Property Franchise Group PLC (The) Trading Update (3967D)
31 January 2018 - 6:00PM
UK Regulatory
TIDMTPFG
RNS Number : 3967D
Property Franchise Group PLC (The)
31 January 2018
31 January 2018
THE PROPERTY FRANCHISE GROUP PLC
("TPFG", the "Company" or the "Group")
Trading Update for Financial Year Ended 31 December 2017
The Property Franchise Group PLC today issues the following
trading update for the year ended 31 December 2017 ("FY 17"), ahead
of its final results on Tuesday, 10 April 2018.
The Group's traditional high street brands have performed well
during FY 17 and pleasingly, its online brand EweMove traded
profitably in the second half of the year*. Consequently, the
Company confirms that trading for FY 17 is expected to be in line
with market expectations.
Highlights:
-- Revenue increased by 23% to GBP10.2m* (2016: GBP8.3m)
-- Expanding UK network with 403 offices, 283 traditional brands and 120 EweMove (2016:377)
-- Serving c.52,000 tenanted managed properties at the year end (2016: c.48,000)
-- Recruited 6 new franchisees for the traditional brands, and 31 for EweMove
-- Group remains heavily weighted toward lettings, which
accounts for 70% of Management Service Fees (2016: 74%)
-- Strong balance sheet, with net cash at the year-end after
fully paying the earn-out to the founders of EweMove
* Unaudited
Outlook
The fundamental drivers for expansion of the UK private rented
sector remain in place despite ongoing changes to the commercial
environment within the sector. The Group's managed portfolio
continued to grow organically, as well as by franchisee-led
acquisitions in FY 17.
The timetable for implementation of the Government's proposal to
ban or restrict the charging of fees to tenants in England has been
indicated to be Spring 2019. Accordingly, TPFG does not expect
there to be any adverse impact on trading for the financial year
ending 31 December 2018.
The Board believes that the Group's multi-brand strategy with an
online offering provides a well-balanced exposure to the
opportunities and threats which exist in a changing property
marketplace and remains confident for the year ahead.
Chief Executive Ian Wilson commented,
"We are pleased to be reporting another year of growth for the
Group, despite industry consensus that 2017 was a tougher trading
year than 2016, particularly for sales in London.
"Our network continues to grow, with our traditional brands
having performed very well, and benefitted from website
improvements applied using insights gained from EweMove. These
improvements generated 17,000 new business leads for franchisees
from pay-per-click campaigns, with website lead volumes increasing
between 200% and 550% year-on-year in Q4 17.
"The trading losses incurred at our EweMove subsidiary in H1 17
were substantially reversed in H2 17 trading, during which period
EweMove traded profitably. Franchisee recruitment continues to be
an area of focus at EweMove, particularly the number of experienced
estate agents being recruited. The new Managing Director at
EweMove, having joined in June 2017, has made a very positive
impact, turning around profitability and supporting the business
development of existing franchisees.
"With a strong balance sheet, the Group is well-positioned to
continue leveraging its scale and local brand recognition to
capitalise on growth opportunities. The Board is excited by the
opportunity presented to us both online and on the high street and
I look forward to providing a further update at our full year
results in April".
For further information, please contact:
The Property Franchise Group PLC
Ian Wilson, Chief Executive Officer
David Raggett, Chief Financial Officer 01202 292829
Cenkos Securities plc
Max Hartley (Nominated Adviser) 0207 397
Alex Aylen (Sales) 8900
Alma PR
Josh Royston
Rebecca Sanders-Hewett 0203 865
Susie Hudson 9667
This information is provided by RNS
The company news service from the London Stock Exchange
END
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