The bulk of the profits rise in the first half came from selling life assurance, bonds and mortgage protection insurance, which accounted for 59 per cent of group profits. Just under a half of these sales come on the back of the group's house sales. But while the group is benefitting from rising house prices - average commissions per sales are up 6.7 per cent to pounds 1,583 - volumes are not moving upwards. Earnings growth this year will depend on it maintaining its success in persuading more housebuyers to take out a mortgage, or mortgage cover, through their estate agents.
That's not a Herculean task given its already taken 8 per cent of the mortage market. Elsewhere, the company is building up a conveyancing business and cannot meet demand for surveying.
WestLB Panmure forecasts pre-tax profits of pounds 71.4m and earnings of 16p per share this year, putting the shares on a forward p/e of just 11. The shares look good value.Reuse content