Trading Update

RNS Number : 3967D

Property Franchise Group PLC (The)

31 January 2018

 

31 January 2018

THE PROPERTY FRANCHISE GROUP PLC

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

Trading Update for Financial Year Ended 31 December 2017

The Property Franchise Group PLC today issues the following trading update for the year ended 31 December 2017 ("FY 17"), ahead of its final results on Tuesday, 10 April 2018. 

The Group's traditional high street brands have performed well during FY 17 and pleasingly, its online brand EweMove traded profitably in the second half of the year*. Consequently, the Company confirms that trading for FY 17 is expected to be in line with market expectations.

Highlights:

·      Revenue increased by 23% to £10.2m* (2016: £8.3m)

·      Expanding UK network with 403 offices, 283 traditional brands and 120 EweMove (2016:377)

·      Serving c.52,000 tenanted managed properties at the year end (2016: c.48,000)

·      Recruited 6 new franchisees for the traditional brands, and 31 for EweMove

·      Group remains heavily weighted toward lettings, which accounts for 70% of Management Service Fees (2016: 74%)

·      Strong balance sheet, with net cash at the year-end after fully paying the earn-out to the founders of EweMove

* Unaudited

Outlook

The fundamental drivers for expansion of the UK private rented sector remain in place despite ongoing changes to the commercial environment within the sector. The Group's managed portfolio continued to grow organically, as well as by franchisee-led acquisitions in FY 17.

The timetable for implementation of the Government's proposal to ban or restrict the charging of fees to tenants in England has been indicated to be Spring 2019. Accordingly, TPFG does not expect there to be any adverse impact on trading for the financial year ending 31 December 2018.

The Board believes that the Group's multi-brand strategy with an online offering provides a well-balanced exposure to the opportunities and threats which exist in a changing property marketplace and remains confident for the year ahead.

Chief Executive Ian Wilson commented,

"We are pleased to be reporting another year of growth for the Group, despite industry consensus that 2017 was a tougher trading year than 2016, particularly for sales in London.

"Our network continues to grow, with our traditional brands having performed very well, and benefitted from website improvements applied using insights gained from EweMove. These improvements generated 17,000 new business leads for franchisees from pay-per-click campaigns, with website lead volumes increasing between 200% and 550% year-on-year in Q4 17.

"The trading losses incurred at our EweMove subsidiary in H1 17 were substantially reversed in H2 17 trading, during which period EweMove traded profitably. Franchisee recruitment continues to be an area of focus at EweMove, particularly the number of experienced estate agents being recruited. The new Managing Director at EweMove, having joined in June 2017, has made a very positive impact, turning around profitability and supporting the business development of existing franchisees.

"With a strong balance sheet, the Group is well-positioned to continue leveraging its scale and local brand recognition to capitalise on growth opportunities. The Board is excited by the opportunity presented to us both online and on the high street and I look forward to providing a further update at our full year results in April".

For further information, please contact:

The Property Franchise Group PLC      Ian Wilson, Chief Executive Officer David Raggett, Chief Financial Officer	01202 292829
Cenkos Securities plc Max Hartley (Nominated Adviser) Alex Aylen (Sales)	0207 397 8900
Alma PR Josh Royston Rebecca Sanders-Hewett Susie Hudson	0203 865 9667

 

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