Propty Franchis Regulatory News (TPFG)

MARTINCO PLC

("Martin & Co" or "the Group")

Admission to trading on AIM

MartinCo, one of the UK's largest residential letting businesses, is pleased to announce that dealings in its shares on AIM will commence today, following a placing of new ordinary shares and sale shares at 100 pence per share, raising a total of £10.35 million before expenses. Panmure Gordon is the Nominated Adviser and Broker to the Group.

The Group operates a franchise business model under the brand Martin & Co and comprises 157 franchisees trading at 187 offices, with a further two trading offices which are currently Group owned. The Group recently added an estate agency service to the franchise, and 95 of its franchise offices are now licensed to offer this service.

Placing details

Trading will commence on AIM at 08:00 am on 18 December 2013 (ticker symbol AIM: MCO).

Commenting on the Company's admission to AIM, Ian Wilson, CEO of MartinCo Group, said:

"The Group is excited to begin its next phase of growth as a public company. It is a strong endorsement of our business that it has attracted such high-quality institutional shareholders on its IPO. The Group has a clear strategy and believes it is well placed to further consolidate its position as one of the UK's largest residential lettings agents and build out its estate agency services."

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For further information, please contact:

The Group's admission document can be found at www.martinco.com/investor-relations

Overview of Martin & Co

§ Martin & Co is a multi-award winning residential lettings and property management business, which adopted its franchise model in 1995

§ The Group's franchisees currently manage approximately 30,000 properties on behalf of private clients and agreed over 25,000 lettings in the year to 31 December 2012

§ The Group's current footprint extends across the UK and includes 24 offices within the catchment of London as defined by the M25 motorway

§ The Group is highly cash generative and has achieved year-on-year growth in Group fee income and profits before tax. In 2012, eight franchise owners had an annual income of £500k or more, compared to just four in 2010

§ The combined turnover of the franchise network was approximately £35 million to 31 December 2012 and the Directors expect this to exceed £37 million to 31 December 2013

Franchise model

§ The Group recruits franchisees from a wide variety of backgrounds and provides relevant letting and estate agency training

§ A typical business plan envisages that a new franchise will cover operating and borrowing costs on a monthly basis at the end of the first year of trading and will be cumulatively profitable at the start of the third year of trading

§ The Group charges an initial franchise fee, and a Management Services Fee ("MSF") set at nine per cent. (plus VAT) of turnover, which the Directors believe is in line with charges applied by competing property franchises

§ Approximately 25 per cent. of all new Martin & Co franchisees purchase an established Martin & Co business where the incumbent franchisee is seeking to exit or is leaving the network by mutual agreement

§ The new franchisee typically pays the same initial franchise fee together with a negotiated sum representing the going concern value of the business

§ A new franchisee typically improves the fee income of an established Martin & Co office by approximately 30 per cent. within 12 months of the change of ownership

§ In all cases, the Group's franchise agreement licenses the franchisee to use the Martin & Co brand and know-how in a postcode delineated territory. The agreement is for a fixed term of five years with an option to renew subject to meeting certain performance criteria.

The market and competitor landscape

The private rental market has experienced a 38 per cent. increase in the number of households privately renting in the decade to 2011, with forecast growth in the value of rents paid on privately rented homes estimated to grow from £48 billion in 2011 to £70 billion by 2016. In 2011 the Group's franchisees managed just 1.4 per cent. of the total private rented stock in all occupied territories. The Directors therefore believe there is a large and growing potential market to capture.

At the end of June 2013, approximately 14,500 agents were advertising properties to let on UK estate agency portal websites, up from approximately 10,000 at the end of June 2009. As of March 2013, Market Location, a business data company, holds records of 15,186 letting agents. The Directors believe that the UK lettings market is highly fragmented and split between the following categories of agents:

§ A limited number of large chains where the primary business activity remains estate agency and financial services but where lettings activity has in recent years been the subject of increased attention and investment;

§ Smaller estate agencies, most of which comprise single offices where lettings is an add-on activity;

§ Specialist letting agents, most of which are small scale and local but with a few more substantial and scalable networks, however only one of comparable size to Martin & Co

Growth strategy

The Directors believe there is a clear opportunity for Martin & Co to further grow its national franchise brand through a combination of organic growth, an acquisition programme and the expansion of its estate agency network.

§ Organic growth - the Group will drive organic growth through its selection process for new franchisees, training programme for its existing franchisees, investing in customer relationship management and by a programme of recovering or improving under-utilised franchise territories within its network

§ Acquisition programme - the Group plans to purchase lettings portfolios in partnership with its franchisees, either in existing or new territories

§ Estate agency network - the Group will expand its estate agency network to take advantage of a cyclical up-turn in UK house sale transaction volumes and leverage its established brand