The Property Franchise Group PLC, the UK’s largest property franchisor, whose brands include Martin and Co, Hunters and CJ Hole, has published an update on trading ahead of its interim results in September.

H1 2023 performance was in line with management’s expectations, driven by the Group’s continued focus on growing its lettings revenues.

· Group revenue increased 1% to £13.2m (H1 2022: £13.1m)

· Management Service Fees (“royalties” or “MSF”) increased 3% to £7.7m (H1 2022: £7.5m)

· Sales’ agreed pipeline decreased 16% to £28.4m (H1 2022: £33.8m)

· Managing 77,000 rental properties (H1 2022: 74,000)

· EweMove sold 17 new territories (H1 2022: 19)

· Net cash of £0.7m (H1 2022: net debt of £2.6m)

The Group says that Lettings MSF continued to perform strongly, achieving 12% growth over H1 2022. This growth more than offset the reduction in sales MSF over the same period as the residential sales market continued to adjust to the uncertainty regarding inflation, interest rates and house prices.

Sustained demand for lettings properties, growth in the portfolio of managed properties and rental inflation meant lettings MSF continued to be a growing and highly resilient revenue stream for the Group, contributing 61% (H1 2022: 55%) of total MSF in the period.

Seasonally adjusted UK Property Transactions [HMRC National Statistics 28 July 2023] at 521,950 for June 2023 YTD were 20% lower than H1 2022, a trend reflected in Hunters performance, whilst other brands grew market share.

The Group says that its pipeline of agreed sales remains ‘very healthy’. Lead times for converting agreed sales into completions have lengthened in the same way that they did in H1 2022, and management expects sales transactions in 2023 to continue at this reduced level whilst uncertainty surrounding interest rates continues.

EweMove continued to perform well with MSF increasing by 15% over H1 2022. It sold 17 new territories in the half year almost equalling its strong performance in the prior period.

Chief Executive Officer, Gareth Samples, commented: “We are pleased with our performance in the first half of 2023.

“The benefits of operating a focused franchise model with multiple income streams are reflected in these results, as we continue to demonstrate considerable resilience in the face of an uncertain macro-economic backdrop.

“Whilst the Board expects the macro-economic uncertainty to continue, it is confident that trading remains in line with expectations for the full year.”