Trading Update

RNS Number : 9671D

MartinCo PLC

04 February 2015

 

MartinCo Plc ("MartinCo or the "Group")

Pre-close statement for Financial Year End 2014

MartinCo Plc, one of the UK's largest property franchise businesses, today issues the following pre-close trading update for the year ended 31 December 2014, ahead of reporting its final results for the 12 month period on 31 March 2015.

Highlights:

·    8% year-on-year growth in franchise Management Service Fees at Martin & Co (UK) Ltd

·    Group total revenue up 24% from £4.1m to £5.1m of which £0.3m attributable to the acquisition of Xperience (excludes discontinued activities)

·    Xperience acquisition increased Group size by 45% from 194 to 282 offices

·    Number of tenanted managed properties increased from 30,623 to 32,210 at Martin & Co and to approx. 43,000 across the enlarged Group

·  14 new Martin & Co franchisees recruited, 5 new offices opened (Inverness, Guisborough, Sunderland, Fitzrovia & Wilmslow) and 2 offices preparing to launch (Plymouth & Edinburgh)

·   The Group remains heavily weighted towards lettings, which accounts for 78% of Management Service Fees revenue

·    Strong cash position with £5m debt facility agreed during the period

·    Overall trading for the period in line with market expectations

The Xperience acquisition extended the Group's footprint, adding 44 franchise areas where Martin & Co had not previously traded. Xperience's Managing Director, Michael Stoop, was appointed as the new Group Managing Director, with the remit of driving lettings and estate agency revenue across all five brands.

The Group has provided operational assistance to its franchisees, and in some cases additional financial support with smaller scale acquisitions. Throughout the year this has added approx. 850 properties to the tenanted managed portfolio. The Board remains confident in its acquisition strategy and will look to progress further acquisitions where it can see potential for value creation.

In line with Group strategy, the roll-out of cloud-based operational software to all Martin & Co. offices was completed in the period. The last remaining company owned and operated office was sold to a franchisee, completing the discontinuation of this activity.

The Martin & Co estate agency business has made significant progress during the period, with a 138% year-on-year increase in Management Service Fee revenue. The number of Martin & Co offices offering the estate agency service increased organically during the period from 90 to 152. The Xperience acquisition further adds to the Group's estate agency capability with another 88 offices already offering this service.

The £5m loan facility arranged with Santander and announced in October 2014 means that the Group is in a strong cash position at the period end.

Outlook

The Board is confident that the prospect of rising interest rates and uncertainty during a General Election year will not materially affect trading prospects for 2015. Whilst the acquisition of Xperience adds to the Group's estate agency business and to its footprint within the M25, MartinCo remains largely lettings-led across the UK. The outlook remains positive as the lettings market continues to experience strong tenant demand in a market characterized by an undersupply of rented housing. In addition to forecast organic growth, the Board will continue to evaluate selective acquisitions that fit with our specific criteria.

Commenting on Group performance, MartinCo CEO Ian Wilson, said:

"I am pleased by the growth of the Group in its maiden IPO year. In line with our key strategic objectives, the acquisition of Xperience has added considerable value. It has significantly increased our UK footprint and the number of properties under management across our five franchise brands. We are now a top 10 UK property business, measured both in terms of number of offices and market share.

"We remain very positive about the outlook for our core lettings business, from which 78% of our franchise royalty income is derived. I look forward to providing a further update at our full year results in March".

-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 78862500
Bell Pottinger    David Rydell, Joanna Boon	020 3772 2500

About MartinCo  

MartinCo Group operates one of the UK's largest property franchise businesses through its 282 offices and 5 franchise brands Martin & Co, CJ Hole, Parkers, Ellis & Co and Whitegates.

The Group's franchisees manage approximately 43,000 properties on behalf of private clients. The Group added an estate agency service in 2013 and offers this service at 240 of its offices.

MartinCo is a multiple award winning business and the Directors and senior management have over 100 years of combined residential letting and estate agency experience.

www.martinco.com 

 

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