Interim Results

RNS Number : 4674Y

MartinCo PLC

09 September 2015

 



MARTINCO PLC

("Martin & Co", the "Company" or the "Group")

Interim Results for the six months ended 30 June 2015

Record revenue up 48% with successful integration of the "Xperience" brands and continued development of estate agency and lettings

MartinCo Plc, one of the UK's largest property franchises, today announces its interim results for the period ended 30 June 2015.

FINANCIAL HIGHLIGHTS

§ Revenue increased by 48% to £3.4m (H1 2014: £2.3m)

§ Management Service Fees (royalties) increased by 61% to £2.9m (H1 2014: £1.8m)

§ Gross profit increased by 53% to £3.2m (H1 2014: £2.1m)

§ Operating profit increased by 66% to £1.3m (H1 2014: £0.8m) before exceptional  reorganisation costs of £0.1m following the acquisition of "Xperience"

§ Operating margin of 38% (H1 2014: 34%) before exceptional items

§ Strong balance sheet with a cash position of £3.8m at 30 June 2015 (H1 2014: £5.5m)

§ Earnings per share increased by 45% to 4.2p per share (H1 2014: 2.9p)

§ Interim dividend increased by 38% to 1.8p per share (H1 2014: 1.3p)

OPERATIONAL HIGHLIGHTS

§ 284 trading offices (H1 2014: 193), 239 franchisees, no company owned offices

§ 253 offices offering Estate Agency service (H1 2014: 145)

§ 44,000 tenanted managed properties (H1 2014: 31,000)

§ 7 new franchisees recruited (H1 2014: 12)

§ 5 new offices opened (H1 2014: 3), further 7 offices preparing to open (H1 2014: 3)

§ 6 portfolio acquisitions by franchisees, adding 519 tenanted managed properties

Ian Wilson, CEO commented:

"Our strategy of developing "The Property Franchise Group" by acquiring other property franchisors has delivered a very good set of numbers in the first half-year after our acquisition of "Xperience". We have seen a strong increase in Group revenue and an even stronger increase in Group operating profits.

"We have substantially completed the integration of the "Xperience" divisional functions into our Head Office in Bournemouth, and we believe that there is scope for further operational gearing if the right target presented itself. We have cash on the balance sheet, unused debt facility and evidence that we can execute and consolidate the acquisition of another franchisor successfully.

"We will be increasing our focus in the second half-year on franchise sales activity, as we believe that each of our five brands is capable of further development through a mix of franchisee recruitment, encouragement for existing franchisees to expand, and the conversion of competitors to a franchise model.

"The track record of our letting business is that it has traditionally performed more strongly in the second half of the year and this trading pattern is expected in our estate agency business for 2015.  The slower start to estate agency transactions in 2015 compared to 2014 appears to be reversing and the value of our transactions exchanged at £6.6m was 21% higher in June 2015 than it was in the previous year.

"We are pleased to announce an interim dividend of 1.8p representing a 38% year on year increase and it confirms our commitment to a progressive dividend policy."

-Ends-

For further information, please contact:

MartinCo Plc   Ian Wilson, Chief Executive Officer David Raggett, Chief Financial Officer	01202 292829
Panmure Gordon Dominic Morley (Corporate Finance) Charles Leigh-Pemberton (Corporate Broking)	020 7886 2500
Bell Pottinger David Rydell, Nick Hyett	020 3772 2500

Chief Executive's Review

I am delighted to report the Group achieved both record revenue and record profits for the period. We had anticipated a period of retrenchment following our acquisition of "Xperience" but the evidence is that the re-structuring work and associated costs have been addressed in H1 2015 and early trading into H2 is encouraging with the management focused on future growth.

Franchise sales

The Group added to its UK footprint with new office openings in Downend (Bristol) and Gloucester under our CJ Hole brand and in, Kingston-on-Thames, Chester and Plymouth under our Martin & Co brand. In addition, one office converted from the Parkers brand to CJ Hole, taking the total number of CJ Hole offices to 20. We anticipate opening a further two offices for CJ Hole in Worcester and Cirencester during H2 2015.

As at 30 June 2015, the Group had 284 offices all of which were franchised and operated by 239 franchisees.

Lettings

High tenant demand continues with 65,917 viewings in the period for the Martin & Co offices, up from 63,698 in H1 2014 and 62,086 in H1 2013.

Our survey of 304 landlord clients conducted following the announcement in the budget of changes to landlord tax allowances found that 90% intended to maintain or expand their portfolio.

The total tenanted managed portfolio across the Group remains stable at circa 44,000.

Estate Agency

The roll-out of estate agency services continued at Martin & Co which prior to 2012 had been positioned as a "lettings specialist" brand. At 30 June 2015 there were 164 Martin & Co offices offering estate agency (H1 2014: 145) and they listed 3,079 properties for sale during the period (H1 2014: 2,161).

Since Martin & Co launched a "no frills" online estate agency service in September 2014 there has been very limited take-up with less than 5% of listings and 1% of estate agency revenue generated from this source. Prospective vendors given a choice between a traditional, no-sale no-fee commission-based estate service, and an upfront fixed fee "no frills" online service appear to continue to prefer the traditional service.

Martin & Co offices increased the number of properties being listed for sale, against market trend. Listings at Martin & Co were 3,079 compared to 2,161 in H1 2014 and 1,060 in H1 2013. This compares to a slight dip in listings at the "Xperience" offices in H1 2015 with 4,730 compared to 5,465 in H1 2014. This reflects a market perception that estate agency activity has been slower more recently.

A new factor has been the length of time it takes for a sale to progress to completion. Historically it has taken three months but during H1 2015 the Group average was between four and five months. This may be the new market "norm" as a result of reduced capacity in conveyancing firms.

At period end the "pipeline" of sales agreed stood at £4.90m for "Xperience" (H1 2014: £4.65m) and £1.7m for Martin & Co (H1 2014: £0.82m).

Acquisition strategy

At the franchisee level there has been a steady stream of small scale portfolio additions with 6 completed in the period, adding 519 tenanted managed properties.

At the franchisor level we have continued to explore the possibility of adding another brand to the Group.

Outlook

The UK housing market is recovering, and the "buy-to-let" sector remains healthy, with all the drivers for further growth remaining in place.

Our Group is better positioned to capitalise on growing activity now that it offers a more balanced mix of lettings and estate agency services.

Appropriately, management spent considerable time during H1 consolidating the acquisition of Xperience. The value of this "add on" business materialised in H1 despite some restructuring costs. H2 trading is historically stronger and management is confident that the Group is well placed to deliver a strong performance for the year as a whole.

Ian Wilson, Chief Executive

Financial Review

Revenue

Revenue from continuing activities for the six months ended 30 June 2015 was £3.4m (H1 2014: £2.3m), an increase of £1.1m (48%) over the comparative period. This was all driven by strong growth in Management Service Fees (royalties) of £1.1m (61%) over the comparative period with Xperience brands contributing £0.9m and Martin & Co contributing £0.2m. The growth in MSF from Martin & Co was 10%.

Operating profit

Operating profit from continuing activities before exceptional costs increased by 66% to £1.3m for the six months ended 30 June 2015 (H1 2014: £0.8m) following the integration of the Xperience brands.

While revenue from continuing activities increased by £1.1m (48%) in the first 6 months of 2015, our administration costs increased by £0.6m (45%) in the same period generating a net increase in operating margin of £0.5m. This lifted the overall operating margin before exceptional items to 38% for the six months ended 30 June 2015 (H1 2014: 34%).

The main contributor to the increase in administration costs of £0.6m was the integration of the Xperience brands which added £0.3m to personnel costs and £0.1m to other administrative expenses. Furthermore, the amortisation of the acquired intangibles added a further £0.1m to administration costs.

The operating profit from continuing activities after exceptional reorganisation costs was £1.2m (H1 2014: £0.8m).

EBITDA

The Group's EBITDA from continuing activities was £1.3m (H1 2014: £0.8m), an increase of £0.5m (66%) over the comparative period.

Earnings per share

Earnings per share for the six months ended 30 June 2015 was 4.2p (H1 2014:  2.9p). The income attributable to owners was £0.9m (H1 2014: £0.6m).

Dividends

The Board intends to continue to pursue a progressive dividend policy providing an attractive yield to shareholders. The Group has increased the interim dividend by 38% over last year and intends to make an interim dividend payment of 1.8p per share on 30 September 2015 to shareholders on the register on 18 September 2015.

Cash flow

The net cash inflow from operating activities in the first six months of 2015 was £0.9m (H1 2014: £0.6m). Unlike in the first 6 months of FY14, the Group paid bank interest and corporation tax in the first 6 months of FY15, amounting to £0.2m in total. Thus, the underlying trend is continued strong growth in operating cash inflows.

On 30 January 2015 the Group sold the portfolio managed on its behalf by T G Fisheries Ltd, the franchisee operating Martin & Co Saltaire, to T G Fisheries Ltd for £255,998 and generated a resulting profit over its net book value of £1,152.

This sale together with the continued receipts of deferred consideration on owned offices disposed of in the year ended 31 December 2013 generated proceeds from the sale of intangible assets of £0.3m. As a result, the Group had net cash inflows from investing activities of £0.3m (H1 2014: nil).

In the first 6 months of 2015 the Group made bank loan repayments of £0.25m and paid a final dividend of £0.6m for the year ended 31 December 2014.

Overall cash increased in the first six months of 2015 by £0.4m (H1 2014: £0.6m).

Liquidity

The Group had cash balances of £3.8m at 30 June 2015 compared to £5.5m at 30 June 2014. The Group also had unutilised bank loan facilities of £2.75m at 30 June 2015.

Financial position

The Group is strongly cash generative which combined with its robust balance sheet, and unutilised bank loan facilities puts it in a strong position to fulfil the acquisition element of our strategic plan.

David Raggett, Chief Financial Officer

MARTINCO PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2015

			Unaudited		Unaudited		Audited
			6 Months Ended		6 Months Ended		12 Months Ended
			30.06.15		30.06.14		31.12.14
	Notes		£		£		£
CONTINUING OPERATIONS
Revenue	6		3,353,937		2,268,978		5,176,174
Cost of sales			(177,839)		(191,609)		(354,145)
GROSS PROFIT			3,176,098		2,077,369		4,822,029
Administrative expenses			(1,895,291)		(1,306,661)		(2,789,131)
			1,280,807		770,708		2,032,898
Exceptional items	7		(114,704)		--		(158,741)
OPERATING PROFIT			1,166,103		770,708		1,874,157
Finance income			29,271		25,517		51,140
Finance costs			(43,401)		--		(22,295)
PROFIT BEFORE INCOME TAX			1,151,973		796,225		1,903,002
Tax expense	8		(233,169)		(165,083)		(411,541)
PROFIT AND TOTAL COMPREHENSIVE INCOME FOR THE PERIOD FROM CONTINUING OPERATIONS
			918,804		631,142		1,491,461
DISCONTINUED OPERATIONS
Profit and total comprehensive income for the period from discontinued operations
			--		4,405		18,565
PROFIT AND TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO OWNERS
			918,804		635,547		1,510,026
Earnings per share - continuing activities (pence)			4.2p		2.9p		6.9p
Earnings per share - discontinued activities (pence)			--		--		--
Total Earnings per share (pence)	9		4.2p		2.9p		6.9p
Diluted earnings per share - continuing activities (pence)			4.0p		2.8p		6.6p
Diluted earnings per share - discontinued activities (pence)			--		--		--
Diluted earnings per share (pence)	9		4.0p		2.8p		6.6p

MARTINCO PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2015

				Unaudited		Unaudited		Audited
				As at		As at		As at
				30.06.15		30.06.14		31.12.14
	Notes			£		£		£
ASSETS
NON-CURRENT ASSETS
Intangible assets		11		6,149,508		378,479		6,270,173
Property, plant and equipment				89,149		82,685		92,158
Deferred tax				--		89,960		--
				6,238,657		551,124		6,362,331
CURRENT ASSETS
Trade and other receivables		12		977,824		626,655		965,319
Cash and cash equivalents				3,761,512		5,461,878		3,367,259
				4,739,336		6,088,533		4,332,578
Assets of disposal group classified as held for sale		17		--		212,618		254,846
				4,739,336		6,301,151		4,587,424
TOTAL ASSETS				10,977,993		6,852,275		10,949,755
EQUITY
SHAREHOLDERS' EQUITY
Share capital		13		220,000		220,000		220,000
Share premium				3,790,000		3,790,000		3,790,000
Other reserves		14		35,477		(83,621)		(61,406)
Retained earnings				2,652,957		1,739,674		2,328,153
TOTAL EQUITY				6,698,434		5,666,053		6,276,747
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings		15		1,750,000		--		2,000,000
Deferred tax				675,669		--		791,136
				2,425,669		--		2,791,136
CURRENT LIABILITIES
Borrowings		15		500,000				500,000
Trade and other payables		16		962,494		572,893		1,046,530
Tax payable				391,396		582,068		335,342
				1,853,890		1,154,961		1,881,872
Liabilities of disposal group classified as held for sale		17		--		31,261		--
				1,853,890		1,186,222		1,881,872
TOTAL LIABILITIES				4,279,559		1,186,222		4,673,008
TOTAL EQUITY AND LIABILITIES				10,977,993		6,852,275		10,949,755

MARTINCO PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2015

		Called up share capital (note 13)	Retained earnings	Share premium	Other reserves (note 14)		Total equity
		£	£	£	£		£
Balance at 1 January 2014 (audited)		220,000	1,104,127	3,790,000	(138,926)		4,975,201
Profit and total comprehensive income		--	635,547	--	--		635,547
Deferred tax on share based payments		--	--	--	55,305		55,305
Balance at 30 June 2014 (unaudited)		220,000	1,739,674	3,790,000	(83,621)		5,666,053
Profit and total comprehensive income		--	874,479	--	--		874,479
Dividends paid (note 10)		--	(286,000)	--	--		(286,000)
Deferred tax on share based payments		--	--	--	22,215		22,215
Balance at 31 December 2014 (audited)		220,000	2,328,153	3,790,000	(61,406)		6,276,747
Profit and total comprehensive income		--	918,804	--	--		918,804
Dividends paid (note 10)		--	(594,000)	--	--		(594,000)
Deferred tax on share based payments		--	--	--	96,883		96,883
Balance at 30 June 2015 (unaudited)		220,000	2,652,957	3,790,000	35,477		6,698,434

MARTINCO PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2015

												Unaudited		Unaudited			Audited
												6 Months Ended		6 Months Ended			12 Months Ended
												30.06.15		30.06.14			31.12.14
												£		£			£
Cash flows from operating activities
Profit before income tax											1,151,973				801,836		1,926,502
Depreciation and amortisation charges											129,137				9,900		74,087
Profit on disposal of intangible assets											(1,152)				--		(4,007)
Finance costs											43,401				--		22,295
Finance income											(29,271)				(25,517)		(51,140)
Operating cash flow before changes in working capital											1,294,088				786,219		1,967,737
Increase in trade and other receivables											(30,029)				(17,107)		(107,279)
(Decrease)/increase in trade and other payables											(91,643)				(126,824)		77,153
Cash generated from operations											1,172,416				642,288		1,937,611
Interest paid											(49,323)				--		(203)
Tax paid											(195,700)				--		(609,292)
Net cash generated from operations											927,393				642,288		1,328,116
Cash flows from investing activities
Purchase of Subsidiary undertakings net of cash acquired											--				--		(5,065,902)
Purchase of intangible assets											--				(277,450)		(326,317)
Purchase of tangible assets											(5,463)				(5,424)		(17,520)
Proceeds from sale of intangible assets											287,052				259,428		341,576
Proceeds from sale of tangible assets											--				--		24,646
Interest received											29,271				25,517		51,140
Net cash generated from/(used in) investing activities											310,860				2,071		(4,992,377)
Cash flows from financing activities
(Repayment of)/proceeds from borrowings											(250,000)				--		2,500,000
Equity dividends paid											(594,000)				--		(286,000)
Net cash (used in)/generated from investing activities											(844,000)				--		2,214,000
Increase/(decrease) in cash and cash equivalents											394,253				644,358		(1,450,261)
Cash and cash equivalents at the beginning of the period											3,367,259				4,817,520		4,817,520
Cash and cash equivalents at end of period											3,761,512				5,461,878		3,367,259

MARTINCO PLC

NOTES TO THE INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2015

1.       GENERAL INFORMATION

The principal activity of MartinCo plc and its subsidiaries is that of a UK residential property franchise business. The Group operates in the UK. The company is a public limited company incorporated and domiciled in the UK. The address of its head office and registered office is 2 St Stephen's Court, St Stephen's Road, Bournemouth, Dorset, UK.

2.       GOING CONCERN

The interim financial information has been prepared on the basis that the Group is a going concern.

When assessing the foreseeable future the directors have looked ahead for a period of more than 12 months from the date of approval of the interim financial information. The directors have a reasonable expectation that the Group has adequate resources to continue to trade for the foreseeable future and, therefore, consider it appropriate to prepare the Group's interim financial information on a going concern basis.

3.       BASIS OF PREPARATION

The consolidated interim financial information for the six months ended 30 June 2015 was approved by the Board and authorised for issue on 8 September 2015. The results for 30 June 2015 and 30 June 2014 are unaudited. The disclosed figures are not statutory accounts in terms of Section 435 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2014 on which the auditors gave an audit report which was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

This interim report has been prepared on a basis consistent with the accounting policies expected to be applied for the year ending 31 December 2015, and uses the same accounting policies and methods of computation applied for the year ended 31 December 2014.

4.       BASIS OF CONSOLIDATION

The Group's interim financial information includes those of the parent company and its subsidiaries, drawn up to 30 June 2015. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. When necessary amounts reported by subsidiaries have been adjusted to conform with the Group's accounting policies.

5.       SEGMENTAL REPORTING

The board of Directors, as the chief operating decision-making body, review financial information for and make decisions about the Group's overall franchising business and have identified a single operating segment, that of property franchising.

MARTINCO PLC

NOTES TO THE INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2015

6.       REVENUE

The Directors believe there to be three material income streams relevant to property franchising which are split as follows:

			Unaudited		Unaudited		Audited
			6 Months Ended		6 Months Ended		12 Months Ended
			30.06.15		30.06.14		31.12.14
			£		£		£
Management service fee			2,898,748		1,803,200		4,048,575
Franchise sales			130,258		160,024		423,779
Other			324,931		305,754		703,820
			3,353,937		2,268,978		5,176,174

            All revenue is earned in the UK and no customer represents greater than 10 per cent of total revenue in the periods reported.

7.       EXCEPTIONAL ITEMS

The exceptional items represent costs relating to the acquisition of Xperience (Xperience Franchising Limited and Whitegates Estate Agency Limited) in the year ended 31 December 2014, and subsequent redundancy costs as part of the reorganisation in period ended 30 June 2015.

8.       TAXATION

The underlying tax charge is based on the expected effective tax rate for the full year to December 2015. The majority of the tax arises from applying this effective tax rate to the profit on ordinary activities

MARTINCO PLC

NOTES TO THE INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2015

9.       EARNINGS PER SHARE

Earnings per share is calculated by dividing the profit for the financial period by the weighted average number of shares during the period.

		Unaudited		Unaudited			Audited
		6 Months Ended		6 Months Ended			12 Months Ended
		30.06.15		30.06.14			31.12.14
Basic earnings per share
Weighted average number of shares		22,000,000		22,000,000			22,000,000
Profit for the period from continuing activities (£)		918,804		631,142			1,491,461
Profit for the period from discontinued activities (£)		-		4,405			18,565
Total profit for the period (£)		918,804		635,547			1,510,026
Earnings per share - continuing activities (pence)		4.2p		2.9p			6.9p
Earnings per share - discontinued activities (pence)		--		--			--
Total Earnings per share		4.2p		2.9p			6.9p

			Unaudited		Unaudited		Audited
			6 Months Ended		6 Months Ended		12 Months Ended
			30.06.15		30.06.14		31.12.14
Diluted earnings per share
Weighted average number of shares			22,000,000		22,000,000		22,000,000
Dilutive effect of share options on ordinary shares			836,447		845,040		832,818
			22,836,447		22,845,040		22,832,818
Diluted earnings per share - continuing activities (pence)			4.0p		2.8p		6.6p
Diluted earnings per share - discontinued activities (pence)			--		--		--
Diluted earnings per share (pence)			4.0p		2.8p		6.6p

MARTINCO PLC

NOTES TO THE INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2015

10.     DIVIDENDS

			Unaudited		Unaudited		Audited
			As at		As at		As at
			30.06.15		30.06.14		31.12.14
			£		£		£
Dividends (ordinary share of £0.01 each)			594,000		--		286,000
Dividend per share			2.7p		--		1.3p

The dividends above are the amounts paid in the respective periods. The maiden interim dividend of 1.3p per share (£286,000 in total) was paid on 30 September 2014 and the final dividend for the financial year ended 31 December 2014 of 2.7p (£594,000 in total) was paid on 11 May 2015.

                MARTINCO PLC

NOTES TO THE INTERIM RESULTS

                FOR THE SIX MONTHS ENDED 30 JUNE 2015

11.     INTANGIBLE ASSETS

		Master Franchise Agreement		Brands		Customer Lists		Goodwill		Total
		£		£		£		£		£
Cost
Balance at 1 January 2014		--		--		--		75,000		75,000
Additions		--		--		307,050		--		307,050
Balance at 30 June 2014 (Unaudited)		--		--		307,050		75,000		382,050
Additions		--		--		19,267		--		19,267
Acquired via business combinations		4,075,085		571,000		225,204		1,313,217		6,184,506
Transferred to assets held for sale		--		--		(271,000)		--		(271,000)
Balance at 31 December 2014 (Audited) and 30 June 2015 (Unaudited)		4,075,085		571,000		280,521		1,388,217		6,314,823
Amortisation
Balance at 1 January 2014		--		--		--		--		--
Charge for period		--		--		3,571		--		3,571
Balance at 30 June 2014 (Unaudited)		--		--		3,571		--		3,571
Charge for period		27,167		--		30,066		--		57,233
Transferred to assets held for sale		--		--		(16,154)		--		(16,154)
Balance at 31 December 2014 (Audited)		27,167		--		17,483		--		44,650
Charge for period		81,502		--		39,163		--		120,665
Balance at 30 June 2015 (Unaudited)		108,669		--		56,646		--		165,315
Net book value
30 June 2014 (Unaudited)		--		--		303,479		75,000		378,479
31 December 2014 (Audited)		4,047,918		571,000		263,038		1,388,217		6,270,173
30 June 2015 (Unaudited)		3,966,416		571,000		223,875		1,388,217		6,149,508

                MARTINCO PLC

NOTES TO THE INTERIM RESULTS

                FOR THE SIX MONTHS ENDED 30 JUNE 2015

12.       TRADE AND OTHER RECEIVABLES

			Unaudited		Unaudited		Audited
			As at		As at		As at
			30.06.15		30.06.14		31.12.14
			£		£		£
Trade receivables			54,360		56,100		55,536
Loans to franchisees			176,332		36,000		190,333
Prepayments and accrued income			635,890		383,737		552,187
Other receivables			111,242		150,818		167,263
			977,824		626,655		965,319

13.       CALLED UP SHARE CAPITAL

	Unaudited		Unaudited		Audited
	As at		As at		As at
	30.06.15		30.06.14		31.12.14
	£		£		£
Group
22,000,000 Authorised, allotted issued and fully paid Ordinary Shares of 1p each	220,000		220,000		220,000

14.       OTHER RESERVES

		Merger  Reserve		Share Based Payment Reserve		Total
		£		£		£
1 January 2014 (Audited)		(179,800)		40,874		(138,926)
30 June 2014		(179,800)		96,179		(83,621)
31 December 2014 (Audited)		(179,800)		118,394		(61,406)
30 June 2015		(179,800)		215,277		35,477

Merger reserve

The merger reserve relates to the acquisition of Martin & Co (UK) Limited by MartinCo PLC.  This did not meet the definition of a business combination and therefore, falls outside of the scope of IFRS 3. This transaction was accounted for in accordance with the principles of merger accounting as set out in Financial Reporting Standard 6 - Acquisitions and Mergers.

Share-based payment reserve

The share based payments reserve comprises charges made to the income statement in respect of share-based payments and related deferred tax impacts under the Group's equity compensation scheme.

MARTINCO PLC

NOTES TO THE INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2015

15.   BORROWINGS

		Unaudited		Unaudited		Audited
		As at		As at		As at
		30.06.15		30.06.14		31.12.14
		£		£		£
Repayable within 1 year:
Bank loan (term loan)		500,000		--		500,000
Repayable in more than 1 year:
Bank loan (term loan)		1,750,000		--		2,000,000
Bank loans due after more than 1 year are repayable as follows:
Between 1 and 2 years		500,000		--		500,000
Between 2 and 5 years		1,250,000		--		1,500,000

The term loan of £2.25m (31.12.14: £2.5m) is secured with a fixed and floating charge over the Group's assets and a cross guarantee across all companies in the Group. The loan commenced on 30 October 2014 and is repayable over 5 years in equal instalments. Interest is charged quarterly on the outstanding amount and the rate is fixed during the term at 4.08%. At 31 December 2014 the unutilised amount of the facility was £2.5m and on 30 June 2015 the unutilised amount of the facility was £2.75m.

16.     TRADE AND OTHER PAYABLES

			Unaudited		Unaudited		Audited
			As at		As at		As at
			30.06.15		30.06.14		31.12.14
			£		£		£
Trade payables			124,997		76,372		178,673
Accruals			448,962		214,617		503,752
Other taxes and social security			354,535		236,162		340,534
Other payables			34,000		45,742		23,571
			962,494		572,893		1,046,530

17.     DISCONTINUED OPERATIONS AND HELD FOR SALE ASSETS AND LIABILITIES

Discontinued operations arose from the Board's decision to discontinue the activity of owning and managing its own offices. All bar one of the owned offices were sold in 2013. The remaining office in Worthing was sold on 30^th December 2014.

In June 2014, the Group acquired its first portfolio of 374 managed lettings properties in Saltaire for £0.3m. On 21 November 2014 T G Fisheries Ltd, the franchisee operating Martin & Co Saltaire, notified the Group of its intention to purchase the portfolio of properties it was managing on behalf of the Group in accordance with the services agreement signed between the parties. At the 31 December 2014 this asset was classified as held for resale but not as a discontinued operation because the Group intends to continue to pursue and acquire portfolios of managed properties which meet its criteria. The sale was completed on 30 January 2015.

 

END

 

 

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