TPFG: Buying Hunters and uniting with LSL has ‘bolstered our position in the market’

Gareth Samples, CEO of the Property Franchise Group PLC, has praised the group’s franchisees after the company announced positive full year results for the year ended 31 December 2020 yesterday, revealing that profit before tax was up 20% to £4.8m, from £4m a year earlier.

The UK’s largest property franchisor reports that network income increased to £94m (2019: £93m), group revenue increased to £11.5m (2019: £11.4m), while management service fees hit £9.4m (2019: £9.7m).

Businesses was divided – 70% lettings and 30% sales, adjusted EBITDA increased 8% to £5.8m (2019: £5.3m, operating margin of 42% was recorded (2019: 35%), and dividends paid for FY20 of 8.7p (2019: 2.6p)

Overall, the group maintained a strong balance sheet, with net cash of £8.8m at the year-end (2019: net cash £4.0m). Net debt at 31 March 21 was £7.3m.

In terms of operational highlights, the ales agreed pipelines at year-end saw high street-led brands’ almost double December 2019 at £10.3m (2019: £5.2m), EweMove’s more than double December 2019 at £5.6m (2019: £2.5m), 11 assisted portfolio acquisitions by franchisees, adding 1,305 managed properties; and £0.1m of annualised MSF.

In addition, the results show c.58,000 rental properties managed – the same level as a year earlier, along with strengthened senior management team to provide franchisees with enhanced support.

Looking more recently, the Q1 trading update reveals that TPFG high street-led brands saw network income increase 13% to £23m (2020: £20m), the sales agreed pipeline on 31 March was up 45% on prior year at £9.4m (2020: £6.4m), sales exchanges up 49% on prior year at 2,553 (2020: 1,594), while 55,000 rental properties were being managed on 31 March, down slightly from 56,000 a year earlier.

In total the group had 235 offices on 31 March, down from 241 a year earlier.

EweMove

Network income more than doubled to £5m (2020: £2m)

Sales agreed pipeline on 31 March up 120% on prior year at 1,976 properties (202: 897)

Sales completions up 102% on prior year at 1,229 (2020: 607)

Managing 3,000 rental properties on 31 March (2020: 2,000)

Franchise sales significantly up year on year at 20 (2020: 3)

Total offices 135 (2020: 123)

Hunters

Network income increased 69% to £16m (2020: £10m)

Sales agreed pipeline on 31 March up 45% on prior year at £16.3m (2020: £11.3m)

Sales exchanges up 65% on prior year at 4,077 (2020: 2,467)

Managing 15,000 rental properties on 31 March (2020: 14,000)

Total offices 210 (2020: 204)

LSL

LSL Property Services has reached a long-term agreement with TPFG to offer mortgage and protection advice services to all its franchisees.

LSL will provide digital and face-to-face mortgage and protection advice to TPFG’s expanded network of over 430 estate agency offices, including those recently incorporated as a result of its combination with Hunters Property.

The agreement is for a minimum of a five-year period and means that LSL will be providing digital and face-to-face mortgage and protection advice to the customers of TPFG and TPFG’s franchisees.

TPFG franchisees will be provided with a range of options via LSL’s PRIMIS Mortgage Network. Franchisees will be offered the opportunity either to take on their own mortgage adviser and become an appointed representative of PRIMIS, or to refer their customers to existing PRIMIS Appointed Representatives, including LSL’s in-house mortgage brokers.

LSL is already one of the largest providers of services to mortgage intermediaries and mortgage & protection advice to estate agency customers completing around £32.6bn of mortgages in 2020.  It currently represents around 9% of the total purchase and remortgage market with over 2,600 advisers.

LSL says that this agreement underlines the opportunity for further growth of its financial services businesses, leveraging LSL’s existing leading positions in the mortgage advice market.

This contract will enhance the financial services division profit after an initial 12-18 month investment period requiring one-off transition and integration costs.

Gareth Samples

CEO Gareth Samples commented: “2020 and the year to date has seen the Group achieve many significant milestones and I am very pleased with the results that we have delivered.”

“Whilst navigating the global pandemic we were resourceful in protecting the business in the first half and had the right strategy in place to take advantage of the buoyant housing market throughout the remainder of the year. Our franchisees have worked incredibly hard throughout the year and I would like to thank all our network and the central team for their continued dedication.

“The acquisition of Hunters post-period end and the strategic partnership announced today with LSL has significantly bolstered our position in the market, and I am excited to see what we can achieve in the coming year. Looking forward, we have a strengthened platform to focus on the growth of our Financial Services capability, build upon the success of our hybrid offering, EweMove, and leverage Hunters and TPFG’s existing strengths across the enlarged Group. We are confident that our success will be underpinned by our unrivalled management team, scale, excellent stable of brands and strong relationships with our franchisees.”

A video of CEO Gareth Samples providing an overview of the results is available to watch by clicking here.

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15 Comments

  1. FranchisePrison

    Interesting how their own financial services was a flop. Great idea to leech off another business’ set up. Leeching is what they seem to do best!

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    1. OneEyedJack

      Im just reading between the lines, but im presuming you are a franchisee. ‘Leeching is what they do best…’
      By this I (again) presume you mean where you sign a contract to receive certain things for money.
      Leeching / agreed contractual obligation – same same 

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  2. smile please

    Very impressed with what LSL are achieving.

    Seem to do everything well.

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    1. majortom1

      did very well out of the pandemic Id say looking into the detail

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  3. AlwaysAnAgent

    If I have read this correctly, group revenue increased by £100k, in a year which included an SDLT holiday, and the number of offices fell from 241 to 235?

    It does appear that the business needed to to be “bolstered” by Hunters.

    Looks as if PFG customers will be trotting over to Your Move for financial services and other products.

     

     

     

     

     

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  4. OneEyedJack

    They are a lettings business with a small % of sales. So its probably commensurate …

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  5. flockfollower102

    They appear to be profitable, but the Lettings managed figures are interesting. They lent money to franchisees which saw 1000 managed properties coming in, but for the year they ate down around 1000 managed properties. The business is standing still in terms of managed numbers but only by getting franchisees to take on debt and purchase portfolios.

    They will know what is going on and who is slipping but it looks as if there is still plenty of work to be done.

    The FS side will not work. Better to let individual franchisees build local relationships. The last thing I would want is my customer going off to talk to a competitor fs advisor. Definitely a waste of management time and money if the past is anything to go by.

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  6. Hillofwad71

    Congratulations to TPFG on a sparkling set of financial results after a difficult year and to all those individual franchisees who have contributed towards that.
    LSL reporting   excellent results today too Q1 up massively

    Many success stories throughout the network and all credit to them  .

     
     11 new franchisees arriving at Ewemove but too easy to forget the collateral damage in all this,the lost sheep ,those  picking up the bill who won’t be sharing any of the profits .

    The prize rams can look after themselves it’s the rest of the flock that needs shepherding .

    The stories Litte Bo Peep  doesn’t want telling .

    Ian Wilson the outgoing CEO of Property Franchise Group  had something to say on franchise recruitment.
     
    Did they all succeed? No. My batting average was 5% fairly swift failures,10% disappointing relationships and 85% achieving solid viability,ranging from OK to spectacularly good. ”
     
    However Ewemove with a current roster of 115 as at 01/01/2021 just  increased to 135  since .With  70+ disappearing since the get got this  is far removed from Ian’s batting averages .Too many wickets .An unacceptable high rate of failure.

    A statistic quite frankly the industry should be ashamed of.despite the success of many of the individual franchisees and some of the new recruitments at Ewemove  as evidenced in the  results.
    The Chairman said yesterday

     ” It is clear that franchisees see the benefits of being part of a strong and capable Group.”
    Less so for the lost sheep who didn’t  hold a Martins or Whitegates franchise !

    Those who have exited so far  have either dissolved or migrated within TPFG. The promised exit sale of their  franchise to a new entrant  for £500k + ,a sheeps dream.

    .

    The stark reality a debt burden for some of life changing proportions for those franchisees who have  exited.
    Spare a thought too for those Martins & Whitegates  franchisees who have  taken  on  Ewemove franchises and recently thrown in the  towel .

    Long standing Martin’s Southend franchisee who took on Ewemove franchises  at Southend  & Shoeburyness.Rochford in 2017 have closed  them down last year  . 
    Likewise In Cheshire Ewemove’s Northwich office  with sister operations in Sandbach, Middlewich, Winsford Crewe and Nantwich closed  by the exiting Martins & Whitegates franchisee
    Chelmsford ,Macclesfield & Doncaster are towns which  have the dubious distinction of  having not 1 but 2 franchisees close  down
    Ian never went on to explain why Martins or Whitegates have not  experienced  similar carnage as Ewemove? Their  network more robust and stable Maybe this is something Gareth  can address 
     
    “Earn your success based on service to others, not at the expense of others.”
    H. Jackson Brown, Jr.

    There are at least 12 Ewemove  franchisees trading  where their current inventory is not sufficent to  meet their annual creditors .Their  liabilites  increasing year on year acc.to Companies House.

    One franchise in the South currently trading  has just the 1 instruction  listed in January.The last accounts showed a staggering deficit of £259k with £299k  creditors due in 1 year .
    Both Directors are  of retirement age with that almighty burden to bear. How can  a  caring Shepherd  let this situation develop?
    Close by to this franchise ,recent departees  include Bracknell  & Newbury,both   trading since  2015 ,both carrying deficits
     

     

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    1. DONOVANMOHOG

      And I was so excited to read the initial opener… Still banging the same drum I see though. Hey ho. Its fantastic to see the wider business reporting strong results and the continued ambition of the group. For EweMove the results are testament to the drive of franchisees and committed leadership and support from the HO team. Nobody likes to see some fail. I trained with the Newbury franchisee and it is a real shame. But It’s the reality of owning a business I’m afraid. However the support is there for those that want it.  

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      1. Hillofwad71

        Yep still banging the drum and it seems that you are still showing a singular lack of empathy for the vanquished .It’slightly more than a real shame  I appreciate it interferes with the narrative

        Unfortunately those horrendous numbers of failure figures tell a slightly different  story

        Here is my concern

         

        Ewemove  have announced they intend  to quadruple  recruitment .

        Time then to tone down their pitch .Unrealistic expectations for the vast majority .
         
        in their 5* Trustpilot Ratings in thir franchisee pitch they even include Waterlooville as a success story which failed .Misleading 
         
        THE SHEEP HOOKS
        “In Year 2 enjoy a whopping £100k income” 
        This is far from the course for many who aren’t doing that in year 5

        “Your income grows each month as you bring on board more sellers and landlords. With a completed house sale, you’ll get a big fat juicy commission – but the real prize comes from the ‘steady as you go’ monthly lettings income. This is a ‘Get rich slow’ business.
         

        “Building your £1 Million Business”

        “BY YEAR  5, YOUR FRANCHISE COULD BE WORTH WELL OVER HALF A MILLION POUNDS”

        The reality the  vast majority of those leaving left with substantial debts some life changing let alone a penny piece  for their franchise 
        and Ian also went onto say 

         “What made my heart sink deepest in franchise suitability interviews were the words 
        “My wife/husband/friend and I have always wanted to work together”. 
        OUR FAILURE RATE IN THOSE CASES SHOT UP DRAMATICALLY”
         
        The first  hook prospective franchisees  perusing the Ewemove  site  are greeted  with  is the success  story of the husband and wife team who have gone from strength to strength in Beverley. Well done to them 
         

        “We signed up £100,021 of sales in our first 6 months”
         
        Alas that is the exception  to the rule  .Very few franchisees achieve that sort of success in that time frame There are other successful husband & wife teams but  Ian was  right
         
        Ewemove looking to quadruple numbers .That is worrying 
         
         Prospective husband &wife   franchisees  might like to have a word with these  former Ewemove franchisee  husband  and wife teams  amongst the  many lost sheep at Ewemove    
         
        STAINES & ASHFORD
        CREWE
        CHEADLE
        CAMBRIDGE SOUTH 
        MACCLESFIELD 
        PUDSEY   
        SOUTHAMPTON NORTH
        LINCOLN CENTRAL
        MARKET WEIGHTON
        EDINBURGH WEST

        for a more grounded view 
         
        Case  Study :Edinburgh West  .A salutary experience
         
        Featuring in  Ewemove’s recruitment as one of their franchisee  success  stories! . A later life career change for the married couple 
         
        “We had been looking for a while for a franchise to save us starting a business from scratch, as we had done before. We were drawn initially by the fantastic EweMove branding and the more we found out the more appealing it became. We were looking for a franchise where we would feel art of something ”

         
        In Edinburgh ,the husband after the 1st  year of trading with debt accumulating took on a full time job  leaving his wife to limp  on til last year  .
        With  just a handful of instructions  and debts increasing year on year to a staggering 6 figures .Annual creditors increasing also . 
         
        They  dissolved their company franchise in  October  last year .
         
        2017                             2018                       2019
         
        (£61.117 )              (£89,882)                 (£108,554)
         
        The gamboling spring lamb Nick Neil had the neck  to say this on EYE !!!  
         
        Head_Shepherd#2
        JULY 24, 2020 AT 12:07#5
        “I’m sure Edinburgh would not regard their recent successful and lucrative sale of their business as a casualty…”

        What  else can they think! Who did they “sell” it to?
        Scotland hasn’t been a particularly happy  ground for flock expansion  for  Ewemove
        There is now  no Ewemove franchisee in Edinburgh. The company was dissolved  in Oct 2020 ,not sold .  In Scotland there is a franchise  in Aberdeen trading satisfactorily but the  Glasgow franchisee has just 2  not had a single instruction since last October . Running on empty
        They lost their other Scottish franchisee in Hamilton previously

        Unfortunately Ewemove forgetting that the Head Shepherd’s main duty is the health of all  the flock not just the prize tups

        The recruitment  should come with a  Gov’t health warning.High risk of failure not for the faint hearted. Those departing franchisees pay a huge price for Ewemove’ success!
        Prospective franchisees are comforted by the assurance
        “This gives EweMove the security and support of being under the umbrella of a large PLC.”
         
        Unfortunately  that must stick in the craw of those  who have vanished with huge liabilities  

         

         

         

         

         

         

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        1. DONOVANMOHOG

          My comment doesn’t lack empathy. 
          It simply provides context to your point of view. 
          Nobody like to see a colleague take the decision to depart  and not all departures are failures.
          Have a good day  
           
           

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          1. Hillofwad71

            “But It’s the reality of owning a business I’m afraid”
            However that reality is not spelled out in the  pitch  .Far from it  Only tales of the prize rams 
             
            Name me a franchisee who has exited selling their business for £500k?
             
            The wool has been pulled over the eyes The “Get rich slow”  for many has been far from the truth  .Being allowed to continue to operate year on year increasing debts Some never stood a chance
             
            A head shepherd should never allow that to happen to one of the flock

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    2. GeorgeHammond78

      HoW71 –  I am firmly of the opinion that Wilson bought a dead dog nicely dressed as a hi-tech sheep. However, it looks like the hi-tech was actually very low fidelity (read the word fidelity as you will) and a good number of the then franchisees were unsuitable dupes. But credit where its due, these figures suggest an enormous amount of work has been done over the last few years to actually make a real business of it. A very costly mistake no doubt but if they can keep it on the same upward trajectory, they should eventually get their money back. I think the real skill has been to keep the City off their back (in terms of share price) during the necessary rebuilding works. You have to wonder if the purchase of a sheep with scrapie was fatal to Wilson’s career?

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      1. Hillofwad71

        Certainly things have  improved (lets face it the  rate of losses was unsustainable)and many of those recently joined have hit the ground running 
        However still too many rolling on from year to year liabilities increasing  
         
        My main gripe  is the way the franchise is still being pitched without the warning of the very real prospect  of 
        the risk of failure     

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    3. majortom1

      how is a large drop in revenue a great result

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