The Property Franchise Group PLC – the UK’s largest multi-brand property franchisor – has announced an increase in revenue ahead of its interim results, set to be published on Tuesday, 10 September 2024.

The group attributes its performance to the merger with Belvoir Group and the acquisition of GPEA, owner of The Guild of Property Professionals and Fine & Country. These strategic moves have marked a “transformational period”, the company said.

Key highlights from the trading update include:

• Group revenue increased 104% to £26.9m (H1 2023: £13.2m) – 3% like for like increase to £13.6m
• Management service fees (MSF) increased 60% to £12.3m (H1 2023: £7.7m) – 8% like for like increase to £8.3m
• Sales agreed pipeline increased 67% to £47.5m (H1 2023: £28.4m) – 16% like for like increase to £32.8m
• Managing 152,500 rental properties (H1 2023: 77,000) – 2% like for like increase to 78,000
• 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)

(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. This, says the group, demonstrates that it 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 it says bodes well for H2 trading despite lead times remaining high.

The group also believes 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.

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 £12.2m, of which £7.1m was financial services, £4m MSF and £1.1m other franchising income.

The GPEA acquisition completed on 31 May 2024 and its trading results for June 2024 (one month) will also 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 £1m.

Gareth Samples, chief executive officer, 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 have 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.”