REG - Property FranchiseGp - Half Year Trading Update

Property FranchiseAnnouncement

07/08/2024 07:00

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RNS Number : 4511Z  Property Franchise Group PLC (The)  07 August 2024

7 August 2024

 

THE PROPERTY FRANCHISE GROUP PLC

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

 

Half Year Trading Update

Transformational period for UK's leading property franchisor

 

The Property Franchise Group PLC, the UK's largest multi-brand property
franchisor, is pleased to provide the following trading update ahead
of publishing its interim results on Tuesday 10 September 2024.

 

The last six months has seen the commencement of another transformational
period for the Group following to the merger with the Belvoir Group PLC
("Belvoir") and the acquisition of GPEA Limited ("GPEA"), owner of The Guild
of Property Professionals and Fine & Country. Group revenue more than
doubled compared to the prior period with significant increases in franchising
and financial services, along with the addition of a new licensing revenue
stream.

 

Highlights:

 

 ·             Group revenue increased 104% to £26.9m (H1 2023: £13.2m)
               o                                         3% like for like increase to £13.6m(1)
 ·             Management Service Fees ("MSF") increased 60% to £12.3m (H1 2023: £7.7m)
               o                                         8% like for like increase to £8.3m(1)
 ·             Sales agreed pipeline increased 67% to £47.5m (H1 2023: £28.4m)
               o                                         16% like for like increase to £32.8m(1)
 ·             Managing 152,500 rental properties (H1 2023: 77,000)
               o                                         2% like for like increase to 78,000(1)
 ·             EweMove sold 22 new territories (H1 2023: 17)
 ·             Financial services commissions increased 778% to £7.9m (H1 2023: £0.9m), all
               of the increase being attributable to Belvoir
 ·             Net debt of £14.3m after borrowing £20m to fund the acquisition of GPEA (H1
               2023: net cash of £0.7m)

 

(1)Like for like comparison excluding the impact of the acquisition of Belvoir
Group on 7 March 2024, and GPEA on 31 May 2024.

 

Lettings MSF increased by 8%, in line with the ONS Private Sector Index which
showed a similar annual rental inflation to June 2024. With continued strong
demand, lettings continues to be an important driver of the Group's revenue
growth.

 

Sales MSF increased by 7%, when seasonally adjusted UK property transactions
for January to June were flat on the same period in the prior year(2),
demonstrating that the Group has outperformed the broader market. The Group's
sales agreed pipeline at 30 June 2024 was 16% higher on a like for like basis
than 30 June 2023 which bodes well for H2 trading despite lead times remaining
high.

 

The recent base interest rate cut should have a positive impact on H2 sales
and financial services activity.

 

Revenues from financial services are now dominated by the contribution from
Belvoir. Total financial services revenues increased by 18%, with the
acquisitions made by Belvoir in 2023 contributing approximately half of this
increase.

 

 (2)HMRC National Statistics 31 July 2024

 

Contributions from Acquisitions

 

The merger with Belvoir became effective on 7 March 2024 and Belvoir's trading
results from that date to 30 June 2024 will be included within the Group's
financial statements for the six months ended 30 June 2024. The H1 2024
revenue contribution from Belvoir was £12.2 million, of which £7.1 million
was financial services, £4.0 million MSF and £1.1 million other franchising
income.

 

The GPEA acquisition completed on 31 May 2024 and its trading results for June
2024 (one month) will be included within the Group's financial statements for
the six months ended 30 June 2024. The H1 2024 revenue contribution from these
businesses was £1.0 million.

 

The integration of Belvoir and GPEA into the broader Property Franchise group
is progressing well with the restructuring of the senior leadership team
largely completed and projects being initiated to drive synergies and develop
revenue opportunities.

 

Chief Executive Officer, Gareth Samples, commented: "The first half of 2024
has been transformational for our Group, building on our track record of
growth and completing two significant acquisitions which has created a
substantially larger group with an international presence. We are delighted
with our organic revenue performance in the first half year and the
contributions from each of our new businesses.

 

"We have a very resilient and focused franchise model and multiple income
streams across 18 brands including a significantly enhanced, exciting
opportunity in financial services. With an improving pipeline and at least one
interest rate reduction behind us, the Board is confident that trading remains
at least in line with market expectations for the full year."

 

 

For further information, please contact:

 

 The Property Franchise Group PLC                                 01202 405 549

 Gareth Samples, Chief Executive Officer

 David Raggett, 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

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

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