Pre-Close Trading Update and Notice of Results

RNS Number : 2298A

Property Franchise Group PLC (The)

01 February 2022

 

01 February 2022

THE PROPERTY FRANCHISE GROUP PLC

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

Pre-Close Trading Update and Notice of Preliminary Results

Profit anticipated to be ahead of market expectations

The Property Franchise Group PLC, the UK's largest property franchisor, is pleased to provide a trading update for the year ended 31 December 2021. 

The Group achieved a strong performance in 2021 through organic growth, a very active residential housing market and the acquisition of Hunters Property PLC ("Hunters"), which completed in March 2021. Like for like revenue and Management Service Fees were significantly up on 2020 and, it is important to note given the disruption in 2020, similarly up on 2019. As a result, profit is now anticipated to be ahead of market expectations.

Highlights¹

· Group revenue increased 119% to £24.1m² (2020: £11.0m)³

o  26% like for like increase on 2020 to £13.9m²

o  23% like for like increase on 2019

· Management Service Fees ("royalties") increased 57% to £14.7m² (2020: £9.4m)

o  19% like for like increase on 2020 to £11.2m²

o  16% like for like increase on 2019

· Network income increased 67% to £157.0m (2020: £94.0m)

o  17% like for like increase on 2020 to £110.0m

o  18% like for like increase on 2019

· EweMove sold 58 new territories (2020: 11) taking the total number under contract to 167

· Number of offices increased by 72% to 591 (2020: 343), including 209 Hunters offices

· Sales agreed pipeline remained strong at £26.5m at 31 December 2021 (2020: £15.3m)

· Managing 74,000 rental properties at 31 December 2021 (2020: 58,000)

· Net debt of £2.7m² on 31 December 2021 demonstrating continued strong cash generation since borrowing £12.5m to fund the acquisition of Hunters (30 June 2021: £5.4m; 31 Dec 2020: net cash £8.8m).

¹   Like for like comparisons exclude the impact of the acquisitions of Hunters, The Mortgage Genie Ltd, and The Genie Group UK Ltd and the disposals of Aux Group Ltd and Auxilium Partnership Ltd

²   Unaudited

³ Group revenue for 2021 and 2020 excludes Aux Group Ltd and Auxilium Partnership Ltd which were sold in July 21

The Government's initiatives to support the housing market, coupled with remote working and changes to homeowners' requirements, supported a very strong property sales performance, with 26,000 sales' contracts exchanged across our network. Although those initiatives ended in September 2021, we continued to see strong levels of sales being agreed and finished the year with a significant sales agreed pipeline of £26.5m.

The Group now manage in excess of 74,000 rental properties on behalf of landlords, with much of the growth through the year coming from the acquisition of Hunters. Consequently, lettings Managed Service Fees ('MSF') increased 18% versus 2020. Towards the end of the year, we started to see a rise in the rents charged for both new and renewed tenancies in the range of 6% - 8%.

EweMove, the Group's hybrid estate agency, had an outstanding year as it continued to build on its brand positioning and scale. The sale of 58 new territories versus 11 in 2020 helped set a new record for the total number of territories under contract of 167. This puts the Group on track to achieve one of its core strategic aims: to double the size of its EweMove territories to 230 by the end of 2022.

Post-period end we launched a new hybrid franchise model, 'Hunters Personal Agent'. This model follows our established, successful hybrid model and complements the Hunters brand. Hunters Personal Agent is designed to provide agents with greater flexibility in running their business from a low-cost base and the initial response to its launch has been encouraging.

Overall, the Group has made faster progress than expected with the strategic initiatives first outlined in September 2020 and continues to have substantial growth opportunities ahead of it. All of which is underpinned by significant recurring lettings revenue and a strong balance sheet. We continue to identify potential acquisition targets to enhance shareholder value and to invest in our team. Consequently, the Board remains confident in the long-term outlook for the business. 

Notice of results

We expect to release our preliminary results for the year ended 31 December 2021 on Tuesday 5 April 2022.

Chief Executive Officer, Gareth Samples, commented:

"The Board and I are delighted to report that the excellent trading momentum seen in the first six months of 2021 continued in the second half. We have built a fantastic senior management team across the Group with an incredible combined knowledge and experience of the market. The value of their guidance and support can be seen reflected in the fact that we are seeing more and more people interested in joining our franchise network, as well as existing franchisees wishing to expand their representation.

We've also made significant strides forward against each of our strategic priorities this year, which are vital in underpinning our ongoing success no matter how the external conditions develop. With the support of our employees, franchisees, and partners, we are well on track to increase our market share substantially further."

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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) Bobbie Hilliam Tom Diehl	0207 523 8000
Alma PR  Susie Hudson Justine James Joe Pederzolli	020 3405 0205 [e-mail]

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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