Trading Update, Notice of Results and Presentation

RNS Number : 2584T

Property Franchise Group PLC (The)

24 March 2021

 

24 March 2021

THE PROPERTY FRANCHISE GROUP PLC

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

FY20 Trading Update,

Notice of Final Results and Investor Presentation

The Property Franchise Group PLC, the UK's largest property franchisor, completed the acquisition of Hunters Property plc on Monday 22 March, and is pleased to provide a trading update for the year ended 31 December 2020 ("FY20"), for the Group and Hunters.

TPFG is now the leading property franchise group in the UK, managing the second largest estate agency network and portfolio of lettings properties.

FY20 Trading Update

FY20 was a volatile year for the estate and lettings agency industry as companies navigated an unprecedented period of full closure and various levels of restrictions for the remainder of the year. While constructive Government initiatives such as the stamp duty holiday had a positive impact on underlying activity levels, extended lead times meant that this surge of activity will largely flow through into fees in early 2021.  

Both TPFG and Hunters performed very well despite the circumstances, demonstrating the strength and resilience of the franchise model and the quality of their respective management teams.

As previously announced, both companies had a keen focus on cost management over the year, as was prudent given the uncertain environment, which together with stable revenues has led to a positive impact on profitability.

The Property Franchise Group

· Network income increased to £94m (2019: £93m)

· Revenue increased to £11.5m (2019: £11.4m)

· Management Service Fees of £9.4m (2019: £9.7m)

o  70% Lettings and 30% Sales

· Average branch revenue of c.£333,000 (2019: c.£321,000) excluding EweMove

· Tenanted managed properties remained stable at c.58,000 (2019: c.58,000)

· Sales agreed pipeline at year-end almost double December 2019 at £10.3m (2019: £5.2m)

· 11 assisted portfolio acquisitions by franchisees, adding 1,305 managed properties

· The Group maintains a strong balance sheet, with net cash of £8.8m* at the year-end (2019: net cash £4.0m)

Hunters

The highlights below relate to the year ended 31 December 2020, prior to the completion of the acquisition.

· Network income increased to £43m (2019: £42m)

· Adjusted** revenue decreased by 4% to £12.5m (2019: £13.0m)

· Management Service Fees of £3.4m (2019: £3.2m)

o  64% Sales and 36% Lettings

· Average branch revenue of c.£207,000 (2019: c.£205,000)

· Tenanted managed properties of c.15,000 (2019: c.14,000)

· Sales agreed pipeline increased 84% to £17.3m (2019: £9.4m)

· Improved balance strength with zero net debt at the year-end* (2019: net debt £3.2m)

*Unaudited

** Adjusted for offices franchised in 2020 and changes to portal charging.

Current trading and Outlook

With the strong pipeline and momentum generated late FY20 continuing into the current year, TPFG and Hunters both came into 2021 with sales agreed pipelines in their networks up more than 80% on the end of the prior year.

The sales pipeline has continued at strong levels. As a result, at the end of February 2021, the sales agreed pipeline had only reduced by 6% since the end of 2020, when they were at record highs.

Sales agreed pipelines have also started to convert into completions at faster rates. Consequently, TPFG and Hunters have benefited from significantly increased turnover from sales activities over the comparative period for FY20.

Sales valuations and listings, as well as Lettings' instructions and lettings, have started more slowly in 2021 than they did in 2020 when we experienced the confidence following the UK general election. However, the confirmation of the extension of the stamp duty holiday by the Chancellor in his March 2021 Budget and the intended easing of lockdown restrictions should both help to improve performance over the coming months.

Underpinning the lettings income of both TPFG and Hunters is the portfolio of managed properties which now stands at c73,000 properties.

Whilst the outlook for the UK economy remains difficult to predict, we are confident that an exciting year of progress is ahead of the Group. Aside from external market conditions, in the year ahead TPFG looks forward to pursuing the new opportunities available to it following the Hunters acquisition, leveraging its significantly enhanced scale and continuing to execute on its ambitious growth strategy.

Notice of Results and Investor Presentation

The Board intends to reinstate guidance for the enlarged Group alongside the publication of its full year results for FY20 on 27 April 2021.

Gareth Samples, CEO, and David Raggett, CFO, will be hosting a live private investor presentation on the results on Wednesday 28 April 2021 at 11.30am.

All existing and potential private investors interested in attending are asked to register for free using the following link:  http://bit.ly/TPFG_Full_Year_Results_PresentationWebinar

Attendees will have the opportunity to ask questions to Management as part of the event, with feedback collected following the meeting. Any questions there is not time to answer live are asked to be sent to  [e-mail]  and will be responded to directly. A recording of the webinar will be posted shortly after the event on the Company's website: www.propertyfranchise.co.uk

Chief Executive Officer, Gareth Samples, commented,

"I am very pleased to be announcing strong results in 2020 delivered by both The Property Franchise Group and Hunters. Both companies have demonstrated their strength and agility under rapidly changing circumstances, progressing financially and operationally in the year. We are confident that bringing a strong, growing business into the Group will supercharge our expansion plans, delivering great value for both our shareholders and our franchisees.

We now have an unrivalled management team, geographical reach and brand value within the Group. We are excited for what the future holds."

For further information, please contact:

The Property Franchise Group PLC   Gareth Samples, Chief Executive Officer David Raggett, Chief Financial Officer	01202 405549
Cenkos Securities plc (Nominated Adviser and Broker) Max Hartley, Callum Davidson Julian Morse (Sales)	0207 397 8900
Alma PR  Susie Hudson Justine James Harriet Jackson	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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