The Property Franchise Group this morning announced a 6% rise in profits during the first half of this year, although revenue was unchanged at £5.5m.
Pre-tax profits rose from £1.9m in the same period last year to £2m. However, the number of trading offices in its network shrank, from 377 to 369, despite the recruitment of eight new franchisees and the opening of nine new offices.
The group also reported on 17 acquisitions by franchisees in the year to date, and the number of tenanted properties under management rose from 53,000 to 56,000.
On its ‘hybrid’ brand EweMove, the group reported that it demonstrated that its “unique, highly customer centric offering can defy the challenging sales market, as its sales revenue increased”.
EweMove has 115 franchise territories trading, similar to a year ago, but property listings rose from 3,062 to 3,173.
The group said EweMove is “on track to materially improve” on last year’s results.
It said that when experienced estate agents were recruited to EweMove, they outperformed inexperienced franchise recruits but only in the first two years: “Consequently we have resumed recruiting non-agents as franchisees at EweMove provided that we are satisfied that they have transferable sales skills and access to sufficient working capital during the build-up period.”
CEO Ian Wilson said: “We have delivered another strong set of results, with progress in each of our six brands, which have all grown our most important revenue stream, franchise management services fees over the same period last year. Our profit has also grown, driven by the health of our franchisees’ businesses and prudent cost management.
“Historically, the Group experiences stronger trading in the second half year, associated with heightened lettings activity in the period from June to September. At this stage we believe that this pattern will be maintained.
“Our strong balance sheet and our continued confidence in the underlying strength of our business model means that we are pleased to be increasing the interim dividend by 8% to 2.6p in line with our progressive dividend policy.
“Thanks to our franchise business model, diverse brand offering, lettings weighting and high levels of cash generation, resulting in a strong balance sheet, we are well-positioned to outperform our competitors, increase market share and deliver value for all our stakeholders in the immediate and longer term.”
Yesterday, the shares in The Property Franchise Group closed up by about 1%, at 165.5p.
Comments (5)
“EweMove has 115 franchise territories trading, similar to a year ago..”
Carefully chosen words.
If you look up Ewemove on TPOS website, there are fewer than 100. Strip out the obvious duplicates and known closures and the number falls dramatically.
Ewemove !!!! Extract from TPFG results this morning
“Having examined the evidence, experienced estate agents initially outperform inexperienced franchise recruits from other sectors, but only in the first TWO YEARS trading as a EweMove franchisee. Consequently, we have resumed recruiting non-agents as franchisees at EweMove provided that we are satisfied they have transferable sales skills and access to SUFFICENT WORKING CAPITAL during the build-up period. 2
What evidence is that a few highly performing franchisees !
The devil is in the detail .
I am sure all those franchisees who have and accumulated vast debts take some sort of satisafaction that Head Office turned a profit .Collateral damage.
Well what is clear is that there are many franchisees still struggling after 2 years and the failure rate shows no sign of falling off.
Only the other week Ewemove Stalybridge threw in the towel after trading since 2015 .Ewemove Cheltenham & Bishops Cleeve Ltd also was struck off with the last accounts looking horrendous ringfencing the debts. The franchisee still trading but now directly under TPFG Newmarket went west in August after 12 months the poor guy was carrying just the 1 instruction at the death So well done in recruiting him as a non agent
Only this morning a franchisee up North recruited last year has had first notice at Companies House to be struck off
A Midlands franchisee currently has 0 instructions and a quick google in the local media perhaps explains why !
What must be a record toxic debt burden revealed in their latest set of accounts submitted the other week was a 2 franchise ,2director+branch manager operation in the South showing a deficit of £212,636 and a mind boggling annual creditors due in 12months of £241,603 Their current portfolio certainly not sufficent to feed 3 mouths and deal with all that
Many on death row with deficits increasing.
Let’s see what the picture looks like next year If Ewemove think this is sustainable think again
You are right in all you say HoW.
Ewemove has an awful success rate for those taking out franchises. Why do so many fail? poor recruitment or poor support or a combination of both?
Had a Ewemove franchisee visit me at my home, lovely guy, but the moment I met him I could see he had no chance and no proper back up. Yes he went bust.
To be fair they have a number of successful franchisees which do include those with no previous property experience. Beverley being a good example and hats off to them Suspect though that is due to the hardwork,talents and diligence of the individuals the type who would make a success of any venture they turned their hand to
What does concern me is there are a number of franchisees including many husband and wive teams where the deficits are incraesing year on year Annual creditors due to be paid in one year increasing without the portfolios to service that
The Road to Perdition There are 2 husband and wife teams now up North which need to face the music and throw in the towel You can see as an outsider the disaster unfolding Where is the management in all this?