The Property Franchise Group this morning announced a 6% rise in profits during the first half of this year, although revenue was unchanged at £5.5m.
Pre-tax profits rose from £1.9m in the same period last year to £2m. However, the number of trading offices in its network shrank, from 377 to 369, despite the recruitment of eight new franchisees and the opening of nine new offices.
The group also reported on 17 acquisitions by franchisees in the year to date, and the number of tenanted properties under management rose from 53,000 to 56,000.
On its ‘hybrid’ brand EweMove, the group reported that it demonstrated that its “unique, highly customer centric offering can defy the challenging sales market, as its sales revenue increased”.
EweMove has 115 franchise territories trading, similar to a year ago, but property listings rose from 3,062 to 3,173.
The group said EweMove is “on track to materially improve” on last year’s results.
It said that when experienced estate agents were recruited to EweMove, they outperformed inexperienced franchise recruits but only in the first two years: “Consequently we have resumed recruiting non-agents as franchisees at EweMove provided that we are satisfied that they have transferable sales skills and access to sufficient working capital during the build-up period.”
CEO Ian Wilson said: “We have delivered another strong set of results, with progress in each of our six brands, which have all grown our most important revenue stream, franchise management services fees over the same period last year. Our profit has also grown, driven by the health of our franchisees’ businesses and prudent cost management.
“Historically, the Group experiences stronger trading in the second half year, associated with heightened lettings activity in the period from June to September. At this stage we believe that this pattern will be maintained.
“Our strong balance sheet and our continued confidence in the underlying strength of our business model means that we are pleased to be increasing the interim dividend by 8% to 2.6p in line with our progressive dividend policy.
“Thanks to our franchise business model, diverse brand offering, lettings weighting and high levels of cash generation, resulting in a strong balance sheet, we are well-positioned to outperform our competitors, increase market share and deliver value for all our stakeholders in the immediate and longer term.”
Yesterday, the shares in The Property Franchise Group closed up by about 1%, at 165.5p.