Gareth Samples, CEO of the Property Franchise Group PLC, has praised the group’s franchisees after the company announced positive full year results for the year ended 31 December 2020 yesterday, revealing that profit before tax was up 20% to £4.8m, from £4m a year earlier.
The UK’s largest property franchisor reports that network income increased to £94m (2019: £93m), group revenue increased to £11.5m (2019: £11.4m), while management service fees hit £9.4m (2019: £9.7m).
Businesses was divided – 70% lettings and 30% sales, adjusted EBITDA increased 8% to £5.8m (2019: £5.3m, operating margin of 42% was recorded (2019: 35%), and dividends paid for FY20 of 8.7p (2019: 2.6p)
Overall, the group maintained a strong balance sheet, with net cash of £8.8m at the year-end (2019: net cash £4.0m). Net debt at 31 March 21 was £7.3m.
In terms of operational highlights, the ales agreed pipelines at year-end saw high street-led brands’ almost double December 2019 at £10.3m (2019: £5.2m), EweMove’s more than double December 2019 at £5.6m (2019: £2.5m), 11 assisted portfolio acquisitions by franchisees, adding 1,305 managed properties; and £0.1m of annualised MSF.
In addition, the results show c.58,000 rental properties managed – the same level as a year earlier, along with strengthened senior management team to provide franchisees with enhanced support.
Looking more recently, the Q1 trading update reveals that TPFG high street-led brands saw network income increase 13% to £23m (2020: £20m), the sales agreed pipeline on 31 March was up 45% on prior year at £9.4m (2020: £6.4m), sales exchanges up 49% on prior year at 2,553 (2020: 1,594), while 55,000 rental properties were being managed on 31 March, down slightly from 56,000 a year earlier.
In total the group had 235 offices on 31 March, down from 241 a year earlier.
EweMove
Network income more than doubled to £5m (2020: £2m)
Sales agreed pipeline on 31 March up 120% on prior year at 1,976 properties (202: 897)
Sales completions up 102% on prior year at 1,229 (2020: 607)
Managing 3,000 rental properties on 31 March (2020: 2,000)
Franchise sales significantly up year on year at 20 (2020: 3)
Total offices 135 (2020: 123)
Hunters
Network income increased 69% to £16m (2020: £10m)
Sales agreed pipeline on 31 March up 45% on prior year at £16.3m (2020: £11.3m)
Sales exchanges up 65% on prior year at 4,077 (2020: 2,467)
Managing 15,000 rental properties on 31 March (2020: 14,000)
Total offices 210 (2020: 204)
LSL
LSL Property Services has reached a long-term agreement with TPFG to offer mortgage and protection advice services to all its franchisees.
LSL will provide digital and face-to-face mortgage and protection advice to TPFG’s expanded network of over 430 estate agency offices, including those recently incorporated as a result of its combination with Hunters Property.
The agreement is for a minimum of a five-year period and means that LSL will be providing digital and face-to-face mortgage and protection advice to the customers of TPFG and TPFG’s franchisees.
TPFG franchisees will be provided with a range of options via LSL’s PRIMIS Mortgage Network. Franchisees will be offered the opportunity either to take on their own mortgage adviser and become an appointed representative of PRIMIS, or to refer their customers to existing PRIMIS Appointed Representatives, including LSL’s in-house mortgage brokers.
LSL is already one of the largest providers of services to mortgage intermediaries and mortgage & protection advice to estate agency customers completing around £32.6bn of mortgages in 2020. It currently represents around 9% of the total purchase and remortgage market with over 2,600 advisers.
LSL says that this agreement underlines the opportunity for further growth of its financial services businesses, leveraging LSL’s existing leading positions in the mortgage advice market.
This contract will enhance the financial services division profit after an initial 12-18 month investment period requiring one-off transition and integration costs.
CEO Gareth Samples commented: “2020 and the year to date has seen the Group achieve many significant milestones and I am very pleased with the results that we have delivered.”
“Whilst navigating the global pandemic we were resourceful in protecting the business in the first half and had the right strategy in place to take advantage of the buoyant housing market throughout the remainder of the year. Our franchisees have worked incredibly hard throughout the year and I would like to thank all our network and the central team for their continued dedication.
“The acquisition of Hunters post-period end and the strategic partnership announced today with LSL has significantly bolstered our position in the market, and I am excited to see what we can achieve in the coming year. Looking forward, we have a strengthened platform to focus on the growth of our Financial Services capability, build upon the success of our hybrid offering, EweMove, and leverage Hunters and TPFG’s existing strengths across the enlarged Group. We are confident that our success will be underpinned by our unrivalled management team, scale, excellent stable of brands and strong relationships with our franchisees.”
A video of CEO Gareth Samples providing an overview of the results is available to watch by clicking here.
Comments (15)
Congratulations to TPFG on a sparkling set of financial results after a difficult year and to all those individual franchisees who have contributed towards that.
LSL reporting excellent results today too Q1 up massively
Many success stories throughout the network and all credit to them .
11 new franchisees arriving at Ewemove but too easy to forget the collateral damage in all this,the lost sheep ,those picking up the bill who won’t be sharing any of the profits .
The prize rams can look after themselves it’s the rest of the flock that needs shepherding .
The stories Litte Bo Peep doesn’t want telling .
Ian Wilson the outgoing CEO of Property Franchise Group had something to say on franchise recruitment.
Did they all succeed? No. My batting average was 5% fairly swift failures,10% disappointing relationships and 85% achieving solid viability,ranging from OK to spectacularly good. ”
However Ewemove with a current roster of 115 as at 01/01/2021 just increased to 135 since .With 70+ disappearing since the get got this is far removed from Ian’s batting averages .Too many wickets .An unacceptable high rate of failure.
A statistic quite frankly the industry should be ashamed of.despite the success of many of the individual franchisees and some of the new recruitments at Ewemove as evidenced in the results.
The Chairman said yesterday
” It is clear that franchisees see the benefits of being part of a strong and capable Group.”
Less so for the lost sheep who didn’t hold a Martins or Whitegates franchise !
Those who have exited so far have either dissolved or migrated within TPFG. The promised exit sale of their franchise to a new entrant for £500k + ,a sheeps dream.
.
The stark reality a debt burden for some of life changing proportions for those franchisees who have exited.
Spare a thought too for those Martins & Whitegates franchisees who have taken on Ewemove franchises and recently thrown in the towel .
Long standing Martin’s Southend franchisee who took on Ewemove franchises at Southend & Shoeburyness.Rochford in 2017 have closed them down last year .
Likewise In Cheshire Ewemove’s Northwich office with sister operations in Sandbach, Middlewich, Winsford Crewe and Nantwich closed by the exiting Martins & Whitegates franchisee
Chelmsford ,Macclesfield & Doncaster are towns which have the dubious distinction of having not 1 but 2 franchisees close down
Ian never went on to explain why Martins or Whitegates have not experienced similar carnage as Ewemove? Their network more robust and stable Maybe this is something Gareth can address
“Earn your success based on service to others, not at the expense of others.”
H. Jackson Brown, Jr.
There are at least 12 Ewemove franchisees trading where their current inventory is not sufficent to meet their annual creditors .Their liabilites increasing year on year acc.to Companies House.
One franchise in the South currently trading has just the 1 instruction listed in January.The last accounts showed a staggering deficit of £259k with £299k creditors due in 1 year .
Both Directors are of retirement age with that almighty burden to bear. How can a caring Shepherd let this situation develop?
Close by to this franchise ,recent departees include Bracknell & Newbury,both trading since 2015 ,both carrying deficits
And I was so excited to read the initial opener… Still banging the same drum I see though. Hey ho. Its fantastic to see the wider business reporting strong results and the continued ambition of the group. For EweMove the results are testament to the drive of franchisees and committed leadership and support from the HO team. Nobody likes to see some fail. I trained with the Newbury franchisee and it is a real shame. But It’s the reality of owning a business I’m afraid. However the support is there for those that want it.
Yep still banging the drum and it seems that you are still showing a singular lack of empathy for the vanquished .It’slightly more than a real shame I appreciate it interferes with the narrative
Unfortunately those horrendous numbers of failure figures tell a slightly different story
Here is my concern
Ewemove have announced they intend to quadruple recruitment .
Time then to tone down their pitch .Unrealistic expectations for the vast majority .
in their 5* Trustpilot Ratings in thir franchisee pitch they even include Waterlooville as a success story which failed .Misleading
THE SHEEP HOOKS
“In Year 2 enjoy a whopping £100k income”
This is far from the course for many who aren’t doing that in year 5
“Your income grows each month as you bring on board more sellers and landlords. With a completed house sale, you’ll get a big fat juicy commission – but the real prize comes from the ‘steady as you go’ monthly lettings income. This is a ‘Get rich slow’ business.
“Building your £1 Million Business”
“BY YEAR 5, YOUR FRANCHISE COULD BE WORTH WELL OVER HALF A MILLION POUNDS”
The reality the vast majority of those leaving left with substantial debts some life changing let alone a penny piece for their franchise
and Ian also went onto say
“What made my heart sink deepest in franchise suitability interviews were the words
“My wife/husband/friend and I have always wanted to work together”.
OUR FAILURE RATE IN THOSE CASES SHOT UP DRAMATICALLY”
The first hook prospective franchisees perusing the Ewemove site are greeted with is the success story of the husband and wife team who have gone from strength to strength in Beverley. Well done to them
“We signed up £100,021 of sales in our first 6 months”
Alas that is the exception to the rule .Very few franchisees achieve that sort of success in that time frame There are other successful husband & wife teams but Ian was right
Ewemove looking to quadruple numbers .That is worrying
Prospective husband &wife franchisees might like to have a word with these former Ewemove franchisee husband and wife teams amongst the many lost sheep at Ewemove
STAINES & ASHFORD
CREWE
CHEADLE
CAMBRIDGE SOUTH
MACCLESFIELD
PUDSEY
SOUTHAMPTON NORTH
LINCOLN CENTRAL
MARKET WEIGHTON
EDINBURGH WEST
for a more grounded view
Case Study :Edinburgh West .A salutary experience
Featuring in Ewemove’s recruitment as one of their franchisee success stories! . A later life career change for the married couple
“We had been looking for a while for a franchise to save us starting a business from scratch, as we had done before. We were drawn initially by the fantastic EweMove branding and the more we found out the more appealing it became. We were looking for a franchise where we would feel art of something ”
In Edinburgh ,the husband after the 1st year of trading with debt accumulating took on a full time job leaving his wife to limp on til last year .
With just a handful of instructions and debts increasing year on year to a staggering 6 figures .Annual creditors increasing also .
They dissolved their company franchise in October last year .
2017 2018 2019
(£61.117 ) (£89,882) (£108,554)
The gamboling spring lamb Nick Neil had the neck to say this on EYE !!!
Head_Shepherd#2
JULY 24, 2020 AT 12:07#5
“I’m sure Edinburgh would not regard their recent successful and lucrative sale of their business as a casualty…”
What else can they think! Who did they “sell” it to?
Scotland hasn’t been a particularly happy ground for flock expansion for Ewemove
There is now no Ewemove franchisee in Edinburgh. The company was dissolved in Oct 2020 ,not sold . In Scotland there is a franchise in Aberdeen trading satisfactorily but the Glasgow franchisee has just 2 not had a single instruction since last October . Running on empty
They lost their other Scottish franchisee in Hamilton previously
Unfortunately Ewemove forgetting that the Head Shepherd’s main duty is the health of all the flock not just the prize tups
The recruitment should come with a Gov’t health warning.High risk of failure not for the faint hearted. Those departing franchisees pay a huge price for Ewemove’ success!
Prospective franchisees are comforted by the assurance
“This gives EweMove the security and support of being under the umbrella of a large PLC.”
Unfortunately that must stick in the craw of those who have vanished with huge liabilities
My comment doesn’t lack empathy.
It simply provides context to your point of view.
Nobody like to see a colleague take the decision to depart and not all departures are failures.
Have a good day
“But It’s the reality of owning a business I’m afraid”
However that reality is not spelled out in the pitch .Far from it Only tales of the prize rams
Name me a franchisee who has exited selling their business for £500k?
The wool has been pulled over the eyes The “Get rich slow” for many has been far from the truth .Being allowed to continue to operate year on year increasing debts Some never stood a chance
A head shepherd should never allow that to happen to one of the flock
HoW71 – I am firmly of the opinion that Wilson bought a dead dog nicely dressed as a hi-tech sheep. However, it looks like the hi-tech was actually very low fidelity (read the word fidelity as you will) and a good number of the then franchisees were unsuitable dupes. But credit where its due, these figures suggest an enormous amount of work has been done over the last few years to actually make a real business of it. A very costly mistake no doubt but if they can keep it on the same upward trajectory, they should eventually get their money back. I think the real skill has been to keep the City off their back (in terms of share price) during the necessary rebuilding works. You have to wonder if the purchase of a sheep with scrapie was fatal to Wilson’s career?
Certainly things have improved (lets face it the rate of losses was unsustainable)and many of those recently joined have hit the ground running
However still too many rolling on from year to year liabilities increasing
My main gripe is the way the franchise is still being pitched without the warning of the very real prospect of
the risk of failure
how is a large drop in revenue a great result
They appear to be profitable, but the Lettings managed figures are interesting. They lent money to franchisees which saw 1000 managed properties coming in, but for the year they ate down around 1000 managed properties. The business is standing still in terms of managed numbers but only by getting franchisees to take on debt and purchase portfolios.
They will know what is going on and who is slipping but it looks as if there is still plenty of work to be done.
The FS side will not work. Better to let individual franchisees build local relationships. The last thing I would want is my customer going off to talk to a competitor fs advisor. Definitely a waste of management time and money if the past is anything to go by.
They are a lettings business with a small % of sales. So its probably commensurate …
If I have read this correctly, group revenue increased by £100k, in a year which included an SDLT holiday, and the number of offices fell from 241 to 235?
It does appear that the business needed to to be “bolstered” by Hunters.
Looks as if PFG customers will be trotting over to Your Move for financial services and other products.
Very impressed with what LSL are achieving.
Seem to do everything well.
did very well out of the pandemic Id say looking into the detail
Interesting how their own financial services was a flop. Great idea to leech off another business’ set up. Leeching is what they seem to do best!
Im just reading between the lines, but im presuming you are a franchisee. ‘Leeching is what they do best…’
By this I (again) presume you mean where you sign a contract to receive certain things for money.
Leeching / agreed contractual obligation – same same