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RNS Number : 0738B
Property Franchise Group PLC (The)
28 January 2020
28 January 2020
THE PROPERTY FRANCHISE GROUP PLC
("TPFG", the "Company" or the "Group")
Pre-Close Trading Update and Notice of Full Year Results
The Property Franchise Group PLC, one of the UK's largest
property franchises, is pleased to provide a trading update for the
year ended 31 December 2019 ("FY19"), ahead of reporting its final
results on Tuesday, 31 March 2020.
The Group has successfully navigated a difficult year for UK
residential property and performed in line with market
expectations, delivering growth in both revenues and management
service fees. Our franchisees successfully mitigated much of the
impact of the tenant fee ban and achieved a record performance for
lettings revenue. The Group's hybrid brand, EweMove, is also
anticipated to show another significant improvement in profit over
the prior year.
Despite the wider lettings market being adversely impacted by
the tenant fee ban, the Group increased overall revenue to
GBP11.4m* (2018: GBP11.2m). Furthermore, Management Service Fees
(royalties) rose to GBP9.6m* (2018: GBP9.4m) and the number of
tenanted managed properties serviced increased to c.58,000 at the
year-end (2018: c.55,000).
During the financial year, the Group's assisted acquisitions
programme supported 24 acquisitions by franchisees and added 2,381
managed properties. The Group has continued to invest in technology
to enhance opportunities and is pleased to report a 54% increase in
leads through its pay-per-click campaign via the traditional high
street brands' customer websites, from c.30,000 to c.47,000.
The Group maintains a strong balance sheet, with nil debt and
net cash of GBP4.0m* at the year-end.
*Unaudited
Outlook
As previously announced, the Group encouraged its franchisees to
follow a mitigation plan to alleviate the impact of the tenant fee
ban which became effective in England & Wales on 1 June 2019.
As expected, the ban tempered lettings revenues in H2 2019, however
the Group has made good progress with this initiative and is now
confident that the objective of full mitigation will be attained by
June 2020, a full six months ahead of the Group's original
plan.
Early indications of improving market conditions underpin our
expectation that the volume of house sales should increase in 2020.
The lettings market is also anticipated to remain healthy, with
rising rents and increased confidence leading to more opportunities
for the Group's franchisees to acquire competitors' books than were
available in 2019.
Post period end, the Group announced the launch of its "buy and
build" Financial Services division and the appointment of Mark
Graves to the new role of Financial Services Director.
Through this new division, the Group believes that it can
significantly enhance longer term profitability through the
creation of a financial services franchise as well as building its
own financial services business serving the residential property
market.
Chief Executive Ian Wilson commented,
"Our ability to deliver revenue growth and continued operational
progress over the year, notwithstanding the market headwinds, is
testament to the strength of our business and the franchise
model.
"Looking ahead, there are numerous opportunities for us to now
build further momentum across the business, as we continue to
invest in our traditional brands and EweMove remains robust. In
parallel we will focus our attention on growing a national mortgage
brokerage network under our newly created financial services
division.
"This is my last year with TPFG and I'm delighted that we have
continued the journey that we started with our IPO in December
2013, having materially increased the dividend every year. We are
dedicated to continuing to create value for all our stakeholders
and are confident we will continue to do so in the year ahead."
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, Callum Davidson (Nominated Adviser)
Julian Morse (Sales) 0207 397 8900
Alma PR
Susie Hudson
Rebecca Sanders-Hewett 0203 405
Jessica Joynson 0205
About The Property Franchise Group PLC:
The Property Franchise Group PLC (AIM: TPFG) is one of the
largest property franchises in the UK. The Company was founded in
1986 and has since grown to a diverse portfolio of six brands
operating throughout the UK, comprising longstanding high-street
brands and a hybrid, no sale no fee agency.
The Property Franchise Group's brands include:
-- Martin & Co: a national lettings focused brand
-- EweMove: a national, digitally enabled, hybrid sales and lettings brand
-- CJ Hole: a full-service estate agency serving the West Country for 151 years
-- Ellis & Co: a full-service estate agency serving London for 168 years
-- Parkers: a full-service estate agency serving the M4 corridor for 70 years
-- Whitegates: a full-service estate agency serving the Midlands
and North of England for 40 years
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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END
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