Half Year Trading Update

RNS Number : 9055U

Property Franchise Group PLC (The)

04 August 2022

 

04 August 2022

THE PROPERTY FRANCHISE GROUP PLC

("TPFG", the "Company" or the "Group")

Half Year Trading Update

The Property Franchise Group PLC, the UK's largest property franchisor, is pleased to provide the following trading update ahead of publishing its interim results on Tuesday 13 September 2022.

The Group has achieved strong growth in the first half with revenue significantly increasing vs H1 2021, despite 2021 having been a very strong year for the residential housing market. 

Highlights:

· Group revenue increased 18% to £13.1m (H1 2021: £11.1m)

· Management Service Fees ("royalties" or "MSF") increased 1% to £7.4m (H1 2021: £7.3m)

· Sales agreed pipeline increased 15% to £33.8m (H1 2021: £29.5m)

· Managing 74,000 rental properties (H1 2021: 73,000)

· EweMove sold 19 new territories (H1 2021: 37)

· Net debt of £2.6m (31 Dec 2021: £5.0m), following another period of strong cash generation

The growth in Group revenue was driven primarily by the acquisitions of Hunters and Mortgage Genie in FY21, with revenue growth from the existing businesses contributing £0.2m.

Management Service Fees increased 1% with the growth in lettings MSF of 12% offsetting the reduction in sales MSF as the residential sales market normalises. Sustained demand for lettings properties and rental inflation means lettings MSF continues to be a highly resilient revenue stream for the Group, contributing 55% of total MSF in the period.

Seasonally adjusted UK Property Transactions* at 621,000 for H1 2021 were 28% lower than the same period last year, a trend reflected in our Group's results. While our sales pipeline remains very healthy, lead times have lengthened, and supply continues to be restricted. We still believe that our forecast of 1.2m UK transactions for 2022 remains achievable and we expect H2 to generate a similar level of Sales MSF to H1.  

EweMove and Hunters Personal, our two hybrid offerings, have performed well in the first half, selling 24 new territories. We believe this model continues to be attractive during more uncertain macro-economic times, allowing franchisees to benefit from a low-cost base and increased flexibility.

Our network of franchisees continues to benefit from the strength and experience of the senior management team, who are focused on the execution of our six strategic growth initiatives. Support from an experienced central team, dedicated to increasing business activity and profitability, is invaluable during more challenging periods. In addition, we are confident that further growth opportunities, for example the acquisition of lettings portfolios, will arise over the next twelve months, which we are well positioned to capitalise on.

*HMRC National Statistics 21 July 2022

Chief Executive Officer, Gareth Samples, commented:

"We are very pleased with the numbers announced today, particularly given the increasingly uncertain macro backdrop. Our performance demonstrates the many advantages of operating a focused franchise model, which has a multitude of income streams, franchise brands and ways of meeting consumers' requirements. Our team works tirelessly to help our franchisees navigate challenges and explore growth opportunities. As such, the Board are confident that trading remains in line with market expectations for the full year."

For further information, please contact:

The Property Franchise Group PLC   Gareth Samples, Chief Executive Officer David Raggett, Chief Financial Officer	01202 405549
Canaccord Genuity Limited (Nominated Adviser and Broker) Max Hartley Tom Diehl	0207 523 8000
Alma PR  Susie Hudson Justine James Joe Pederzolli	0203 405 0209

About The Property Franchise Group PLC:

The Property Franchise Group PLC (AIM: TPFG) is the largest property franchisor in the UK and manages the second largest estate agency network and portfolio of lettings properties in the UK.

The Company was founded in 1986 and has since grown to a diverse portfolio of nine brands operating throughout the UK, comprising longstanding high-street focused brands and a hybrid, no sale no fee agency.

The Property Franchise Group's brands are Martin & Co, EweMove, Hunters, CJ Hole, Ellis & Co, Parkers, Whitegates, Mullucks & Country Properties.

Headquartered in Bournemouth, UK, the Company was listed on AIM on the London Stock Exchange in 2013. More information is available at  www.propertyfranchise.co.uk

 

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