Propty Franchis Regulatory News (TPFG)

30 January 2025

THE PROPERTY FRANCHISE GROUP PLC

("TPFG", the "Company" or the "Group")

FY24 Trading Update

Transformational year with the delivery of significant organic and inorganic growth,

redefining the scale of the Group

The Property Franchise Group PLC, the UK's largest multi-brand property franchisor, announces its trading update for the year ended 31 December 2024, and is pleased to report significant organic and inorganic growth during the year with trading expected to be in line with market expectations.

Highlights

· Group revenue increased 146% to £67.2m (2023: £27.3m), with 52% (£35m) deriving from recurring revenue sources

· Management Service Fees ("MSF") increased 76% to £28.3m (2023: £16.1m)

· Lettings MSF Like for Like has increased 8% to £10.7m (2023: £9.9m)

· Sales MSF Like for Like has increased 15% to £7.2m (2023: £6.3m)

· Financial Services commissions now a significant revenue stream at £19.2m (2023: £1.5m)

· Licensing income of £7.2m from GPEA acquisition

· Net debt of £9.1m after borrowing £20m to fund the acquisition of GPEA (2023: net cash £5.1m)

This has been a transformational year for the Group, with the merger with Belvoir Group PLC ("Belvoir") and the acquisition of GPEA Limited ("GPEA") adding material scale and market reach in our franchise business, a significantly strengthened Financial Services division, and a new licensing revenue stream. As a result, the Group is now segmented into three distinct business divisions: Franchising, Financial Services and Licensing. Good progress has been made in the period in integrating the two new businesses and realising synergies, which started to materialise towards the end of 2024.

Franchising

As a result of the Belvoir merger, the Company's franchising division now operates across 15 brands, managing a combined 153,000 rental properties (3% of the Private Rental Sector) and achieved over 30,000 sales during 2024, making it the biggest property franchise business in the UK.

Lettings MSF in 2024 grew 93% to £19.0m with the merger with Belvoir contributing significantly, with the Group managing over 153,000 (2023: 78,000) rental properties at year end. This being a result of the combination of, minimising landlord attrition through strong relationships and market leading technical guidance, increasing the size of the letting book through acquisition and, continuing to see rental prices increasing across the network, particularly outside of London.

Sales MSF in 2024 grew 48% to £9.3m, performing well over the full year and particularly in H2 as consumers capitalised on the declining cost of finance resulting in a strong upturn in sales agreed and completed.

Total MSF on a like for like basis (excluding acquisitions) increased 11% demonstrating continued growth within the original business.

Ewemove, the Group's market disruptor brand, continues to grow in strength with a further 39 (2023: 31) new territories sold during 2024, and total revenue increasing by 17% year on year.

Financial Services

The Belvoir acquisition also transformed the financial services offering, with the addition of Brook Financial Services, an authorised representative of the Mortgage Advice Bureau. Over the last 12 months, the division delivered over 23,000 mortgages at a value of over £4bn.

Financial Services income in 2024 totalled £19.2m, with a strong H2 performance as a result of improved volume due to the decreases in the Bank of England base rate and lenders pricing for further decreases in 2025, as well as improved productivity of advisers.

Recurring revenue from repeat customers reaching the end of their fixed term mortgages has totalled £1.4m since the acquisition.

Licensing

The acquisition of GPEA added a new licensing division. This being made up of Fine and Country where both UK and International licensees pay a fixed fee in return for being able to trade under the brand whilst receiving marketing and regulatory support, and the Guild of Property Professionals, which offers its members a well established brand that provides access to group buying power and regulatory guidance in return for an annual fee.

Total revenue in the licensing division for 2024 is £7.2m since the acquisition which completed on 3 June 2024.

The Fine and Country business has continued to grow since acquisition, with the addition of 17 new UK licensees as well as three new international offices in Barbados, Ireland and Dubai.

Current Trading and Outlook

Looking ahead to 2025, the focus for the upcoming period will be on completing the successful integrations of Belvoir and GPEA, delivering the projected cost synergies and unlocking the additional income opportunities resulting from the scale of the combined Group.

We anticipate the lettings business to continue to grow in 2025, with the upcoming Renters Reform Bill expected to provide an additional opportunity for the Group, given the tough compliance requirements, to convert more landlords to the managed property model.

We have seen strong demand in January within our financial services business as customers continue to enjoy more affordable rates. The combination of a strong sales pipeline which has increased by 71% to £39.4m (2023: £23.1m) and current mortgage rates give us confidence in achieving a positive H1. H2 will be influenced by the anticipated interest rate cuts.

The strength of the Group's franchise model and diversified revenue streams puts TPFG in a strong position and continues to shelter it from market cyclicality. As such, the Group expects further growth across the divisions in FY 2025 and looks to the future with confidence.

Chief Executive Officer, Gareth Samples, commented: "I am immensely proud of what the Group achieved in 2024, with the delivery of two major acquisitions, now integrated into the Group, as well as strong organic growth. Our success has culminated in yet another record-breaking financial performance which has redefined the scale of our business and set us up for ongoing success.

FY25 has started with strong momentum and we look forward to the continued synergies from the two transformative deals, with Belvoir and GPEA, and other strategic projects initiated in the year coming to fruition in 2025, unlocking the full potential of the combined Group as it looks to its next phase of growth."

For further information, please contact:

About The Property Franchise Group PLC:

The Property Franchise Group PLC (AIM: TPFG) is the UK's largest multi-brand property franchisor, with a network of over 1,946 outlets delivering high quality services to residential clients, combined with an established Financial Services business.

The Company was founded in 1986 and has since strategically grown to a diverse portfolio of 18 brands operating throughout the UK, comprising longstanding high-street focused brands and two hybrid brands. The Property Franchise Group is also a member of two leading mortgage networks through its mortgage brokers, Brook Financial (MAB) and The Mortgage Genie (Primis).

TPFG's brands are: Belvoir, CJ Hole, Country Properties, Ellis & Co, EweMove, Fine & Country, Hunters, Lovelle, Martin & Co, Mr and Mrs Clarke, Mullucks, Newton Fallowell, Nicholas Humphreys, Northwood, Parkers, The Guild of Property Professionals and Whitegates.

Headquartered in Bournemouth, the Company was listed on AIM on the London Stock Exchange in 2013 and entered the AIM 100 in July 2024.

More information is available at https://thepropertyfranchisegroup.co.uk/