The Property Franchise Group has published its Interim Results for the six months ended 30 June 2020.
• Robust revenue of £5.4m (H1 2019: £5.4m), despite the closure and challenges caused by Covid-19
• Management Service Fees (“royalties”) of £4.2m (H1 2019: £4.6m)
• Operating margin held at 37% (H1 2019: 37%), demonstrating careful cost management
• Adjusted EBITDA of £2.5m (H1 2019: £2.4m) (After adding back the share-based payments charge)
• Profit before tax remained stable at £2.0m (H1 2019: £2.0m)
• Very strong balance sheet with a net cash position of £6.1m at 30 June 2020 (30 June 2019: £2.8m). Net cash generated from operations of £2.2m (H1 2019: £2.2m)
• Interim dividend reinstated at 2.1p per share
• Tenanted managed properties increased to 58,000 (H1 2019: 56,000)
• Group remains heavily weighted towards lettings, accounting for 73% of Management Service Fees (H1 2019: 70%)
Gareth Samples, Chief Executive Officer of The Property Franchise Group, said:
“Whilst the first half of this year was unlike any other, I am delighted with the resilience our business has shown and the first-rate performance of our franchisees who responded decisively and navigated well through the unprecedented environment.
“Despite nearly two months of the first half spent operating under severe restrictions, and impacted by the tenant fee ban which came into force on 1 June 2019, we have demonstrated the true strength of our busines model.
“We have continued to generate high levels of revenue, held profit before tax stable at £2.0m, increased our cash balances and subsequently reinstated an interim dividend.
“The substantial increase in activity we recorded in June has continued, with record performances continuing to be set across both the lettings and sales markets in July.
“Whilst the future remains uncertain, what this period of volatility has shown is that we are both a robust business in the face of adversity as well as a market leader able to reap the rewards in better times.
“We are focussed on maximising the opportunities that the market currently presents with a clear focus to deliver on the execution of our key strategic growth initiatives.”
Comments (14)
Since the ‘Eye Correspondent’ has seen fit to remove all and any mention of EweMove from this Half Year update, here is what you could be reading, (which incidentally was skillfully included in the stories yesterday on Estate Agent Today and the day before on the Negotiator website).
Excellent performance from EweMoveEweMove has again demonstrated the benefits of its unique, hybrid, highly customer centric and flexible cost based model. The hybrid estate agency model continues to be an appealing option for estate agents and buyers alike who want to do things differently. We believe that one impact of C-19 will be to increase interest in this model.During the lock-down, the brand benefitted from its franchise model with each individual business owner able to manage costs very effectively. The entirety of the EweMove footprint, which has now reached 230 people across 110 territories, was sustained over this challenging period, and since restrictions have eased our franchisees have been able to move rapidly to take advantage of the rising market.We achieved record performances in June, beaten again in July with sales listings and sales agreed in July up 36% and 28% on June 2020 respectively. Having performed strongly and proven beyond doubt its resilience and adaptability, we are confident there is a significant opportunity to recruit new franchisees into EweMove. This will become a core part of the Group’s growth strategy going forward.
If board count is anything to go by the team in North Devon is a testament to how well the model can work. Russell and his team are now an accepted and respected player in this #local market.
One branch of Ewemove which is Champions league is Basingstoke with a gutbusting inventory today of 264 sales instructions,Not only that but an average listing time of just 11 weeks.
Contrast that with the other local Ewemove franchisees close by , their positions polar opposite .Ewemove Wokingham 8 instructions. Ewemove Newbury just 3 instructions and Ewemove Bracknell just 1 instruction who has been struggling for sometime !
Unsustainable -what is being done by HO to help these?
Amazing what well run businesses with great leadership and proper detailed strategic planing can achieve . Well done to all involved
Nothing wrong with that at all
Reported favorably on Ewemove
.” The entirety of the EweMove footprint, which has now reached 230 people across 110 territories, was SUSTAINED over this challenging period, and since restrictions have eased our franchisees have been able to move rapidly to take advantage of the rising market.”
Certainly some of the franchisees going great guns .Some who were suffering from a paucity of instructions before easing of lockdown have picked up who must be mightily relieved. Some carrying the burden of some high debts
Some still carrying an unsustainable number of instructions
One franchisee who has picked up is relative new comers Otley who had very few instructions since arriving as a husband and wife team a couple of years ago . Since the adjoining Harrogate franchisee disappeared its been noticeable that they have picked up very strongly ,achieving a number of sales so good luck to them
As ever with these statements the devil is in the detail. The branch network has only been sustained as new arrivals in new territories have replaced parting ones from others. The churn still too high . Some leave for personal reasons as expected but others unfortunately with large debts where the franchisee unfortuantely bears the brunt
Recent departees include Hull West ,West Grimsby Gloucester a recent recruit, Harrogate,Macclesfield .Doncaster South,Watford North and Edinburgh West
I’m sure you are right on EM branches. What about the number of traditional branches which is the lion’s share of the underlying business? PIE hasn’t included the numbers or direction of travel with these. Missed out a few other items that other PLCs have been compared against. I’m sure that’s entirely down to the journo cutting and pasting their company statement and not the way the companies present themselves. Some journos take the time to analyse.
From RNS
“Our traditional brands have performed resiliently during the period, generating MSF of £3.3m (H1 2019: £3.5m). This reflects our strategic weighting towards lettings and particularly the recurring nature of the lettings management service fees (MSF) revenue stream. Traditional brands’ lettings MSF declined only 4% to £2.7m (H1 2019: £2.8m) over the period.”
Thanks H I read that too. It’s the actual number of physical offices I was struggling to identify, perhaps I missed them.
Acc to website
Martin 190
Whitegates 40
Parkers 13
Cj Hole 22
Ellis 19
The numbers look corrrect though it would be interesting to know how many Franchisees there are as Ian Wilson – in his time as CEO – had many smaller ones ”gobbled” up by a bigger more successful franchisee nearby. Also, how many new franchises were launched in 2019 and so far in 2020. Finally, what was the organic growth of the lettings portfolio without acquisitions added?
you’re right, physical offices are important.For example if you have one branch turning over £500k and it closes, it still has a turnover of £500k until the next period of accounts, at which point turnover could be half or even zero. The number of physical branches can be sign of what comes next. It’s certainly one ‘normal’ indicator in a set of accounts or results of any company. Same in other sectors.
Very good results for TPFG, however, they still need to conquer sales if they are to be considered a major player in UK real estate I believe.
Out of interest, why? 2/3rds of home moves are lettings, 1/3 are sales. Isn’t it enough that they are an organisation that since 1994 has done (mainly) one thing and as the years have gone by, done it better and better?
Lettings and Management is a different beast to sales, it requires a different skill and mind set. Ideally you shouldn’t mix the two. Sales staff might do well on lettings but get to the paperwork side of a tenancy and that is definitely better done by someone no salesy.
In my opinion (as I have often said) TPFG is already a major and respected player in the industry.
They have conquered sales and need to continue to do so because when landlords sell up they need to be there to pick up the business. Lettings is a steady income but there is good profit to be made in sales and there is no need to mix staff.