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REG - Property FranchiseGp - Pre-Close Trading Update and Notice of Results

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RNS Number : 2298A  Property Franchise Group PLC (The)  01 February 2022

 

01 February 2022

 

THE PROPERTY FRANCHISE GROUP PLC

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

 

Pre-Close Trading Update and Notice of Preliminary Results

 

Profit anticipated to be ahead of market expectations

 

The Property Franchise Group PLC, the UK's largest property franchisor, is
pleased to provide a trading update for the year ended 31 December 2021.

 

The Group achieved a strong performance in 2021 through organic growth, a very
active residential housing market and the acquisition of Hunters Property PLC
("Hunters"), which completed in March 2021. Like for like revenue and
Management Service Fees were significantly up on 2020 and, it is important to
note given the disruption in 2020, similarly up on 2019. As a result, profit
is now anticipated to be ahead of market expectations.

 

Highlights(1)

 

·      Group revenue increased 119% to £24.1m(2) (2020: £11.0m)(3)

o  26% like for like increase on 2020 to £13.9m(2)

o  23% like for like increase on 2019

·      Management Service Fees ("royalties") increased 57% to £14.7m(2)
(2020: £9.4m)

o  19% like for like increase on 2020 to £11.2m(2)

o  16% like for like increase on 2019

·      Network income increased 67% to £157.0m (2020: £94.0m)

o  17% like for like increase on 2020 to £110.0m

o  18% like for like increase on 2019

·      EweMove sold 58 new territories (2020: 11) taking the total
number under contract to 167

·      Number of offices increased by 72% to 591 (2020: 343), including
209 Hunters offices

·      Sales agreed pipeline remained strong at £26.5m at 31 December
2021 (2020: £15.3m)

·      Managing 74,000 rental properties at 31 December 2021 (2020:
58,000)

·      Net debt of £2.7m(2) on 31 December 2021 demonstrating continued
strong cash generation since borrowing £12.5m to fund the acquisition of
Hunters (30 June 2021: £5.4m; 31 Dec 2020: net cash £8.8m).

 

 

(1) Like for like comparisons exclude the impact of the acquisitions of
Hunters, The Mortgage Genie Ltd, and The Genie Group UK Ltd and the disposals
of Aux Group Ltd and Auxilium Partnership Ltd

(2) Unaudited

(3) Group revenue for 2021 and 2020 excludes Aux Group Ltd and Auxilium
Partnership Ltd which were sold in July 21

 

 

The Government's initiatives to support the housing market, coupled with
remote working and changes to homeowners' requirements, supported a very
strong property sales performance, with 26,000 sales' contracts exchanged
across our network. Although those initiatives ended in September 2021, we
continued to see strong levels of sales being agreed and finished the year
with a significant sales agreed pipeline of £26.5m.

 

The Group now manage in excess of 74,000 rental properties on behalf of
landlords, with much of the growth through the year coming from the
acquisition of Hunters. Consequently, lettings Managed Service Fees ('MSF')
increased 18% versus 2020. Towards the end of the year, we started to see a
rise in the rents charged for both new and renewed tenancies in the range of
6% - 8%.

 

EweMove, the Group's hybrid estate agency, had an outstanding year as it
continued to build on its brand positioning and scale. The sale of 58 new
territories versus 11 in 2020 helped set a new record for the total number of
territories under contract of 167. This puts the Group on track to achieve one
of its core strategic aims: to double the size of its EweMove territories to
230 by the end of 2022.

 

Post-period end we launched a new hybrid franchise model, 'Hunters Personal
Agent'. This model follows our established, successful hybrid model and
complements the Hunters brand. Hunters Personal Agent is designed to provide
agents with greater flexibility in running their business from a low-cost base
and the initial response to its launch has been encouraging.

 

Overall, the Group has made faster progress than expected with the strategic
initiatives first outlined in September 2020 and continues to have substantial
growth opportunities ahead of it. All of which is underpinned by significant
recurring lettings revenue and a strong balance sheet. We continue to identify
potential acquisition targets to enhance shareholder value and to invest in
our team. Consequently, the Board remains confident in the long-term outlook
for the business.

Notice of results

We expect to release our preliminary results for the year ended 31 December
2021 on Tuesday 5 April 2022.

Chief Executive Officer, Gareth Samples, commented:

 

"The Board and I are delighted to report that the excellent trading momentum
seen in the first six months of 2021 continued in the second half. We have
built a fantastic senior management team across the Group with an incredible
combined knowledge and experience of the market. The value of their guidance
and support can be seen reflected in the fact that we are seeing more and more
people interested in joining our franchise network, as well as existing
franchisees wishing to expand their representation.

 

We've also made significant strides forward against each of our strategic
priorities this year, which are vital in underpinning our ongoing success no
matter how the external conditions develop. With the support of our employees,
franchisees, and partners, we are well on track to increase our market share
substantially further."

 

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.

 

 

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 Broker)   0207 523 8000

 Bobbie Hilliam

 Tom Diehl

 Alma PR                                                   020 3405 0205

 Susie Hudson                                              propertyfranchise@almapr.co.uk

 Justine James

 Joe Pederzolli

 

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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