Whilst Q1 saw headline revenue down 10%, the composition of this is more encouraging, with Lettings up 5% (+2.5% organic) and Financial Services up 3%. Whilst a 35% decline in Sales appears stark, this reflects a tough prior year comp. Stripping out the stamp duty pull-forward that inflated Q1'25 volumes, LFL Sales revenue was up 2% against a more normalised Q1’24 comp. The FY26 outlook reflects a more subdued Sales market and continued resilience in Lettings (65% of revenue). Against this, management has implemented £4.5m of cost savings, which offset more prudent Sales assumptions, driving unchanged headline PBT forecasts. A 25% year to date fall in the share price likely reflects a deteriorating macro backdrop but we think this is overdone, with the shares now trading on an FY26 PER of only 8.5x vs. peers on 11x. Timing of recovery is difficult to predict, but we believe that earnings are now at their trough and see strong medium term upside potential in a model that is highly geared towards the recovery when it materialises (50%+ drop through margins). We therefore stay at Buy.
