Blackfriar: LSL Property is a success story that shines in the gloom

So much so, that it won York-based estate agency group LSL Property Services Deal of the Year.

The purchase from Lloyds Banking Group shot LSL up to the UK's second-largest estate agency group behind Countrywide, creating a network of 584 branches. The estate agencies came with 22.2m cash and net assets worth about 38.4m.

But in chief executive Simon Embley's words, the deal was by no means a "slam dunk". The Halifax branches came with deep-rooted problems. They made 51m losses in 2008; extra income from lettings, conveyancing and insurance was paltry; management was top-heavy and costs were sky high.

LSL has improved the trading of the new branches and cut costs; IT and systems are integrated and new income streams are growing.

Across the group, business is beating the market. Despite depressing statistics about mortgages from the Bank of England and the Council of Mortgage Lenders, encouraging trading seen at the end of 2009 has continued.

In previous interviews, Mr Embley has exuded an air of "I told you so" when talking of the group's success. But with the progress the group's made, he's entitled to a little smugness.

LSL is a property company delivering and growing amid the worst economic climate for decades. By any standards, that's no mean feat.

n Finally, some good news from Spice.

After watching its shares surge yesterday, the Leeds-based utility support services firm confirmed it's in talks over selling its telecoms arm.

New interim chief executive Martin Towers' review of Spice's catchily-named "public-facing distribution businesses" looks to be bearing fruit.

Together with the other non-core businesses, gas and facilities management, analysts reckon telecoms could earn 20m to 30m.

That it needs to make some cash is not in doubt. After years of acquisitions and two recent profit warnings, the City wanted to see debt come down and a focus on organic growth. Asset sales and costs cuts are the logical way to achieve this.

But Blackfriar believes the aggressive undermining of its share price in recent months, dragged down by short sellers and sell recommendations, hasn't been wholly justified.

Its shares touched a recent low of 27.5p, a level not seen since late 2004, giving it a market value of about 106m.

For a company still delivering hefty underlying profitability, with significant exposure to the defensive utilities sector, Blackfriar thinks the market went too far. Spice has delivered healthy cash conversion since 2006.

One of the few bullish analysts who covers Spice, Joe Brent at Liberum Capital, believes the opportunities are plentiful. Spice could expand billing into new markets; increasing environmental legislation should mean more work, and the government's roll-out of smart energy meters will need Spice's expertise.

As Spice cuts debt, Blackfriar believes its underlying qualities will start to shine through.

n It's always good to see the supermarkets having a spat and this week was no exception.

Tesco has pooh-poohed rival Asda's claim that it can leapfrog Tesco in the non-food sector over the next five years.

Tesco's chief executive Terry Leahy dismissed the proposal with great aplomb at a press conference on Tuesday, pointing out that Asda's claim that it will open 150 Asda Living stores within the next five years was rather confusing.

He said that bearing in mind the Leeds-based supermarket said it would open 300 Asda Livings five years ago, he couldn't decide whether this was actually an increase or a decrease. "It depends on how you look at it," he said in his Liverpudlian deadpan voice.

Round One to Tesco.