Company Announcements

23 July 2020

THE PROPERTY FRANCHISE GROUP PLC

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

Half Year Trading Update

Interim dividend reinstated following year-on-year growth delivered in June

The Property Franchise Group PLC (AIM:TPFG) today issues a trading update ahead of publishing its interim results on Tuesday, 8 September 2020.

Following on from our operational update on the 4 June 2020, wherein we confirmed that the Group's franchisees had successfully resumed all sales and lettings activity, we are very pleased to report a strong performance across the half year as well as a return to growth in the final month of the period which has continued into July. 

Despite the challenges of the first half caused by Covid-19, the Group's revenue for this period was robust at £5.2m (H1 2019: £5.4m). Management service fees, supported by 58,000 tenanted properties also showed good resilience at £4.2m (H1 2019: £4.6m), despite the franchised network's revenues being impacted as transaction levels reduced in April and May.

As strong levels of demand returned in June the traditional brands' network revenue was up 5% on June 2019, of which lettings revenue was up 12%. Sales activity measures also saw good growth, with listings of properties for sale at the same level as June 2019 and the sales agreed fees pipeline adding £1.0m in a month, bringing it to almost match the pipeline amount in the same period of the prior year. This momentum has continued into July with a good pipeline into Q3.

EweMove, the Group's digitally enabled, hybrid sales and lettings brand, showed the strength of its model over the period, and particularly in June as it was able to quickly convert increased interest in the sales market into new business. It set new records for sales listings in the month, up 17% on its previous peak, and sales agreed up 49% on its previous peak. 

The net cash within the business has increased by 104% to £5.7m at 30 June 2020 (H1 2019: £2.8m) and by £1.7m since the onset of the Covid-19 crisis in March, demonstrating the strong cash generation and continued careful and diligent management of the Group.

As a result of the growth in the Group's cash position and not withstanding our objective of identifying appropriate strategic acquisition targets, the Group is delighted to confirm that it will pay an interim dividend of 2.1p in respect of all shareholders on the register at 11 September 2020 on the 16 September 2020. This payment is with a view towards reinstating the Group's progressive dividend policy.

Gareth Samples, Chief Executive Officer of TPFG, commented:

"We are very pleased to be reporting such positive news for the Group. Over the past few months we have worked tirelessly to ensure that our franchisees had the best possible support and information available to them so they could navigate their way through the Covid-19 crisis, and these figures demonstrate the clear benefits this has delivered.

I am particularly pleased to be able to announce the reinstatement of our dividend and appreciate that this has only been possible through the ongoing strength and careful management of the business.

The Group remains mindful that the UK housing market may still be prone to a level of uncertainty and we will continue to exercise appropriate caution. That said, our strong balance sheet and continued cash generating capabilities puts us in an excellent position to be able to provide further dividend income to investors and to take advantage of opportunities that will no doubt arise."

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About The Property Franchise Group PLC:

The Property Franchise Group PLC (AIM: TPFG) is one of the largest property franchises in the UK.

The Company was founded in 1986 and has since grown to a diverse portfolio of six brands operating throughout the UK, comprising longstanding high-street brands and a hybrid, no sale no fee agency.

The Property Franchise Group's brands include: 

·    Martin & Co: a national lettings focused brand

·    EweMove: a national, digitally enabled, hybrid sales and lettings brand

·    CJ Hole: a full-service estate agency serving the West Country for 151 years

·    Ellis & Co: a full-service estate agency serving London for 168 years

·    Parkers: a full-service estate agency serving the M4 corridor for 70 years

·    Whitegates: a full-service estate agency serving the Midlands and North of England for 40 years

Headquartered in Bournemouth, UK, the Company was listed on AIM on the London Stock Exchange in 2013. More information is available at  www.propertyfranchise.co.uk