REG - Property FranchiseGp - Half Year Trading Update & Notice of Results

Property FranchiseAnnouncement

02/08/2023 07:00

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RNS Number : 9809H  Property Franchise Group PLC (The)  02 August 2023

2 August 2023

 

THE PROPERTY FRANCHISE GROUP PLC

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

 

Half Year Trading Update and

Notice of Results

 

The Property Franchise Group PLC, the UK's largest property franchisor, is
pleased to provide an update on trading ahead of publishing its interim
results on Tuesday 12 September 2023.

 

H1 2023 performance was in line with management's expectations, driven by the
Group's lettings heritage and the continued focus on growing its lettings
revenues. In the period, the Group achieved a slightly higher revenue
performance over H1 2022, notwithstanding the comparative period benefitting
from a significantly stronger residential housing market.

 

 

Highlights:

 

·      Group revenue increased 1% to £13.2m (H1 2022: £13.1m)

·      Management Service Fees ("royalties" or "MSF") increased 3%
to £7.7m (H1 2022: £7.5m)

·      Sales' agreed pipeline decreased 16% to £28.4m (H1
2022: £33.8m)

·      Managing 77,000 rental properties (H1 2022: 74,000)

·      EweMove sold 17 new territories (H1 2022: 19)

·      Net cash of £0.7m (H1 2022: net debt of £2.6m)

 

 

Lettings MSF continued to perform strongly, achieving 12% growth over H1 2022.
This growth more than offset the reduction in sales MSF over the same period
as the residential sales market continued to adjust to the uncertainty
regarding inflation, interest rates and house prices. Sustained demand for
lettings properties, growth in the portfolio of managed properties and rental
inflation meant lettings MSF continued to be a growing and highly resilient
revenue stream for the Group, contributing 61% (H1 2022: 55%) of total MSF in
the period.

 

Seasonally adjusted UK Property Transactions* at 521,950 for June 2023 YTD
were 20% lower than H1 2022, a trend reflected in Hunters performance, whilst
other brands grew market share. The Group's pipeline of agreed sales remains
very healthy. Lead times for converting agreed sales into completions have
lengthened in the same way that they did in H1 2022, and management expects
sales transactions in 2023 to continue at this reduced level whilst
uncertainty surrounding interest rates continues.

 

EweMove continued to perform well with MSF increasing by 15% over H1 2022. It
sold 17 new territories in the half year almost equalling its strong
performance in the prior period. This model continues to be attractive
especially during more uncertain macro-economic times, allowing franchisees to
benefit from a low-cost base and increased flexibility.

 

Our network of franchisees continues to benefit from the strength and
experience of the senior management team. We are pleased to have further
bolstered the team in H1, with the recruitment of our first Commercial
Director, the appointment of a Group Franchise Services Director and Finance
Director. The investment in our management team will further enhance our
ability to support the franchise network to seize the opportunities that exist
and invest where further value can be derived.

 

*HMRC National Statistics 28 July 2023

 

 

Chief Executive Officer, Gareth Samples, commented: "We are pleased with our
performance in the first half of 2023. The benefits of operating a focused
franchise model with multiple income streams are reflected in these results,
as we continue to demonstrate considerable resilience in the face of an
uncertain macro-economic backdrop. Whilst the Board expects the macro-economic
uncertainty to continue, it is confident that trading remains in line with
expectations for the full year."

 

 

For further information, please contact:

 

 

 The Property Franchise Group PLC                                  01202 405549

 Gareth Samples, Chief Executive Officer

 David Raggett, Chief Financial Officer

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

 Max Hartley

 Tom Diehl

 Singer Capital Markets (Joint Broker)                             020 7496 3000

 Rick Thompson

 James Fischer

 Alma PR                                                           020 3405 0209

 Justine James

 Joe Pederzolli

 Kinvara Verdon

 

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 (http://www.propertyfranchise.co.uk/)

 

 

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