the ratio between the Group CEO’s remuneration and our wider workforce since 2018.

Financial year

2018

2019

2020

2021

2022

2023

Method

Option A

The 2023 employee data used to calculate the ratios is set out in the table below:

Total pay and benefits of employees

Basic salary of employees

110

25th percentile
pay ratio

40.5 : 1

38.1 : 1

23.4 : 1

40.3 : 1

29.3 : 1

22.5 : 1

25th percentile

£25,389

£22,877

Median
pay ratio

27.9 : 1

26.1 : 1

15.8 : 1

26.5 : 1

20.0 : 1

13.4 : 1

Median

£42,687

£37,200

75th percentile
pay ratio

16.2 : 1

14.9 : 1

9.1 : 1

15.4 : 1

11.6 : 1

9.1 : 1

75th percentile

£62,984

£51,978

Notes on percentage change in Group CEO to employee pay ratio:
We have chosen option A (which compares our full-time equivalent total remuneration for all UK employees against the Group CEO) as the most
appropriate methodology to report the ratios, in line with the recommendation from the UK Government’s Department for Business and Trade, and
a number of shareholder representative and proxy voting bodies.

The ratio above includes all UK-based employees who were employed in any part of the Group as at 31 December 2023. The employee
remuneration data includes the full-time equivalent data in respect of basic pay, bonus, commission, taxable benefits, share-based remuneration
and pension benefits, so as to provide a comparable figure to the Group CEO single figure total remuneration. The full-time equivalent data for each
employee was grossed up based on the full-time equivalent hours for each role.

In calculating the bonus and commission elements for employees, we have used the bonus and commission paid to employees during 2023. In some
instances, employees receive bonus or commission payments in arrears. However, due to a number of these elements (for example year end annual
bonuses) not being finalised at the time of writing, this Report was written with these elements not being reapportioned to the relevant financial
year. However, we consider that this approach provides a broadly similar outcome to the result if 2023 year end bonuses had been included.

The Committee notes the decrease in the ratio from 2022 as a result of higher base salary increases for the workforce compared with the Group
CEO, no bonus being payable to the Group CEO in respect of 2023 and a reduction in the workforce as a result of our Estate Agency Division moving
to a franchise model, disposal of B2C Financial Services businesses and disposal of Marsh & Parsons.

As at 31 December 2023, we employed over 1,727 people in a wide variety of roles. The reward policies and practices for employees follow those
set for the Executive Directors, as detailed on page 110 of this Report. The Committee also has responsibility for setting the remuneration of the
Executive Committee and reviews and monitors the Group’s wider remuneration policies and practices. On this basis, the Committee is satisfied the
median pay ratio is consistent with the pay, reward and progression polices of the companies UK-based employees.

Relative importance of spend on pay
The following table shows our actual spend on pay for all employees, relative to dividends paid and profit earned:

Staff costs1

Dividends

Profit after tax2

Adjusted profit after tax3

2023 (£m)

2022 (£m)3

Change (%)

99.1

11.7

8.0

7.8

145.3

11.7

(26.8)

28.3

-32%

–

130%

-72%

Notes:
1. See note 15 to the Financial Statements for calculation of staff costs.
2. The percentage change in profit after tax and adjusted profit after tax has been shown as this is considered an important financial KPI used to monitor our

performance. See note 12 to the Financial Statements for the calculation.
3. 2022 staff costs and profit after tax have updated as they have been restated.

Statement of shareholders’ voting
The Annual Statement and Report on Remuneration for 2022 and the Policy (all included in the Annual Report and Accounts 2022) were presented
to shareholders at the 2023 AGM on 25 May 2023. The voting outcomes were as follows:

Votes cast in favour

Votes cast against

Total votes withheld

Remuneration Committee

Annual Statement and Annual
Report on Remuneration

Directors’ Remuneration Policy

99.99%

0.01%

1,286

99.99%

0.01%

1,286

Role and membership
Details of the Committee’s composition and responsibilities are set out in the Corporate Governance Report on page 68 of this Report. During
2023, the Committee was chaired by Darrell Evans and its other members were Bill Shannon, David Barral, Gaby Appleton, James Mack and Sonya
Ghobrial. David Barral joined the Committee on 3 April 2023 and Bill Shannon retired from the Committee at the close of the 2023 AGM. Following
a review of the Committee’s composition in the year, James Mack and Sonya Ghobrial stepped down from the Committee in November 2023.
Following the Board changes on 26 February 2024, further changes were made to the Committee and at the date of this Report, the Committee
is: Gaby Appleton (Chair); Darrell Evans; and Sonya Ghobrial.

The Committee’s terms of reference are available from the Company Secretary or from our website (lslps.co.uk).

111

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Directors’ Remuneration Report including Remuneration Committee Report

The work of the Remuneration Committee
The Remuneration Committee met three times in 2023.

Set out below is a summary of the topics discussed by the Committee during the year:

Annual reporting
a. Recommended the Directors’ Remuneration Report for inclusion in the Annual Report and Accounts 2022, including completing an annual review

of the Executive Directors’ shareholdings.

b. Recommended the Directors’ Remuneration Policy for presentation to the 2023 AGM for shareholder approval.

Executive and colleague remuneration:
c. Received market updates and remuneration reports from Korn Ferry, including a presentation on the use and operation of long-term incentive

schemes.

d. Reviewed arrangements for the 2020 LTIP vesting and approving the quality of earnings assessment.

e. Reviewed and approved the grant of the 2023 LTIP awards.

f. Reviewed the Financial Services Network’s remuneration arrangements, including a presentation from the Financial Services managing director

on commission arrangements.

g. Conducted the 2023 colleague pay review.

h. Oversaw the bonus scheme designs, including approving Executive Director non-financial measures, and reviewed bonus payments.

i. Received information on and approved, where relevant, ad hoc promotions and appointments throughout the year.

Governance
j. Completed an annual review of the Committee’s terms of reference, for recommendation to the Board.

Remuneration Committee advisers
The Committee received independent professional advice during the year from Korn Ferry on matters relating to Executive Director and Senior
Management remuneration. Korn Ferry does not provide any other services to the Group.

The Committee appointed Korn Ferry in 2017. Korn Ferry’s fees for 2023, which are primarily based on an hourly rate, were £65,000 (excluding VAT)
(2022: £29,391).

Korn Ferry is a signatory to the Remuneration Consultants’ Code of Conduct and has confirmed that it adheres in all respects to the terms of this
code. The Committee is comfortable that its advice continues to be independent and objective.

The Directors’ Remuneration Report is approved by and signed on behalf of the Board of Directors

Gaby Appleton
Chair of the Remuneration Committee

24 April 2024

112

Financial Statements

In this section

114

123
124
125
126
127
128
181
182
183
184

Independent Auditor’s Report to the Members of
LSL Property Services plc
Group Income Statement
Group Statement of Comprehensive Income
Group Balance Sheet
Group Statement of Cash Flows
Group Statement of Changes in Equity
Notes to the Group Financial Statements
Parent Company Balance Sheet
Parent Company Statement of Cash Flows
Parent Company Statement of Changes in Equity
Notes to the Parent Company Financial
Statements

113

Other InformationFinancial StatementsStrategic ReportOverview

Independent Auditor’s Report

for the year ended 31 December 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF LSL PROPERTY SERVICES PLC

Opinion
In our opinion:

• LSL Property Services plc’s group financial statements and parent company financial statements (the “financial statements”) give a true and fair
view of the state of the group’s and of the parent company’s affairs as at 31 December 2023 and of the group’s loss for the year then ended;

• the group financial statements have been properly prepared in accordance with UK adopted international accounting standards;

• the parent company financial statements have been properly prepared in accordance with UK adopted international accounting standards as

applied in accordance with section 408 of the Companies Act 2006; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of LSL Property Services plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended
31 December 2023 which comprise:

Group

Parent company

Group Income Statement for the year ended 31 December 2023

Parent Company Balance Sheet as at 31 December 2023

Group Statement of Comprehensive Income for the year ended
31 December 2023

Parent Company Statement of Cash Flows for the year ended
31 December 2023

Group Balance Sheet as at 31 December 2023

Parent Company Statement of Changes in Equity for the year ended
31 December 2023

Group Statement of Cash Flows for the year ended 31 December
2023

Related notes 1 to 22 to the financial statements including material
accounting policy information

Group Statement of Changes in Equity for the year ended
31 December 2023

Related notes 1 to 37 to the financial statements, including material
accounting policy information

The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards and
as regards the parent company financial statements, as applied in accordance with section 408 of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence
We are independent of the group and parent in accordance with the ethical requirements that are relevant to our audit of the financial statements
in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company and we remain independent
of the group and the parent company in conducting the audit.

114114

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors’ assessment of the group and parent company’s ability to continue to adopt the
going concern basis of accounting included the following procedures:

How we evaluated the directors’ going concern assessment

• We evaluated the directors’ going concern assessment process to determine whether it was appropriate in the context of our own risk assessment

on going concern;

• We assessed the appropriateness of the duration of the going concern assessment period to 30 June 2025 and considered the existence of any

significant events or conditions beyond this period based on our procedures over the group’s cash flow forecasts and from knowledge arising from
other areas of the audit;

• We understood the basis on which the directors’ going concern assessment was prepared, which included understanding the terms of the group’s
undrawn revolving credit facility; the nature of the facility, facility amount, repayment terms, covenants and attached conditions. We verified via
an independent confirmation that the facility is committed for the entire going concern period and understood the conditions (including financial
conditions) that must exist in order for the facility to be drawn down upon;

• We verified the mathematical accuracy of the directors’ going concern model and covenant calculations for the period to 30 June 2025;

• We challenged the appropriateness of the key assumptions in the directors’ forecasts with reference to industry and economic forecasts and

through consideration of historical forecasting accuracy;

• We assessed the plausibility of both the directors’ downside scenario analysis and reverse stress testing by considering key market and macro-

economic forecast data across multiple sources and searching for contradictory evidence in relation to the appropriateness of key assumptions.
Further we considered whether there could be any material impact of climate change in the going concern period;

• We performed our independent assessment with consideration to the various changes in group structure which have taken place during and
subsequent to the year ended 31 December 2023, including the post year end acquisition of TenetLime described in note 34. This included
independent reverse stress testing in order to identify and understand the likelihood of factors which would lead to the group utilising all available
liquidity or breaching the financial covenants attached to the group’s revolving credit facility during the going concern period;

• We considered the quantum and timing of mitigating factors available to the directors, the extent to which these are included in the directors’

forecasts and challenged the extent to which these are within the directors’ control; and

• We reviewed the disclosures made relating to going concern included in the Annual Report & Accounts in order to assess the appropriateness of

the disclosures and conformity with reporting standards.

Our key observations
• The directors’ assessment forecasts that the group will maintain sufficient liquidity throughout the going concern assessment period in the base

case scenario and will not breach banking covenants;

• Under the directors’ downside scenario analysis, which assumes a continuation of 2023 activity levels throughout the assessment period, liquidity

remains and there is no breach of covenant;

• We have not identified any climate related risks that would materially impact the group’s forecasts to 30 June 2025; and

• Controllable mitigating actions available to management over the going concern assessment period include reductions to non-declared dividend

payments.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group and parent company’s ability to continue as a going concern for the period from the date the
financial statements are authorised for issue through to 30 June 2025.

In relation to the group and parent company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the group’s ability to continue as a
going concern.

115115

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)Independent Auditor’s Report continued.
for the year ended 31 December 2023

Overview of our audit approach

Audit scope

• We performed an audit of the complete financial information of 8 components and audit procedures on specific

balances for a further 8 components.

• The components where we performed full or specific audit procedures accounted for 96% of revenue from
continuing operations (the basis upon which we have determine group materiality) 97% of absolute profit
before tax and 93% of total assets.

Key audit matters

• Risk of inappropriate recognition of revenue around the year end (including valuation of the commission refund

liability)

Materiality

• Overall group materiality of £0.7m which represents 0.5% of revenue from continuing operations.

• Risk of inappropriate accounting applied to the transition of Estate Agency to a Franchise business

An overview of the scope of the parent company and group audits

Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for each company
within the group. Taken together, this enables us to form an opinion on the consolidated financial statements. We take into account size, risk profile,
the organisation of the group and effectiveness of group-wide controls, changes in the business environment (including the impact of the transition
of Estate Agency to a Franchise business), the potential impact of climate change and other factors such as recent Internal Audit results when
assessing the level of work to be performed at each component.

In assessing the risk of material misstatement to the group financial statements, and to ensure we had adequate quantitative coverage of significant
accounts in the financial statements, of the 30 reporting components of the group, we selected 16 components covering entities within the UK and
Guernsey, which represent the principal business units within the group.

Of the 16 components selected, we performed an audit of the complete financial information of 8 components (“full scope components”) which
were selected based on their size or risk characteristics. For the remaining 8 components (“specific scope components”), we performed audit
procedures on specific accounts within that component that we considered had the potential for the greatest impact on the significant accounts in
the financial statements either because of the size of these accounts or their risk profile.

The coverage achieved through full, specific and other procedures is illustrated below and calculated on an absolute basis. In 2023, we report
coverage over revenue from continuing operations and profit before tax (2022: total revenue and adjusted profit before tax). This reflects a change in
our materiality basis.

The following table summarises the coverage obtained from the work performed by our audit teams.

Scope

Full

Specific

Other procedures

2023

Revenue from
continuing
operations

Absolute
profit
before tax

84%

12%

88%

Total
Assets

88%

2022

Absolute
adjusted profit
before tax

85%

11%

Revenue

85%

10%

Total
Assets

95%

The audit scope of the specific scope components may not have included testing of all significant accounts of the component but will have
contributed to the coverage of significant accounts tested for the group.

Of the remaining 14 components (the components other than those assigned a full or specific scope) that together represent 4% of the group’s
revenue from continuing operations, none are individually greater than 3% of the group’s revenue from continuing operations. For these
components, we performed other procedures, including external bank confirmation, analytical review, review of internal audit reports, review
of minutes of board meetings, testing of consolidation journals and review of entity level controls to respond to any potential risks of material
misstatement to the group financial statements. Within the 7% of the group’s total assets audited through other procedures, external bank
confirmations covered 5% of the group’s total assets. The remaining 2% of the group’s total assets were covered through other procedures as
described above.

116116

Changes from the prior year
The changes in our current year scoping, when compared to our prior year scoping, are driven by the disposals of Marsh & Parsons and the four
direct-to-consumer financial service advice businesses in addition to the transition of Estate Agency to a Franchise business which together changed
the composition of the group and the relative contribution of each component.

Involvement with component teams
In establishing our overall approach to the group audit, we determined the type of work that needed to be undertaken at each of the components
by us, as the primary audit engagement team, or by component auditors from other EY global network firms operating under our instruction. Of the
8 full scope components, audit procedures were performed on 5 of these directly by the primary audit team and 3 by the component audit team.
Of the 8 specific scope components audit procedures were performed on 3 of these directly by the primary audit team and 5 by the component audit
team. For the 3 full scope and 5 specific scope components where the work was performed by component auditors, we determined the appropriate
level of involvement to enable us to determine that sufficient audit evidence had been obtained as a basis for our opinion on the group as a whole.

The component team is also based in the UK. The primary team interacted regularly with the component team, where appropriate, during various
stages of the audit, reviewed relevant working papers and were responsible for the scope and direction of the audit process. At critical periods of the
audit, we increased the use of online collaboration tools to facilitate team meetings, information sharing and the evaluation, review and oversight of
the component team. We utilised fully the interactive capability of our global audit workflow tool, to review remotely the relevant underlying work
performed and retained component working papers in key risk areas on the group audit file. This, together with the additional procedures performed
at group level, gave us appropriate evidence for our opinion on the group financial statements.

Climate change
Stakeholders are increasingly interested in how climate change will impact LSL Property Services plc. Given the nature of the business in a non-
carbon intensive industry, management does not consider there to be a material impact from climate change. The group has determined that
the most significant future impacts from climate change on its operations will be from physical risks, such as severe weather events impacting
office-based locations, as well as transition risks such as policy and regulation changes. However, with a predominantly leased property footprint,
group management concludes there is little risk of significant business disruption and no significant financial impact from climate change. These
are explained on pages 34 to 49 in the required Task Force On Climate Related Financial Disclosures and on pages 29 to 33 in the principal risks and
uncertainties. They have also explained their climate commitments on pages 34 to 49. All of these disclosures form part of the “Other information,”
rather than the audited financial statements. Our procedures on these unaudited disclosures therefore consisted solely of considering whether they
are materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appear to be materially
misstated, in line with our responsibilities on “Other information”.

In planning and performing our audit we assessed the potential impacts of climate change on the group’s business and any consequential material
impact on its financial statements.

The group has explained in note 2 to the group financial statements its articulation of how climate change has been reflected in the financial
statements. The group did not identify any climate risk that would materially impact the carrying values of the group’s assets or have any other
impact on the financial statements. The group has explained how the impact of climate change aligns with their commitment to the aspirations of the
Paris Agreement to achieve net zero emissions by 2050. These disclosures also explain where governmental and societal responses to climate change
risks are still developing, and where the degree of certainty of these changes means that they cannot be taken into account when determining asset
and liability valuations under the requirements of UK adopted international accounting standards. There are no significant judgements or estimates
relating to climate change in the notes to the financial statements due to the group’s assessment that there is no significant financial impact from
climate change on the group given the nature of its operations.

Our audit effort in considering the impact of climate change on the financial statements was focused on evaluating management’s assessment of
the impact of climate risk, physical and transition, their climate commitments. As part of this evaluation, we performed our own risk assessment to
determine the risks of material misstatement in the financial statements from climate change which needed to be considered in our audit.

We also challenged the directors’ considerations of climate change risks in their assessment of going concern and viability and associated disclosures.
Where considerations of climate change were relevant to our assessment of going concern, these are described above.

Based on our work we have not identified the impact of climate change on the financial statements to be a key audit matter or to impact a key audit
matter.

Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the
current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These
matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion
thereon, and we do not provide a separate opinion on these matters.

117117

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)Key observations communicated to the
Audit & Risk Committee
We have not identified any material
misstatements in the revenue recognised in
the year.

Independent Auditor’s Report continued.
for the year ended 31 December 2023

Risk
Risk of inappropriate recognition of revenue
around the year end (including valuation of
the commission refund liability)

Refer to the Audit & Risk Committee Report
(page 85); Accounting policies (page 128);
and Note 3 of the group financial statements
(page 138)

The group has reported revenue from
continuing operations of £144.4m
(2022: total revenue of £321.7m).

The group has recognised a commission
refund liability of £2.9m (2022: £5.2m).

The risk was one of the most significant
assessed risks of material misstatement due
to the potential for bias or error in the timing
of transactions.

There is also judgement in the value of
commission income that will be clawed back.

We identified the following specific risk
of fraud and error in respect of improper
revenue recognition and management
override given the nature of the group’s
services:

• Inappropriate cut-off of revenue at the
period end in addition to the date of
transition to the franchise business model
for relevant Estate Agency components;
and

• Inappropriate measurement of the

reduction to revenue recorded for expected
clawback of commissions on lapsed
insurance policies.

The risk has increased in the current year due
to the challenging market conditions being
experienced by the group.

Our response to the risk
At each full and specific scope audit component
with material revenue streams:

• We performed walkthroughs of each

significant stream of revenue and confirmed
the existence of key controls around the
recognition of revenue and measurement of
the commission refund liability;

• We performed cut-off testing for a period
before and after the year end for those
components which remained part of
the group as at the year end date and
for a period before and after the date of
transition to the franchise business model
for relevant Estate Agency components.
These procedures have been performed
with reference to underlying contracts and
evidence of management’s assessment
of the point of revenue recognition. This
included assessment of the appropriateness
of the cut-off model applied by management
in the Financial Services division;

• We performed transactional testing through
to underlying contracts and data analysis
procedures to assess the recognition of
revenue around the year end or date of
transition to the franchise business model,
as relevant to the respective component.
Where items did not follow the expected
transaction flow, we investigated outliers
and corroborated to third party evidence
where appropriate.

• We performed targeted journal entry testing
with a focus on entries posted to revenue
accounts.

For the commission refund liability:

• We tested the underlying calculations for

arithmetical accuracy and consistency across
the group.

• We verified the appropriateness of the

insurance policy lapse rate applied in the
commission refund liability model and where
relevant, tested a sample of historical lapses
to third party evidence.

• We performed full and specific scope audit
procedures over this risk area in the 14
in-scope locations which have revenue. This
covered 96% of the group’s revenue from
continuing operations.

118118

Key observations communicated to the
Audit & Risk Committee

Based on the audit procedures performed,
we consider management’s accounting
applied to the transition of Estate Agency to a
Franchise business to be appropriate.

We have concluded that the key judgements,
estimates and assumptions applied by
management, and the disclosures thereof,
are reasonable and compliant with relevant
accounting standards.

Risk

Our response to the risk
• We also performed other procedures in

the locations which covered the remaining
4% of the group’s revenue. This consisted
of analytical procedures over material
movements in revenue and related balance
sheet accounts as compared to the prior
year.

Risk of inappropriate accounting applied to
the transition of Estate Agency to a Franchise
business

We challenged key judgements, estimates
and assumptions applied by management in
accounting for the transition. Specifically, we:

Refer to the Audit & Risk Committee Report
(page 85); Accounting policies (page 128);
and Note 6 of the Consolidated Financial
Statements (page 142)

In 2023, the group has transitioned its
owner-managed Estate Agency business to
a Franchise business model which included
the sale of the trade and assets or statutory
entities, as applicable, as well as the signing of
franchise agreements.

The accounting applied to this transition is
complex and includes significant estimation
and judgement. As a result, there is a
significant risk of inappropriate accounting
applied to the transition of the Estate Agency
business to a Franchise business.

The most significant judgements and
estimates related to the presentation of the
previously owned network of estate agency
branches as a discontinued operation and the
identification and measurement of the fair
value of non-cash proceeds arising from the
transaction.

• Performed walkthrough procedures to verify

our understanding of the accounting processes
performed by management in relation to the
transition, and confirmed the existence of key
controls over valuation and presentation and
disclosure;

• Obtained the underlying transaction

agreements and compared the key terms to the
accounting treatment applied;

• Challenged the judgement applied by

management in presenting the disposal of the
owned network of estate agency branches
as a discontinued operation, by considering
the requirements of IFRS 5 and assessing the
characteristics and structure of the business
disposed compared to the operations retained
by the group;

• Challenged management on the fair value

calculation of the non-cash proceeds arising
from the transaction through engaging
EY valuation specialists to determine an
independent range of acceptable outcomes
on the discount rate applied and by
assessing the reasonableness of growth
rates applied to the forecasts with reference
to market data;

• Challenged management on the completeness
of the assets disposed as part of the transaction;

• Recalculated management’s calculations to

determine arithmetical accuracy; and

• Reviewed the disclosures made by

management in respect of the transaction,
including compliance with relevant
accounting standards.

In the prior year, our auditor’s report included a key audit matter in relation to the risk of inappropriate valuation of goodwill in relation to
Your Move / Reeds Rains and LSLi. In the current year this no longer represents a key audit matter, following the disposal of the goodwill associated
with these businesses as part of the transition of Estate Agency to a Franchise business, which itself represents a key audit matter, as described above.

Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in
forming our audit opinion.

119119

Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic
decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures.

We determined materiality for the group to be £0.7 million (2022: £1.4 million), which is 0.5% of group revenue from continuing operations
(2022: 5% of adjusted profit before tax). We believe that group revenue from continuing operations is a key focus for the users of the financial
statements and is used prominently in communications to investors and in recent annual reports. The change in the basis upon which we determine
materiality from adjusted profit before tax used in the prior year to revenue from continuing operations in the current year, is driven by the current
year performance of the business and the transition of Estate Agency to a Franchise business part way through the year, which together would mean
the use of current year adjusted profit before tax as our basis would not result in an appropriate materiality figure for the size of the business.

We determined materiality for the parent company to be £0.8 million (2022: £1.0 million), which is 1% (2022: 1%) of equity. For our testing of parent
company balances that are consolidated into the group financial statements, an allocation of group performance materiality was used.

Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the group’s overall control environment, our judgement was that performance
materiality was 50% (2022: 50%) of our planning materiality, namely £0.3m (2022: £0.7m). We have set performance materiality at this percentage
reflecting our prior audit experience of the group.

Audit work at component locations for the purpose of obtaining audit coverage over significant financial statement accounts is undertaken based
on a percentage of total performance materiality. The performance materiality set for each component is based on the relative scale and risk
of the component to the group as a whole and our assessment of the risk of misstatement at that component. In the current year, the range of
performance materiality allocated to components was £0.1m to £0.2m (2022: £0.1m to £0.5m).

Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit & Risk Committee that we would report to them all uncorrected audit differences in excess of £0.03m (2022: £0.07m),
which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant
qualitative considerations in forming our opinion.

Other information
The other information comprises the information included in the annual report set out on pages 01 to 112, other than the financial statements and
our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we
do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in
the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other
information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is

consistent with the financial statements; and

• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

120120

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we
have not identified material misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our
opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches

not visited by us; or

• the parent company financial statements and the part of the directors’ remuneration report to be audited are not in agreement with the

accounting records and returns; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit

Corporate Governance Statement
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement
relating to the group and company’s compliance with the provisions of the UK Corporate Governance Code specified for our review by the Listing
Rules.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement
is materially consistent with the financial statements or our knowledge obtained during the audit:

• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties

identified set out on page 61;

• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the period is appropriate set out

on page 32;

• Director’s statement on whether it has a reasonable expectation that the group will be able to continue in operation and meets its liabilities set out

on page 61;

• Directors’ statement on fair, balanced and understandable set out on page 64;

• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 64;

• The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 88;

and;

• The section describing the work of the Audit & Risk Committee set out on page 85

Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 64, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group and parent company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend
to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or
through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

121121

However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the company and
management.

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and determined that the most significant
are those that relate to the reporting framework (UK adopted international accounting standards, Companies Act 2006, and the UK Corporate
Governance Code 2018), and the relevant tax compliance regulations in the UK.

• We considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which
may be fundamental to the group’s ability to operate. These include compliance with FCA regulations, the Estate Agents Act 1979, and the Data
Protection Act.

• We understood how LSL Property Services plc is complying with those frameworks making enquiries of management, internal audit, those

responsible for legal and compliance procedures and the Company Secretary. We corroborated our enquiries through our review of board minutes
and papers provided to the Audit & Risk Committee, also, where necessary, reports provided to other Committees of the Board, and attendance at
all meetings of the Audit & Risk Committee.

• We assessed the susceptibility of the group’s financial statements to material misstatement, including how fraud might occur by meeting with

management from various components of the group to understand where it considered there was a susceptibility to fraud. We also considered
performance targets and their propensity to influence efforts made by management to manage earnings. We considered the programmes and
controls that the group has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management
monitors those programmes and controls. Where the risk was considered to be higher, we performed audit procedures to address each identified
fraud risk or other risk of material misstatement. These procedures included those on revenue recognition detailed above and the testing of
manual journals and were designed to provide reasonable assurance that the financial statements were free from material fraud and error.

• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures

involved journal entry testing, with a focus on manual consolidation journals and journals indicating large or unusual transactions based on our
understanding of the group; enquiries of legal counsel, management and internal audit; and testing as described above. In addition, we completed
procedures to conclude on the compliance of the disclosures in the Annual Report and Accounts with the requirements of the relevant accounting
standards, UK legislation and the UK Corporate Governance Code 2018.

• At a component level, our full and specific scope component audit team’s procedures included inquiries of component management, journal entry

testing and focused testing, including in respect of the key audit matter of revenue recognition.

• Where we identified potential non-compliance with laws and regulations at a group level through review of Audit & Risk Committee papers, we

communicated this to relevant components who developed an appropriate audit response.

A further description of our responsibilities for the audit of the financial statements is located on the inancial Reporting Council’s website at https://
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Other matters we are required to address
• Following the recommendation from the Audit & Risk Committee, we were appointed by the company on 7 July 2004 to audit the financial

statements for the year ending 31 December 2004 and subsequent financial periods.

The period of total uninterrupted engagement including previous renewals and reappointments is 20 years, covering the years ending
31 December 2004 to 31 December 2023. LSL Property Services plc listed on the London Stock Exchange in 2006.

• The audit opinion is consistent with the additional report to the Audit & Risk Committee.

Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work
has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

David Wilson (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London

25 April 2024

122122

Group Income Statement

for the year ended 31 December 2023

Continuing operations:
Revenue
Operating expenses:
Employee costs
Depreciation on property, plant and equipment and right-of-use assets
Other operating costs
Other (losses)/gains
Share of post-tax (loss) from joint venture
Share-based payments
Amortisation of intangible assets
Exceptional gains
Exceptional costs
Contingent consideration payable
Group operating profit/(loss)
Finance income
Finance cost
Net finance income/(cost)
Profit/(loss) before tax
Taxation
Profit/(loss) for the period from continuing operations
Discontinued operations:
Loss for period from discontinued operations
Loss for the period
Attributable to:
Owners of the parent
Non-controlling interest

Loss per share from total operations (expressed in pence per share):
Basic
Diluted
Earnings/(loss) per share from continuing operations (expressed as pence per share):
Basic
Diluted

*See note 36 for details regarding restatements.

The notes on pages 128 to 180 form part of these Financial Statements.

Note

2023
£’000

Restated*
2022
£’000

15
18

3
20
15
17
9
9
25
4
7
8

12
12

144,418

217,472

(99,090)
(3,362)
(31,046)
(211)
(390)
164
(2,258)
9,320
(13,767)
(31)
3,747
2,817
(1,701)
1,116
4,863
3,170
8,033

(46,093)
(38,060)

(38,001)
(59)
(38,060)

(36.9)
(36.6)

7.9
7.8

(145,325)
(7,612)
(35,502)
1,334
(494)
(1,860)
(2,787)
694
(48,316)
696
(21,700)
76
(2,147)
(2,071)
(23,771)
(3,020)
(26,791)

(36,511)
(63,302)

(63,209)
(93)
(63,302)

(61.6)
(61.6)

(26.0)
(26.0)

123123

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Group Statement of Comprehensive Income

for the year ended 31 December 2023

Loss for the year
Items that will not to be reclassified to profit and loss in subsequent periods:
Revaluation of financial assets not recycled through the income statement
Tax on revaluation
Total other comprehensive loss for the year, net of tax

Total comprehensive loss for the year, net of tax
Attributable to:
Owners of the parent
Non-controlling interest

*See note 36 for details regarding restatements.

The notes on pages 128 to 180 form part of these Financial Statements.

Note

2023
£’000
(38,060)

(116)
(1)
(117)

Restated*
2022
£’000
(63,302)

(5,096)
130
(4,966)

(38,177)

(68,268)

(38,118)
(59)

(68,175)
(93)

124124

Group Balance Sheet
Group Balance Sheet

as at 31 December 2023
as at 31 December 2023

Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment and right-of-use assets
Financial assets
Deferred tax asset
Investment in sublease
Investment in joint venture
Contract assets
Loans to franchisees and appointed representatives
Total non-current assets

Current assets
Trade and other receivables
Financial assets
Contract assets
Investment in sublease
Current tax assets
Loans to franchisees and appointed representatives
Cash and cash equivalents

Assets held for sale
Total current assets
Total assets

Current liabilities
Financial liabilities
Trade and other payables
Provisions for liabilities
Bank overdrafts

Liabilities held for sale
Total current liabilities

Non-current liabilities
Financial liabilities
Deferred tax liability
Provisions for liabilities
Total non-current liabilities
Total liabilities
Net assets

Equity
Share capital
Share premium account
Share-based payment reserve
Shares held by employee benefit trust and share incentive plan
Treasury shares
Fair value reserve
Retained earnings
Total equity attributable to owners of the parent
Non-controlling interest
Total equity

*See note 36 for details regarding restatements.

The notes on pages 128 to 180 form part of these Financial Statements.

The Financial Statements were approved by and signed on behalf of the Board by:

David Stewart
Group Chief Executive Officer
24 April 2024

Adam Castleton
Group Chief Financial Officer
24 April 2024

Note

17
17
18
19
16
19
20
21
19

22
19
21
19
16
19
23

25
24
26
23

25
16
26

28
29
29
2,29
29
29

2023
£’000

16,855
21,461
6,917
5,407
166
1,756
9,359
329
1,655
63,905

23,206
54
40
1,582
2,183
444
58,110
85,619
–
85,619
149,524

(3,320)
(30,485)
(5,903)
(23,139)
(62,847)
–
(62,847)

(5,085)
–
(5,647)
(10,732)
(73,579)
75,945

210
5,629
3,564
(2,871)
(3,983)
(385)
74,087
76,251
(306)
75,945

Company No. 05114014

Restated*
2022
£’000

Restated*
1 January 2022
£’000

54,997
14,698
15,570
1,045
–
–
5,068
431
–
91,809

26,608
–
348
–
3,063
–
61,215
91,234
54,402
145,636
237,445

(6,949)
(47,030)
(660)
(24,460)
(79,099)
(21,930)
(101,029)

(6,277)
(2,392)
(1,695)
(10,364)
(111,393)
126,052

210
5,629
5,331
(5,457)
(3,983)
(20,239)
144,133
125,624
428
126,052

155,654
29,517
37,070
5,748
–
–
1,610
733
–
230,332

33,829
–
424
–
1,142
–
72,712
108,107
–
108,107
338,439

(8,523)
(64,206)
(775)
(24,248)
(97,752)
–
(97,752)

(22,602)
(2,491)
(3,191)
(28,284)
(126,036)
212,403

210
5,629
5,263
(3,063)
–
(15,273)
219,116
211,882
521
212,403

125125

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Group Statement of Cash Flows

for the year ended 31 December 2023

Profit/(loss) before tax from continuing operations
Loss before tax from discontinued operations
Loss before tax
Adjustments for:
Exceptional costs
Exceptional gains
Contingent consideration payable
Depreciation of tangible assets
Amortisation of intangible assets
Share-based payments
Loss on disposal of property, plant and equipment and right-of-use assets
Loss from joint venture
Recognition of investments at fair value through the income statement
Decrease in contract assets
Finance income
Finance costs
Operating cash flows before movements in working capital
Movements in working capital
Decrease/(increase) in trade and other receivables
Decrease in trade and other payables
Increase/(decrease) in provisions

Cash generated from operations
Interest paid (leases)
Interest received (leases)
Income taxes paid
Exceptional costs paid
Net cash (expended)/generated from operating activities
Cash flows used in investing activities
Interest received
Disposal of businesses, net of cash disposed
Payment of contingent consideration
Investment in joint venture
Proceeds from sale of financial assets
Franchisees and appointed representatives loans granted
Franchisees and appointed representatives loan repayments
Receipt of lease income
Purchase of property, plant and equipment and intangible assets
Proceeds from sale of property, plant and equipment
Net cash generated/(expended) on investing activities
Cash flows used in financing activities
Purchase of LSL shares by the employee benefit trust
Repurchase of treasury shares
Proceeds from exercise of share options
Payment of lease liabilities
Dividends paid
Net cash expended in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

*See note 36 for details regarding restatements.

2023
£’000
4,863
(45,425)
(40,562)

57,650
(9,320)
31
4,512
2,660
(109)
(2)
390
279
410
(2,817)
1,811
14,933

909
(13,130)
1,203
(11,018)
3,915
(580)
140
–
(10,391)
(6,916)

1,599
26,538
(2,280)
(4,681)
206
(2,914)
1,275
1,134
(2,856)
–
18,021

–
–
–
(4,529)
(11,714)
(16,243)
(5,138)
40,109
34,971

Restated*
2022
£’000
(23,771)
(34,674)
(58,445)

87,255
(694)
(696)
11,629
4,020
1,977
(8)
494
(678)
378
(80)
2,497
47,649

(1,491)
(12,198)
(799)
(14,488)
33,161
(1,387)
–
(6,109)
(384)
25,281

–
–
(76)
(3,952)
–
–
–
68
(3,853)
1,304
(6,509)

(5,026)
(3,983)
825
(7,170)
(11,773)
(27,127)
(8,355)
48,464
40,109

Note

18
17
6,15
6
20
19
21
7
6,8

27
27

25
20
19
19
19
27
17,18
18

15
14
13

23
23

Closing cash and cash equivalents includes £nil (2022: £3.4m) presented in assets held for sale on the Group Balance Sheet.

The notes on pages 128 to 180 form part of these Financial Statements.

126126

Group Statement of Changes in Equity

for the year ended 31 December 2023

At 1 January 2023
Loss for the year
Revaluation of financial assets
Tax on revaluations
Total comprehensive loss for the
year
Acquisition of non-controlling
interests
Exercise of options
Vested share options lapsed
during the year
Dividend paid
Fair value reclassification
following disposals
Share-based payments
Tax on share-based payments
At 31 December 2023

Share
capital
£’000

210
–
–
–

Share
premium
account
£’000

5,629
–
–
–

–

–
–

–

–
–

–
–
–
210

–
–
–
5,629

Share-
based
payment
reserve
£’000

5,331
–
–
–

Shares
held by
EBT and
SIP
£’000

(5,457)
–
–
–

–

–
(1,106)

–
2,586

–
–

(445)
–

–
(109)
(107)
3,564

Treasury
shares
£’000

Fair value
reserve
£’000

Retained
earnings
£’000

Equity
attributable
to owners
of the
parent
£’000

Non-
controlling
interest
£’000

Total
equity
£’000

(3,983)
–
–
–

(20,239) 144,133
(38,001)
–
–

–
(116)
(1)

125,624
(38,001)
(116)
(1)

428
(59)
–
–

126,052
(38,060)
(116)
(1)

–

–
–

(117)

(38,001)

(38,118)

(59)

(38,177)

–
–

675
(1,480)

675
–

(675)
–

–
–

445
(11,714)

–
(11,714)

–
–

–
(11,714)

–
–
–
(2,871)

–
–
–
(3,983)

19,971
–
–
(385)

(19,971)
–
–
74,087

–
(109)
(107)
76,251

–
–
–
(306)

–
(109)
(107)
75,945

During the period, 567,665 share options were exercised relating to LSL’s various share option schemes resulting in the shares being sold by the
Employee Benefit Trust. LSL received £nil on exercise of these options.

The notes on pages 128 to 180 form part of these Financial Statements.

Group Statement of Changes in Equity

for the year ended 31 December 2022

Share
premium
account
£’000

Share
capital
£’000

Share-
based
payment
reserve
£’000

Shares
held by
EBT and
SIP
£’000

210

5,629

5,263

(3,063)

–
210
–
–
–

–
–
–
–
–
–
–
210

–
5,629
–
–
–

–
–
–
–
–
–
–
5,629

–
5,263
–
–
–

–
–
–
(1,806)
–
1,977
(103)
5,331

–
(3,063)
–
–
–

–
–
(5,026)
2,632
–
–
–
(5,457)

At 1 January 2022
Prior year restatements
(net of tax)*
At 1 January 2022 (Restated)
Loss for the year (Restated)
Revaluation of financial assets
Tax on revaluations
Total comprehensive loss for the
year
Shares repurchased into treasury
Shares repurchased into EBT
Exercise of options
Dividend paid
Share-based payments
Tax on share-based payments
At 31 December 2022

Treasury
shares
£’000

Fair value
reserve
£’000

Retained
earnings
£’000

Equity
attributable
to owners
of the
parent
£’000

Non-
controlling
interest
£’000

Total
equity
£’000

(15,273) 224,832

217,598

521

218,119

–

–
–
–
–
–

–

(5,716)
(15,273) 219,116
(63,209)
–
–

–
(5,096)
130

–
(3,983)
–
–
–
–
–
(3,983)

(4,966)
–
–
–
–
–
–

(63,209)
–
–
(1)
(11,773)
–
–
(20,239) 144,133

(5,716)
211,882
(63,209)
(5,096)
130

(68,175)
(3,983)
(5,026)
825
(11,773)
1,977
(103)
125,624

–
521
(93)
–
–

(93)
–
–
–
–
–
–
428

(5,716)
212,403
(63,302)
(5,096)
130

(68,268)
(3,983)
(5,026)
825
(11,773)
1,977
(103)
126,052

*See note 36 for details regarding restatements.

During the year ended 31 December 2022, the Trust acquired 1,351,000 LSL shares. During the period, 890,146 share options were exercised relating
to LSL’s various share option schemes resulting in the shares being sold by the Employee Benefit Trust. LSL received £0.8m on exercise of these
options.

The notes on pages 128 to 180 form part of these Financial Statements.

127127

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Notes to the Group Financial Statements

for the year ended 31 December 2023

1. Authorisation of Financial Statements and statement of compliance with UK-adopted IAS

The Group Financial Statements of LSL and its subsidiaries for the year ended 31 December 2023 were authorised for issue by the Board of
Directors on 24 April 2024 and the balance sheet was signed on the Board’s behalf by David Stewart, Group CEO and Adam Castleton, Group CFO.
LSL is a company which is listed on the London Stock Exchange, incorporated and domiciled in England and the Group operates Financial Services,
Surveying & Valuation and Estate Agency Franchising businesses.

2. Accounting policies, judgements and estimates

2.1 Basis of preparation
The accounting policies which follow set out those significant policies which apply in preparing the Financial Statements for the year ended
31 December 2023. The policies have been applied consistently to all years presented. The Group’s Financial Statements are presented in pound
sterling and all values are rounded to the nearest thousand pounds (£’000) except when otherwise indicated.

These Financial Statements have been prepared in accordance with UK-adopted IAS. The Group Financial Statements have been prepared on a going
concern basis under the historical cost convention and on a historical cost basis, except for certain debt and equity financial assets that have been
measured at fair value.

In preparing the Financial Statements management has considered the impact of climate change, taking into account the relevant disclosures in the
Strategic Report, including those made in accordance with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD).
The Group has assessed climate-related risks, covering both physical risks and transition risks. In the short (0-3 years) to medium term (4-9 years),
the impact of climate-rated risks on the Group is expected to be relatively low due to the nature of the Group’s business model. Over the long term
(beyond 10 years), there could be physical risks, such as severe weather, flooding events, increase in temperature and rising sea levels, as well as
transition risks such as policy and regulation changes. The risk to the Group’s own premises as a result of climate change is considered low, the
majority of our property portfolio is leased, and we would not expect significant climate-related costs during the remainder of our current lease
terms. The impact of climate change in the medium to long term is likely to be localised and have varying degrees of impact on the areas where we
work and our revenue profile. This could have an impact on the carrying value of goodwill and investments.

2.2 Basis of consolidation
The consolidated Financial Statements comprise the Financial Statements of the Company and its subsidiaries as at 31 December 2023. The financial
year represents the year from 1 January 2023 to 31 December 2023.

Subsidiaries
Subsidiaries are consolidated from the date that control commences until the date control ceases. A change in the ownership interest of a subsidiary,
without a loss of control, is accounted for as an equity transaction.

Interest in joint ventures
The Group’s share of the results of joint ventures is included in the Group Income Statement using the equity method of accounting. Investment in
joint ventures are carried in the Group Balance Sheet at cost plus post-acquisition changes in the Group’s share of the net assets of the entity, less
any impairment in value. Goodwill relating to the joint venture is included in the carrying amount of the investment and is not tested for impairment
individually. Unrealised gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the
interest in the joint venture.

In addition, when there has been a change recognised directly in the equity of the joint venture, the Group recognises its share of any changes, when
applicable, in the statement of changes in equity.

The Financial Statements of the joint venture are prepared for the same reporting period as the Group. When necessary, adjustments are made to
bring the accounting policies in line with those of the Group.

2.3 Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and position, are set out in the Financial
and Divisional Reviews section (page 14) of the Strategic Report. The financial position of the Group, its cash flows, liquidity position and policy for
treasury and risk management are described in the Financial Review section of the Strategic Report (page 14). Details of the Group’s borrowing
facilities are set out in note 32. The Group’s objectives, policies and processes for managing its capital; its financial risk management objectives;
details of its financial instruments; and its exposures to credit risk and liquidity risk are also set out in note 32. A description of the Group’s principal
risks and uncertainties and arrangements to manage these risks can be found in the Principal Risks and Uncertainties section of the Strategic Report
on page 29.

128

2. Accounting policies, judgements and estimates (continued)

The UK Corporate Governance Code requires the Board to assess and report on the prospects of the Group and whether the business is a going
concern. In considering this requirement, the Directors have taken into account the Group’s forecast cash flows, liquidity, borrowing facilities and
related covenant requirements and the expected operational activities of the Group.

The Group expects to continue to meet its day-to-day working capital requirements through cash flows generated by its trading activities and
available net cash resources (31 December 2023: £35.0m). The Group’s banking facility, a £60.0m committed revolving credit facility (RCF) has a
maturity date of May 2026, having been amended and restated in February 2023. As shown in note 25, the Group have not currently utilised the
facility leaving £60.0m of undrawn committed borrowing facilities in respect of which all conditions precedent had been met. The facility agreement
contains financial covenants, including a minimum net debt to EBITDA ratio. At the balance sheet date, the Group could have drawn a maximum of
c£33.0m from the facility and remain compliant with covenants. However, under the base case and downside scenarios the full facility would not be
available within the going concern period.

LSL has continued to run a variety of scenario models throughout the year to help the ongoing assessment of risks and opportunities. The Group
considered both current trading and external reference points in developing a base case forecast and has assumed inflation and interest rates of 5.0%
and 5.5% respectively in 2024 (4.0% and 5.0% in 2025). The base case forecast prudently assumes a continuation of current trading throughout the
going concern period to 30 June 2025.

A severe downside scenario has been modelled as part of the going concern assessment, which includes the pessimistic assumption that there is a
significant reduction in market transaction volumes reducing below the low point experienced during the global financial crisis and in turn reducing
Group revenue by over 25%. The scenario modelling includes certain mitigating actions, within the Group’s control, however there are further cost
mitigations that could be applied in such a severe scenario. Underpinned by LSL’s strong balance sheet and diverse business revenue streams, the
severe downside financial scenario modelling confirmed that the Group’s current liquidity position would enable the Group to operate under this
scenario to 30 June 2025 within the terms of its current facilities with no breach of banking covenants and therefore it is appropriate to use the going
concern basis of preparation for this financial information.

In reaching its conclusion on the going concern assessment, the Board considered the findings of the work performed to support the Group’s
long-term viability statement. As noted in the Viability Statement, which is included in the Principal Risks and Opportunities section of this Report
(page 29), this included assessing forecasts of severe but plausible downside scenarios related to our principal risks, notably the extent to which
a severe downturn in the UK lending and housing markets, close to levels seen during the financial crisis in 2008, would affect the Group’s base
forecasts.

Having due regard to the scenarios above and after making appropriate enquiries, the Directors have a reasonable expectation that the Group and
the Company have adequate resources to remain in operation to 30 June 2025. The Board has therefore continued to adopt the going concern basis
in preparing this Report.

2.4 Revenue recognition
Revenue is recognised under IFRS 15. The standard is based on a single model that distinguishes between promises to a customer that are satisfied at
a point in time and those that are satisfied over time. Revenue is recognised when performance obligations are fulfilled.

Financial Services
Revenue is earned on mortgage procuration fees and insurance commissions from sales of protection and general insurance policies. Revenue from
mortgage procuration fees is recognised by reference to the completion date of the mortgage/remortgage on the housing transaction and revenue
from insurance commissions is recognised by reference to the date that the policy goes on risk. The commission refund liability (formerly named
lapse provision) associated with insurance commissions is recognised as a reduction in revenue which is calculated with reference to historical
refunds which have occurred, commission refund liabilities are recorded within trade and other payables.

The Group acts as both a principal and agent depending on its arrangements with the lenders and broker firms. In scenarios where the Group
determines that it has control of the service before it is provided to a client, the Group recognises revenue as the gross amount of consideration
expected to be received following satisfaction of the performance obligation. In scenarios where the Group concludes that it does not control the
service before it is provided to a client, the Group recognises revenue on a net basis, being gross consideration less any fee or commission due to a
counterparty.

Estate Agency
At 1 January 2023, the Group’s Estate Agency Division included a network of owned and franchised branches. During the year, the Group has
transitioned to a fully franchised business model for its principal estate agent businesses and the revenue from the formerly owned operations has
been presented as discontinued, see note 2.25 for further details. The accounting policies for both franchise and residential services and lettings, as
well as asset management and conveyancing services, are set out below.

129

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

2. Accounting policies, judgements and estimates (continued)

Franchise services:
Revenue represents the value of commissions, charges for services and fixed fees due to the Group under franchise agreements. The Group earns a
percentage of all sales and lettings income generated by the franchisees. Revenue in respect of commissions due on house sales is recognised at the
point of the relevant property sale, in which the franchisee acts as estate agent, having been exchanged. Revenue in respect of commissions due on
lettings, property management and ancillary products is recognised at the point at which the underlying performance obligation has been delivered
by the franchisee. Revenue for services provided to the franchisee by the Group is recognised in the period to which the services relate, typically
monthly. The franchise agreements include fixed fees for membership of the franchise which are charged per branch on a monthly basis for the term
of the franchise agreement and are recognised over time.

Residential services:

Residential sales:
Revenue from the exchange fees generated in the formerly owned residential sales exchange business described above is recognised by reference to
the legal exchange date of the housing transaction.

Lettings:
Revenue from lettings in the formerly owned lettings business is recognised monthly once the Group has satisfied its performance obligations, such
as the collection of rent.

New build residential sales:
Revenue earned by the Group’s new build residential sales business is recognised by reference to the legal exchange date of the housing transaction.

Conveyancing services:
Where the Group provides conveyancing packaging services, the revenue is recognised by reference to the legal exchange date of the housing
transaction.

Asset management:
Revenue earned from the repossessions asset management business is recognised by reference to the legal exchange date of the housing
transaction.

Surveying & Valuation
Revenue from the supply of surveying and valuation services is recognised upon the completion of the professional survey or valuation by the
surveyor, and therefore at a point in time.

Interest income
Revenue is recognised at a point in time as interest accrues (using the effective interest method – that is the rate that discounts estimated future
cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset).

Dividends
Revenue is recognised when the Group’s right to receive the payment is established.

2.5 Segment reporting
An operating segment is a distinguishable segment of an entity that engages in business activities from which it may earn revenues and incur
expenses and whose operating results are reviewed regularly by the Board. The Board reviews the Group’s operations and financial position as
Financial Services, Surveying & Valuation and Estate Agency Franchising, and therefore considers that it has three operating segments. During the
year, the Group made the strategic decision to convert the entire owned estate agency branch network into franchises, in doing so the Estate Agency
Franchising operating segment became mainly a provider of franchise services.

Within the Estate Agency Franchising operating segment, the only remaining owned operations relate to the Group’s new build residential sales,
conveyancing packaging and asset management businesses which are LSL Land & New Homes Ltd, Homefast Property Services Limited, LSL Corporate
Client Services Limited and Templeton LPA Limited.

The information presented to the Directors directly reflects the Group Underlying Operating Profit as defined in the alternate performance measures
(APM) in note 5 to these Financial Statements and they review the performance of the Group by reference to the results of the operating segments
against budget.

130

2. Accounting policies, judgements and estimates (continued)

2.6 Alternative Performance Measures (APMs)
In reporting financial information, the Group presents a number of APMs that are designed to assist with the understanding of underlying Group
performance. The Group believes that the presentation of APMs provides stakeholders with additional helpful information on the performance of the
business. APMs are also used to help enhance comparability of information between reporting periods. The Group does not consider APMs to be a
substitute for or superior to IFRS measures and the Group’s APMs are defined, explained and reconciled to the nearest statutory measure in notes 5,
12 and 35.

2.7 Discontinued operations
The Group has classified its previously owned network of estate agency branches as a discontinued operation for the reporting period ending
31 December 2023. The Group operated a network of both owned and franchised branches prior to disposing of its entire owned network. The
owned network was determined to be a separate major line of business because it made up the majority of the branch network, its revenue, costs
and risk profile was significantly different to that of franchise and its cash flows could be clearly distinguished.

The owned branch network became a discontinued operation on 1 April 2023 when it was classified as held for sale. The Group has presented both
the current and comparative income statement and statement of comprehensive income as if the owned network had been discontinued from
1 January 2022.

Discontinued operations are presented in the Group Income Statement as a single line, which comprises the post-tax profit or loss of the
discontinued operation along with the post-tax gain or loss recognised on the re-measurement to fair value less costs to sell on disposal of the assets
or disposal groups constituting discontinued operations.

2.8 Exceptional items
Exceptional items are those which are material by size and are both non-recurring and unusual in nature. These items are presented within their
relevant income statement category but highlighted separately on the face of the income statement. Items that management considers fall into this
category are also disclosed within the notes to the Financial Statements (see notes 6 and 9).

Due to the nature and expected infrequency of these items, separate presentation helps provide a better indication of the Group’s underlying
business performance. This allows shareholders to better understand the elements of financial performance in the year, so as to facilitate comparison
with prior periods and to better assess trends in financial performance.

Income taxes

2.9
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates
and laws that are enacted or substantively enacted by the balance sheet date. Management periodically evaluates positions taken in the tax returns
with respect to the situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in
the Financial Statements, with the following exceptions:

• where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business

combination that at the time of the transaction affects either accounting nor taxable profit or loss;

• in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary

differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and

• deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available, against which the deductible

temporary differences, carried forward tax credits or tax losses can be utilised.

Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is
realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are
reassessed at each reporting period and are recognised to the extent that it has become probable that future taxable profits will allow the deferred
tax asset to be recovered.

Deferred income tax assets and liabilities are offset, only if a legally enforceable right exists to offset current tax assets against current tax liabilities,
the deferred income taxes relate to the same taxation authority and that authority permits the Group to make a single net payment. Income tax is
charged or credited directly to other comprehensive income (OCI) or equity, if it relates to items that are charged or credited in the current or prior
periods to OCI or equity respectively. Otherwise, income tax is recognised in the income statement.

131

2. Accounting policies, judgements and estimates (continued)

2.10 Share-based payment transactions
The equity share option programme allows Group employees to acquire LSL shares. The fair value of the options granted is recognised as an
employee expense with a corresponding increase in equity in the case of equity-settled schemes. The fair value is measured at grant date and spread
over the period during which the employees become unconditionally entitled to the options. The fair value of employee share option plans, which are
all equity-settled, is calculated at the grant date using the Black Scholes model. The resulting cost is charged to the Group Income Statement over the
vesting period. The value of the charge is adjusted to reflect expected and actual levels of vesting.

No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions where vesting is conditional upon a market or
non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-market vested condition is satisfied, provided
that all other performance and/or service conditions are satisfied.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further details are
given in note 12 to these Financial Statements).

2.11 Business combinations and goodwill
The Group accounts for business combinations using the acquisition method of accounting when control is transferred to the Group. On acquisition,
the assets, liabilities, and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of
acquisition over the fair values of the net assets acquired is recognised as goodwill.

Deferred and contingent consideration, resulting from business combinations is valued at fair value at the acquisition date as part of the business
combination. When the contingent consideration meets the definition of a financial liability, it is subsequently measured to fair value at each
reporting date. The determination of the fair value for deferred and contingent consideration is based on discounted cash flows and is included
within financial liabilities on the balance sheet.

After the initial recognition, goodwill is measured at cost less accumulated impairment losses, for the purposes of impairment testing, goodwill
acquired in a business combination is allocated to each of the Group’s cash generating units (CGU) that are expected to benefit from the
combination. Where goodwill has been allocated to a CGU and part of the operations within that unit are disposed of, the goodwill associated with
the disposed operation is included in the carrying amount when determining the gain or loss on disposal. Goodwill disposed in these circumstances is
measured based on the relative values of the disposed operation and the portion of the CGU retained.

2.12 Intangible assets
Intangible assets such as brand names, lettings contracts, franchise agreements, customer relationships and in-house software are measured at cost
less accumulated amortisation and impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised
and the related expenditure is reflected in the profit or loss in the period in which the expenditure is incurred.

Intangible assets acquired in a business combination are deemed to have a cost to the Group of the asset’s fair value at the acquisition date. The fair
value of an intangible asset reflects market expectations about the profitability that the future economic benefits embodied in the asset will flow up
to the Group.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognised in the income statement when the asset is derecognised.

The useful lives of intangible assets are assessed as either finite or indefinite.

Brand names are not amortised as the Directors are of the opinion that they each have an indefinite useful life based on the expectation that there
is no foreseeable limit to the period over which each of the assets are expected to generate net cash inflows to the businesses. The Directors are
confident that trademark registration renewals will be filed at the appropriate time and sufficient investment will be made in terms of marketing
and communication to maintain the value inherent in the brands, without incurring significant cost. All brands recognised have been in existence for
a number of years and are not considered to be at risk of obsolescence from technical, technological nor commercial change. Whilst operating in
competitive markets they have demonstrated that they can continue to operate in the face of such competition and that there is expected to remain
an underlying market demand for the services offered. The lives of these brands are not dependent on the useful lives of other assets of the entity.

Franchise agreements entered into by the Group (as franchisor) as part of contractual arrangements concerning the disposal of previously owned
branches are recognised as intangible assets. Franchise intangible assets are initially recognised at fair value level 3 and subsequently amortised on
a straight-line basis over their useful economic lives, being the term of the agreement. The franchise intangible assets are being written off over a
remaining life of 15 years as based on the agreements, this is the most likely minimum term. The life of the relationship is assessed annually.

132

2. Accounting policies, judgements and estimates (continued)

All other intangible assets are amortised on a straight-line basis over their useful economic lives of 12 months for order books, two years for customer
contacts, five years for lettings contracts and between three and five years for in-house software.

2.13 Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses. Property, plant and equipment is depreciated
on a straight-line basis to its residual value over its anticipated useful economic life:

Office equipment, fixtures and fittings
Computer equipment
Motor vehicles
Leasehold improvements
Freehold and long leasehold property

– over three to seven years
– over three to four years
– over three to four years
– over the shorter of the lease term or ten years
– over fifty years or the lease term whichever is shorter

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the
asset) is included in the income statement when the asset is derecognised. These assets’ residual values, useful lives and methods of depreciation are
reviewed at each financial year end, and adjusted prospectively, if appropriate.

2.14 Financial instruments
Financial assets and financial liabilities are recognised in the Group’s Balance Sheet when the Group becomes a party to the contractual provisions of
the instrument. When financial assets are recognised initially, they are measured at fair value, being the transaction price plus, in the case of financial
assets not at fair value through the income statement, directly attributable transaction costs. Financial assets are derecognised when the Group
no longer has the rights to cash flows, the risks and rewards of ownership or control of the asset. Financial liabilities are derecognised when the
obligation under the liability is discharged, cancelled or expires. The subsequent measurement of financial assets depends on their classification.

The Group’s accounting policy for each category of financial instruments is as follows:

Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair value through
OCI when they meet the definition of equity under IFRS 9 Financial Instruments and are not held for trading. The classification is determined on an
instrument-by-instrument basis. Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other
income in the statement of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a
recovery of part of the cost of the financial asset, in which case such gains are recorded in OCI. Equity instruments designated at fair value through
OCI are not subject to impairment assessment.

Financial assets designated at fair value through the income statement
Gains and losses arising from the changes in the fair value of equity investments are in the income statement.

Cash and cash equivalents
Cash and cash equivalents include cash in hand and on demand deposits and fixed-term deposits with original maturities of three months or less with
the Group’s relationship banks. Bank overdrafts which are repayable on demand are included in cash and cash equivalents only when there is a legal
right to offset and an intention to settle net, otherwise these amounts are classified separately as liabilities on the balance sheet. For the purposes
of the statement of cash flow, bank overdrafts are a component of cash and cash equivalents as they are repayable on demand and form an integral
part of the Group’s cash management.

Trade receivables
Trade receivables do not carry any interest and are stated at their original invoiced value as reduced by appropriate allowances for estimated
irrecoverable amounts. The expected credit loss model under IFRS 9 is applied to trade and other receivables. The chosen method of recognising
the expected credit loss across the Group is the simplified approach allowing a provision matrix to be used, which is based on the expected life of
trade receivables and historic default rates, default being defined as when impaired debts are assessed as uncollectable. The carrying amount of the
receivables is reduced through use of an allowance account and impaired debts are derecognised when they are assessed as uncollectable.

Trade payables
Trade payables are stated on the balance sheet at their original invoice value.

133

2. Accounting policies, judgements and estimates (continued)

Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at fair value less directly attributable transaction costs. After initial recognition, interest-bearing loans
and borrowings are subsequently measured at amortised cost using the effective interest method. Gains and losses arising on repurchase, settlement
or otherwise cancellation of liabilities are recognised respectively in finance income and finance costs. Finance costs comprise interest payable on
borrowings calculated using the effective interest rate method and are recognised on an accruals basis. Borrowing costs are recognised as an expense
when incurred.

2.15 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual
impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. For the purposes of impairment testing,
assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the
cash inflows of other assets or cash generating units (CGUs). An asset’s or CGU’s recoverable amount is the higher of its fair value less costs to sell
(FVLCTS) and value-in-use (VIU). Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount. In assessing an asset’s VIU, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of
continuing operations are recognised in the income statement in those expense categories consistent with the function of the impaired asset.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable
amount.

2.16 Loans to franchisees and appointed representatives
The Group issues loans to its franchisees and appointed representatives, the Group’s objective is to hold these loans to collect contractual cash flows
and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are
directly attributable to their issue and are subsequently carried at amortised cost, less provision for impairment.

Loans to appointed representatives are made in the normal course of business and on standard terms, the duration is typically three years and the
loans are offered on an interest-free basis. The Group calculates the difference between the par value and fair value on recognition using a market
rate of interest and charges this amount to finance costs in the Group Income Statement, the residual loan amount is recorded as a financial asset at
amortised cost.

Impairment provisions against loans to franchisees and appointed representatives are recognised based on an expected credit loss model. The
methodology used to determine the amount of provision is based on whether there has been a significant increase in credit risk since initial
recognition of these financial assets and is calculated by considering the cash shortfalls that would be incurred and probability of these cash shortfalls
using the Group’s model. Where a significant increase in credit risk is identified, lifetime expected credit losses are recognised; alternatively, if there
has not been a significant increase in credit risk, a 12-month expected credit loss is recognised. Such provisions are recorded in a separate allowance
account with the loss being recognised within operating expenses in the Group Income Statement. On confirmation that a loan will not be collectable,
the gross carrying value of the asset is written off against the associated provision.

2.17 Gain or loss on disposal to a joint venture
In circumstances where a former subsidiary is sold to a joint venture through a downstream transaction, the Group recognises the full gain or loss in
the income statement, consistent with IFRS 10. The resultant gain or loss is calculated as consideration received less the net assets of the subsidiary.

2.18 Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event and it is
probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability.

134

2. Accounting policies, judgements and estimates (continued)

2.19 Leases
Leases are defined as a contract which gives the right to use an asset for a period of time in exchange for consideration. As a lessee, the Group
recognises three classes of leases on this basis:

• Property leases

• Motor vehicle leases

• Other leases

Property leases and motor vehicle leases have been recognised on the Group Balance Sheet, in financial liabilities, by recognising the future cash
flows of the lease obligation, discounted using the incremental borrowing rate of the Group, adjusted for factors such as swap rates available and the
credit risk of the entity entering into the lease.

Corresponding right-of-use assets have been recognised on the Group Balance Sheet under property, plant and equipment and have been measured
as being equal to the discounted lease liability plus any lease payments made at or before the inception of the lease and initial direct costs, less any
lease incentives received. Cash flows from these leases have been recognised by including the principal portion of the lease payments in cash flows
from financing activities and the interest portion of the lease payment recognised through operating activities.

Other leases are leases for low value items or leases whose contract term is less than 12 months. The practical expedient not to recognise right-of-
use assets and lease liabilities for these leases has been utilised by the Group. A charge for these leases has been recognised through the income
statement as an operating expense. The cash flows relating to low value and short-term leases have been recognised in net cash flows from operating
activities.

No leases where the Group is a lessee, or a lessor contain variable lease payments.

In scenarios where the Group is an intermediate lessor, the sublease is classified as a finance lease if substantially all of the risk and rewards incidental
to the ownership of the leased asset have transferred to the sublessee, otherwise the sublease is classified as an operating lease. The Group accounts
for finance subleases by derecognising the existing right-of-use asset at the effective date of the sublease and recognising a receivable for the Group’s
net investment in the sublease, with any resultant gain/(loss) recognised in the income statement. The net investment in the leases equals remaining
fixed payments, discounted at the interest rate implicit in the lease. After initial recognition, the Group recognises finance income over the remaining
lease using the amortised cost method. The net investment in sublease is subsequently reviewed for impairment under IFRS 9 (further details are
given in note 27 to these Financial Statements).

Rental income including the effect of lease incentives from sublet properties and vehicles are recognised over time on a straight-line basis,
throughout the lease term for operating leases or by recognising in the balance sheet a lease receivable equal to the investment in the lease for
finance leases. Subleases are assessed as finance leases or operating leases in reference to the right-of-use asset the lease generates.

2.20 Assets and liabilities held for sale
A disposal group is classified as held for sale where it is available for immediate sale, in its present condition and it is highly probable that its value will
be recovered through a sale rather than continuing use. Disposal groups are measured at the lower of carrying value and fair value less costs to sell
(FVLCTS) and their assets and liabilities are presented separately from other assets and liabilities on the balance sheet.

2.21 Shares held by employee benefit trust (EBT) and share incentive plan (SIP)
The Group has an employee share scheme (ESOT) for the granting of LSL shares to Executive Directors and selected senior employees and an
employee share incentive plan. Shares in LSL held by the ESOT and the trusts are treated as treasury shares and presented in the balance sheet as a
deduction from equity. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of the Group’s own equity
instruments. The finance costs and administration costs relating to the ESOT and the trusts are charged to the income statement. Dividends earned
on shares held in the ESOT and the trusts have been waived. The ESOT and trust shares are ignored for the purposes of calculating the Group’s
earnings per share (EPS).

2.22 Treasury shares
Where the Group repurchases shares from existing shareholders, they are held as treasury shares and are presented as a deduction from equity. No
gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Treasury shares
are ignored for the purposes of calculating the Group’s EPS and adjusted EPS.

135

2. Accounting policies, judgements and estimates (continued)

2.23 Dividends
Equity dividends are recognised when they become legally payable. In the case of interim dividends to shareholders, this is when paid. In the case of
final dividends, this is when approved by shareholders at each AGM.

2.24 Pensions
The Group operates a defined contribution pension scheme for employees of all Group companies. The assets of the scheme are invested and
managed independently of the finances of the Group. The pension cost charge represents contributions payable in the year.

2.25 Critical accounting judgements and estimates
The preparation of the Group’s Financial Statements requires the use of estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the Financial Statements and the reported amounts of revenue and expenses during the year. These estimates and
judgements are based on Management’s best knowledge of the amount, event or actions and actual results ultimately may differ from those
estimates. Group Management believes that the estimates and assumptions listed below have a significant risk of resulting in a material adjustment
to the carrying amounts of assets and liabilities.

Carrying value of goodwill and intangible assets (estimate)
The Group carries out impairment reviews of intangible assets when there is an indication that the carrying value may not be recoverable and tests
the carrying value of goodwill and indefinite life intangibles at least annually, each of the Group’s three segments hold goodwill or indefinite life
intangible assets and therefore an annual impairment review is required.

The Group disposed of £38.1m of goodwill and £1.5m of intangible assets in the period to 31 December 2023, remaining goodwill of £16.9m includes,
Surveying & Valuation (£9.6m), Estate Agency Franchising (£0.3m) and Financial Services (£7.0m). At 31 December 2023, the Group held £21.4m
of intangible assets on the balance sheet (2022: £14.7m), of which £6.9m are indefinite life intangible assets relating to brand (2022: £6.9m), the
remaining balance of £14.5m is split between franchise intangibles £11.7m (2022: £1.5m) and software £2.8m (2022: £4.7m).

The former Estate Agency impairment review (including the owned and franchise network) had a low level of headroom due to the high value of
goodwill in the segment, this made the model particularly sensitive to changes in forecast assumptions and discount rate. The Estate Agency segment
disposed of £38.1m of goodwill associated with the owned network, replaced by a franchise asset of £11.7m in the new franchise operation (Estate
Agency Franchising), the value of brand has transferred from Estate Agency to Estate Agency Franchising and has remained consistent period on
period. Furthermore, of the Group’s three Divisions, Estate Agency has historically been the most sensitive to changes in assumptions, Surveying &
Valuation and Financial Services have always previously had greater levels of headroom and therefore have typically been less sensitive.

The impairment tests are carried out by CGU and reflect the latest Group budgets and forecasts approved by the Board. The budgets and forecasts
are based on various assumptions relating to the Group’s business including assumptions relating to market outlook, observable trends, and
profitability. A pre-tax discount rate has been used to discount the CGU cash flows:

• Financial Services Division – 15.6%

• Surveying & Valuation Division – 15.6%

• Estate Agency Franchising Division – 15.7%

A terminal value is also applied using a long-term growth rate of 2.0%. A sensitivity analysis has been performed allowing for possible changes to the
assumptions in the impairment model, see note 17 for details.

Commission refund liability (formerly named lapse provision) (estimate)
Certain subsidiaries sell life assurance products which are cancellable without a notice period, and if cancelled within a set period require that a
portion of the commission earned must be repaid. The commission refund liability is recognised as a reduction in revenue which is calculated with
reference to historic refunds which have occurred. Details of the assumptions applied to commission refund liability and the impact of changes in
average lapse rates are shown in note 24.

Professional Indemnity (PI) claims – valuation (estimate)
A provision is made for professional indemnity claims and potential claims that arise during the normal course of business in relation to valuations
performed by the Surveying & Valuation Division. This includes an estimate for the settlement of claims already received as well as claims incurred
but not yet reported (IBNR). Details of the assumptions applied to PI claims areas are disclosed in note 26 to these Financial Statements. A sensitivity
analysis which illustrates the impact of different assumptions on the required PI Costs provision is also included in note 26.

136

2. Accounting policies, judgements and estimates (continued)

Contingent consideration receivable (estimate)
Deferred and contingent consideration, resulting from disposals of businesses is valued at fair value at the disposal date. When the contingent
consideration meets the definition of a financial asset, it is subsequently measured to fair value at each reporting date. The determination of the fair
value for deferred and contingent consideration is based on discounted cash flows and is included within financial assets on the balance sheet. Any
changes to fair value are recorded in the operating results of the income statement, with the effects of discounting being recorded in finance income.

The receivables are disclosed in note 19 to these Financial Statements. A sensitivity calculation showing the impact of changes to future performance
assumptions is also included in note 19.

Valuation of franchise intangible assets (estimate)
When valuing franchise intangible assets associated with the franchising of previously owned estate agency branches, management estimate the
expected future cash flows under the agreement and choose a suitable discount rate to calculate the present value of those cash flows. The budgets
and forecasts are based on various assumptions relating to the future performance of franchised branches including assumptions relating to market
outlook and observable trends. A sensitivity analysis has been performed allowing for possible changes to assumptions in the valuation of franchise
intangible assets, see note 17 for details.

Dilapidation provisions (estimate)
When valuing dilapidation provisions the Group estimates the potential future liability based on an average dilapidations rate per square foot or
a cost estimate provided for each property which has satisfied the Group’s recognition criteria. The future liability is then discounted to present
value based on the estimated timing of the outflow. A sensitivity analysis has been performed allowing for possible changes to assumptions in the
dilapidation provision, see note 26 for details.

Exceptional items (judgement)
The Group presents as exceptional items on the face of the income statement those material items of income and expense which, because of the
nature and expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better the
elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends in financial performance.

Classification of discontinued operations (judgement)
The Group disposed of its entire owned estate agency network during the period, judgement was required to determine whether the disposal
represented a discontinued operation. The key considerations made by Management in determining whether the disposals of the owned network
met the definition of a discontinued operation are noted below:

• The Group ceased to operate all remaining owned estate agency branches and has changed strategic direction in being an operator of franchised

estate agencies only.

• The owned estate agencies constitute a component of the Group in that the operations could be clearly distinguished operationally, and for

financial reporting purposes, from the rest of the Group.

• The owned estate agency operations constituted a separate major line of business which has been discontinued, prior to transitioning to a fully

franchised model the Group’s weighting of owned vs franchised branches was 63% / 37%.

• The risk profile of the Estate Agency Division changed significantly on moving to a fully franchised model, the customer base has changed to

franchisees only, the new segment’s revenue (now includes only commission payments, charges for services and fixed charges), as well as the high
fixed cost of operating branches (c£125m) have been reduced substantially.

Management considered the requirements of IFRS 5 in the context of the disposal and concluded that the disposal did meet the definition of a
discontinued operation. The Group has retained its new build residential sales, conveyancing services and asset management business, these
businesses were previously included in the Estate Agency Division and accounted for less than 20% of the segment’s revenue in 2022. The businesses
were not part of the disposed owned network and are now included within the Estate Agency Franchising Division.

2.26 New standards and interpretations not applied
The Group is required to comply with the requirements of IFRS 17 Insurance Contracts from 1 January 2023. The new accounting standard sets out
requirements that the Group should apply in reporting information about insurance contracts it issues and reinsurance contracts it holds. The Group
has undertaken an assessment of its insurance contracts, including those held under its captive insurance company, Albany Insurance Company
(Guernsey) Limited (Albany) and has concluded that there is no impact on the Group Financial Statements as Albany does not write insurance
contracts outside of the Group, nor does it enter into reinsurance arrangements.

The amendments to IAS 1 – Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants which are required to be
effective from 1 January 2024 are currently under review. The Group has chosen not to adopt the amended standard early.

137

3. Disaggregation of revenue

Set out below is the disaggregation of the Group’s revenue from contracts with customers:

Year ended 31 December 2023

Financial
Services
£’000

Surveying &
Valuation
£’000

Residential
sales
exchange*
£’000

Lettings*
£’000

Estate
Agency
Franchising
income
£’000

Asset
management
£’000

Other
£’000

Total
£’000

Timing of revenue recognition
Services transferred at a point in time
Services transferred over time
Total revenue from contracts with customers

51,692
–
51,629

67,834
–
67,834

4,115
–
4,115

950
170
1,120

13,529
952
14,481

3,907
113
4,020

1,156
–
1,156

143,183
1,235
144,418

*Continuing operations residential and lettings revenues include Marsh & Parsons prior to disposal, and revenue from the Group’s new build residential sales and
conveyancing services businesses.

During the year 14% (2022: 12%) of the Group’s revenue was generated from a single large customer within the Surveying & Valuation Division. The
revenue recorded within continuing operations in relation to this customer during the year was £19.9m (2022: £26.0m).

Year ended 31 December 2022 (Restated)

Timing of revenue recognition
Services transferred at a point in time
Services transferred over time
Total revenue from contracts with
customers

Revenue from services
Operating revenue
Rental income
(Loss)/gain on fair value (note 19)
Other gains
Other operating (loss)/income
Total revenue and operating income

Financial
Services
£’000

Surveying &
Valuation
£’000

Residential
sales
exchange
£’000

Lettings
£’000

81,681
–

93,228
–

15,532
–

16,876
2,337

Estate
Agency
income
£’000

2,656
–

Asset
management
£’000

Other
£’000

Total
£’000

2,811
1,150

1,201
–

213,985
3,487

81,681

93,228

15,532

19,213

2,656

3,961

1,201

217,472

2023
£’000
144,418
144,418
–
(279)
68
(211)
144,207

Restated
2022
£’000
217,472
217,472
656
678
–
1,334
218,806

4. Segment analysis of revenue and operating profit

For the year ended 31 December 2023 LSL has reported three operating segments: Financial Services; Surveying & Valuation; and Estate Agency
Franchising, see Strategic Report for details regarding each Division. During the year the Group disposed of its entire owned estate agency branch
network and in doing so transitioned to an operator of franchised estate agencies only. The Estate Agency segment previously included the Group’s
owned network, pre-existing franchise network, new build residential sales, conveyancing services and asset management businesses. The Estate
Agency segment has been replaced by Estate Agency Franchising which includes the Group’s franchise operations, new build residential sales,
conveyancing services and asset management businesses. The Group’s asset management business will transfer from Estate Agency Franchising to
Surveying & Valuation following changes in management responsibilities from 1 January 2024. Management deemed the Group’s asset management
operations, including the class of customer for its services, are more closely aligned to the Surveying & Valuation Division after the Estate Agency
Division’s transformation into a franchise model. Internally, the Chief Operating Decision Maker has begun monitoring the performance of the asset
management businesses as part of the Surveying & Valuation segment from 1 January 2024.

Operating segments
Each reportable segment has various products and services and the revenue from these products and services are disclosed on pages 14 to 22 under
the Business Review section of the Strategic Report.

138

4. Segment analysis of revenue and operating profit (continued)

The Management Team monitors the operating results of its segments separately for the purpose of making decisions about resource allocation and
performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects, as explained in the table
below, is measured differently from operating profit or loss in the Group Financial Statements. Head office costs, Group financing (including finance
costs and finance income) and income taxes are managed on a Group basis and are not allocated to operating segments.

Reportable segments
The following table presents revenue and profit information regarding the Group’s reportable segments for the financial year ended 31 December
2023 and financial year ended 31 December 2022 respectively.

Year ended 31 December 2023

Income statement information
Total revenue from external customers from continuing
operations
Introducers’ fee
Revenue from continuing operations
Revenue from external customers from discontinued
operations
Introducers’ fee
Total revenue from continuing and discontinued operations
Segmental result:
– Group Underlying Operating profit/(loss) from continuing
operations
– Operating profit/(loss)
Finance income
Finance costs
Profit before tax
Loss before tax from discontinued operations
Loss before tax
Taxation
Loss for the year
Balance sheet information
Segment assets – intangible
Segment assets – other
Total segment assets
Total segment liabilities
Net assets
Other segment items
Capital expenditure including intangible assets
Depreciation
Amortisation of intangible assets
Exceptional gains
Exceptional costs
Share of results in joint venture
PI Costs provision
Dilapidation provision
Restructuring provision
Other provision
Onerous leases provision
Share-based payment

Financial
Services
£’000

Surveying
& Valuation
£’000

Estate Agency
Franchising
£’000

Unallocated
£’000

Total
£’000

53,284
(1,592)
51,692

–
–
51,692

7,022
5,049

8,893
23,439
32,332
(14,476)
17,856

(2,065)
(590)
(1,733)
8,981
(9,275)
(390)
(905)
–
–
–
–
54

67,834
–
67,834

–
–
67,834

5,398
2,000

11,626
12,063
23,689
(13,728)
9,961

(536)
(1,754)
(46)
339
(3,661)
–
(2,313)
–
–
–
–
(30)

24,892
–
24,892

30,750
1,592
57,234

–
–
–

5,637
4,364

(7,738)
(7,666)

17,761
12,530
30,291
(19,510)
10,781

(255)
(1,018)
(443)
–
(831)
–
–
(5,691)
(2,069)
(571)
(1)
1

36
63,176
63,212
(25,865)
37,347

–
–
(36)
–
–
–
–
–
–
–
–
139

146,010
(1,592)
144,418

30,750
1,592
176,760

10,319
3,747
2,817
(1,701)
4,863
(45,425)
(40,562)
2,502
(38,060)

38,316
111,208
149,524
(73,579)
75,945

(2,856)
(3,362)
(2,258)
9,320
(13,767)
(390)
(3,218)
(5,691)
(2,069)
(571)
(1)
164

Unallocated net assets comprise intangible assets and plant and equipment £1.0m, other assets £4.2m, cash £58.0m, accruals and other payables
£2.8m, overdraft of £23.1m. Unallocated result comprises costs relating to the Parent Company.

139

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

4. Segment analysis of revenue and operating profit (continued)

Year ended 31 December 2022 (Restated)

Income statement information
Total revenue from external customers from continuing
operations
Introducers’ fee
Revenue from continuing operations
Revenue from external customers from discontinued
operations
Introducers’ fee
Total revenue from continuing and discontinued operations
Segmental result:
– Group Underlying Operating profit/(loss)
– Operating profit/(loss)
Finance income
Finance costs
Loss before tax
Loss before tax from discontinued operations
Loss before tax
Taxation
Loss for the year
Balance sheet information
Segment assets – intangible
Segment assets – other
Total segment assets
Total segment liabilities
Net assets
Other segment items
Capital expenditure including intangible assets
Depreciation
Amortisation of intangible assets
Exceptional gains
Exceptional costs
Share of results in joint venture
PI Costs provision
Onerous leases provision
Share-based payment

Financial
Services
£’000

Surveying
& Valuation
£’000

Estate Agency
Franchising
£’000

Unallocated
£’000

Total
£’000

87,437
(5,756)
81,681

–
–
81,681

12,841
(7,179)

11,750
24,182
35,932
(20,983)
14,949

(1,888)
(810)
(2,546)
–
(17,458)
(494)
–
–
(16)

93,228
–
93,228

–
–
93,228

20,378
20,799

11,217
9,236
20,453
(14,926)
5,527

(736)
(1,755)
(36)
694
–
–
2,341
–
(237)

42,563
–
42,563

98,510
5,756
146,829

–
–
–

3,949
(26,822)

(7,295)
(8,498)

46,656
64,915
111,571
(46,824)
64,747

(886)
(3,742)
(205)
–
(30,858)
–
–
14
(80)

72
69,417
69,489
(28,660)
40,829

(343)
(1,305)
–
–
–
–
–
–
(1,527)

223,228
(5,756)
217,472

98,510
5,756
321,738

29,873
(21,700)
76
(2,147)
(23,771)
(34,674)
(58,445)
(4,857)
(63,302)

69,695
167,750
237,445
(111,393)
126,052

(3,853)
(7,612)
(2,787)
694
(48,316)
(494)
2,341
14
(1,860)

Unallocated net assets comprise intangible assets and plant and equipment £2.0m, other assets £6.3m, cash £61.2m, accruals and other payables
£2.2m, current and deferred tax liabilities £2.0m, overdraft of £24.5m. Unallocated result comprises costs relating to the Parent Company.

140

5. Group and Divisional Underlying Operating Profit

Group and Divisional Underlying Operating Profit are alternative performance measures (APMs) used by the Directors and Group Management to
monitor performance of operating segments against budget. It is calculated as (loss)/profit before tax adjusted for the items set out below. The
Group’s APMs are defined, explained, and reconciled to their closest statutory measures in note 35.

Year ended 31 December 2023

Profit/(loss) before tax
Net finance income/(cost)
Operating (loss)/profit per
income statement
Operating Margin
Adjustments:
Share-based payments
Amortisation of intangible
assets
Exceptional gains
Exceptional costs
Contingent consideration
payable
Underlying Operating
Profit/(Loss)
Underlying Operating
Margin

Surveying
& Valuation
£’000

Estate Agency
Franchising
£’000

Unallocated
£’000

5,117
(753)

4,364
17.5%

(8,678)
1,012

(7,666)
–

IFRS reported
total from
continuing
operations
£’000

4,863
(1,116)

3,747
2.6%

Discontinued
operations
£’000

(45,425)
110

Total including
discontinued
operations
£’000
(40,562)
(1,006)

(45,315)
(140.1%)

(41,568)
(23.5%)

(1)

(139)

(164)

(109)

443
–
831

–

36
–
–

2,258
(9,320)
13,767

402
–
43,883

2,660
(9,320)
57,650

–

Financial
Services
£’000

5,848
(799)

5,049
9.8%

(54)

1,733
(8,981)
9,275

2,576
(576)

2,000
2.9%

46
(339)
3,661

–

7,022

5,398

5,637

(7,738)

10,319

(975)

9,344

13.6%

8.0%

22.6%

–

7.1%

(3.0%)

5.3%

Year ended 31 December 2022 (Restated)

Financial
Services
£’000

(7,183)
4

(7,179)
(8.8%)

2,546
–
17,458

Surveying
& Valuation
£’000

20,921
(122)

20,799
22.3%

237

36
(694)
–

Estate Agency
£’000

Unallocated
£’000

(27,731)
909

(26,822)
(63.0%)

(9,778)
1,280

(8,498)
–

IFRS reported
total from
continued
operations
£’000

(23,771)
2,071

Discontinued
operations
£’000

(34,674)
346

Total including
discontinued
operations
£’000
(58,445)
2,417

(21,700)
(10.0%)

(34,328)
(32.9%)

(56,028)
(17.4%)

1,527

1,860

117

1,977

205
–
30,858

–
–
–

2,787
(694)
48,316

1,233
–
38,939

4,020
(694)
87,255

–

(372)

(324)

(696)

–

(696)

12,841

20,378

3,949

(7,295)

29,873

5,961

35,834

15.7%

21.9%

9.3%

–

13.7%

5.7%

11.1%

141

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

6. Discontinued operations

On 4 May 2023, the Group announced that its entire owned estate agency network of 183 branches would become franchises. The operations of
the previously owned network were franchised to a combination of new and existing franchisees between 4 May and 31 May. The operations of the
branches were sold to the franchisees through either asset or share sales.

Following completion of these franchise agreements, LSL became one of the largest providers of estate agency franchise services in the UK, supplying
services to a network of just over 300 branches. The Group previously operated both franchised and owned branch business models, and by
disposing of all owned branches the Group now no longer operates as a principal in an estate agency business and has changed to solely operating as
the franchisor of estate agents.

At 31 December 2023, the owned branch network of estate agencies was classified as a discontinued operation and presented as such within the
Financial Statements. The financial performance and cash flow information presented here are for the five months ended 31 May 2023 and year
ended 31 December 2022.

2023
£’000
32,342

(20,660)
(1,150)
(11,509)
2
(55)
(402)
(9,049)
(10,481)
–
(110)
(110)
(10,591)
(668)
(11,259)
(34,834)
–
(34,834)
(46,093)

2023
£’000
(3,524)
(671)
(935)
(5,130)

2022
£’000
104,266

(61,244)
(4,017)
(33,052)
8
(117)
(1,233)
(38,939)
(34,328)
4
(350)
(346)
(34,674)
(1,837)
(36,511)

2022
£’000
7,087
(672)
(2,887)
3,528

Financial performance and cash flow information

Revenue
Operating Expenses:
Employee and subcontractor costs
Depreciation on property, plant and equipment
Other operating costs
Gain on sale of property, plant and equipment
Share-based payments
Amortisation of intangible assets
Exceptional costs
Group operating loss
Finance income
Finance costs
Net finance costs
Loss before tax
Taxation charge
Loss for the year
Loss on sale of discontinued operation
Attributable tax expense
Loss on sale of discontinued operation
Loss after tax for the period from discontinued operation

The net cash flows (incurred)/generated by discontinued operations are, as follows:

Operating
Investing
Financing
Net cash (outflow)/inflow

142

6. Discontinued operations (continued)

Loss on disposal
Details of the sale of the operations:

Consideration received or receivable:
Cash
Franchise intangible
Directly attributable costs
Total disposal consideration
Carrying amount of net assets sold
Loss on sale before tax
Tax
Loss on sale after tax*

2023
£’000

144
10,707
(3,334)
7,517
(42,351)
(34,834)
–
(34,834)

*Loss on sale after tax is wholly attributable to owners of the Parent

The total disposal consideration recognised includes cash of £0.1m, a franchise intangible asset of £10.7m less directly attributable costs of £3.3m.
A franchise intangible asset of £10.7m has been calculated using expected future cash flows that will be generated from the franchise agreement,
discounted using a post-tax discount rate of 11.8% (the Group’s WACC at the date of the agreement). A term of 15 years has been applied to the cash
flows, consistent with management’s estimate of most likely minimum term per the franchise agreements. Market growth assumptions have been
applied to 2024 and 2025, with a long-term growth rate of 2.0% applied thereafter.

The directly attributable costs incurred of £3.3m include legal, advisory and support costs of £1.4m, of which £1.0m relates to a provision for legal
expenses associated with the transfer of leases to the franchisees which the Group agreed to pay up to a certain amount per lease as part of the
franchise agreement. A further £1.9m relates to committed branch work costs which were also agreed as part of the franchise agreement.

The carrying amount of net assets sold relates mostly to the goodwill associated with Your Move and Reeds Rains (£15.3m), LSLi (£22.5m) and other
(£0.3m). The entire balance of goodwill held by Your Move, Reeds Rains, and LSLi and other related to the owned branch network, has therefore
been disposed of as part of the transition to a fully franchised business model. The loss also included the disposal of other assets with a net book
value of £2.2m and lettings contracts of £1.2m relating to asset sales and net assets of £0.6m associated with share sales.

Franchise intangible – sensitivity analysis
The fair value of franchise intangible assets is calculated based on a discounted future cash flow model, the cash flows are based on Management’s
future assumptions of franchise performance and considers market outlook and observable trends. If the discount rate was to be increased by 1%,
this would result in a decrease in the assets of £0.6m, similarly if the rate was to decrease by 1%, this would result in an increase in the franchise
intangible of the same amount. If the net cash flows from future franchise operations were to decrease by 10% this would result in a reduction in the
assets of £1.1m, if they were to increase by 10% this would result in an increase in the value of the same amount. A reasonable change in the long-
term growth rate would not result in a material difference to the value of the franchise intangible.

Exceptional costs

Exceptional costs:
Estate Agency restructuring costs
Goodwill and intangible asset impairment

2023
£’000

9,049
–
9,049

2022
£’000

632
38,307
38,939

Estate Agency restructuring costs
The Group has provided for future dilapidation costs of £4.6m related to previously owned branches, consistent with the recognition criteria per the
Group’s accounting policy, please refer to note 26 for detail of how the provision has been calculated. The other costs incurred are redundancy and
office closure costs totalling £4.1m and project costs of £0.5m offset by a gain of £0.2m recognised on derecognition of the right-of-use assets for
previously owned branches and recognition of investment in sublease.

143

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

7. Finance income

Finance income on subleased assets
Unwinding of discount on contingent consideration receivable
Interest from loans to franchisees and appointed representatives
Bank interest
Other interest receivable

8. Finance costs

Commitment and non-utilisation fees on RCF
Unwinding of discount on lease liabilities
Unwinding of discount on contingent consideration payable
Unwinding of discount on dilapidations provision
Fair value adjustment to loans receivable
Other interest payable

9. Exceptional items

Exceptional costs:
Goodwill and intangible asset impairment (note 17)
Estate Agency restructuring costs
Surveying & Valuation restructuring costs
Financial Services acquisition costs
Loss on sale of disposal groups
Intangible assets write down
Reduction in deferred consideration receivable

Exceptional gains:
Exceptional gain in relation to historic PI Costs
Gain on sale of disposal groups

144

2023
£’000
140
986
148
1,536
7
2,817

2023
£’000
728
499
3
119
332
20
1,701

2023
£’000

–
–
3,661
2,164
1,697
2,152
4,093
13,767

339
8,981
9,320

2022
£’000
9
–
–
–
67
76

2022
£’000
1,035
1,037
75
–
–
–
2,147

Restated
2022
£’000

47,208
1,108
–
–
–
–
–
48,316

694
–
694

9. Exceptional items (continued)

Exceptional costs

Estate Agency restructuring costs
The costs incurred as a result of estate agency restructuring during 2023 are included within discontinued operations. The costs included in
continuing operations in 2022 relate to the closure of branches in Marsh & Parsons.

Surveying & Valuation restructuring costs
The Group initiated a restructuring program in response to the difficult market conditions which followed the UK mini-budget in quarter three 2022.
The exceptional costs related to redundancy costs of £3.4m and office closure costs of £0.2m.

Financial Services acquisition costs
Financial Services restructuring costs relate to corporate activity, including costs related to the acquisition of TenetLime Limited of £1.1m (refer to
note 34) and aborted deal costs of £1.1m.

Loss on sale of disposal groups
The loss on disposal groups relates to the sale of Marsh & Parsons, Group First and RSC during January 2023.

Group First and RSC
The Group announced the sale of Group First and RSC on 13 January 2023 to Pivotal Growth for consideration payable of 7x the combined Group
First and RSC EBITDA in calendar year 2024, subject to working capital adjustments and payable in the first half of 2025. Group First and RSC were
classified as held for sale at 31 December 2022 and were written down to their fair value less cost to sell (FVLCTS) of £5.3m, calculated as the present
value of consideration receivable less costs to dispose. The Group recognised losses on the disposal of Group First and RSC of £0.7m and £0.2m
respectively as a result of adverse working capital adjustments during the period 1 January 2023 to 13 January 2023 and an update to expected
consideration of £0.3m.

Marsh & Parsons
The Group announced the sale of Marsh & Parsons on 26 January 2023 to Dexters for an initial consideration of £29.0m, subject to adjustments for
working capital and debt-like items. Marsh & Parsons was classified as held for sale at 31 December 2022 and was written down to its fair value less
cost to sell (FVLCTS) of £26.9m, calculated as consideration received (£29.0m), less estimated adjustments for debt-like items (£2.0m) and costs to
sell (£0.1m). A loss on disposal of £0.8m has been recognised at 31 December 2023 and this is a result of adverse working capital movements during
the period 1 January 2023 to 26 January 2023 of £0.3m and and additionally adjustments to consideration of £0.3m.

See note 36 for details regarding restatements.

Intangible assets write down
During the period there has been an impairment to other intangible assets of £2.2m (2022: £0.1m). The charge relates to software assets within the
Financial Services Division where there has been a strategic shift to focus developments on the Group’s PRIMIS Connect and a declining number of
third party software users. Please to refer to note 17 for further information.

Reduction in deferred consideration receivable
The reduction in deferred consideration receivable relates to contingent consideration assets recognised on the disposal of Group First, RSC and
EFS. The charge included in exceptionals is the result of a downward revision of future forecasts at the reporting date in comparison to original
recognition, combined with changes in discount rate. The Group has included movements in the deferred consideration for these disposals in
exceptional, because the original gain/loss on disposal was taken to exceptional. The Group recognises finance income on the unwinding of the
receivables in finance income in the income statement.

Exceptional gains

Gain on sale of disposal groups
On 11 April 2023, the Group announced the disposal of two further subsidiaries, Embrace Financial Services (EFS) and First2Protect (F2P) to Pivotal
Growth. The consideration payable for EFS will be 7x the EBITDA in calendar year 2024, subject to working capital adjustments and payable in the first
half of 2025. The consideration for F2P was £9.3m. The Group recognised a gain on disposal of EFS and F2P of £1.6m and £7.4m respectively. This EFS
gain has been calculated as contingent consideration of £2.4m less disposal costs of £0.5m and net assets disposed of £0.2m. The gain recognised on
F2P has been calculated as consideration received of £9.3m, less transaction costs of £0.1m and net assets disposed of £1.9m.

145

9. Exceptional items (continued)

Summary of gain/loss on disposal groups

Goodwill
Other intangible assets
Property, plant and equipment and
right-of-use assets
Trade and other receivables
Bank balances and cash
Deferred tax asset/(liability)
Current tax asset/(liability)
Trade and other payables
Financial liabilities
Net assets disposed of
Consideration
Cash and cash equivalents
Contingent consideration
Disposal costs
Total consideration (less transaction costs)
Gain/(loss) on disposal
Net cash inflow arising on disposal
Consideration received in cash and cash
equivalents
Less: cash and cash equivalents disposed
Less: disposal costs paid
Cash inflow/(outflow)

10. Loss before tax

Loss before tax is stated after charging:

Group
First
£’000
3,638
396

294
230
1,438
15
(379)
(847)
–
4,785

–
4,152
(75)
4,077
(708)

–
(1,438)
(75)
(1,513)

RSC
£’000
1,064
43

74
220
986
14
(197)
(663)
(74)
1,467

–
1,382
(75)
1,307
(160)

–
(986)
(75)
(1,061)

Marsh &
Parsons
£’000
10,557
12,067

15,704
6,333
1,493
47
94
(4,928)
(14,668)
26,699

26,100
–
(230)
25,870
(829)

26,100
(1,493)
(230)
24,377

EFS
£’000
–
–

56
462
2,652
–
171
(3,115)
–
226

–
2,352
(501)
1,851
1,625

–
(2,652)
(501)
(3,153)

Auditor’s remuneration (note 11)
Short-term leases
Low value leases
Depreciation – owned assets
Depreciation – right-of-use assets
Gains/(losses) on disposal of property, plant and equipment and right-of-use assets

11. Auditor’s remuneration

The remuneration of the auditors is further analysed as follows:

Audit of the Financial Statements
Audit of subsidiaries
Total audit
Audit-related assurance services (including interim results review)

146

F2P
£’000
–
–

301
892
1,733
(3)
(329)
(417)
(275)
1,902

9,289
–
(31)
9,258
7,356

9,289
(1,733)
(31)
7,525

2023
£’000
1,533
1,960
334
1,482
1,880
–

2023
£’000
490
588
1,078
455
1,533

Total
£’000
15,259
12,506

16,429
8,137
8,302
73
(640)
(9,970)
(15,017)
35,079

35,389
7,886
(912)
42,363
7,284

35,389
(8,302)
(912)
26,175

2022
£’000
1,001
1,997
649
3,853
3,759
–

2022
£’000
333
543
876
125
1,001

12. Earnings per Share (EPS)

Basic EPS amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average
number of ordinary shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of
ordinary shares outstanding during the year, plus the weighted average number of ordinary shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares.

As the Group reported a profit from continuing operations in 2023 (2022: loss), the effect of dilutive share options has been included in the
calculation of diluted earnings per share for continuing operations, discontinued operations and the overall result.

However, for the calculation in 2022, as the Group reported a loss from continuing operations, any potential ordinary shares are antidilutive and are
therefore excluded from the calculation of diluted earnings per share for continuing operations, discontinued operations and the overall result:

Total EPS:

Basic EPS
Effect of dilutive share options
Diluted EPS

Total EPS from continuing operations:

Basic EPS
Effect of dilutive share options
Diluted EPS

Total EPS from discontinued operations:

Basic EPS
Effect of dilutive share options
Diluted EPS

2023

Loss
after tax
£’000
(38,001)
–
(38,001)

Weighted
average number
of shares
103,066,026
817,786
103,883,812

2023

Profit
after tax
£’000
8,092
–
8,092

Weighted
average number
of shares
103,066,026
817,786
103,883,812

2023

Loss
after tax
£’000
(46,093)
–
(46,093)

Weighted
average number
of shares
103,066,026
817,786
103,883,812

Per share
amount
pence
(36.9)
–
(36.6)

Per share
amount
pence
7.9
–
7.8

Per share
amount
pence
(44.7)
–
(44.4)

2022

Restated
loss after tax
£’000
(63,209)
–
(63,209)

Weighted average
number of shares
102,659,027
–
102,659,027

2022

Restated
loss after tax
£’000
(26,698)
–
(26,698)

Weighted average
number of shares
102,659,027
–
102,659,027

Restated per
share amount
pence
(61.6)
–
(61.6)

Restated per
share amount
pence
(26.0)
–
(26.0)

2022

Restated
loss after tax
£’000
(36,511)
–
(36,511)

Weighted average
number of shares
102,659,027
–
102,659,027

Restated per
share amount
pence
(35.6)
–
(35.6)

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion
of these Financial Statements.

Adjusted basic and diluted EPS
The Directors (who were members of the Board at 31 December 2023) consider that the adjusted earnings shown below give a consistent indication
of the Group’s underlying performance:

Group Underlying Operating Profit
Loss attributable to non-controlling interest
Finance income/(costs) (excluding exceptional and contingent consideration items, fair value adjustment to
loans receivable and discounting on lease liabilities)
Normalised taxation (tax rate 23.5%, 2022: 19.0%)*
Adjusted profit after tax attributable to owners of the parent

*The headline UK rate of corporation tax for the period is 23.5% (2022: 19.0%).

2023
£’000
9,344
59

795
(2,396)
7,802

Restated
2022
£’000
35,834
93

(968)
(6,642)
28,317

147

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

12. Earnings per Share (EPS) (continued)

Adjusted basic and diluted EPS

Adjusted basic EPS
Effect of dilutive share options
Adjusted diluted EPS

Profit
after tax
£’000
7,802
–
7,802

2023

Weighted
average number
of shares
103,066,026
817,786
103,883,812

2022

Per share
amount
pence
7.6
–
7.5

Restated
profit after tax
£’000
28,317
–
28,317

Weighted average
number of shares
102,659,027
1,275,216
103,934,243

Restated per
share amount
pence
27.6
–
27.2

This represents adjusted profit after tax attributable to equity holders of the parent. Tax has been adjusted to exclude the prior year tax adjustments,
and the tax impact of exceptional items, amortisation, and share-based payments. The effective tax rate used is 23.5% (31 December 2022: 19.0%).

13. Dividends paid and proposed

Declared and paid during the year:
2023 Interim: 4.0 pence per share (2022 Interim: 4.0 pence)
Dividends on shares proposed (not recognised as a liability as at 31 December):
Equity dividends on shares:
Dividend: 7.4 pence per share (2022: 7.4 pence)

2023
£’000

2022
£’000

4,098

4,084

7,714

7,616

14. Cash flow from financing activities

Lease liabilities

At 1 January
2023
£’000
10,915
10,915

Cash flow
£’000
(4,529)
(4,529)

Additions
£’000
4,350
4,350

Disposals
£’000
(2,396)
(2,396)

Reclassified as
held for sale
£’000
–
–

At 31 December
2023
£’000
8,340
8,340

Set out below are the movements in the Group’s lease liabilities and long-term debt during the year.

Lease liabilities

Non-current liabilities
Current liabilities

At 1 January
2022
£’000

28,117
28,117

Cash flow
£’000
(7,170)
(7,170)

Additions
£’000
5,550
5,550

Disposals
£’000
(875)
(875)

Reclassified as
held for sale
£’000
(14,707)
(14,707)

2023
£’000
5,085
3,255
8,340

At 31 December
2022
£’000

10,915
10,915

2022
£’000
6,246
4,669
10,915

Lease liability movements comprise new leases entered into during the year, cancellation of leases and movements between current and non-current
liabilities, this also includes interest paid during the year of £0.6m (2022: £1.4m). The Group holds no other long-term debt at 31 December 2023.

148

15. Directors and employees

Remuneration of Directors

Directors’ remuneration (short-term benefits)*
Contributions to money purchase pensions schemes (post-employment benefits)
Aggregate gains on exercise of share based payment awards

2023
£’000
1,367
2
479
1,369

2022
£’000
1,563
2
1,226
1,565

Note:

*Directors’ remuneration (short term benefits) excludes the value of share awards (including the value of matching shares, dividend shares and free share awards) that
vested in the year amounting to £0.2m (2022:£0.4m). Included within this amount are accrued bonuses of £nil (2022: £nil).

The number of Directors who were members of Group money purchase pension schemes during the year totalled 2 (2022: 2).

Remuneration of Key Management Personnel

Key management personnel remuneration (short-term benefits)1
Contributions to money purchase pensions schemes (post-employment benefits)
Termination benefits
Share-based payments charge on current incentive schemes

Note:
1

Included within this amount are accrued bonuses of £0.1m (2022: £1.5m).

2023
£’000
2,641
63
142
377
3,223

2022
£’000
5,402
48
–
1,253
6,703

Remuneration of Key Management Personnel represents the charge to the income statement in respect of the remuneration of the Group Board and
Group Executive Committee members.

Employee numbers and costs
The Group employs staff in Divisional offices and head office. Aggregate payroll costs of these employees, including Directors were:

Wages and salaries
Social security costs
Pension costs
Subcontractor costs
Total employee costs
Share-based payment (credit)/expense (see below)

The average monthly FTE staff numbers (including Directors) during the year were:

Financial Services
Surveying & Valuation
Estate Agency Franchising

2023
£’000
83,401
10,862
4,536
291
99,090
(164)

2023
£’000
490
879
1,006
2,375

2022
£’000
122,187
16,229
6,002
907
145,325
1,860

2022
£’000
953
931
2,062
3,946

During the year the Group announced that its entire owned estate agency network of 183 branches would become franchises. The operations of the
previously owned network were franchised to a combination of new and existing franchisees between 4 May and 31 May. As a result, only 15% of the
estate agency staff remained employees of LSL, 85% of staff were transferred to the franchisees. The average monthly FTE staff number disclosed in
2022 includes staff which were in the Group’s old estate agency model.

Share‑based payments
The Directors’ Remuneration Policy on pages 95 – 100 of the Directors’ Remuneration Report details the policies in relation to share-based payments,
which includes details on the Remuneration Committee’s discretion to adjust the LTIP vesting outcomes if it considers that it is not reflective of the
underlying performance of LSL.

149

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

15. Directors and employees (continued)

The Group operates the following equity-settled share-based remuneration schemes:

Long‑term incentive plan (LTIP)
The Group operates a LTIP (an equity-settled share-based remuneration scheme) for certain employees. Under the LTIP, the options vest if the
individual remains an employee of the Group after a three-year period, unless the individual has left under certain ‘good leaver’ terms in which case
the options may vest earlier and providing the performance conditions are met.

Vesting conditions:
For all LTIP options granted between 2020 and 2023, 50% of the options vest based on the total shareholder return (TSR) of LSL as compared to a
comparator group of FTSE Small Cap, excluding investment trusts, over the three-year performance period (for LTIP 2023 this is 1 January 2023 to
31 December 2025):

• if the Group is in the top 25% percentile, all of these options will vest;

• if the Group is at the median, 25% will vest;

• straight-line vesting between median and top 25% percentile; and

• below the median, no options vest.

The remaining 50% of the options are based on LSL’s Adjusted Basic EPS performance in the financial year which they become exercisable:

100% vest
25% vest
Straight-line vesting
No options vest

(more than or equal to)
(equal to)
(between)
(less than)

LTIP 2023
EPS (pence)
24.0
16.0
16.0 – 24.0
16.0

LTIP 2022
EPS (pence)
52.8
46.9
46.9 – 52.8
46.9

LTIP 2021
EPS (pence)
31.5
25.6
25.6 – 31.5
25.6

LTIP 2020
EPS (pence)
31.5
25.6
25.6 – 31.5
25.6

Company stock option plan (CSOP)
The Group operates a CSOP (an equity-settled share-based remuneration scheme) for certain employees. Under the CSOP the options vest if the
individual remains an employee of the Group after a three-year period, unless the individual has left under certain ‘good leaver’ terms in which case
the options may vest earlier.

SAYE (save‑as‑you‑earn) scheme
The Group has offered options under the SAYE scheme in each of 2011 to 2014, 2016 to 2019 and 2021 years. All these offers were open to all
qualifying employees and provide for an exercise price equal to the daily average market price on the date of grant. The options will vest if the
employee remains in service for the full duration of the option scheme (three years). There are no cash settlement alternatives.

BAYE (buy‑as‑you‑earn) scheme
The matching shares element of the SIP (share incentive plan)/SAYE was introduced and provides participants with one matching share for every five
partnership shares purchased. The matching shares are allocated from ordinary shares held by the Employee Benefit Trust for the benefit of SIP/BAYE
participants. The maximum saving under the scheme would be automatically capped at £150 per month (as per HMRC limits).

All employee share award
The Group launched its second free share award under its SIP Plan in 2022. The award was £500 per full-time employee and a pro-rated award for all
part-time employees. This award offer was made to LSL employees who had joined the Group on or before 28 February 2022 and remain employed
and not serving notice at the date the shares are awarded in April 2022. The awards will normally become available for employees once they have
been held in the SIP for three years or more.

The Group’s first free share scheme awarded £500 per full-time employee and a pro-rated award for all part-time employees who had joined the
Group on or before 31 March 2020 and were still employed and not serving notice at the time the grant was made on 1 October 2020. The awards
will normally become available for employees once they have been held in the SIP plan for three years or more.

150

15. Directors and employees (continued)

Movements during the year
The following table illustrates the number and weighted average exercise prices of, and movements in, share options during the year:

Outstanding at 1 January
Granted during the year
Exercised during the year*
Lapsed during the year
Outstanding at 31 December

2023

2022

Weighted
average exercise
price
0.71
0.98
0.00
0.81
0.87

Weighted
average exercise
price
0.98
–
0.93
1.09
0.71

Number
4,808,256
1,639,999
(567,665)
(1,815,311)
4,065,279

Number
4,994,221
1,303,850
(890,146)
(599,669)
4,808,256

*The weighted average share price at the date of exercise of these options was £2.35 in 2023 (2022: £3.53)

• There were no cancellations or modifications to the awards in 2023 or 2022.

• The weighted average remaining contractual life for the share options outstanding as at 31 December 2023 was 1.46 years (2022: 1.07 years).

• The weighted average fair value of options granted during the year was £1.76 (2022: £3.43).

• The range of exercise prices for options outstanding at the end of the year was £nil to £3.64 (2022: £1.22 to £3.64).

• 719,230 share options were exercisable as at 31 December 2023.

The following tables list the inputs to the models used for the new plans for the years ended 31 December 2023 and 2022, respectively:

Option pricing model used
Weighted average share price at grant date (£)
Exercise price (£)
Expected life of options (years)
Expected volatility (%)
Expected dividend yield (%)
Risk free interest rate (%)

LTIP
2023
Black Scholes
2.44
–
3
100
3.96
3.99

SAYE
2023
Black Scholes
2.50
1.99
3
100
6.03
3.83

LTIP
2022
Black Scholes
3.67
–
3
100
3.77
1.93

Share award
2022
Black Scholes
3.93
–
3
100
3.77
1.93

The volatility assumption, measured at the standard deviation of expected share price returns, is based on statistical analysis of historical share price.
The dividend yield assumption is based on the fact that the shares awarded are not eligible to receive dividends until the end of the vesting period.

The total cost recognised for equity-settled transactions is as follows:

Share-based payment (credit)/expense during the year

A credit of £0.1m (2022: charge of £1.5m) relates to employees of the Company.

2023
£’000
(164)

2022
£’000
1,860

151

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

16. Taxation

(a) Taxation charge
The major components of income tax charge in the Group Income Statement are:

UK corporation tax – current year
– adjustment in respect of prior years

Deferred tax:
Origination and reversal of temporary differences
Rate differential
Adjustment in respect of prior years
Deferred tax balances written back on disposal of subsidiaries
Total deferred tax (credit)/charge
Total tax (credit)/charge in the income statement

Continuing and discontinued operations:

Total tax (credit)/charge from continuing operations
Total tax charge from discontinued operations

2023
£’000
–
153
153

246
16
(416)
(2,501)
(2,655)
(2,502)

2023
£’000
(3,170)
668
(2,502)

Restated
2022
£’000
5,783
(824)
4,959

(202)
(64)
164
–
(102)
4,857

Restated
2022
£’000
3,020
1,837
4,857

Corporation tax is recognised at the headline UK corporation tax rate of 23.5% (2022: 19.0%).

The opening and closing deferred tax balances in the Financial Statements were measured at 25%. This is in accordance with rates included in the
Finance Act 2021 which was enacted on 10 June 2021 and came into effect from 1 April 2023.

The effective rate of tax for the year was 6.2% (2022: (8.3%)). The effective tax rate for 2023 is lower than the headline UK tax rate of 23.5% largely
as a result of two items. Firstly, the inclusion of a loss on disposal following the Group’s adoption of a franchise model within the loss before tax
which is not deductible for corporation tax purposes and net gains arising from the disposal of investments in subsidiary undertakings during the year
which similarly are non-taxable for corporation tax purposes. The second being the impact of writing back the deferred tax balances held at Group in
relation to the subsidiary undertakings disposed of.

Deferred tax credited directly to other comprehensive income is rounded to £nil (2022: £0.1m). Income tax debited directly to the share-based
payment reserve is £0.1m (2022: £0.1m).

152

16. Taxation (continued)

(b) Factors affecting tax charge for the year
The tax assessed in the profit and loss account is higher than (2022: higher than) the standard UK corporation tax (CT) rate, because of the following
factors:

Profit/(loss) before tax from continuing operations
(Loss)/profit before tax from discontinued operations
Loss before tax
Tax calculated at UK standard CT rate of 23.5% (2022: 19.0%)
Non-deductible expenditure from joint venture
Other disallowable expenses
Net non-taxable gains on disposal of investments
Impact of movement in contingent consideration credited to the income statement
Share-based payment relief
Brought forward losses not previously recognised
Current year losses not recognised
Impact of rate change on deferred tax
Prior period adjustments – current tax
Prior period adjustment – deferred tax
Deferred tax balances written back on disposal of subsidiary undertakings
Total taxation (credit)/charge
Total tax (credit)/charge from continuing operations
Total tax charge from discontinued operations
Total taxation (credit)/charge

2023
£’000
4,863
(45,425)
(40,562)
(9,532)
91
9,934
(834)
817
(229)
(1)
–
16
153
(416)
(2,501)
(2,502)
(3,170)
668
(2,502)

Restated
2022
£’000
(23,771)
(34,674)
(58,445)
(11,105)
94
16,525
–
(118)
78
(50)
157
(64)
(824)
164
–
4,857
3,020
1,837
4,857

Other disallowable expenses of £9.9m (2022: £18.4m) includes the tax impact of exceptional costs of £9.7m (2022: £16.6m), which are not taxable /
deductible for tax purposes. This item also includes other smaller permanent items which are not eligible for tax relief.

The impact of the net non-taxable gains on disposal of investments during the year relate to the disposal of the Group’s interests in its subsidiary
undertakings of Marsh & Parsons, the Group’s D2C broker businesses (Group First, RSC, EFS and F2P) those subsidiary undertakings impacted by the
Group’s adoption of a franchise model (see note 6). A net deferred tax liability of £2.5m was held in relation to those entities disposed of and the
balances have been written back to the income statement as a credit.

There is a debit to the income statement of £0.2m in relation to a corporation tax prior year adjustment. This balance refines the estimate previously
reported and its main contributing components are prior year losses not surrendered for group relief and carried forward (£0.1m) and a reduction in
available capital allowances (£0.1m).

There is a credit to the income statement in relation to a deferred tax prior year adjustment of £0.4m. This predominately relates to losses available
to carry forward in relation to the Group’s D2C broker businesses. These balances have been subsequently disposed of during the financial year as a
debit to the income statement.

(c)

Factors that may affect future tax charges (unrecognised)

Unrecognised deferred tax asset relating to:
Losses

2023
£’000

3,020
3,020

2022
£’000

3,018
3,018

No deferred tax asset is recognised in respect of trading losses of £9.5m (2022: £9.3m). Of this balance, £1.6m relates to the impact of the prior year
restatement (refer to note 36 for further information). The balance has not been recognised as the formal process for claiming a deduction for these
losses has not yet been finalised. The remaining losses may be recoverable in the future, and this is dependent on subsidiary companies generating
taxable profits sufficient to allow the utilisation of these amounts. These deferred tax assets cannot be offset against profits elsewhere in the Group
as they relate to losses brought forward which can only be offset against taxable profits arising from the same trade in which the losses arose. There
is no time limit for utilisation of the above tax losses.

No deferred tax asset is recognised in respect of capital losses of £2.6m (2022: £2.7m) as there are no capital profits forecast against which these
losses can be utilised. There is no time limit for utilisation of the above tax losses.

153

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

16. Taxation (continued)

(d) Deferred tax
An analysis of the balance sheet movements in deferred tax is as follows:

Net deferred tax liability at 1 January
Research and development tax credits
Deferred tax liability recognised directly in other comprehensive income
Deferred tax (credit) in income statement for the year from continuing operations
Deferred tax charge in income statement for the year from discontinued operations
Reclassified as held for sale
Net deferred tax (asset)/liability at 31 December

Net deferred tax (asset)/liability analysed as:

Accelerated capital allowances
Deferred tax liability on separately identifiable intangible assets on business combinations
Deferred tax on financial assets
Deferred tax on share options
Other short-term temporary differences
Trading losses recognised
Reclassified as held for sale

2023
£’000
2,392
(14)
108
(5,898)
3,246
–
(166)

2023
£’000
(1,583)
5,200
93
(487)
(166)
(3,223)
–
(166)

Restated
2022
£’000
2,491
–
(28)
(152)
50
31
2,392

Restated
2022
£’000
(1,318)
5,198
13
(713)
(319)
(500)
31
2,392

During the year, the Group adopted a full franchised model in Estate Agency. An intangible asset of £10.7m has been recognised in relation to the
franchise agreements signed. This has resulted in a deferred tax liability of £2.7m being recognised in the year.

In addition, the reported results for 2022 have been restated to recognise an intangible asset of £1.5m in relation to owned branches which were
franchised in 2019. This resulted in a deferred tax liability of £0.4m being recognised. Refer to note 36 for further information.

At 31 December 2023, the Group has unused trading tax losses of £12.9m available for offset against future profits. See note 16c for commentary on
those balances for which no deferred tax asset is recognised.

At the end of either year there was no unrecognised deferred tax liability for taxes that would be payable on the unremitted earnings of the Group’s
subsidiaries.

Deferred tax credit in income statement relates to the following:

2023
£’000
(2)
267
(119)
(213)
2,722
2,655

Restated
2022
£’000
513
(260)
(179)
7
21
102

Intangible assets recognised on business combinations
Accelerated capital allowance
Deferred tax on share options
Other temporary differences
Trading losses recognised
Total deferred tax credited in income statement

154

16. Taxation (continued)

Deferred tax (credit) in income statement for the year from continuing operations
Deferred tax charge in income statement for the year from discontinued operations
Total deferred tax credited in income statement

2023
£’000
5,901
(3,246)
2,655

Restated
2022
£’000
152
(50)
102

The profit and income statement credit of £2.6m includes a credit of £2.5m relating to the deferred tax balances written back on disposal of
subsidiaries. The £2.5m disposal credit comprises of a £0.2m credit on accelerated capital allowances, a £2.9m credit on intangible assets recognised
on business combinations, a £0.5m debit on trading losses recognised and a £0.1m debit on other temporary differences. The remaining £0.1m credit
to the income statement comprises of a net rounded £nil credit on accelerated capital allowances, a £2.9m debit on intangible assets recognised on
business combinations, a £3.2m credit which is inclusive of the calculated prior year adjustment of £0.4m (see note 16a) on trading losses recognised
and a £0.2m debit on other temporary differences.

17. Intangible assets

Goodwill and brand

Cost
At 1 January 2022 (as previously reported)
Restatement (note 36)
At 1 January 2022 (Restated)
Impairment (Restated, note 36)
Reclassified as held for sale
At 31 December 2022 (Restated)
Disposed
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022 (Restated)

The carrying amount of goodwill and brand by CGU is summarised below:

Financial Services segment companies
First Complete
Advance Mortgage Funding
Personal Touch Financial Services

Surveying & Valuation segment company
e.surv
Estate Agency Franchising segment companies
Your Move and Reeds Rains*
LSLi*
Templeton LPA
Others

Total

Goodwill
£’000

160,865
(5,211)
155,654
(83,363)
(17,294)
54,997
(38,142)
16,855

16,855
54,997

Brand
2023
£’000

–
180
–
180

1,305

3,751
1,675
–
–
5,426
6,911

Brand
£’000

Total
£’000

19,074
–
19,074
–
(12,163)
6,911
–
6,911

6,911
6,911

Restated
goodwill
2022
£’000

3,998
2,604
348
6,950

9,569

15,282
22,512
336
348
38,478
54,997

179,939
(5,211)
174,728
(83,363)
(29,457)
61,908
(38,142)
23,766

23,766
61,908

Brand
2022
£’000

–
180
–
180

1,305

3,751
1,675
–
–
5,426
6,911

Goodwill
2023
£’000

3,998
2,604
348
6,950

9,569

–
–
336
–
336
16,855

* Goodwill balances associated with Your Move, Reeds Rains and LSLi were disposed of in the year due to the Group’s transition to a franchise model. Refer to note 6 for
further detail.

155

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

17. Intangible assets (continued)

Impairment of goodwill and other intangibles with indefinite useful lives
The Group tests goodwill and the indefinite life intangible assets annually for impairment, or more frequently if there are indicators of impairment.
Goodwill and brands acquired through business combinations have been allocated for impairment testing purposes to statutory companies or groups
of statutory companies which are managed as individual CGUs as follows:

• Financial Services companies

– First Complete

– Advance Mortgage Funding

– Personal Touch Financial Services

– Direct Life and Pension Services

• Surveying & Valuation company

– e.surv

• Estate Agency companies

– Your Move and Reeds Rains (including its share of cash flows from LSL Corporate Client Department)

– LSLi

– Templeton LPA

– St Trinity

Recoverable amount of CGUs
The recoverable amount of the Financial Services, Surveying & Valuation and Estate Agency Franchising companies has been determined based on a
value-in-use (VIU) calculation using cash flow projections based on financial budgets and forecasts approved by the Board and in the three-year plan.

During the year, the Group disposed of £15.3m of goodwill and £12.2m of brand associated with businesses disposed during H1 which were
previously held for sale. The Group disposed of a further £38.1m of goodwill when the Estate Agency Division transferred to a fully franchised model.

The calculation of value-in-use for each of the Financial Services, Surveying & Valuation and Estate Agency companies is most sensitive to the
following assumptions:

• Discount rates

• Performance in the market

Discount rates
The pre-tax discount rate applied to cash flow projections used in the VIU models is as follows:

Financial Services
Surveying & Valuation
Estate Agency Franchising

2023*
15.6%
15.6%
15.7%

2022
14.2%
14.2%
14.2%

*The Group’s approach has been updated in the current year to apply CGU specific discount rates.

Cash flows beyond the three-year plan are extrapolated using a 2.0% growth rate (2022: 2.0%).

Performance in the market
Reflects how Management believes the business will perform over the three-year period and is used to calculate the value-in-use of the CGUs.

Sensitivity to changes in assumptions
Sensitivity analysis has been performed to assess whether changes to key assumptions would lead to impairments across the Group. Management
deemed that there are no reasonably possible changes in key assumptions that would cause any of the Group’s CGUs carrying amounts to exceed its
recoverable amounts.

156

17. Intangible assets (continued)

Other intangible assets

Cost
At 1 January 2022 (as previously reported)
Restated (note 36)
At 1 January 2022 (Restated)
Additions (Restated)
Reclassified as held for sale
At 31 December 2022 (Restated)
Additions
Disposals
Impairment
At 31 December 2023
Amortisation and impairment
At 1 January 2022 (as previously reported)
Restated (note 36)
At 1 January 2022 (Restated)
Amortisation (Restated)
Other intangible impairment
Reclassified as held for sale
At 1 January 2023 (Restated)
Amortisation
Disposals
Impairment
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022 (previously reported)
At 31 December 2022 (Restated)

Customer
contracts
£’000

625
–
625
–
–
625
–
–
–
625

286
–
286
313
–
–
599
26
–
–
625

–
26
26

Lettings
contracts
£’000

21,770
–
21,770
–
–
21,770
–
(21,770)
–
–

19,037
–
19,037
1,163
–
–
20,200
291
(20,491)
–
–

–
1,570
1,570

Franchise
agreements
£’000

Software
£’000

Total
£’000

–
2,059
2,059
–
–
2,059
10,707
–
–
12,766

–
389
389
137
–
–
526
494
–
–
1,020

11,746
–
1,533

22,558
(2,057)
20,501
1,827
(1,128)
21,200
2,137
–
(3,940)
19,397

15,100
(300)
14,800
2,407
117
(782)
16,542
1,849
(10)
(1,788)
16,593

2,804
7,240
4,658

44,953
2
44,955
1,827
(1,128)
45,654
12,844
(21,770)
(3,940)
32,788

34,423
89
34,512
4,020
117
(782)
37,867
2,660
(20,501)
(1,788)
18,238

14,550
8,836
7,787

At 31 December 2023, the Group performed an impairment indicator assessment of its other intangible assets and identified an impairment trigger in
the Financial Services Division relating to the Group’s Mortgage Gym software platform. The trigger was the result of a strategic shift by the Group to
focus development on the Group’s PRIMIS Connect platform and a declining number of paid users of Mortgage Gym. The Group determined that the
total net book value of Mortgage Gym (£2.2m) should be written down to £nil at the period end as the remaining future cash flows associated with
the platform show a net loss and it is expected that all users will cease to use the platform during 2024.

157

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Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

18. Property, plant and equipment and right-of-use assets

Cost
At 1 January 2022
Additions
Disposals
Transferred to asset held for sale
At 31 December 2022
Additions
Disposals
Transfer to investment in sublease
At 31 December 2023
Depreciation and impairment
At 1 January 2022
Charge for the year
Disposals
Transferred to asset held for sale
At 31 December 2022
Charge for the year
Disposals
Transfer to investment in sublease
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022
Property, plant and equipment
Right-of-use assets

Land and
buildings
£’000

Leasehold
improvements
£’000

41,207
3,069
(3,743)
(18,619)
21,914
1,614
(4,861)
(9,649)
9,018

17,879
5,831
(2,553)
(6,300)
14,857
1,356
(3,021)
(5,858)
7,334

1,684
7,057
–
1,684

9,611
242
(660)
(7,747)
1,446
100
(580)
–
966

5,981
860
(499)
(5,248)
1,094
57
(185)
–
966

–
352
–
–

Motor
vehicles
£’000

9,003
2,075
(1,908)
(1,726)
7,444
2,710
(2,190)
(738)
7,226

5,440
1,969
(1,849)
(1,087)
4,473
1,425
(1,728)
(223)
3,947

3,279
2,971
–
3,279

Fixtures, fittings
and computer
equipment
£’000

18,741
1,785
(1,082)
(3,524)
15,920
620
(5,758)
–
10,782

12,192
2,969
(1,079)
(3,352)
10,730
1,674
(3,576)
–
8,828

1,954
5,190
1,954
–

Total
£’000

78,562
7,171
(7,393)
(31,616)
46,724
5,044
(13,389)
(10,387)
27,992

41,492
11,629
(5,980)
(15,987)
31,154
4,512
(8,510)
(6,081)
21,075

6,917
15,570
1,954
4,963

In 2023, the Group disposed of assets with a net book value of £4.9m, including property, plant and equipment of £2.8m and right-of-use assets of
£2.1m. On transferring the Group’s entire owned Estate Agency to franchise, the Group derecognised £4.3m property and vehicle right-of-use assets
of £4.3m and recognised an investment in sublease in its place.

The additions value consists of property, plant and equipment of £0.7m (2022: £2.0m) and right-of-use asset of £4.3m (2022: £5.1m).

158

19. Financial assets

(a) Financial assets at fair value through other comprehensive income (FVOCI)
Unquoted shares at fair value
(b) Financial assets at fair value through income statement (FVPL)
Unquoted shares at fair value (Openwork units)
Contingent consideration receivable
(c) Financial assets at amortised cost
Investment in sublease
Loans to franchisees and appointed representatives

Non-current assets
Current assets

2023
£’000

–

399
5,062

3,338
2,099
10,898
8,818
2,080
10,898

2022
£’000

322

678
–

45
–
1,045
1,045
–
1,045

(a) Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income (FVOCI) include unlisted equity instruments which are carried at fair value and
measured using level 3 valuation techniques. During the period the Group disposed of the following equity instruments:

• The Group sold its shares in Yopa Property Limited for £nil consideration based on third party valuations provided to the existing shareholders (fair

value at 31 December 2022: £nil); and

• The Group sold its shares in Vibrant Energy Matters Limited (VEM) for consideration of £0.2m (fair value at 31 December 2022: £nil).

On disposal of these equity investments, any related balance within the FVOCI reserve is reclassified to retained earnings.

During the period, the Group also wrote down its investment in Global Property Ventures to £nil at 31 December 2023 (2022: £0.1m). The Group also
holds an equity instrument in NBC Property Master Limited which is carried at £nil value (2022: £nil).

(b) Financial assets at fair value through income statement
Financial assets through profit or loss (FVPL) include unquoted shares in Openwork’s and contingent consideration receivable which are carried at fair
value and measured using level 3 valuation techniques. During the year, the following gains/(losses) were recognised in the income statement:

Fair value (losses)/gains on equity investments at FVPL recognised in other operating costs
Fair value (losses) on contingent consideration recognised as exceptional
Finance income recognised on contingent consideration receivable

2023
£’000
(279)
(4,093)
986

2022
£’000
678
–
–

Openwork Units
During the period the fair value of units held in The Openwork Partnership LLP was reassessed to £0.4m (31 December 2022: £0.7m), with the
reduction in value recognised in other operating costs. Our valuation is based on an estimated strike price which has been calculated using the
average strike price from recently executed trading windows.

Contingent Consideration Receivable
Contingent consideration of £4.8m relates to EFS, Group First and RSC which were sold in H1 2023. The consideration payable will be 7x the
combined EBITDA in calendar year 2024, subject to working capital adjustments and is payable in the first half of 2025. The fair value of the
contingent consideration receivable has been calculated for each of the three disposals noted above based on forecast profitability in calendar year
2024, discounted at 15.5% (Financial Services Division’s weighted average cost of capital for an 18-month period).

The future cash flow and discount rate assumptions are key to the calculation, if full year 2024 profitability was to reduce by 10% this would result
in a reduction in the receivable of £0.5m, if profitability was to increase, this would result in an increase in the receivable of the same amount. If the
discount rate was to increase by 1%, the receivable would decrease by £0.1m, and if the discount rate was to reduce by 1%, this would result in an
increase in the receivable of the same amount.

159

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Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

19. Financial assets (continued)

The remaining £0.3m of contingent consideration relates to amounts due from disposed lettings books, amounts are receivable in December 2024
and November 2025.

Financial assets measured at amortised cost

(c)
Financial assets measured at amortised cost include investment in subleases and loans to franchisees and appointed representatives.

Investment in subleases
The Group recognises an investment in sublease in scenarios where it is an intermediate lessor, and the sublease is classified as finance lease. On
recognition, the investment in sublease is valued as the remaining fixed payments due from the sublessor, discounted at the discount rate implicit
in the headlease. The Group recognises finance income over the remaining life of the leases. An expected credit loss has been provided against the
investment in sublease of £0.1m, applying a 12-month expected credit loss model.

Loans to franchisees and appointed representatives
The loans to franchisees and appointed representatives balance includes loans to franchisees in the Estate Agency Franchising segment and loans to
appointed representatives in Financial Services.

The franchisee loans reflect drawdowns on agreed facilities which have availability over a range of periods from 31 December 2024 to 31 December
2025, are repayable in full within 24 months from the respective period end and bear fixed rate interest at 8.5%. The Group has issued franchisee
loans of £1.6m during the period and has received principal repayments of £0.8m, an expected credit loss has been provided against the facility of
£0.1m applying a 12-month expected credit loss model.

The Group issues loans to appointed representatives in the normal course of business and on standard terms, the duration is typically three years
and the loans are offered on an interest-free basis. The Group has issued loans to appointed representatives of £1.3m during the year, which were
subsequently written down by £0.2m, and received principal repayments of £0.5m. An expected credit loss has been provided against the remaining
facility of £0.3m, applying a 12 month expected credit loss model. In previous periods, the Group has reported loans to appointed representatives as
part of prepayments in trade and other receivables.

20. Investments in joint venture

Opening balance
Equity investment in Pivotal Growth
Equity accounted (loss)
Adjustment for non-controlling interests
Closing balance

2023
£’000
5,068
4,681
(549)
159
9,359

2022
£’000
1,610
3,952
(494)
–
5,068

Pivotal Growth
The Group is party to one joint venture, Mottram TopCo Limited. The Group holds a 47.8% (2022: 47.8%) shareholding in Mottram TopCo Limited
and has joint control by virtue of its holding of 50% of the voting shares in Mottram TopCo Limited and through rights granted to it under a joint
venture agreement.

Mottram TopCo Limited holds a 100% shareholding in Mottram MidCo Limited which in turn holds a 89.6% shareholding in Pivotal Growth Limited
(Pivotal). Mottram TopCo and Mottram MidCo are both holding companies. Pivotal is a direct-to-consumer (D2C) financial services advice business
which invests in growing mortgage and protection brokerages to help them build long-term sustainable value. The brokerages will have access to
LSL’s financial services network which further aids the brokerages and LSL’s growth plans. Pivotal’s principal place of business is the United Kingdom.

As at 31 December 2023, the Group did not have any commitments or contingent liabilities relating to Pivotal.

The Group invested a further £4.7m during the year (2022: £4.0m).

160

20. Investments in joint venture (continued)

The summarised financial information of Pivotal, which is accounted for using the equity method, is presented below:

Pivotal balance sheet:
Non-current assets
Current assets (excluding cash and cash equivalents)
Cash and cash equivalents
Current liabilities
Non-current liabilities
Net assets
Add Back: Net assets attributable to non-controlling interests
Net assets attributable to Pivotal
LSL share of Pivotal’s net assets*

*LSL’s share of Pivotal’s assets was adjusted to include the effect of share-based payments within the joint venture.

Pivotal results:
Revenue
Operating expenses
Operating loss
Finance costs
Finance income
Loss before tax
Taxation
Loss after tax
LSL share of total loss after tax
Adjustment for non-controlling interests
LSL share of post-tax (loss) from joint venture

The above Pivotal results for the period ended 31 December 2023 includes the following:

Depreciation
Amortisation

2023
£’000

28,981
2,273
8,896
(7,874)
(12,574)
19,702
241
19,943
9,359

2023
£’000

37,308
(37,886)
(578)
–
34
(544)
(606)
(1,150)
(549)
159
(390)

2023
£’000
(170)
(51)

2022
£’000

11,827
257
1,986
(1,357)
(2,110)
10,603
–
–
5,068

2022
£’000

6,217
(6,974)
(757)
(6)
–
(763)
(269)
(1,032)
(494)
–
(494)

2022
£’000
(24)
(3)

161

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Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

21. Contract assets

Non-current contract asset
Current contract asset

2023
£’000
329
40
369

2022
£’000
431
348
779

In 2021, the Group entered a long-term contract for the provision of mortgage and insurance advice in the Financial Services Division. In accordance
with IFRS 15, items relating to the reimbursement of costs associated with the award of material contracts in the Group have been recognised
as contract assets. This reimbursement will be amortised over the term of the contracts. The amount of amortisation recognised in the income
statement in 2023 is £0.3m (2022: £0.4m). During the year, the Group reviewed the contract’s value-in-use (VIU) and recognised £0.1m (2022: £nil)
impairment to the asset.

22. Trade and other receivables

Current
Trade receivables
Prepayments*
Accrued income
Other debtors
Reclassified to held for sale

2023
£’000

5,611
6,377
9,656
1,562
–
23,206

Restated*
2022
£’000

14,887
10,761
7,982
380
(7,402)
26,608

*Accrued income was reported within the prepayments balance in the 2022 financial statements.

Trade receivables are non-interest-bearing and are generally on 4 to 30 day terms depending on the services to which they relate. As at
31 December 2023, trade receivables with a nominal value of £3.6m (2022: £3.0m) were impaired and provided for. Set out below is the movement
in the allowance for expected credit losses of trade receivables:

At 1 January
Provision for expected credit losses
Amounts written off
At 31 December

2023
£’000
2,988
1,588
(954)
3,622

2022
£’000
3,248
453
(713)
2,988

The chosen method of recognising the expected credit loss across the Group is the simplified approach allowing a provision matrix to be used, which
is based on the expected life of trade receivables, historic default rates and forward-looking information.

As at 31 December, an analysis of gross trade receivables by credit risk rating grades is as follows:

2023
2022

Total
£’000

18,889
25,857

Neither past due
nor impaired
£’000

7,215
17,552

<30 days
£’000

5,568
2,504

30-60 days
£’000

60-90 days
£’000

90-120 days
£’000

863
780

362
329

515
211

> 120 days
£’000

4,366
4,481

The expected credit loss rate applied by ageing bracket has been disclosed below:

2023
2022

Neither past due
nor impaired

0.24%
0.90%

<30 days

6.29%
7.77%

30-60 days

60-90 days

90-120 days

> 120 days

14.03%
17.77%

28.60%
36.79%

33.81%
50.06%

64.71%
50.68%

During 2023 the expected credit loss rate applied to >120 days ageing bracket has increased due to a higher expectation of credit risk. This has been
driven by increased bad debt write offs in the year.

162

23. Cash and cash equivalents

Bank overdrafts reflect the aggregate overdrawn balances of Group companies (even if those companies have other positive cash balances). The
overdrafts are held with the Group’s relationship banks.

For the purpose of the statement of cash flows, cash and cash equivalents comprise the following at 31 December:

Cash and cash equivalents
Bank overdrafts
Cash and cash equivalents

24. Trade and other payables

Current
Trade payables
Other taxes and social security payable
Other payables
Accruals
Commission refund liability*
Reclassified to held for sale

*Formerly named lapse provision.

2023
£’000
58,110
(23,139)
34,971

2023
£’000

6,423
4,755
6,683
9,769
2,855
–
30,485

Restated
2022
£’000
61,215
(24,460)
36,755

2022
£’000

8,416
11,764
2,524
25,430
5,240
(6,344)
47,030

Commission refund liability
Certain subsidiaries earn commissions on the sale of life assurance and general insurance products with terms from one to four years which are
cancellable without a notice period and, if cancelled within a set period, require that a portion of the commission earned must be repaid. The
subsidiaries do not hold insurance risk on the life assurance and general insurance products sold.

The commission refund liability is recognised as a reduction in revenue. The liability represents management’s best estimate of commissions that
will be clawed back for insurance products sold that may be cancelled in future periods and is calculated based on historic cancellation experience. If
average lapse rates across all products sold were to increase by 1.0%, the total liability would increase by £0.3m. The reduction in commission refund
liabilities in the year was due to the Group’s disposals of its direct-to-consumer financial service advice businesses EFS, Group First and RSC.

25. Financial liabilities

Current
IFRS 16 lessee financial liabilities
Contingent consideration

Non-current
IFRS 16 lessee financial liabilities
Contingent consideration

2023
£’000

3,255
65
3,320

5,085
–
5,085

2022
£’000

4,669
2,280
6,949

6,246
31
6,277

Bank loans – RCF and overdraft
In accordance with the terms at 31 December 2023, the utilisation of the RCF may vary each month as long as this does not exceed the maximum
£60.0m facility (2022: £90.0m). The Group’s overdraft is also secured on the same facility, and the combined overdraft and RCF cannot exceed
£60.0m (2022: £90.0m). The banking facility is repayable when funds permit on or by May 2026.

163

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Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

25. Financial liabilities (continued)

Fees payable on the RCF amounted to £0.7m during the year (2022: £1.0m) including amortisation of arrangement fees and non-utilisation fees.

Contingent consideration

RSC
DLPS

Current contingent consideration
Non-current contingent consideration
Total contingent consideration
Opening balance
Cash paid
Acquisition
Amounts recorded through income statement
Closing balance

2023
£’000
–
65
65
65
–
65
2,311
(2,280)
–
34
65

2022
£’000
2,280
31
2,311
2,280
31
2,311
3,008
(76)
–
(621)
2,311

RSC
The contingent consideration of £2.3m, in line with the fair value recognised at 31 December 2022 was paid in January 2023 prior to the disposal of
the entity.

Direct Life and Pensions Services Limited
£0.07m of contingent consideration relates to DLPS, acquired in January 2021. The additional consideration has been calculated using earnings
multiple of four times EBITA. The contingent consideration was paid in February 2024.

The table below shows the allocation of the contingent consideration liabilities (income)/charge to the income statement:

Arrangement under IFRS 3
Unwinding of discount on contingent consideration (note 7)
Debit/(credit) to income statement

2023
£’000
31
3
34

2022
£’000
(696)
75
(621)

The contingent consideration charged to the income statement in the year, excluding the unwinding of discount relates to the previous acquisitions
of DLPS, debit of £0.03m (2022: £0.03m credit).

164

26. Provisions for liabilities

Balance at 1 January
Transfer from accruals*
Provided in financial year
Amount utilised
Amount released
Unwinding of discount
Balance at 31 December
Current liabilities
Non-current liabilities

PI claim
provisions
£’000
2,341
–
1,622
(406)
(339)
–
3,218
1,314
1,904
3,218

Onerous
leases
£’000
14
–
–
(13)
–
–
1
1
–
1

2023

Dilapidation
provision
£’000
–
1,007
4,647
–
(82)
119
5,691
1,948
3,743
5,691

Restructuring
provision
£’000
–
–
2,941
(872)
–
–
2,069
2,069
–
2,069

Other
£’000
–
571
–
–
–
–
571
571
–
571

Total
£’000
2,355
1,578
9,210
(1,291)
(421)
119
11,550
5,903
5,647
11,550

* The Group has transferred £1.2m of opening balances from accruals during 2023, including dilapidation provisions of £1.0m and an indemnity provision of £0.6m
relating to a previously disposed joint venture. The reclassification of the dilapidation provision is the result of a change to the planned timing of future works and the
reclassification of the indemnity provision is the result of a reassessment by Management in light of ongoing legal matters which cannot be assessed with a high degree
of certainty.

PI claim provisions:

Surveying & Valuation PI provision
The PI claim provision is to cover the costs of claims that arise during the normal course of business. The PI claim provision includes both valuation
and defect claims and provides for claims already received from clients and claims yet to be received. The provision is Management’s best estimate
of the likely outcome of such claims, taking account of the incidence of such claims and the size of the loss that may be borne by the claimant, after
taking account of actions that can be taken to mitigate losses.

The PI claim provision will be utilised as individual claims are settled, and the settlement amount may vary from the amount provided depending on
the outcome of each claim. It is not possible to estimate the timing of payment of all claims and therefore a significant proportion of the provision
has been classified as non-current. As of 31 December 2023, the total provision for PI claim was £2.4m. The Directors have considered the sensitivity
analysis on the key risks and uncertainties discussed above.

Valuation claims:

• Cost per claim

A substantial element of the PI claim provision relates to specific claims where disputes are ongoing. These specific claims have been separately
assessed and specific provisions have been made. The average cost per claim has been used to calculate the claims incurred but not yet reported
(IBNR). Should the costs to settle and resolve these specific claims and future claims increase by 10%, an additional £0.2m would be required.

• Rate of claim

The IBNR assumes that the rate of claim for the high-risk lending period reduces over time. Should the rate of reduction be lower than
anticipated and the duration extended, further costs may arise. An increase of 30% in notifications more than that assumed in the IBNR
calculations would increase the required provision by £0.5m. Claims are settled, on average, 3.7 years after initial notification.

• Notifications

The Group has received a number of notifications which have not deteriorated into claims or loss. Should the rate of deterioration increase by
50%, an additional provision of less than £0.1m would be required.

Defect claims:
The Group also provides for defect claims, whereby it is found that a property has a defect which was not identified when the survey was performed.
The value provided for each received claim is the expected value of that claim. To assess the value of future claims incurred but not yet received
(IBNR), analysis is performed on the number of surveys that lead to future claims and the average cost per claim.

PI release:
The PI amounts released relate to a PI balance that was originally recognised as exceptional and relates specifically to valuation work performed pre-
2008 (pre-financial crisis).

165

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Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

26. Provisions for liabilities (continued)

Financial Services PI provision
The PI claim provision is to cover the costs of claims that arise during the normal course of business. The PI provision provides for both claims
which have been received from customers and claims yet to be received (IBNR). The provision includes amounts for the anticipated cost of offering
redress where appropriate, and is calculated using Management’s best estimate of the potential liability for claims received. In addition, an asset is
recognised for the estimated recoveries from professional indemnity insurance. The provision is presented gross of amounts due from insurers which
form part of other debtors included in note 22.

The Group calculates a provision for claims expected to be received based on the historical rate of claims, average cost per claim and the time which
elapses between the advice being provided and the claim being raised. The average cost per claim is calculated based on data from recent claims
paid. If the average rate of claim was to increase by 10%, the IBNR provision would increase by £0.01m and if the average cost per claim was to
increase by 10%, this would result in an increase to the provision of £0.02m.

As at 31 December 2023, the total provision for Financial Services PI was £0.9m, including a provision for received claims of £0.7m and IBNR of
£0.2m. The Group has recognised an asset of £0.6m against received claims in other debtors at 31 December 2023.

Dilapidation provision
The Group recognises its obligation to make good its leased properties when it becomes probable that there will be an economic outflow and a
reliable estimate can be made, this is typically where notice has been served to the landlord and there is an agreed exit date.

During the year, the Group has entered into a number of ‘right to occupy’ agreements with its Estate Agency franchisees. The right to occupy
agreements relate to leases held by the Group that are due to be novated to the franchisees. They set out the Group’s obligations to the franchisees,
regarding the making good of existing modifications to the leased properties incurred during the Group’s tenancy, which will be payable to the
franchisees at the point of novation. The calculation of the Group’s dilapidation settlement provision is based on an average cost rate per square foot,
for damages already incurred during the Group’s occupancy. The provision is discounted using a risk-free discount rate based on expected date of
novation of the lease.

If the average rates applied were to increase by 10% this would result in an increase in the overall provision of £0.8m, if they were to decrease by
10% this would result in a reduction of the same amount. If the discount rate was to increase by 1.0% this would result in a decrease in the provision
of £0.1m, if the discount rate was to decrease by 1.0% this would result in an increase in the provision of the same amount. Management has
concluded the provision to be the best estimate of the expenditure required to settle present obligations at the end of the reporting period.

Restructuring provision:
The restructuring provision recognised relates to costs associated with the disposal of the owned branch network (£2.0m), including committed
branch works (£1.1m) and legal costs for the novation of leases to franchisees (£0.9m).

Other:
Claims indemnity provision and contingency
Included in the sale agreement of LMS was a claims indemnity of £2.0m, for which the Group has provided £0.6m, which it considers to be the most
likely outcome, the Group disposed of LMS in 2021. Further cases exist and are considered possible, not probable, therefore no further provision has
been made for these cases in the Financial Statements. Should these claims succeed the estimated further costs would be £1.4m.

166

27. Leases

Group as a lessee
At the year ended 31 December 2023, the Group has the following in regards to leases in the Group Balance Sheet.

Right-of-use assets

1 January
Additions
Disposals
Depreciation
Transfer to investment in sublease
Reclassified as held for sale
31 December

Property
£’000
6,813
1,615
(1,597)
(1,356)
(3,791)
–
1,684

2023

Motor vehicles
£’000
2,971
2,710
(462)
(1,425)
(515)
–
3,279

Total
£’000
9,784
4,325
(2,059)
(2,781)
(4,306)
–
4,963

Property
£’000
22,788
3,356
(1,479)
(5,813)
–
(12,039)
6,813

2022

Motor vehicles
£’000
3,550
2,075

(52)
(1,963)
–
(639)
2,971

Total
£’000
26,338
5,431
(1,531)
(7,776)
–
(12,678)
9,784

These are included in the carrying amounts of property, plant and equipment on the face of the Group Balance Sheet and have been included in
note 18.

Lease liabilities

1 January
Additions
Interest expense
Disposals
Repayment of lease liabilities
Classification as held for sale
31 December

2023
£’000
10,915
4,350
580
(2,396)
(5,109)
–
8,340

2022
£’000
28,117
5,550
1,387
(875)
(8,557)
(14,707)
10,915

The Group added £4.4m (2022: £5.6m) of new lease liabilities in the year. The weighted average discount rate applied across the Group for these
additions was 7.40% (2022: 7.21%)

Maturity of these lease liabilities undiscounted is analysed as follows:

Current lease liabilities
Non-current lease liabilities
31 December 2023

Property
£’000
2,194
3,107
5,301

Motor vehicles
£’000
1,659
2,357
4,016

Total
£’000
3,853
5,464
9,317

These are included in non-current and current financial liabilities on the face of the Group Balance Sheet and have been included in note 25. Maturity
analysis of the future cash flows of lease liabilities has been included in note 32.

Group as a lessor
Following the transition of the Group’s entire owned estate agency network to franchises, described further in note 6, the Group has become an
intermediate lessor on premises it leased whilst owning the estate agency network, that are now operated by franchisees.

In such situations, the Group has maintained the head lease with the original lessor, and has entered a sublease with the franchisee until the head
lease transfers or expires.

The Group, in its capacity as lessor, has determined that the subleases with franchisees are finance leases and on the commencement date of the
sublease, the Group has derecognised the right-of-use assets previously associated with these leases and recognised a net investment in the sublease
of £4.3m on its balance sheet. The Group has since received £1.1m of repayments from the franchisees in relation to the subleases, with finance
income of £0.1m being recognised.

These leases have a term of up to five years. Although the risks associated with rights that the Group retains in underlying assets are not considered
to be significant, the Group employs strategies to further minimise these risks. For example, including clauses to enable periodic upward revision of
the rental charge in line with the head lease.

167

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Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

27. Leases (continued)

The maturity analysis of lease receivables, including the undiscounted lease payments to be received are as follows:

Less than 1 year
1-2 years
2-3 years
3-4 years
4-5 years
More than 5 years

Unearned finance income
Net investment in sublease

2023
£000
1,540
965
570
239
102
74
3,490
(152)
3,338

2022
£000
–
–
–
–
–
–
–
–
–

The following shows how lease income and expenses have been included in the income statement and cash flow statement, broken down between
amounts charged to operating profit and amounts charged to finance costs:

Depreciation of right-of-use assets
Property
Vehicles
Short-term and low value lease expense (note 10)
Sublease income
Charge to operating profit
Interest expense related to lease liabilities
Interest income related to investment in sublease
Charge to profit before taxation
Cash inflow/(outflow) relating to operating activities
Cash inflow relating to investing activities
Cash outflow relating to financing activities
Total net cash (outflow) relating to leases

2023
£’000

(1,356)
(1,425)
(2,294)
2,294
(2,781)
(580)
140
(440)
440
1,134
(4,529)
(2,955)

Restated
2022
£’000

(5,813)
(1,963)
(2,646)
68
(10,354)
(1,387)
–
(1,387)
(1,387)
68
(7,170)
(8,489)

At 31 December 2023 the Group had not entered into any leases to which it was committed but had not yet commenced.

28. Share capital

Authorised:
Ordinary shares of 0.2 pence each
Issued and fully paid:
At 1 January
At 31 December

2023

£’000

2022

£’000

500,000,000

1,000

500,000,000

1,000

105,158,950
105,158,950

210
210

105,158,950
105,158,950

210
210

168

29. Reserves

Share premium
The amount subscribed for share capital in excess of nominal value less any costs attributable to the issue of new shares.

Share-based payment reserve
The share-based payment reserve is used to record the value of equity-settled share-based payment provided to the employees, as part of their
remuneration. Note 15 gives further details of these plans.

Shares held by employee benefit trust (EBT) and share incentive plan (SIP)
Shares held by EBT represent the cost of LSL shares purchased in the market and held by the Employee Benefit Trust and the Share Incentive Plan
(SIP) to satisfy future exercise of options under the Group’s employee share options schemes.

At 31 December 2023, the Trust held 517,949 (2022: 1,063,097) LSL shares at an average cost of £3.86 (2022: £3.72), and the SIP held 991,419
(2022: 1,185,692) LSL shares at an average cost of £0.88 (2022: £0.88). The market value of the LSL shares at 31 December 2023 was £3.9m
(2022: £4.1m). The nominal value of each share is 0.2 pence.

Treasury shares
Treasury shares represent the cost of LSL shares purchased in the market as a result of a share buy-back scheme which commenced in April 2022
and ceased in September 2022. At 31 December 2023, LSL had repurchased 1,179,439 (2022: 1,179,439) LSL shares at an average cost of £3.38
(2022: £3.38). The market value of the LSL shares at 31 December 2023 was £3.0m (2022: £4.1m). The nominal value of each share is 0.2 pence.

Fair value reserve
The fair value reserve is used to record the changes in fair value of equity financial assets that the Group has elected to recognise through OCI.
Following the disposals of investments in Vibrant Energy Matters Limited (VEM) and Yopa Property Limited (Yopa) during the year, £20m of fair value
held within the fair value reserve were transferred to retained earnings.

30. Pension costs and commitments

The Group operates defined contribution pension schemes for certain Executive Directors and certain employees. The assets of the schemes are held
separately from those of the Group in independently administered funds, the total contributions to the defined contribution schemes in the year
were £4.5m (2022: £6.0m). At 31 December 2023, there were outstanding pension contributions of £0.5m (2022: £0.9m) included in trade and other
payables.

31. Client monies

As at 31 December 2023, monies held by the Group on behalf of franchisees in separate bank accounts in relation to client monies amounted to
£68.4m (2022: £104.1m). Neither this amount, nor the matching liabilities to the clients concerned are included in the Group Balance Sheet.

Client funds are protected by the Financial Services Compensation Scheme (FSCS) under which the Government guarantees amounts up to £85,000.
This guarantee applies to each individual client, not the total of deposits held by LSL.

32. Financial instruments – risk management

The Group’s principal financial instruments comprise of cash and cash equivalents with access to a further £60m revolving credit facility which
is undrawn at the balance sheet date. The main purpose of these financial instruments is to raise finance for the Group’s operations and to fund
acquisitions. The Group has various financial assets and liabilities such as trade receivables, cash and short term deposits and trade payables, which
arise directly from its operations.

The Group is exposed through its operations to the following financial risks:

• interest rate risk;

• liquidity risk; and

• credit risk.

Policy for managing these risks is set up by the Board following recommendations from the Group Chief Financial Officer. Certain risks are managed
centrally, while others are managed locally following communications from the centre. The policy for each of the above risks is described in more
detail below.

169

32. Financial instruments – risk management (continued)

Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the use of the Group’s RCF. The RCF incurs interest on
drawings at a variable rate, based on the Bank of England base rate plus a margin and this policy is managed centrally by the Group treasury function.
The subsidiaries are not permitted to borrow from external sources directly without approval from the Group treasury function.

The Group has not drawn down on its RCF during the year to 31 December 2023 and therefore has incurred no interest, the amount shown in
interest expense relates to the amortisation of the facility fees.

Liquidity risk
The Group aims to mitigate liquidity risk by managing cash generation by its operations, dividend policy and acquisition strategy. Acquisitions are
carefully selected with authorisation limits operating up to Board level and cash payback periods applied as part of the investment appraisal process.
In this way the Group aims to maintain a good credit rating to facilitate fundraising. The Group is also very cash generative. The Group has net current
assets in the current year. The requirement to pay creditors is managed through future cash generation and, if required, from the RCF.

The Group monitors its risk of a shortage of funds using a recurring liquidity planning tool and daily cash flow reporting. This includes consideration of
the maturity of both its financial investments and financial assets (e.g. accounts receivable, and other financial assets) and projected cash flows from
operations. The Group’s objective is to maintain a balance between continuity of funding and flexibility for potential acquisitions through the use of
its banking facilities.

Cash at the bank earns interest at floating rates based on daily bank overnight deposit rates. Short-term deposits are made for varying periods of
time depending on the immediate cash requirements of the Group and earn varying interest rates. The fair value of net cash and cash equivalents
is £35.0m (2022: £40.1m, including £3.4m included in assets held for sale). At 31 December 2023, the Group had available £60.0m of undrawn
committed borrowing facilities, of which the Group could have drawn £33.0m under the terms of the facility (2022: the Group could have drawn
£90.0m of the facility available at 31 December 2022).

The table below summarises the maturity profile of the Group’s financial liabilities at 31 December 2022 based on contractual undiscounted
payments:

Year ended 31 December 2023

Trade payables
Other payables
Overdraft
Contingent consideration
Lease liabilities

Year ended 31 December 2022 (Restated)

Trade payables
Other payables
Overdraft
Contingent consideration
Lease liabilities

On demand
£’000
–
–
23,139
–
–
23,139

On demand
£’000
–
–
24,460
–
–
24,460

Less than
3 months
£’000
6,423
21,207
–
65
963
28,658

Less than
3 months
£’000
8,416
39,718
–
2,280
1,886
52,300

3 to 12 months
£’000
–
–
–
–
2,890
2,890

3 to 12 months
£’000
–
–
–
–
5,659
5,659

1 to 5 years
£’000
–
–
–
–
5,385
5,385

1 to 5 years
£’000
–
–
–
31
15,371
15,402

> 5 years
£’000
–
–
–
–
79
79

> 5 years
£’000
–
–
–
–
5,025
5,025

Total
£’000
6,423
21,207
23,139
65
9,317
60,151

Total
£’000
8,416
39,718
24,460
2,311
27,941
102,846

The 2022 disclosure includes all payable balances that have been transferred to liabilities held for sale.

The liquidity risk of each Group entity is managed centrally by the Group Treasury function. The Group’s cash requirement is monitored closely. All
surplus cash is held centrally to achieve higher interest income. The type of cash instrument used and its maturity date will depend on the Group’s
forecast cash requirements. The Group has a RCF with a syndicate of major banking corporations to manage longer-term borrowing requirements.

170

32. Financial instruments – risk management (continued)

Capital management
The primary objective of the Group’s capital management is to ensure that it maintains appropriate capital structure to support its business
objectives, including any capital adequacy requirements, and maximise shareholder value. The capital structure of the Group consists of cash and
cash equivalents and equity attributable to the shareholders comprising issued capital, reserves and retained earnings as disclosed in the statement
of changes in equity.

The Group does not have a current ratio of Net Bank Debt to EBITDA (2022: nil) due to a net cash position of £35.0m (2022: net cash £40.1m) and
operating profit before exceptional costs, amortisation and share-based payment charge of £9.3m (2022: £36.5m). The business is cash generative
with a low capital expenditure requirement. The Group remains committed to its stated dividend policy of 30% of Group Underlying Operating Profit
after interest and tax. The Board has reviewed the policy in line with the risks and capital management decisions facing the Group.

Credit risk
There are no significant concentrations of credit risk within the Group. The Group is exposed to credit risk in respect of revenue transactions
(i.e. turnover from customers). It is Group policy, implemented locally, to obtain appropriate details of new customers before entering into contracts.

Estate Agency Franchising’s highest risk exposure is in relation to loans to franchises and their ability to service their debt. The Directors have
established a credit policy under which each new franchisee is analysed individually for creditworthiness before a franchise is offered. The Company’s
review includes external ratings, when available, and in some cases bank references.

Risk of exposure to non-return of cash on deposit is managed by placing funds with lenders who form part of the Group’s agreed banking facility
syndicate, which comprises several leading UK banks.

The majority of the Surveying & Valuation customers and those of the asset management business are large financial institutions and as such, the
credit risk is not expected to be significant. The maximum credit risk exposure relating to financial assets is represented by the carrying value as at the
balance sheet date.

Financial instruments are grouped on a subsidiary basis to apply the expected credit loss model.

The chosen method of recognising the expected credit loss across the Group is the simplified approach allowing a provision matrix to be used, which
is based on the expected credit life of trade receivables, historic default rates and forward-looking information. Trade receivable balances are written
off when the probability of recovery is assessed as being remote.

Interest rate risk profile of financial assets and liabilities
LSL’s treasury policy is described above. The disclosures below exclude short-term receivables and payables which are primarily of a trading nature
and expected to be settled within normal commercial terms.

The interest rate profile of the financial assets and liabilities of the Group as at 31 December 2023 are as follows:

Floating rate
Cash and cash equivalents
Bank overdrafts

Within 1 year
£’000

1‑2 years
£’000

2‑3 years
£’000

3‑4 years
£’000

Total
£’000

58,110
(23,139)

–
–

58,110
(23,139)

Fair values of financial assets and financial liabilities
There are no differences between the carrying amounts and fair values of all of the Group’s financial instruments that are carried in the Financial
Statements.

Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of the financial instruments by valuation technique:

• Level 1:

quoted (unadjusted) prices in active markets for identical assets or liabilities;

• Level 2:

other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or
indirectly; and

• Level 3:

techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

171

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Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

32. Financial instruments – risk management (continued)

The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities:

2023
Assets measured at fair value
Financial assets
Liabilities measured at fair value
Contingent consideration

2022

Assets measured at fair value
Financial assets
Liabilities measured at fair value
Contingent consideration

Total
£’000

5,461

Total
£’000

1,045

2,311

Level 1
£’000

Level 2
£’000

–

Level 1
£’000

Level 2
£’000

–

Level 3
£’000

5,461

Level 3
£’000

1,045

2,311

Financial assets in 2022 included £0.2m of IFRS 16 subleases held in assets held for sale.

The fair value of financial assets that are not traded in the open market is £0.4m (2022: £1.0m), these are valued using Level 3 techniques in
accordance with the fair value hierarchy and Management use all relevant and up to date information (including cash flow forecasts and financial
statements) to arrive at their judgement. Where appropriate, a range of potential outcomes is considered in reaching a conclusion. If this was to drop
by 10%, the implied valuation is likely to also drop by around 10%, £0.04m.

Contingent consideration receivable of £4.8m relates to EFS, Group First and RSC which were sold in 2023. The consideration payable will be 7x
the combined EBITDA in calendar year 2024, subject to working capital adjustments and is payable in the first half of 2025. The fair value of the
contingent consideration receivable has been calculated for each of the three disposals noted above based on forecast profitability in calendar year
2024, discounted at 15.5% (Financial Services Division’s weighted average cost of capital for an 18-month period).

The remaining £0.3m contingent consideration receivable relates to the Group’s disposal of lettings books in the year. Amounts are receivable in
December 2024 and November 2025.

The contingent consideration payable relates to amounts payable in the future on acquisitions. The amounts payable are based on the amounts
agreed in the contracts and based on the future profitability of each entity acquired. In valuing each provision, estimates have been made as to when
the options are likely to be exercised and the future profitability of the entity at this date. Further details of these provisions are shown in note 25. Of
the balance held at 31 December 2023, £0.07m (2022: £2.3m) relates to DLPS acquired in January 2021. The consideration has been calculated using
earnings multiple of 4x EBITA. The contingent consideration was paid in January 2024.

172

33. Related party transactions

As disclosed in note 20 LSL have one joint venture partner, Mottram Topco.

Transactions with Pivotal Growth and its subsidiaries

Gross commission received
Commissions paid to broker businesses
Revenue recognised
Receivable/(payable) at 31 December

2023
£’000
17,340
(6,710)
3,688
682

2022
£’000
3,833
(3,421)
412
(3)

There are no transactions with key management personnel other than those disclosed in note 15.

34. Events after the reporting period

On 2 February 2024, the Group acquired the entire issued share capital of TenetLime Limited (TenetLime), a subsidiary of Tenet Group Limited (Tenet
Group). TenetLime operates a network providing services to mortgage and protection advisers operating within appointed representative (AR) firms.
Following completion TenetLime became part of the PRIMIS Network and the Financial Services Network acquired 153 AR firms. The transaction also
includes the transfer of AR firms from Tenet Connect Limited (Tenet Connect) into other parts of the PRIMIS Network.

35. Alternative performance measures

In reporting financial information, the Group presents APMs which are not defined or specified under the requirements of IFRS. The Group believes
that the presentation of APMs provides stakeholders with additional helpful information on the performance of the business but does not consider
them to be a substitute for or superior to IFRS measures. Definitions and reconciliations of the financial APMs used to IFRS measures, are included
below.

The Group reports the following APMs:

a) Group and Divisional Underlying Operating Profit

Underlying Operating Profit represents the profit/(loss) before tax for the period before net finance cost, share-based payments, amortisation
of intangible assets, exceptional items and contingent consideration. This is the measure reported to the Directors as it considered to give a
consistent indication of both Group and Divisional underlying performance.

The closest equivalent IFRS measure to Underlying Operating Profit is operating profit/(loss). Refer to note 5 for a reconciliation between profit/
(loss) before tax and Group and Divisional Underlying Operating Profit.

b) Group and Divisional Underlying Operating Margin

Underlying Operating Margin is defined as Underlying Operating Profit divided by revenue. Refer to note 5 for the calculation of both Group and
Divisional Underlying Operating Margin. The closest equivalent IFRS measure to Underlying Operating Margin is operating margin, refer to note 5
for a reconciliation between operating margin and Group Underlying Operating Margin.

c) Adjusted basic earnings per share, adjusted diluted earnings per share and adjusted profit after tax

Adjusted basic earnings per share is defined as Group Underlying Operating Profit adjusted for profit/(loss) attributed to non-controlling
interests, net finance cost (excluding exceptional and contingent consideration items and discounting on leases) less normalised tax (to arrive at
adjusted profit after tax), divided by the weighted average number of shares in issue during the financial period. The effect of potentially dilutive
ordinary shares is incorporated into the diluted measure.

The closest equivalent IFRS measures are basic and diluted earnings per share. Refer to note 12 for a reconciliation between earnings/(loss) per
share and adjusted earnings per share.

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Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

35. Alternative performance measures (continued)

d) Adjusted operating expenditure
Adjusted operating expenditure is defined as the total of employee costs, depreciation on property, plant and equipment and other operating costs
and is considered to give a consistent indication of the Group’s underlying operating expenditure.

Total operating expenditure
Add back:
Other (losses)/gains
Gain on sale of property, plant and equipment
Share of post-tax (loss)/profit from joint venture
Share-based payments
Amortisation of intangible assets
Exceptional gains
Exceptional costs
Contingent consideration
Adjusted operating expenditure

2023
£’000
(140,671)

211
–
390
(164)
2,258
(9,320)
13,767
31
(133,498)

Restated
2022
£’000
(239,172)

(1,334)
–
494
1,860
2,787
(694)
48,316
(696)
(188,439)

e) Net cash/debt
Net cash/debt is defined as current and non-current borrowings, less cash on short-term deposits, IFRS 16 financial liabilities, deferred and contingent
consideration and where applicable cash held for sale.

Net Bank Cash/Debt is defined as follows:
Interest-bearing loans and borrowings (including loan notes, overdraft, IFRS 16 leases, contingent and deferred
consideration, bank overdraft)
– Current
– Non-current

Less: cash and short-term deposits
Less: IFRS 16 lessee financial liabilities
Less: deferred and contingent consideration
Less: cash included in held for sale
Net Bank Cash/Debt

2023
£’000

Restated
2022
£’000

26,459
5,085
31,544
(58,110)
(8,340)
(65)
–
(34,971)

31,410
6,277
37,687
(61,215)
(10,915)
(2,311)
(3,355)
(40,109)

f) Adjusted cash flow from operations
Adjusted cash flow from operations is defined as cash generated from operations, less the repayment of lease liabilities, plus the utilisation of PI
provisions.

2023
£’000
3,916
(4,529)
406
(207)

Restated
2022
£’000
34,116
(7,170)
762
27,708

Cash generated from operations
Payment of principal portion of lease liabilities
PI provision utilisation
Adjusted cash flow from operations

174

35. Alternative performance measures (continued)

g) Cash flow conversion rate
Cash flow conversion rate is defined as cash generated from operations (pre-PI Costs and post-lease liabilities, divided by Group Underlying Operating
Profit.

Adjusted cash flow from operations
Group Underlying Operating Profit
Cash flow conversion rate

36. Prior year restatements

2023
£’000
(207)
9,344
(2.2%)

Restated
2022
£’000
27,708
35,834
77.3%

Franchising of previously owned branches
During the current period, the Group franchised its entire owned estate agency network (183 branches). In accounting for this significant transaction,
the Group re-examined the accounting treatment that had been applied to a much smaller transaction in the first half of 2019, when 39 owned
estate agency branches were franchised. The Group has re-examined certain judgements made in accounting for the 2019 transaction, which
were deemed appropriate at the time, and has determined that restatement of the prior year financial information, in accordance with IAS 8, is
appropriate. The cumulative impact on retained earnings on 1 January 2022 was a reduction of £4.0m and was not cash-adjusting. The restatements
are discussed in points 1-3 below:

1. Disposal of goodwill
When the transaction in 2019 was originally accounted for, it was considered not necessary to dispose of goodwill associated with the previously
owned branches which were franchised. Having re-examined the accounting treatment applied; the Group has determined that goodwill of £5.2m,
associated with the previously owned Your Move and Reeds Rains branches, should have been derecognised in 2019. Restatement of the prior year
financial information in this regard results in a decrease in non-current assets only and has no impact on cash.

2. Recognition of franchise intangible and subsequent amortisation
The franchise agreements entered upon disposal of the previously owned branches were not considered to represent assets of the Group and were
not recognised in 2019 when the transaction was accounted for. Having re-examined the accounting treatment applied; restatement of the 2022
opening net assets in this regard will be an increase of £1.7m and has no impact on cash.

The fair value of the franchise intangible asset has been calculated based on the assumptions that would have been made had it been determined in
2019. This was calculated using the expected future cash flows (at the date of the agreement), discounted using a post-tax discount rate of 8.2% (the
Group’s WACC at the date of the agreement). A term of 15 years has been applied, consistent with Management’s estimate of most likely minimum
term per the franchise agreement. Market growth rates, consistent with the Group’s assumptions in 2019 were applied to 2020 and 2021, with a
long-term growth rate of 1.8% applied thereafter.

3. Revision to goodwill impairments
In light of point 1 above, the impairment charged to the goodwill of Your Move and Reeds Rains at 31 December 2022 (£42.0m) has been
re-examined to take account of the restated disposal of goodwill in 2019, resulting in increased headroom. The impact of this assessment is a
reduction to the impairment charge of £3.7m. Restatement of the prior year financial information in this regard results in an increase in non-current
assets and has no impact on cash.

Adjustments to assets held for sale
At 31 December 2022 the Group reported Marsh & Parsons, a single CGU as held for sale. Marsh & Parsons was written down to its fair value
less cost to sell (FVLCTS), which was calculated as the initial consideration received less transaction costs (£28.9m). The sale agreement included
provisions for adjustments to the initial consideration for debt-like items and working capital adjustments. Such amounts were subject to negotiation
and judgement and were not reflected in the fair value assessment at 31 December 2022. The Group has re-examined the judgements made and has
determined that an adjustment to consideration for debt-like items of £2.0m could have been reliably estimated at 31 December 2022. Rather than
recognising this adjustment as an increase in the loss on disposal in 2023, the prior year financial information has been restated, in accordance with
IAS 8. Restatement of the prior year financial information in this regard results in a decrease in current assets, an increase in exceptional costs and
has no impact on cash.

175

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Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

36. Prior year restatements (continued)

Customisation costs in computing arrangements
During the year, the Group revisited its accounting policy in relation to customisation costs incurred in implementing Software as a Service
(SaaS) arrangements. The Group’s accounting policy has historically been to capitalise costs directly attributable to the customisation of SaaS
platforms (typically the cost of employees), as intangible assets on the balance sheet. The Group has reviewed its SaaS arrangements and current
accounting policy during 2023 prompted by the significant restructuring during the year. The Group has concluded that the policy to capitalise
SaaS customisation costs, which was considered appropriate at the time, should be revised, and has determined that restatement of the prior year
financial information is appropriate.

The Group has applied the guidance per the IFRIC SaaS agenda decision as to whether customisation expenditure gives rise to an asset, including
whether the Group has control of the software, or whether the customisation creates a resource controlled by the Group that is separable from
the software. Where these criteria are not met, the Group’s updated policy is to expense costs to operating expenses as they are incurred. The
cumulative impact of the historic adjustment on retained earnings on 1 January 2022 was a reduction of £1.8m between 2019 – 2022 with a
corresponding reduction to intangible assets. At 31 December 2022, the adjustment results in a further reduction of £0.8m to retained earnings and
intangible assets, totalling £2.6m. The adjustment was not cash adjusting.

Cash offsetting
The Group has a bank offset arrangement that was previously recorded as part of cash and cash equivalents. The Group has reviewed its current
arrangements and has concluded that while the Group has a legally enforceable right of offset, the Group did not intend to settle the year-end
balance net. As a result, the overdraft balances included within the offset arrangement should be separately presented in the Group Balance Sheet,
rather than netted off against cash and cash equivalents. Consequently, a restatement has been made with the effect that cash and cash equivalents
and bank overdrafts as at 31 December 2022 increased by £23.1m (31 December 2021: £24.4m). The restatement has no impact on net assets, the
Group’s income statement or statement of cash flows.

Earnings per share
Basic and diluted earnings per share for prior periods have also been restated, as a result of the items above. For the year to 31 December 2022, the
amount of the correction for both basic and diluted earnings per share was an increase of 0.7 pence.

Tax impacts of prior year adjustments
The Group has assessed the tax impact of its prior year adjustments and determined that only the restatement with regards to recognition of
franchise intangible assets and subsequent amortisation has an impact of the tax charge previously reported. The impact would be a decrease in tax
charge by £0.1m and has no impact on cash.

176

36. Prior year restatements (continued)

Balance sheet (extract)

1. Disposal
of goodwill
£’000

2. Franchise
intangible
asset
£’000

5. Custom-
isation
costs
£’000

6. Cash
offsetting
£’000

Restated
year ended
31 December
2021
£’000

Reported
year ended
31 December
2022
£’000

1. Disposal
of goodwill
£’000

2. Franchise
intangible
asset
£’000

3. Revision
of goodwill
impairments
£’000

4. Adjust-
ments to
assets held
for sale
£’000

5. Custom-
isation
costs
£’000

6. Cash
offsetting
£’000

Restated
year ended
31 December
2022
£’000

Reported
year ended
31 December
2021
£’000

–

Current assets

Assets held for

sale

Cash and cash

equivalents

48,464

Non-current

assets

Goodwill

Other intangible

assets

Current

liabilities

Bank overdrafts

–

Non-current

liabilities

Deferred tax

–

56,437

24,248

72,712

36,755

–

1,670

(1,757)

–

(24,248)

–

160,865

(5,211)

155,654

56,530

(5,211)

29,604

29,517

15,747

–

(2,582)

–

54,402

24,460

61,215

–

54,997

14,698

–

(24,460)

–

3,678

(2,035)

–

1,533

–

liability

(2,073)

–

(418)

–

Net assets

218,119

(5,211)

1,252

(1,757)

Equity

Retained

earnings

Total equity

224,832

218,119

(5,211)

1,252

(1,757)

–

Income statement (extract)

(2,491)

(2,008)

–

(384)

–

212,403

131,053

(5,211)

1,149

3,678

(2,035)

(2,582)

219,116

149,134

212,403

131,053

(5,211)

1,149

3,678

(2,035)

(2,582)

(2,035)

(2,582)

–

(2,392)

126,052

144,133

126,052

Reported
year ended
31 December
2022
£’000

2. Recognition
of franchise
intangible and
subsequent
amortisation
£’000

(67,500)

(4,112)
(88,898)

(56,709)
(4,891)

–

(137)
–

(137)
34

3. Revision
of goodwill
impairments
£’000

4. Adjustments
to assets held
for sale
£’000

5. Customisation
costs in
computing
arrangements
£’000

Restated
year ended
31 December
2022
£’000

Continued
operations
£’000

Discontinued
operations
£’000

–

(1,054)

(68,554)

(35,502)

(33,052)

–
3,678

3,678
–

–
(2,035)

(2,035)
–

229
–

(825)
–

(4,020)
(87,255)

(56,028)
(4,857)

(2,787)
(48,316)

(21,700)
(3,020)

(1,233)
(38,939)

(34,328)
(1,837)

(64,017)

(103)

3,678

(2,035)

(825)

(63,302)

(26,791)

(36,511)

Other operating
costs
Amortisation of
intangible assets
Exceptional costs
Operating profit/
loss
Taxation charge
Profit/(loss) for
the year

177

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Notes to the Group Financial Statements continued.
for the year ended 31 December 2023

37. Subsidiary and joint venture companies

As at 31 December 2023, the Group owned directly or indirectly the following issued and fully paid ordinary and preference share capital of its
subsidiary undertakings, all of which are incorporated in Great Britain, with the exception of Albany Insurance Company (Guernsey) Limited, which is
incorporated in Guernsey, and whose operations are conducted mainly in the UK. The results for all of the subsidiaries have been consolidated within
these Financial Statements:

Registered
office
address
1
1

Proportion of
nominal value
of shares held
LSL shareholder
LSL Property Services plc
100%
Lending Solutions Holdings Limited 100%

LSL holding
Direct
Indirect

Nature of business
Holding Company
Non Trading

Name of subsidiary company
Lending Solutions Holdings Limited
Lending Solutions Limited

Financial Services
Direct Life Quote Holdings Limited
Direct Life and Pensions Services
Limited
Direct Life Limited

LifeQuote Limited

2
2

Reeds Rains Financial Services Limited 2
1
Advance Mortgage Funding Limited

First Complete Limited

Linear Financial Services Limited

Linear Financial Services Holdings
Limited
Linear Mortgage Network Holdings
Limited
Linear Mortgage Network Limited

Mortgage Gym Solutions Ltd.

Personal Touch Administration
Services Limited
Personal Touch Financial Services
Limited
Qualis Wealth Limited

Surveying & Valuation
Albany Insurance Company (Guernsey)
Limited
e.surv Limited

Direct
Indirect

LSL Property Services plc
Direct Life Quote Holdings Ltd

89.5%
100%

Holding Company
Financial Services

Indirect

Indirect
Direct

Direct Life and Pensions Services
Limited
Direct Life and Pensions Services
Limited
Reeds Rains Limited
LSL Property Services plc

100%
100%

100%

Non Trading

100%

Non Trading

Indirect

Lending Solutions Holdings Limited 100%

Financial Services
Financial Services and
Holding Company
Financial Services and
Holding Company
Non Trading

Indirect

Linear Financial Services Holdings
Limited
First Complete Limited

100%

Holding Company

Indirect

First Complete Limited

100%

Holding Company

Indirect

Direct

Linear Mortgage Network Holdings
Limited
LSL Property Services plc

Indirect

Direct

Personal Touch Financial Services
Limited
LSL Property Services plc

100%

Financial Services

100%

Business and domestic
software development
Financial Services

100%

Financial Services

Direct

LSL Property Services plc

100%

Financial Services

Direct

LSL Property Services plc

100%

Captive Insurer

Direct

LSL Property Services plc

100%

Chartered Surveyors

Estate Agency Franchising – asset management
LSL Corporate Client Services Limited
St Trinity Limited
Templeton LPA Limited

1
1
1

Direct
Direct
Indirect

LSL Property Services plc
LSL Property Services plc
First Complete Limited

100%
100%
100%

Asset Management
Non Trading
Asset Management

Estate Agency Franchising – residential sales and lettings
Airport Lettings Stansted Limited

Indirect

ICIEA Limited

100%

Non Trading

178

37. Subsidiary and joint venture companies (continued)

Registered
office
address
2
2
2

2
2
2
2
2
2
2
2
2

Name of subsidiary company
Bawtry Lettings and Sales Limited
Brown North East Lettings Ltd
Charterhouse Management (UK)
Limited
David Frost Estate Agents Limited
Davis Tate Ltd
EA Student Lettings Ltd
Eastside Property Developments Ltd
Fourlet (York) Limited
GFEA Limited
Guardian Property Lettings Limited
Hawes & Co Limited
Headway Property Management
Limited
Holloways Residential Ltd
Home and Student Link Limited
Homefast Property Services Limited
Hydegate Limited
ICIEA Limited
Inter County Lettings Limited
IQ Property (Hull) Limited
JNP Estate Agents Limited
JNP Estate Agents (Princes
Risborough) Limited
JNP (Residential Lettings) Limited
JNP (Surveyors) Limited
Kent Property Solutions Limited
LSL Land & New Homes Ltd
Lauristons Limited
LetCo Group Limited
LetCo Limited
Lets Move Property Limited
Longshoot Properties Limited
LSLi Limited
New Daffodil Limited
New Let Limited
Oakley Lettings Limited
Paul Graham Lettings &
Management Ltd
2
Philip Green Lettings Limited
4
PHP Lettings Scotland Limited
Prestons Lettings Ltd
2
Pygott & Crone Lincoln Lettings Limited 2
2
Reeds Rains Limited

2
2
2
2
2
2
2
2
2
1
2
2
2
2

Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect

Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Direct
Direct
Indirect
Indirect
Indirect

Indirect
Indirect
Indirect
Indirect
Direct

LSL holding
Indirect
Indirect
Indirect

LSL shareholder
your-move.co.uk Limited
your-move.co.uk Limited
your-move.co.uk Limited

Proportion of
nominal value
of shares held
100%
100%
100%

Nature of business
Non Trading
Non Trading
Non Trading

Vitalhandy Enterprises Limited
LSLi Limited
your-move.co.uk Limited
your-move.co.uk Limited
Reeds Rains Limited
LSLi Limited
Reeds Rains Limited
LSLi Limited
Reeds Rains Limited

100%
100%
100%
100%
100%
100%
100%
100%
100%

100%
your-move.co.uk Limited
your-move.co.uk Limited
100%
Lending Solutions Holdings Limited 77.5%
100%
JNP Estate Agents Limited
100%
LSLi Limited
100%
ICIEA Limited
100%
Reeds Rains Limited
100%
LSLi Limited
100%
JNP Estate Agents Limited

JNP Estate Agents Limited
LSLi Limited
your-move.co.uk Limited
your-move.co.uk Limited
LSLi Limited
your-move.co.uk Limited
LetCo Group Limited
your-move.co.uk Limited
your-move.co.uk Limited
LSL Property Services plc
LSL Property Services plc
your-move.co.uk Limited
ICIEA Limited
GFEA Limited

JNP Estate Agents Limited
your-move.co.uk Limited
Reeds Rains Limited
your-move.co.uk Limited
LSL Property Services plc

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

100%
100%
100%
100%
100%

100%
100%

Non Trading
Holding Company
Non Trading
Non Trading
Non Trading
Holding Company
Non Trading
Holding Company
Non Trading

Non Trading
Non Trading
Conveyancing Packaging
Non Trading
Non-Trading
Non Trading
Non Trading
Holding Company
Non Trading

Non Trading
Non Trading
Non Trading
Residential Sales
Non-Trading
Holding Company
Non Trading
Non Trading
Non Trading
Estate Agency
Non Trading
Non Trading
Non Trading
Non Trading

Non Trading
Non Trading
Non Trading
Non Trading
Estate Agency and Holding
Company
Non Trading
Non Trading

179

Reeds Rains Cleckheaton Limited
Simply Let Ltd.

2
4

Indirect
Indirect

Reeds Rains Limited
your-move.co.uk Limited

37. Subsidiary and joint venture companies (continued)

Name of subsidiary company
Thomas Morris Limited
Top-Let Limited
Vitalhandy Enterprises Limited
Warners Letting Agency Limited
Yates Lettings Limited
your-move.co.uk Limited

Registered
office
address
1
2
2
2
2
1

Proportion of
nominal value
of shares held
LSL shareholder
100%
LSLi Limited
100%
LetCo Group Limited
100%
LSLi Limited
100%
ICIEA Limited
Davis Tate Ltd
100%
Lending Solutions Holdings Limited 100%

LSL holding
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect

Lawlors Property Services Limited

Indirect

ICIEA Limited

100%

Nature of business
Non Trading
Non Trading
Holding Company
Non Trading
Non Trading
Estate Agency and Holding
Company
Non Trading

Registered office addresses:
1. Newcastle House, Albany Court, Newcastle upon Tyne, NE4 7YB
2. Howard House, 3 St Mary’s Court, Blossom Street, York, YO24 1AH
3. 80 Hammersmith Road, London, W14 8UD
4. 13 Queens Road, Aberdeen, Scotland, AB15 4YL
5. Unit 1, Orion Park, Kettering, Northamptonshire, England, NN15 6PP
6. The Albany, South Esplanade, St Peters Port, Guernsey, GY1 4NF

Audit exemptions under section 479a of the Companies Act
The following eleven subsidiaries are exempt from audit of individual accounts under section 479a of the Companies Act 2006:

• Lending Solutions Holdings Limited (05095079)

• Reeds Rains Financial Services Limited (08130339)

• New Daffodil Limited (02045933)

• Templeton LPA Limited (06507759)

• St Trinity Limited (07092652)

• Mortgage Gym Solutions Ltd (12460735)

• LSL Land & New Homes Ltd (09018581)

• LSL Corporate Client Services Limited (07299192)

• Linear Mortgage Network Limited (05198588)

• Personal Touch Administration Services Limited (03456365)

• Qualis Wealth Limited (11784115)

180

Parent Company Balance Sheet

as at 31 December 2023

Company No. 05114014

Non-current assets
Other intangible assets
Property, plant and equipment and right-of-use assets
Investment in subsidiaries
Financial assets
Investment in joint venture
Trade and other receivables
Contract assets
Deferred tax asset

Current assets
Trade and other receivables
Cash and cash equivalents
Contract assets
Assets held for sale

Total assets
Current liabilities
Trade and other payables
Bank overdrafts
Financial liabilities
Provision for liabilities

Non-current liabilities
Financial liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium account
Share-based payment reserve
Shares held by employee benefit trust and share incentive plan
Treasury shares
Fair value reserve
Retained earnings
Total equity

Note

2023
£’000

3
4
5
6
7
8
9
14

8
10
9

11
10
12
13

15
16
16
16
16
16

36
937
113,484
1,640
9,359
4,408
329
3,659
133,852

10,537
32
40
–
10,609
144,461

(49,157)
(16,663)
(107)
(571)
(66,498)

(65)
(66,563)
77,898

210
5,629
3,564
(2,871)
(3,983)
(306)
75,655
77,898

Restated*
2022
£’000

79
1,945
116,666
115
5,068
18,079
–
1,019
142,971

20,376
–
–
26,815
47,191
190,162

(85,536)
(4,826)
–
–
(90,362)

(31)
(90,393)
99,769

210
5,629
5,331
(5,457)
(3,983)
(20,190)
118,229
99,769

*See note 21 for details regarding the restatement.
As permitted by Section 408 (3) of the Companies Act 2006, no profit and loss account of the Company is presented. The loss after tax for the
financial year of the Company was £9.8m (2022: £24.4m loss after tax). The notes on pages 184 to 196 form part of these Financial Statements.

The Financial Statements were approved by and signed on behalf of the Board by:

David Stewart
Group Chief Executive Officer
24 April 2024

Adam Castleton
Group Chief Financial Officer
24 April 2024

181

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Parent Company Statement of Cash Flows

for the year ended 31 December 2023

Note

5
5
8
4
3

2023
£’000
(12,673)

8,215
(1,394)
(369)
2,672
533
1,925
675
43
(132)
390
(566)
2,348
(14,500)
(12,833)

11,110
(41,295)
571
(29,614)
(42,447)
(758)
–
6,897
(36,308)

(4,681)
14,500
(129)
26,100
35,790

319
31,195
(19,390)
–
–
–
(11,714)
108
518
–
–
–

Restated*
2022
£’000
(25,010)

(45)
–
–
36,687
–
5,684
1,175
–
1,527
1,361
(80)
1,261
(27,000)
(4,440)

(6,430)
13,465
–
7,035
2,595
(1,181)
(1,271)
–
143

(3,952)
27,000
(3,112)
–
19,936

–
6,699
(6,821)
825
(5,026)
(3,983)
(11,773)
–
(20,079)
–
–
–

Parent operating loss before tax
Adjustments for:
Exceptional costs
Exceptional gains
Increase in contract asset
Impairment of investments
Disposal of investments
Impairment of receivables
Depreciation of tangible assets
Amortisation of intangible assets
Share-based payments
Loss from joint venture
Finance income
Finance costs
Dividend income
Operating cash flows before movements in working capital
Movements in working capital
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Increase in provisions

Cash generated from operations
Interest paid
Income taxes paid
Group tax relief settlement
Net cash generated from operating activities
Cash flows used in investing activities
Investment in joint venture
Dividends received from subsidiaries
Purchases of property, plant and equipment
Proceeds from sale of subsidiary
Net cash generated on investing activities
Cash flows used in financing activities
Interest received
Drawdown of overdraft
Repayment of overdraft
Proceeds from exercise of share options
Purchase of LSL shares by employee benefit trust
Repurchase of treasury shares
Dividends paid to equity holders of the Parent
Repayment of lease liabilities
Net cash (expended) in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

* See note 21 for details regarding the restatement.

The notes on pages 184 to 196 form part of these Financial Statements.

182

Parent Company Statement of Changes in Equity

for the year ended 31 December 2023

As at 1 January 2023
Loss for the year
Revaluation of financial assets
Total comprehensive loss for the year
Exercise of options
Vested share options lapsed in the year
Share-based payment transactions
Fair value reclassification following disposal
Tax on share-based payments
Dividends paid
As at 31 December 2023

Share
capital
£’000

Share
premium
£’000

Share-based
payment
reserve
£’000

Shares held
by EBT
and SIP
£’000

210
–
–
–
–
–
–
–
–
–
210

5,629
–
–
–
–
–
–
–
–
–
5,629

5,331
–
–
–
(1,106)
(445)
(109)
–
(107)
–
3,564

(5,457)
–
–
–
2,586
–
–
–
–
–
(2,871)

Treasury
shares
£’000

(3,983)
–
–
–
–
–
–
–
–
–
(3,983)

Fair value
reserve
£’000

(20,190)
–
(116)
(116)
–
–
–
20,000
–
–
(306)

Retained
earnings
£’000

118,229
(9,825)
–
(9,825)
(1,480)
445
–
(20,000)
–
(11,714)
75,655

Total
£’000

99,769
(9,825)
(116)
(9,941)
–
–
(109)
–
(107)
(11,714)
77,898

The notes on pages 184 to 196 form part of these Financial Statements.

As at 1 January 2022
Loss for the year (Restated)*
Revaluation of financial assets
Total comprehensive loss for the year
Shares repurchased into treasury
Shares repurchased into EBT
Exercise of options
Share-based payment transactions
Tax on share-based payments
Dividends paid
As at 31 December 2022

*See note 21 for details regarding the restatement

Share
capital
£’000

Share
premium
£’000

Share-based
payment
reserve
£’000

Shares held
by EBT
and SIP
£’000

210
–
–
–
–
–
–
–
–
–
210

5,629
–
–
–
–
–
–
–
–
–
5,629

5,263
–
–
–
–
–
(1,806)
1,977
(103)
–
5,331

(3,063)
–
–
–
–
(5,026)
2,632
–
–
–
(5,457)

Treasury
shares
£’000

–
–
–
–
(3,983)
–
–
–
–
–
(3,983)

Fair value
reserve
£’000

(15,695)
–
(4,495)
(4,495)
–
–
–
–
–
–
(20,190)

Retained
earnings
£’000

154,469
(24,466)
–
(24,466)
–
–
(1)
–
–
(11,773)
118,229

Total
£’000

146,813
(24,466)
(4,495)
(28,961)
(3,983)
(5,026)
825
1,977
(103)
(11,773)
99,769

During the year ended 31 December 2022, the Trust acquired 1,351,000 LSL shares. During the period, 890,146 share options were exercised relating
to LSL’s various share option schemes resulting in the shares being sold by the Trust. LSL received £0.8m on exercise of these options.

The notes on pages 184 to 196 form part of these Financial Statements.

183

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

Notes to the Parent Company Financial Statements

for the year ended 31 December 2023

1. Accounting policies

Basis of preparation
The Company Financial Statements have been prepared in accordance with UK-adopted IAS. The Company Financial Statements have been prepared
on a going concern basis and on a historical cost basis, except for, certain debt and financial assets and liabilities that have been measured at fair
value.

The accounting policies which follow set out those significant policies which apply in preparing the Financial Statements for the year ended
31 December 2023. The Company’s Financial Statements are presented in pounds sterling and all values are rounded to the nearest thousand pounds
(£’000) except when otherwise indicated.

In preparing the Parent Company Financial Statements Management has considered the impact of climate change, taking into account the relevant
disclosures in the Strategic Report. The impact of climate-related risks on the Group Financial Statements have been disclosed in the Group basis of
preparation note. The extent to which the Group climate-related risks effect the Parent Company accounts is focused on how medium (4-9 years) to
long term risks (beyond 10 years) may impact our future revenue profile, which could further impact the carrying value of investments. The potential
impact of climate-related risks on the Parent Company’s impairment assessment is considered sufficiently remote at this point in time and therefore
no sensitivity analysis has been performed.

Judgements and estimates
The preparation of financial information in conformity with UK-adopted IAS, requires management to make judgements, estimates and assumptions
that affect the application of policies and reporting amounts of assets and liabilities, income and expenses. The estimates and associated assumptions
are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form
the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and
future periods.

• Judgements
There are no areas of judgement that have a significant effect on the amounts recognised in the Financial Statements of the Company.

• Estimates
The key assumption affected by future uncertainty that has significant risks of causing material adjustment to the carrying value of assets and
liabilities within the next financial year is:

Recoverability of investments and receivables from Group companies (estimate)
The Company assesses whether there are any indicators of impairment of investments or receivables from Group companies at each reporting date.
Investments and receivables from Group companies are tested for impairment when there are indicators that the carrying amounts may not be
recoverable. Details of impairments of investments recorded during the year are included in note 5 and details of intercompany impairments are
included in note 8.

Deferred tax
The Company recognises deferred tax assets on all applicable temporary differences where it is probable that future taxable profits will be available
for utilisation. This requires Management to make judgements and assumptions regarding the amount of deferred tax that can be recognised based
on the magnitude and likelihood of future taxable profits. The carrying amount of deferred tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

Summary of significant accounting policies
The accounting policies adopted in the preparation of the Company Financial Statements are consistent with those followed in the preparation of the
Company Annual Financial Statements for the year ended 31 December 2023.

Income taxes
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates
and laws that are enacted or substantively enacted by the balance sheet date. Management periodically evaluates positions taken in the tax returns
with respect to the situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

184

1. Accounting policies (continued)

•

where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss;

in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and

deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, carried forward tax credits or tax losses can be utilised.

Deferred income tax assets and liabilities are offset, only if a legally enforceable right exists to set off current tax assets against current tax liabilities,
the deferred income taxes relate to the same taxation authority and that authority permits the Group to make a single net payment. Income tax is
charged or credited directly to other comprehensive income or equity, if it relates to items that are charged or credited in the current or prior periods
to other comprehensive income or equity respectively. Otherwise income tax is recognised in the income statement.

Pensions
The Company operates a defined contribution pension scheme for employees of the Company. The assets of the scheme are invested and managed
independently of the finances of the Company. The pension cost charge represents contributions payable in the year.

Share-based payment transactions
The fair value of employee share option plans and share award scheme, which are all equity-settled, is calculated at the grant date using the Black
Scholes model. The resulting cost is charged to the Company income statement over the vesting period. The value of the charge is adjusted to reflect
expected and actual levels of vesting.

Treasury shares
Where the Company repurchases shares from existing shareholders, they are held as treasury shares and are presented as a deduction from equity.
No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Treasury
shares are ignored for the purposes of calculating the Group’s earnings per share.

Shares held by employee benefit trust (EBT) and share incentive plan (SIP)
The Group has an employee share scheme (ESOT) for the granting of LSL shares to Executive Directors and selected senior employees and an
employee share incentive plan (trust). Shares in LSL held by the ESOT and the trusts are treated as treasury shares and presented in the balance sheet
as a deduction from equity. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of the Group’s own
equity instruments. The finance costs and administration costs relating to the ESOT and the trusts are charged to the income statement. Dividends
earned on shares held in the ESOT and the trusts have been waived.

Investments in subsidiaries
Investments are shown at cost less provision for impairment. The cost of an investment is measured as the aggregate of the consideration
transferred, measured at acquisition date fair value. Any contingent consideration will be recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration are recognised through profit and loss.

Investments are reviewed for impairment annually or more frequently if events or changes in circumstances indicate that its carrying value may be
impaired.

185

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)1. Accounting policies (continued)

Investments in joint venture
The Company’s share of the results of joint ventures is included in the Group Income Statement using the equity method of accounting. Investments
in joint ventures are carried in the Parent Company Balance Sheet at cost plus post-acquisition changes in the Company’s share of the net assets of
the entity, less any impairment in value. Goodwill relating to the joint venture is included in the carrying amount of the investment and is not tested
for impairment individually. Unrealised gains and losses resulting from transactions between the Company and the joint venture are eliminated to the
extent of the interest in the joint venture.

In addition, when there has been a change recognised directly in the equity of the joint venture, the Company recognises its share of any changes,
when applicable, in the statement of changes in equity.

The Financial Statements of the joint venture are prepared for the same reporting period as the Company. When necessary, adjustments are made to
bring the accounting policies in line with those of the Group.

Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when
annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable
amount is the higher of its fair value less costs to sell (FVLCTS) and value-in-use (VIU). Where the carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount. In assessing an asset’s VIU, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. Impairment losses of continuing operations are recognised in the income statement in those expense categories consistent with
the function of the impaired asset.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s recoverable amount.

Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses. Property, plant and equipment is depreciated
on a straight-line basis to its residual value over its anticipated useful economic life:

Office equipment, fixtures and fittings
Computer equipment
Leasehold improvements

– over three to seven years
– over three to four years
– over the shorter of the lease term or ten years

Financial instruments
Financial assets and financial liabilities are recognised in the Company’s Balance Sheet when the Company becomes a party to the contractual
provisions of the instrument. When financial assets are recognised initially, they are measured at fair value, being the transaction price plus, in the
case of financial assets not at fair value through the income statement, directly attributable transaction costs. Financial assets are derecognised when
the Company no longer has the rights to cash flows, the risks and rewards of ownership or control of the asset. Financial liabilities are derecognised
when the obligation under the liability is discharged, cancelled or expires. The subsequent measurement of financial assets depends on their
classification.

Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity instruments designated at fair value through
OCI when they meet the definition of equity under IFRS 9 Financial Instruments and are not held for trading. The classification is determined on an
instrument-by-instrument basis. Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other
income in the statement of profit or loss when the right of payment has been established, except when the Company benefits from such proceeds as
a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through
OCI are not subject to impairment assessment.

186

Notes to the Parent Company Financial Statements continued.for the year ended 31 December 20231. Accounting policies (continued)

The Company’s accounting policy for each category of financial instruments is as follows:

Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at fair value less directly attributable transaction costs. After initial recognition, interest-bearing loans
and borrowings are subsequently measured at amortised cost using the effective interest method. Gains and losses arising on repurchase, settlement
or otherwise cancellation of liabilities are recognised respectively in finance income and finance costs. Finance costs comprise interest payable on
borrowings calculated at the effective interest rate method and recognised on an accruals basis. Borrowing costs are recognised as an expense when
incurred.

Intercompany receivables
Intercompany receivables are classified as current where the balance is expected to be repaid in the next 12 months and non-current when they are
expected to be repaid in more than 12 months. The Company recognises a loss allowance based on the lifetime expected credit loss for intercompany
receivables at each reporting date.

2. Cash flow from financing activities

Short term liabilities

At 1 January
2023
£’000
4,826
4,826

Cash flow
£’000
11,837
11,837

Acquisitions
£’000
–
–

Foreign
exchange
£’000
–
–

Unwind of
discount
£’000
–
–

At 31 December
2023
£’000
16,663
16,663

Short term liabilities
At 31 December 2023 short term liabilities include a bank overdraft of £16.7m (2022: £4.8m) see note 10.

3. Intangible assets

Cost
At 1 January 2023
Additions
As at 31 December 2023

Amortisation
At 1 January 2023
Amortisation
As at 31 December 2023

Net book value
As at 31 December 2023
As at 31 December 2022

Software
£’000

Total
£’000

79
–
79

–
43
43

36
79

79
–
79

–
43
43

36
79

187

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

4. Property, plant, and equipment

Cost
At 1 January 2022
Additions
At 31 December 2022
Additions
Disposals
At 31 December 2023

Depreciation
At 1 January 2022
Charge for the year
At 31 December 2022
Charge for the year
Disposals
At 31 December 2023

Net book value
At 31 December 2023
At 31 December 2022

Owned assets
Right-of-use assets

Land and
buildings
£’000

Leasehold
improvements
£’000

Fixtures, fittings
and computer
equipment
£’000

90
–
90
125
–
215

90
–
90
32

–
122

93
–

–
93
93

74
–
74
–
–
74

67
–
67
–

–
67

7
7

7
–
7

120
3,112
3,232
4
(1,606)
1,630

119
1,175
1,294
643
(1,144)
793

837
1,938

837
–
837

Total
£’000

284
3,112
3,396
129
(1,606)
1,919

276
1,175
1,451
675

(1,144)
982

937
1,945

844
93
937

5. Investment in subsidiaries

Details of the subsidiaries held directly and indirectly by the Company are shown in note 37 to the Group Financial Statements.

At 1 January
Additions
Adjustments for share-based payment
Disposals
Impairment in cost of investments
Reclassified as held for sale
At 31 December

2023
£’000
116,666
–
23
(533)
(2,672)
–
113,484

Restated
2022
£’000
179,718
–
450
–
(36,687)
(26,815)
116,666

In 2023 there was a decrease of £0.02m (2022: increase of £0.5m) in investment in subsidiaries for share-based payments, representing the financial
effects of awards by the Company of options over its equity shares to employees of subsidiary undertakings. The decrease in the year was driven by
large volume of options lapsing due to restructuring across the subsidiary undertakings.

During the year, the Company disposed of its subsidiaries Marsh & Parsons (Holdings) Limited (M&P) and Embrace Financial Services Limited (EFS). As
a result, investment balances of £0.4m in M&P and £0.1m in EFS were disposed from the investment in subsidiaries balance.

In 2023, the Company recognised an impairment of £2.7m (2022: £12.7m) in its investment in Reeds Rains. The charge was calculated based on the
recoverable amount of each of the investments, the recoverable amount is based on the higher of each investments value-in-use (VIU) or fair value
less cost to sell (FVCLTS). Where the recoverable amount has been assessed based on a VIU calculation, a discount rate 15.7% (2022: 14.2%) and
terminal growth rate of 2.0% (2022: 2.0%) has been applied. The carrying value of Reeds Rains at the period end is £13.7m (2022: £16.4m).

188

Notes to the Parent Company Financial Statements continued.for the year ended 31 December 2023

5. Investment in subsidiaries (continued)

Sensitivity to change in assumptions
Sensitivity analysis has been performed for investments held by the Company at the reporting date to assess the extent to which reasonably possible
changes in key assumptions would impact the impairment charge. During the year, the Company recorded a total impairment charge of £2.7m in
relation to its investment in Reeds Rains. In addition, the Company’s investment in Albany was sensitive to any changes in key assumptions used
within the VIU calculation.

The following sensitivities have been applied to the investments at the period end:

i. Growth rate – a reduction in growth rate of 0.5% -1.0%
ii. Discount rate – an increase in discount rate of 1.0% -1.5%
iii. Reduction in future cash flows – a reduction in future cash flows of 10.0%

If growth rate was reduced by 1%, the impairment charge to Reeds Rains would increase to £3.0m and there would be an impairment to Albany of
£0.1m. No impairment charge required for any other investments.

If discount rate was to increase by 1.5%, the impairment charge to Reeds Rains would increase to £3.5m and there would be an impairment to Albany
of £0.3m. No impairment charge required for any other investments.

If a reduction in future cash flows of 10% was applied, the impairment charge to Reeds Rains would increase to £3.5m and there would be an
impairment to Albany of £0.3m. No impairment charge required for any other investments.

6. Financial assets

(a) Investment in equity instruments – at fair value
Unquoted shares at fair value

At 1 January
Additions
Disposals
Revaluation
At 31 December

2023
£’000

–
–
115
–
–
(115)
–

2022
£’000

115
115
4,610
–
–
(4,495)
115

Investment in equity instruments
The financial assets include unlisted equity instruments which are carried at fair value. Fair value is judgemental given the assumptions required and
have been valued using a level 3 valuation techniques (see note 32 to the Group Financial Statements). During the period, the Company also revalued
downwards its investment in Global Property Ventures to £nil at 31 December 2023 (2022: £0.1m).

(b) Financial assets at fair value through income statement (FVPL)
Contingent consideration receivable

2023
£’000

1,640
1,640

2022
£’000

–
–

Contingent consideration receivable
Contingent consideration of £1.6m relates to EFS which was sold in H1 2023. The consideration payable will be 7x the combined EBITDA in calendar
year 2024, subject to working capital adjustments and is payable in the first half of 2025. The fair value of the contingent consideration receivable
has been calculated for each of the three disposals noted above based on forecast profitability in calendar year 2024, discounted at 15.5% (Financial
Services Division’s weighted average cost of capital for an 18-month period).

The future cash flow and discount rate assumptions are key to the calculation, if full year 2024 profitability was to reduce by 10% this would result
in a reduction in the receivable of £0.1m, if profitability was to increase, this would result in an increase in the receivable of the same amount. If the
discount rate was to increase by 1%, the receivable would decrease by £21k and if the discount rate was to reduce by 1%, this would result in an
increase in the receivable of the same amount.

189

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

7. Investment in joint venture

At cost
At 1 January
Equity investment in Pivotal Growth
Equity accounted loss
Adjustment for non-controlling interests
At 31 December

2023
£’000

5,068
4,681
(549)
159
9,359

2022
£’000

2,477
3,952
(1,361)
–
5,068

Pivotal Growth
A further £4.7m equity investment in Pivotal Growth was made throughout 2023, please refer to note 20 in the Group Financial Statements for
further information.

8. Trade and other receivables

Non-current
Amounts owed by Group undertakings

Current
Group relief receivable
Prepayments
Other taxes and social security
Amounts owed by Group undertakings

2023
£’000

4,408
4,408

8,203
923
264
1,147
10,537

2022
£’000

18,079
18,079

15,100
2,392
151
2,733
20,376

The expected credit loss relating to intercompany receivables is £7.6m at 31 December 2023 (31 December 2022: £5.7m) and non-current
intercompany receivables are presented net of this provision. No allowance for expected credit losses is deemed necessary in respect of current
intercompany receivables.

2023
£’000
329
40
369

2022
£’000
–
–
–

9. Contract assets

Non-current contract asset
Current contract asset

190

Notes to the Parent Company Financial Statements continued.for the year ended 31 December 2023

10. Cash and cash equivalents and bank overdrafts

Cash and cash equivalents
Cash and cash equivalents (excluding bank overdrafts)

Cash at bank earns interest at floating rates based on daily bank overnight deposit rates.

Bank overdrafts

2023
£’000
32
32

2023
£’000
16,663

2022
£’000
–
–

2022
£’000
4,826

Bank loans – RCF and overdraft
The Company’s bank loan totals £nil (2022: £nil) and the Company’s overdraft totals £16.7m (2022: £4.8m).

In accordance with the terms at 31 December 2023, the utilisation of the RCF may vary each month as long as this does not exceed the maximum
£60.0m facility (2022: £90.0m). The Group’s overdraft is also secured on the same facility, and the combined overdraft and RCF cannot exceed
£60.0m (2022: £90.0m). The banking facility is repayable when funds permit on or by May 2026.

The interest rate applicable to the facility is SONIA plus a margin rate, the margin rate is linked to the leverage ratio of the Group and is reviewed at
six-monthly intervals.

The bank loan totalling £nil (2022: £nil) is secured via cross guarantees issued from the following businesses: LSL Property Services plc, Your-move.
co.uk Limited, Reeds Rains Limited, e.surv Limited, Lending Solutions Holdings Limited, First Complete Limited, New Daffodil Limited, St Trinity
Limited, LSL Corporate Client Services Limited, Advance Mortgage Funding Limited, LSLi Limited, David Frosts Estate Agents Limited, ICIEA Limited,
JNP Estate Agents Limited, Vitalhandy Enterprises Limited, Personal Touch Financial Services Limited and Personal Touch Administration Services
Limited. The bank loan is considered on a group wide net cash position basis, please see note 35 in the Group financial statements for further detail
on Group net cash.

11. Trade and other payables

Trade payables
Accruals
Amounts owed to Group undertakings

Amounts owed to Group undertakings are repayable on demand.

12. Financial liabilities

Current
Contingent liabilities
IFRS 16 financial liabilities

Non-current
Contingent liabilities
IFRS 16 financial liabilities

2023
£’000
424
2,431
46,302
49,157

2022
£’000
525
1,968
83,043
85,536

2023
£’000

2022
£’000

65
42
107

–
65
65

–
–
–

31
–
31

191

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

13. Provision for liabilities

Balance at 1 January
Transfer from accruals
Balance at 31 December
Current liabilities
Non-current liabilities

Provision
£’000
–
571
571
571
–
571

Claims indemnity provision and contingency
Included in the sale agreement of LMS (a former joint venture of the Company) was a claims indemnity of £2.0m, for which the Company has
provided £0.6m, which it considers to be the most likely outcome. Further cases exist and are considered possible, not probable; therefore, no
further provision has been made for these cases in the Financial Statements. Should these claims succeed, the estimated further costs would
be £1.4m. In the prior year, the LMS provision was included within accruals but in the current year, this has been reclassed and disclosed within
provisions for liabilities.

14. Deferred tax

Deferred tax asset
Depreciation charged in advance of capital allowances
Share options
Losses
Deferred tax asset at 31 December

Deferred tax asset at 1 January
Deferred tax credit in profit and loss account for the year
Deferred tax (charge)/credit to other comprehensive income
Deferred tax asset at 31 December

2023
£’000

259
627
2,773
3,659

2023
£’000
1,019
2,747
(107)
3,659

2022
£’000

89
930
–
1,019

2022
£’000
578
338
103
1,019

A deferred tax asset has been recognised on the basis that the Group is anticipated to make suitable taxable profits in the foreseeable future against
which the Company’s attributable assets can be utilised. The Group’s three-year plan indicates that the Company’s losses within the Group through
group relief. Management is therefore satisfied that these can be utilised in a future period.

At December 2023, a deferred tax asset is recognised in relation to share-based payments of £3.7m (2022: £1.0m). No deferred tax liability is
recognised in respect of equity financial assets.

15. Called‑up share capital

Authorised:
Ordinary shares of 0.2 pence each
Issued and fully paid:
At 1 January
Issued in the year
At 31 December

192

2023

£’000

2022

500,000,000

1,000

500,000,000

105,158,950
–
105,158,950

210
–
210

105,158,950
–
105,158,950

£’000

1,000

210
–
210

Notes to the Parent Company Financial Statements continued.for the year ended 31 December 2023

16. Reserves

Share premium
The amount subscribed for share capital in excess of nominal value less any costs attributable to the issue of new shares.

Share-based payment reserve
This represents the amount provided in the year in respect of share awards. The Company has operated long-term incentive plans (including CSOP)
and a number of SAYE schemes for the employees in the Company and the Group. See note 15 to the Group Financial Statements for details of the
LTIP, JSOP, CSOP, SIP/BAYE and the SAYE schemes. The effect of share-based payment transactions on the Company’s profit for the period was a gain
of £0.1m (2022: charge of £1.5m).

Shares held by employee benefit trust (EBT) and share incentive plan (SIP)
Shares held by EBT represent the cost of LSL shares purchased in the market and held by the Trust to satisfy future exercise of options under the
Group’s employee share options schemes. At 31 December 2023 the Trust held 517,949 (2022: 1,063,097) LSL shares at an average cost of £3.86
(2022: £3.72), and the SIP held 991,419 (2022: 1,185,692) LSL shares at an average cost of £0.88 (2022: £0.88). The market value of the LSL shares at
31 December 2023 was £3.9m (2022: £4.1m). The nominal value of each share is 0.2 pence.

Fair value reserve
The fair value reserve is used to record the changes in fair value of equity financial assets.

17. Company loss for the financial year after tax

The Company has not presented its own profit and loss account as permitted by section 408 of the Companies Act 2006. The loss after tax for the
year was £9.8m (2022: loss of £24.4m).

Remuneration paid to Directors of the Company is disclosed in note 15 to the Group Financial Statements.

The Company paid £0.5m (2022: £0.5m) to its auditors in respect of the audit of the Financial Statements of the Company.

Fees paid to the external auditors and their associates for non-audit services to the Company itself are not disclosed in the individual accounts of the
Company because Group financial statements are prepared which are required to disclose such fees on a consolidated basis. These are disclosed in
note 11 to the Group Financial Statements.

18. Pension costs and commitments

Total contributions to the defined contribution schemes in the year were £204,330 (2022: £186,986). The amount outstanding in respect of pensions
as at 31 December 2023 was £nil (2022: £nil).

The average monthly number of employees (including Directors) was 117 (2022: 127).

193

Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)19. Related party transactions

During the year the transactions entered into by the Company are as follows:

Wholly owned subsidiaries
2023
2022

Non-wholly owned subsidiaries
2023
2022

Sales to related
parties
£’000

Purchases from
related parties
£’000

Amounts owed by
related parties
£’000

Amounts owed to
related parties
£’000

–
–

13,760
35,866

45,787
82,521

Sales to related
parties
£’000

Purchases from
related parties
£’000

Amounts owed by
related parties
£’000

Amounts owed to
related parties
£’000

–
–

–
46

515
522

The expected credit loss relating to related parties receivables is £7.6m at 31 December 2023 (31 December 2022: £5.7m) and the related parties
receivables are presented net of this provision. The increase in provision of £1.9m (2022: £5.7m) recorded in the Company’s income statement was
split between £0.3m (2022: £5.7m) in operating expenses and £1.6m (2022: £nil) in exceptional costs.

20. Financial instruments – risk management

The Company’s principal financial instruments comprise of cash and cash equivalents with access to a £60m loan facility. The main purpose of these
financial instruments is to raise finance for the Company’s operations and to fund acquisitions. The Company has various financial assets and liabilities
such as trade receivables, cash and short-term deposits and trade payables, which arise directly from its operations.

It is the Company’s policy that trading in derivatives shall not be undertaken. The Company may, from time to time and as necessary, enter into
interest rate swaps for risk management purposes but did not hold any such swaps during either the current or prior year.

The Company is exposed through its operations to the following financial risks:

•

interest rate risk;

liquidity risk; and

credit risk.

Policy for managing these risks is set up by the Board following recommendations from the Group Chief Financial Officer. The policy for each of the
above risks is described in more detail below.

Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the use of the Group’s RCF facility. The RCF incurs interest on
drawings at a variable rate, based on SONIA plus a margin rate and this policy is managed centrally by the Group treasury function. The subsidiaries
are not permitted to borrow from external sources directly without approval from the Group treasury function.

The Group has not drawn down on its RCF facility during the year to 31 December 2023 and therefore has incurred no interest.

Liquidity risk
The Company aims to mitigate liquidity risk by managing cash generation by its operations, dividend policy and acquisition strategy. Acquisitions are
carefully selected with authorisation limits operating up to Group Board level and cash payback periods applied as part of the investment appraisal
process.

The Company monitors its risk to a shortage of funds using a recurring liquidity planning tool and daily cash flow reporting. This includes
consideration of the maturity of both its financial investments and financial assets (e.g. accounts receivable, and other financial assets) and projected
cash flows from operations. The Company’s objective is to maintain a balance between continuity of funding and flexibility for potential acquisitions
through the use of its banking facilities.

At 31 December 2023, the Group had available £60.0m of undrawn committed borrowing facilities, of which the Group could have drawn £33.0m
under the terms of the facility (2022: the Group could have drawn £90.0m of the facility available at 31 December 2023).

194

Notes to the Parent Company Financial Statements continued.for the year ended 31 December 2023

20. Financial instruments – risk management (continued)

The Company’s bank overdraft and trade and other payables are all repayable on demand (2022: repayable on demand) and the undiscounted cash
flows payable under these liabilities are consistent with the amounts presented in the balance sheet (2022: consistent).

The liquidity risk of the Company entity is managed centrally by the Group Treasury function. The Company’s cash requirement is monitored closely.
The Company has a RCF with a syndicate of major banking corporations to manage longer term borrowing requirements.

Capital management
The primary objective of the Company’s capital management is to ensure that it maintains appropriate capital structure to support its business
objectives, including any regulatory requirements, and maximise shareholder value. Capital includes share capital and other equity attributable to the
equity holders of the parent company.

In the medium to long term, the Company will strive to maintain a reasonable leverage (i.e. balance between debt and equity) to help achieve the
Company’s business objectives of growth (through acquisitions and organic growth) and dividend policy. In the short term, the Company does not
have a set leverage ratio to be achieved but the Directors monitor the ratio of net debt to operating profit to ensure that the debt funding is not
excessively high.

Credit risk
There are no significant concentrations of credit risk within the Company.

Interest rate risk profile of financial assets and liabilities
Treasury policy is described in the note above.

The interest rate profile of the financial assets and liabilities of the Company as at 31 December 2023 are as follows:

Floating rate
Overdraft

Within 1 year
£’000

1‑2 years
£’000

2‑3 years
£’000

3‑4 years
£’000

Total
£’000

(16,663)

–

(16,663)

The interest rate profile of the financial assets and liabilities of the Company as at 31 December 2022 are as follows:

Floating rate
Overdraft

Within 1 year
£’000

1-2 years
£’000

2-3 years
£’000

3-4 years
£’000

Total
£’000

(4,826)

–

(4,826)

Fair values of financial assets and financial liabilities
The fair values for the majority of the financial instruments have been calculated by discounting the expected future cash flows at interest rates
prevailing for a comparable maturity period for each instrument. There are no material differences between the book value and fair value for any of
the Company’s financial instruments.

Fair value hierarchy
The Company uses the following hierarchy for determining and disclosing the fair value of the financial instruments by valuation technique:

•

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or
indirectly; and

•

Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

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Other InformationFinancial StatementsStrategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)

20. Financial instruments – risk management (continued)

The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities.

2023
Assets and liabilities measured at fair value
Financial assets
Financial liabilities

2022
Assets measured at fair value
Financial assets

£’000

1,640
172

£’000

115

Level 1
£’000

–
107

Level 1
£’000

Level 2
£’000

–
–

Level 2
£’000

Level 3
£’000

1,640
65

Level 3
£’000

–

115

The fair value of equity financial assets that are not traded in the open market of £1.6m (2022: £0.1m) are using level 3 techniques in accordance
with the fair value hierarchy and Management use all relevant and up to date information (including cash flow forecasts and financial statements) to
arrive at their judgement. Where appropriate a range of potential outcomes is considered in reaching a conclusion.

21. Prior year restatements

Adjustments to assets held for sale
At 31 December 2022 the Company reported its investment in Marsh & Parsons as held for sale. The investment was written down to its fair value
less cost to sell (FVLCTS), which was calculated as the initial consideration received less transaction costs (£28.9m). The sale agreement included
provisions for adjustments to the initial consideration for debt-like items and working capital adjustments. Such amounts were subject to negotiation
and judgement and were not reflected in the fair value assessment at 31 December 2022. The Company has re-examined the judgements made and
has determined that an adjustment to consideration for debt-like items of £2.0m could have been reliably estimated at 31 December 2022. Rather
than recognising this adjustment as an increase in the loss on disposal in 2023, the prior year financial information has been restated, in accordance
with IAS 8. Restatement of the prior year financial information in this regard results in a decrease in current assets, an increase in the impairment
charge and has no impact on cash.

Balance sheet (extract)

Current assets
Assets held for sale
Net assets
Equity
Retained earnings
Total equity

Income statement (extract)

Exceptional costs
Profit/(loss) for the year
Profit/(loss) for the year
Total comprehensive income/(loss) for the period, net of tax

22. Events after the reporting period

Reported
year ended
31 December
2022
£’000

Adjustment to
assets held for
sale
£’000

Restated
year ended
31 December
2022
£’000

28,850
101,804

120,264
101,804

(2,035)
(2,035)

26,815
99,769

118,229
99,769

Reported
year ended
31 December
2022
£’000
(22,431)
(22,431)
(22,431)
(22,431)

Adjustment to
assets held for
sale
£’000
(2,035)
(2,035)
(2,035)
(2,035)

Restated
year ended
31 December
2022
£’000
(24,466)
(24,466)
(24,466)
(24,466)

On 2 February 2024, the Company acquired the entire issued share capital of TenetLime Limited from Tenet Limited, a subsidiary of Tenet Group
Limited (‘Tenet Group’) for total consideration of up to £11.6m. Please refer to note 34 in the Group Financial Statements for further information.

196

Notes to the Parent Company Financial Statements continued.for the year ended 31 December 2023

Other Information

In this section
Definitions
198
Shareholder Information (including
203
forward-looking statements information)

197

Other InformationFinancial Statements Strategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)Definitions

“Adjusted Basic Earnings per Share” or “Adjusted Basic EPS” is defined at note 12 to the Financial Statements.

“Adjusted EBITDA” is Group Underlying Operating Profit (note 5 to the Financial Statements) plus depreciation on property, plant and equipment.

“AGM” annual general meeting.

“Advance Mortgage Funding” Advance Mortgage Funding Limited.

“AI” artificial intelligence.

“Albany” Albany Insurance Company (Guernsey) Limited.

“AR” appointed representative.

“AR Regime” the FCA’s Appointed Representatives Regime.

“Audit & Risk Committee” LSL’s Audit & Risk Committee.

“Auditor Independence Policy” LSL policy relating to non-audit services provided by the external auditor.

“Basic Earnings per Share” or “EPS” is defined at note 12 to the Financial Statements.

“Board”/“Board of Directors” the board of Directors of LSL.

“BAYE” Buy As You Earn (also referred to as SIP).

“BoE” Bank of England.

“B2B” business to business.

“Committee(s)” refers to LSL’s Nominations Committee, the Audit & Risk Committee, the Remuneration Committee and the Disclosure Committee.

“Company” or “Parent Company” refers to LSL Property Services plc.

“CBI” Conference of British Industry.

“Corporate Governance Report” the Corporate Governance and Nominations Committee Report contained within this Report.

“Code” UK Code of Corporate Governance published by the Financial Reporting Council (FRC) (July 2018 edition).

“Company Secretary” Sapna B. FitzGerald.

“CEO” Chief Executive Officer, David Stewart.

“CFD” Climate-related Financial Disclosures Regulations 2022.

“CFO” Chief Financial Officer, Adam Castleton.

“Colleague Forums” or “Forums” our LSL Group Colleague Engagement, Inclusion and Diversity, and Communities forums.

“COVID-19” coronavirus.

“CPO” Chief People Officer, Debra Gardner.

“CRO” chief risk officer.

“CRWG” climate-related working group.

“CSOP” Company Share Ownership Plan.

“D2C” direct to consumer.

“Data and Information Security Committee” or “DISC” LSL’s Data and Information Security Committee.

“Davis Tate” trading name of Davis Tate Ltd.

“Director” an Executive Director or Non Executive Director of LSL.

“Division(s)” refers to each of our Financial Services, Surveying & Valuation and Estate Agency Franchising divisions.

“DLPS” or “Direct Life and Pension Services” or “Direct Life and Pensions” Direct Life and Pension Services Limited.

198

“DPO” Data Protection Officer.

“EBITDA” earnings, before interest, taxes, depreciation and amortisation.

“Elsevier” Elsevier Limited.

“Embrace Financial Services” Embrace Financial Services Limited.

“EPS” Earnings per Share.

“EPC” energy performance certificate.

“Ernst & Young” Ernst & Young LLP.

“ESG” Environmental, Social and Governance.

“ESOT” LSL’s employee share scheme.

“ESOT Trustees” Apex Financial Services (Trust Company) Limited.

“Estate Agency Division” or “Estate Agency” this refers to LSL’s residential sales and lettings businesses. Following the change to a franchise model
this Division has become the Estate Agency Franchising Division. It also included LSL’s asset management businesses until 31 March 2023.

“Estate Agency Franchising Division” this refers to the provision of estate agency franchising services such as brand marketing and commercial and
IT support, to a network of territories across the UK.

“e.surv” or “e.surv Chartered Surveyors” trading names of e.surv Limited.

“EWG” LSL’s Environmental Working Group.

“Executive Committee” Executive Committee of the Group, which includes the Executive Directors.

“Executive Director(s)” David Stewart, Adam Castleton and Helen Buck (up to 31 March 2023).

“FCA” Financial Conduct Authority.

“Financial Services Division” or “Financial Services” or “FS” refers to LSL’s financial services division (including mortgage, non-investment insurance
brokerage services and the operation of LSL’s intermediary networks).

“Financial Services Networks” or “Networks” refers to the PRIMIS Network and TMA mortgage club.

“Financial Services Other” refers to Pivotal Growth, New Homes businesses, D2C and technology businesses (Mortgage Gym and DLPS).

“First2Protect” First2Protect Limited.

“First Complete” First Complete Limited.

“Financial Services Network” the PRIMIS Mortgage Network.

“Financial Statements” financial statements contained in this Report.

“FRC” Financial Reporting Council.

“FTE” full-time equivalent.

“FY” full year.

“Global Property Ventures” refers to Global Property Ventures Limited.

“Group” LSL Property Services plc and its subsidiaries.

“Group First” Group First Ltd, holding company of Mortgages First Ltd and Insurance First Brokers Ltd.

“Group Revenue” total revenue for the LSL Group.

“Group Underlying Operating margin” Group Underlying Operating Profit divided by Group Revenue.

“Goodfellows” trading name of GFEA Limited.

“H1 2023” 1 January 2023 – 30 June 2023.

199

Other InformationFinancial Statements Strategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)Definitions continued.

“H2 2023” 1 July 2023 – 31 December 2023.

“Hawes” or “Hawes & Co” trading name of Hawes & Co Limited.

“HMRC” His Majesty’s Revenue and Customs.

“Homefast Property Services” Homefast Property Services Limited.

“Home Report” a report which includes a single survey, energy report and property questionnaire and which must accompany all residential property
marketing in Scotland.

“IAS” International Accounting Standards.

“IBNR” Incurred But Not Reported.

“I&D” Inclusion and Diversity.

“IFRS” International Financial Reporting Standards.

“Insurance First Brokers” Insurance First Brokers Ltd.

“Interim Chair”or “Interim Non Executive Chair” refers to Darrell Evans.

“JNP” trading name of JNP Estate Agents Limited.

“JSOP” joint share ownership plan.

“Korn Ferry” trading name of Korn Ferry Hay Group Limited.

“KPI” key performance indicators.

“Land & New Homes” LSL Land & New Homes Ltd.

“Lauristons” trading name of Lauristons Limited.

“LGBT+” lesbian, gay, bisexual and trans.

“Listing Rules” FCA Listing Rules.

“LMS” LMS Direct Conveyancing Limited and Cybele Solutions Holdings Limited.

“Linear” or “Linear Financial Solutions” are trading names of Linear Mortgage Network Limited.

“Living Responsibly Report 2024” report published on our website setting out our Living Responsibly ESG programme.

“LSE” London Stock Exchange.

“LSLi” LSLi Limited and its subsidiary companies. During 2023 the estate agency branches owned by the LSLi companies were franchised as part of
the conversion of the entire LSL owned estate agency network to franchises, these included JNP, Intercounty, David Frost Estate Agents Limited,
Goodfellows, Davis Tate, Lauristons, Hawes & Co and Thomas Morris).

“LSL” or “Group” or “Parent Company” refers to LSL Property Services plc and its subsidiaries.

“LSL Corporate Client Department” trading name of LSL Corporate Client Services Limited.

“LTIP” Long Term Incentive Plan.

“Management” refers to the Group’s management teams.

“MAR” the UK Market Abuse Regulation.

“Marsh & Parsons” trading name of Marsh & Parsons Limited.

“MCAG” industry-wide Mortgage Climate Action Group.

“Mortgages First” Mortgages First Ltd.

“Mortgage Gym” Mortgage Gym Solutions Ltd.

“Net Bank Debt” see note 35 to the Financial Statements.

200

“Net Cash” see note 35 to the Financial Statements.

“New Build” refers to RSC New Homes Limited and the Group First companies.

“Non Executive Director” refers to Gaby Appleton, Darrell Evans, Simon Embley, and Sonya Ghobrial and James Mack.

“Notice of Meeting” the circular made available to shareholders setting out details of the AGM.

“Deutsche Numis” Numis Securities Limited.

“OCI” refers to other comprehensive income.

“P&L” profit and loss statement.

“PDMRs” Persons Discharging Managerial Responsibility as defined in Article 3(1) (25) of UK MAR.

“Personal Touch Financial Services” or “PTFS” Personal Touch Financial Services Limited.

“Personal Touch Administration Services” or “PTAS” Personal Touch Administration Services Limited.

“Pivotal Growth” Pivotal Growth Limited.

“PI” professional indemnity.

“PI Costs” costs relating to ongoing and expected future PI claims relating to Surveying & Valuation business.

“Pollen Street Capital” or “PSC” Pollen Street Capital Limited.

“PRIMIS Network” or “PRIMIS” or “PRIMIS Mortgage Network” a trading name of Advance Mortgage Funding Limited, First Complete Limited and
Personal Touch Financial Services Limited.

“PRSim” refers to our private rented sector property management business which was divested in the first quarter of 2023.

“RCF” revolving credit facility.

“Real Living Wage” a UK wage rate based on the cost of living.

“Reeds Rains” trading name of Reeds Rains Limited.

“Registered Office” Newcastle House, Albany Court, Newcastle Business Park, Newcastle upon Tyne, NE4 7YB.

“RELX” RELX Group plc.

“Report” LSL’s Annual Report and Accounts 2023.

“RICS” Royal Institution of Chartered Surveyors.

“RIDDOR” Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013.

“Road to Health” RoadtoHealth Group Ltd.

“RSC New Homes” or “RSC” RSC New Homes Limited.

“SAYE” Save As You Earn.

“SECR” Streamlined Energy and Carbon Reporting.

“Senior Management Team” or “Senior Managers” refers to our Executive Committee and their direct reports who are A1 and A2 grades (excluding
the Executive Directors).

“SID” Senior Independent Director. During 2023 Gaby Appleton was the SID. James Mack took on the role of SID with effect from 5 March 2024.

“SIP” Share Incentive Plan (also referred to as BAYE).

“SteerCo” Living Responsibly Steering Committee.

“Surveying & Valuation” refers to e.surv Limited (including where it trades as Walker Fraser Steele) and asset management businesses with effect
from 1 April 2023.

“Templeton” trading name of Templeton LPA Limited.

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Other InformationFinancial Statements Strategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)Definitions continued.

“TenetLime” TenetLime Limited.

“TCFD” Task Force on Climate-related Financial Disclosures.

“The Property Franchise Group” or “TPFG” The Property Franchise Group plc.

“Thomas Morris” trading name of Thomas Morris Limited.

“The Mortgage Alliance” or “TMA” are trading names of Advance Mortgage Funding Limited’s mortgage club.

“Treasury Shares” shares held in treasury with no dividend rights and no voting rights at LSL’s general meetings.

“Trust” LSL’s SIP trust.

“Trustees” Link Market Services (Trustees) Limited.

“TSR” Total Shareholder Return.

“UKLA” UK Listing Authority.

“Underlying Operating Margin” operating profit before exceptional costs, contingent consideration, amortisation and share-based payments shown
as a percentage of turnover.

“Underlying Operating Profit/Loss” before exceptional costs, contingent consideration, amortisation of intangible assets and share-based payments.

“Var” variance.

“VEM” or “Vibrant Energy Matters” Vibrant Energy Matters Limited.

“Walker Fraser Steele” a trading name of e.surv Limited.

“YOPA” YOPA Property Limited.

“Your Move” trading name of your-move.co.uk Limited.

“Zeus” Zeus Capital Limited.

202

Shareholder Information
Shareholder Information
(including forward-looking statements information)

Company details
LSL Property Services plc
Registered in England (company number 5114014)
LEI number 213800T4VM5VR3C7S706

Registered office
Newcastle House, Albany Court, Newcastle Business Park, Newcastle upon Tyne, NE4 7YB
Telephone: 0191 233 4600
Email: investorrelations@lslps.co.uk
Website: lslps.co.uk

Company Secretary’s office
Howard House, 3 St Marys Court, Blossom Street, York, YO24 1AH
Email: investorrelations@lslps.co.uk

Share listing
LSL Property Services plc 0.2 pence ordinary shares are listed on the London Stock Exchange under ISIN GB00BIG5HX72

Registrar
Link Group, Central Square, 29 Wellington Street, Leeds, LS1 4DL
Telephone: 0371 664 0300

Calls are charged at the standard geographic rate and will vary by provider. Calls outside the UK will be charged at the applicable international rate. Link Group
is open between 09:00 -17:30, Monday to Friday excluding public holidays in England and Wales.

Website: linkgroup.eu
Email: shareholderenquiries@linkgroup.co.uk

If you move, please do not forget to let the registrar know your new address.

Independent Auditors:
Ernst & Young LLP
1 More London Place
London
SE1 2AF
United Kingdom

Brokers:
Numis Securities Limited
Zeus Capital Limited

Calendar of events
Preliminary results released
AGM proxy form deadline
AGM
The Notice of Meeting convening the AGM will be issued as a separate circulate to shareholders and will confirm the location for the meeting, and detail the
proposed resolutions.

25 April 2024
18 June 2024 at 10am
20 June 2024 at 10am

In accordance with our articles of association, we publish shareholder information, including notice of AGMs and the Annual Report and Accounts on our
website, lslps.co.uk. Reducing the number of communications sent by post not only results in cost savings to us, it also reduces the impact that unnecessary
printing and distribution of reports has on the environment.

Our articles of association enable all communications between us and our shareholders to be made in electronic form (as permitted by the Companies Act
2006). Documents will be supplied via our website to shareholders who have not requested a hard copy or provided an email address to which documents of
information may be sent. Where a shareholder has consented to receive information via the website, a letter will be sent to the shareholder on release of any
information directing them to the website (lslps.co.uk).

If a shareholder wishes to continue to receive hard copy documents, they should contact Link Group (details above).

Forward-looking statements
This Report may contain certain statements that are forward-looking statements. They appear in a number of places throughout this Report and include
statements regarding LSL’s intentions, beliefs or current expectations and those of its officers, directors and employees concerning, amongst other things,
LSL’s results of operations, financial condition, liquidity, prospects, growth, strategies and the business it operates. By their nature, these statements involve
risks and uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-
looking statements reflect knowledge and information available at the date of preparation of this update and, unless otherwise required by applicable law,
LSL undertakes no obligation to update or revise these forward-looking statements. Nothing in this update should be construed as a profit forecast. LSL and its
Directors accept no liability to third parties in respect of this update save as would arise under English law. Information about the management of the Principal
Risks and Uncertainties facing LSL is set out within the Strategic Report on pages 29 to 33.

Any forward-looking statements in this Report speak only at the date of this Report and LSL undertakes no obligation to update publicly or review any forward-
looking statement to reflect new information or events, circumstances or developments after the date of this Report.

203
203

Other InformationFinancial Statements Strategic ReportOverviewDirectors’ Report (including Corporate Governance Reports and Committee Reports)LSL Property Services plc
lslps.co.uk
Registered in England

(Company number 5114014)
Registered office:
Newcastle House
Albany Court
Newcastle Business Park
Newcastle upon Tyne
NE4 7YB
Email: investorrelations@lslps.co.uk