Preliminary Results Presentation
Year Ended 31 December 2006
Simon Embley, Group Chief Executive Officer
Dean Fielding, Group Finance Director
March 2007
1. Overview
Key messages
Growing profitability
of estate agency
division
Substantial
experience of
acquisitions and
corporate reform
Attractive margins
and strong cash
generation
Diversified business
model with some
resilience to property
cycle
Growing and highly
profitable surveying
division
2
Highlights

Strong maiden results

Turnover up 46% to £197.5m

Underlying operating profit¹ up 73% to £32.3m


Organic growth from Your Move and e.surv of 48%

Underlying operating profit margin¹ up from 13.9% to 16.4%

Adjusted proforma earnings per share² up 83% to 19.8p
Strong underlying operating results from all divisions

Surveying profits up 21% to £21.0m

Estate Agency and Financial Services profits up from £1.7m to £12.6m (incl. first full year’s contribution from
Reeds Rains)

Mortgage lending up circa 50% to £3.0bn supported by investment in Linear

Excellent cash flow generation with cash generated from operating activities after capital expenditure £28.2m
(2005: £15.2m)

Net debt³ reduced to £34.2m

Well positioned for further growth both organically and from acquisitions
¹ Before exceptional costs and amortisation
² Adjusted to reflect underlying operating profit and the shares in issue post IPO
³ Financial liabilities less cash and cash equivalents
3
1. Overview
Financials at a glance
A track record of growing profitability across all business segments
EBITA
2006 Group Revenue Split
16.4%
EBITA (£m)
30
13.9%
25
10.1%
20
32.3
15
10
5
18.7
0.9%
1.2
13.4
2003 UK GAAP
2004 IFRS
0
2005 IFRS
EBITA
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
Margin
2006 Group EBITA Split
(excluding unallocated costs)
2005
63.8
14.0
77.8
57.0
134.9
% change
61
48
58
30
46
3.7
-2.0
1.7
17.4
-0.4
18.7
262
* before exceptional costs and amortisation of intangible assets
Source: Company Accounts
Surveying
37%
Estate Agency
52%
2006 IFRS
Group Financial Overview
Revenue
2006
Estate Agency
102.6
FS
20.9
EA & FS
123.5
Surveying
74.0
Total
197.5
Underlying operating profit*
Estate Agency
13.4
FS
-0.8
EA & FS
12.6
Surveying
21.0
Unallocated
-1.3
Total
32.3
Financial Services
11%
EBITA margin
35
Estate Agency and
Financial Services
38%
Surveying
62%
641
21
73
4
Strong Cash Flow
Strong cash generation with minimal capex requirement……
…….solid financial platform to make acquisitions and pay dividends
IFRS
IFRS
Year ended
Year ended
31-Dec-06
31-Dec-05
35.0
21.7
Other Movements
0.4
-
Movement in working capital
5.2
1.0
Cash Flow Statement
£m
EBITDA
Interest paid
(4.5) *
(3.3)
Tax paid
(5.8)
(2.5)
Capex
(2.1)
(1.8)
Net Cash from operating activities
28.2
15.2
*Includes £1.3m of B share dividend


Business significantly cash generative

Business well placed for future dividends

Low capex requirement: £2.1m (2005: £1.8m)

Long term earnings growth potential

Net cash from operating activities to EBITDA ratio: 80% (2005:
70%)

Interim maiden dividend for 2007

Dividend payout ratio of 30%-40%
Business has significant debt flexibility

Net debt at 31 December £34.2m

Group credit facility of £79.5m

Net debt to operating profit ratio of 1.06 to 1.0
5
Operational Performance: Surveying
e.surv
2006
2005
Change
Turnover (£m)
68.3
56.4
21%
Underlying Op. profit
(£m)
20.4
17.6
16%
Margin (%)
29.9
e.surv KPI’s
Mortgage approvals
(millions)
31.2
Jobs managed
Other brands*
Market share (approx)
Turnover (£m)
Underlying Op. profit
(£m)
Margin (%)
5.7
2006
2005
Change
3.5
3.4
5%
935,256
674,730
38%
27%
20%
32%
433,870
378,328
15%
0.6
Jobs performed
0.6
(0.2)
10.5
Nil
Total
Turnover (£m)
74.0
57.0
30%
Underlying Op. profit
(£m)
21.1
17.4
21%
Margin (%)
28.5
30.5
* Other brands include Reeds Rains surveying division from 1.10.05 to
30.9.06, and Chancellors Associates from 1.7.06

Market share growth of circa 32% (by jobs managed)

Supported by new contract wins

Employed surveyors increased to 316 (2005: 262)

Productivity per surveyor (e.surv) maintained @ 6 jobs/day
6
3. Surveying
Future Growth: Surveying
Growth opportunities across the sector
Market shares (based on number of surveyors)


Independents

Lender own
workforces
30%
30%
35%
5%
Lender (workforce management)
Acquisition of independents
Organic growth from

Market share gains and increases in jobs performed

Investment in new product development, such as
Energy Performance Certificates (EPC’s)
Other
Sizeable
Firms
Top 3 (inc
LSL)
Source: Company estimates
Reeds Rains Surveying Performance


Chancellors Associates
Reed Rains (RR) surveying division was achieved as
part of the RR acquisition in Oct 2005
The division was absorbed into e.surv at the end of
Sept 2006
9 Months
2006
12 Months
2005
No. of surveyors
27
28
Turnover (£m)
2.4
2.6
Annualised
turnover (£m)
3.2
2.6
23
Income per
surveyor (£’000)
118
93
27


Chancellors Associates was acquired with effect from
1 July 2006
The company utilises self employment surveyors
%
change
Turnover (£m)
12 Months
2006
12 Months
2005
change
6.2
4.6
35
%
7
Operational Performance: Estate Agency & Financial Services
2006
2005
Turnover (£m)

Your Move
Reeds Rains
EA
63.8
54.5

Excellent results, profit margin at c.20%
FS
13.0
12.3

Total
76.8
66.8
Increased fees (1.22% to 1.31%)
Conveyancing and financial services income

Strong brand and management team
Reeds Rains
EA
34.6
6.8
FS
6.1
1.7
Total
40.7
8.5
Other
5.8
2.5
123.3
77.8
Total Turnover EA & FS

Underlying Op. profit (£m)
Your Move
6.3
0.4
Reeds Rains
8.0
2.2
Other
(1.7)
(0.9)
Total
12.6
Your move

Improving profit and margin

Fees fell marginally

Scope to improve margin
Other businesses

8.2
0.5
Reeds Rains
19.7
2.8
Total
10.2
Investment in developing businesses:Homefast , Linear, Home Inspectors,
First Complete
1.7
Margin (%)
Your Move


Contributed to lending growth from £2bn to
£3bn

Future profit stream and value
2.2
8
* RR profit excludes surveying
4. Estate Agency & Financial Services
Estate Agency Organic Growth
LSL growing presence and proven track record
Expansion through franchising
Combined branch network (December 2006)
100
92
90
80
67
No. branches
70
Scotland & North East
YM:
35
YMF: 20
RR:
26
54
60
50
40
30
20
10
8
0
Midlands
YM:
26
YMF:
5
RR:
88
RRF:
3
Wales
RR: 5
Hampshire &
South West
YM:
32
YMF: 12
2003
2004
Franchise – existing
2005
2006
Franchise – new
Source: Company data
Central
YM: 37
YMF: 29
RR: 12
London
YM: 21
YMF: 7
Kent & Sussex
YM:
46
YMF: 16
YM – Your Move, RR – Reeds Rains, YMF – Your Move franchise, RRF –
Reeds Rains franchise

Opportunities for organic growth

Franchise footprint growing

Opportunity to extend estate agency revenues via:

New Homes

Part exchange

Auctions
Lettings

9
Acquisition Strategy
To be a sector consolidator
Acquisition pipeline

Limited number of large targets

Smaller brands also being considered

Recently acquired a majority stake in
a 5 branch chain at a valuation of £3m

Acquisition criteria

Strong management team

Strong brand

Under leveraged other services
Strong management and local brand
ValueRains
addedexcellent
(Reeds Rains
performance)
Reeds
financial
payback
Large fragmented market (branch market share)
Top 5 (Inc
LSL)
Net Acquisition Price(1)
20%
Regionals 10%
70%
Independents
£20m
FY 2005 Operating Profit
£3.8m
FY 2006 Operating Profit
£8.4m
(1)
Reeds Rains acquired for effective gross value of £26m including £3m of cash
and £3m sale and lease back. Minorities bought out between July and
September 2006
Source: Company reports
Source: Company Data
10
Diversified Business Model
Some resilience to property cycle

Panel manager in surveying


Surveying a bigger percentage of profits than competitors


Growing franchise footprint giving income growth with low fixed costs
Investment in Hometrack


Some downside protection by reducing cost and growing new income streams
Franchising


Surveying profits less cyclical
Potential to grow margins and profits in estate agency


Providing operational flexibility
Providing an insight into the AVM market and a hedge
Opportunity from EPCs

Investment in new product development

New value creation beyond 2007
11
Market Outlook and Current Trading

Market remains robust despite interest rate rises
Mortgage approvals 1998 - 2006
8
6
50
4
2
0
0
05
04
03
02
01
00
99
98
97
96
95
94
93
92
91
90
Monthly Housing Transactions
UK Interest Rate
3,000
2,500
2,000
3,534
2,808
100
3,500
2,097
10
1,992
12
Total number (000)
150
3,566
4,000
14
3,381
16
1,649
200
UK Interest Rate
Housing Transactions (000)
4,500
3,650
4,106
UK housing transactions and interest rate
1,500
Source: National Statistics, Bloomberg
1,000
500
2006
2005
2004
2003
2002
2001
Encouraging activity levels in Q1 to date
2000

0
1999
Activity in Q4 strong with EA having a strong pipeline
1998

Source Bank of England, No of secured lending approvals (not seasonally adjusted)

Optimistic about 2007 subject to:

future interest rate changes

introduction of Home Information Packs planned for June 2007
12
Summary
Financial Results
Market Outlook and Current Trading

Strong maiden results

Activity levels in 2007 to date are encouraging

Strong cash generation – net cash from operating
activities of £28.2m

Interest rates and Home Information Packs could
impact the market

LSL well positioned to respond to the housing cycle

Net debt down to £34.2m
Acquisition Growth
Organic Growth

92 franchise branches operational at year end

One small EA acquisition completed

Additional growth in lending targeted via Linear

Consolidation opportunities across all segments

Increasing market share in surveying

Growth ambitions supported by strong balance sheet


EA margin and profit growth
Energy Performance Certificate investment
opportunity
13