REG - Property FranchiseGp - FY24 Trading Update

Property FranchiseAnnouncement

30/01/2025 07:00

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RNS Number : 1961V  Property Franchise Group PLC (The)  30 January 2025

30 January 2025

 

THE PROPERTY FRANCHISE GROUP PLC

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

 

FY24 Trading Update

 

Transformational year with the delivery of significant organic and inorganic
growth,

redefining the scale of the Group

 

The Property Franchise Group PLC, the UK's largest multi-brand property
franchisor, announces its trading update for the year ended 31 December 2024,
and is pleased to report significant organic and inorganic growth during the
year with trading expected to be in line with market expectations.

 

Highlights

 

·      Group revenue increased 146% to £67.2m (2023: £27.3m), with 52%
(£35m) deriving from recurring revenue sources

·      Management Service Fees ("MSF") increased 76% to £28.3m (2023:
£16.1m)

·      Lettings MSF Like for Like has increased 8% to £10.7m (2023:
£9.9m)

·      Sales MSF Like for Like has increased 15% to £7.2m (2023:
£6.3m)

·      Financial Services commissions now a significant revenue stream
at £19.2m (2023: £1.5m)

·      Licensing income of £7.2m from GPEA acquisition

·      Net debt of £9.1m after borrowing £20m to fund the acquisition
of GPEA (2023: net cash £5.1m)

 

This has been a transformational year for the Group, with the merger with
Belvoir Group PLC ("Belvoir") and the acquisition of GPEA Limited ("GPEA")
adding material scale and market reach in our franchise business, a
significantly strengthened Financial Services division, and a new licensing
revenue stream. As a result, the Group is now segmented into three distinct
business divisions: Franchising, Financial Services and Licensing. Good
progress has been made in the period in integrating the two new businesses and
realising synergies, which started to materialise towards the end of 2024.

 

Franchising

 

As a result of the Belvoir merger, the Company's franchising division now
operates across 15 brands, managing a combined 153,000 rental properties (3%
of the Private Rental Sector) and achieved over 30,000 sales during 2024,
making it the biggest property franchise business in the UK.

 

Lettings MSF in 2024 grew 93% to £19.0m with the merger with Belvoir
contributing significantly, with the Group managing over 153,000 (2023:
78,000) rental properties at year end. This being a result of the combination
of, minimising landlord attrition through strong relationships and market
leading technical guidance, increasing the size of the letting book through
acquisition and, continuing to see rental prices increasing across the
network, particularly outside of London.

 

Sales MSF in 2024 grew 48% to £9.3m, performing well over the full year and
particularly in H2 as consumers capitalised on the declining cost of finance
resulting in a strong upturn in sales agreed and completed.

 

Total MSF on a like for like basis (excluding acquisitions) increased 11%
demonstrating continued growth within the original business.

 

Ewemove, the Group's market disruptor brand, continues to grow in strength
with a further 39 (2023: 31) new territories sold during 2024, and total
revenue increasing by 17% year on year.

 

Financial Services

 

The Belvoir acquisition also transformed the financial services offering, with
the addition of Brook Financial Services, an authorised representative of the
Mortgage Advice Bureau. Over the last 12 months, the division delivered over
23,000 mortgages at a value of over £4bn.

 

Financial Services income in 2024 totalled £19.2m, with a strong H2
performance as a result of improved volume due to the decreases in the Bank of
England base rate and lenders pricing for further decreases in 2025, as well
as improved productivity of advisers.

 

Recurring revenue from repeat customers reaching the end of their fixed term
mortgages has totalled £1.4m since the acquisition.

 

Licensing

 

The acquisition of GPEA added a new licensing division. This being made up of
Fine and Country where both UK and International licensees pay a fixed fee in
return for being able to trade under the brand whilst receiving marketing and
regulatory support, and the Guild of Property Professionals, which offers its
members a well established brand that provides access to group buying power
and regulatory guidance in return for an annual fee.

 

Total revenue in the licensing division for 2024 is £7.2m since the
acquisition which completed on 3 June 2024.

 

The Fine and Country business has continued to grow since acquisition, with
the addition of 17 new UK licensees as well as three new international offices
in Barbados, Ireland and Dubai.

 

Current Trading and Outlook

 

Looking ahead to 2025, the focus for the upcoming period will be on completing
the successful integrations of Belvoir and GPEA, delivering the projected cost
synergies and unlocking the additional income opportunities resulting from the
scale of the combined Group.

 

We anticipate the lettings business to continue to grow in 2025, with the
upcoming Renters Reform Bill expected to provide an additional opportunity for
the Group, given the tough compliance requirements, to convert more landlords
to the managed property model.

 

We have seen strong demand in January within our financial services business
as customers continue to enjoy more affordable rates. The combination of a
strong sales pipeline which has increased by 71% to £39.4m (2023: £23.1m)
and current mortgage rates give us confidence in achieving a positive H1. H2
will be influenced by the anticipated interest rate cuts.

 

The strength of the Group's franchise model and diversified revenue streams
puts TPFG in a strong position and continues to shelter it from market
cyclicality. As such, the Group expects further growth across the divisions in
FY 2025 and looks to the future with confidence.

 

Chief Executive Officer, Gareth Samples, commented: "I am immensely proud of
what the Group achieved in 2024, with the delivery of two major acquisitions,
now integrated into the Group, as well as strong organic growth. Our success
has culminated in yet another record-breaking financial performance which has
redefined the scale of our business and set us up for ongoing success.

 

FY25 has started with strong momentum and we look forward to the continued
synergies from the two transformative deals, with Belvoir and GPEA, and other
strategic projects initiated in the year coming to fruition in 2025, unlocking
the full potential of the combined Group as it looks to its next phase of
growth."

 

For further information, please contact:

 

 The Property Franchise Group PLC                                 01202 405 549

 Gareth Samples, Chief Executive Officer                          company.secretary@propertyfranchise.co.uk

                                                                (mailto:company.secretary@propertyfranchise.co.uk)
 Ben Dodds, Chief Financial Officer

 Canaccord Genuity Limited (Nominated Adviser and Joint Broker)   020 7523 8000

 Max Hartley

 Harry Rees

 Singer Capital Markets (Joint Broker)                            020 7496 3000

 Rick Thompson

 James Fischer

 Alma Strategic Communications                                    020 3405 0209

 Justine James                                                    propertyfranchise@almastrategic.com

                                                                (mailto:propertyfranchise@almastrategic.com)
 Joe Pederzolli

 Kinvara Verdon

 

About The Property Franchise Group PLC:

 

The Property Franchise Group PLC (AIM: TPFG) is the UK's largest multi-brand
property franchisor, with a network of over 1,946 outlets delivering high
quality services to residential clients, combined with an established
Financial Services business.

 

The Company was founded in 1986 and has since strategically grown to a diverse
portfolio of 18 brands operating throughout the UK, comprising longstanding
high-street focused brands and two hybrid brands. The Property Franchise Group
is also a member of two leading mortgage networks through its mortgage
brokers, Brook Financial (MAB) and The Mortgage Genie (Primis).

 

TPFG's brands are: Belvoir, CJ Hole, Country Properties, Ellis & Co,
EweMove, Fine & Country, Hunters, Lovelle, Martin & Co, Mr and Mrs
Clarke, Mullucks, Newton Fallowell, Nicholas Humphreys, Northwood, Parkers,
The Guild of Property Professionals and Whitegates.

 

Headquartered in Bournemouth, the Company was listed on AIM on the London
Stock Exchange in 2013 and entered the AIM 100 in July 2024.

 

More information is available at https://thepropertyfranchisegroup.co.uk/
(https://thepropertyfranchisegroup.co.uk/)

 

 

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