TPFG posts record revenue despite sales slump

The Property Franchise Group (TPFG) has posted record revenues for the first half of the year despite the subdued market.

An interim update from the listed firm, which includes EweMove and Hunters, said growth was suppressed by falling sales transactions but lettings helped picked up the slack. 

Group revenue increased by 1% annually to £13.2m, the update said, “largely because of the group's strength in lettings and the experienced sales agents in the network driving increased market share.”

Profit before tax increased 11% to £4.2m, TPFG said.

There was record revenue from the property franchising division at £12.3m, with the growth in rents helping to more than offset the reduction in sales transactions. The group's lettings revenues increased by 12% whilst the group's sales revenues reduced by 17%.

Franchise sales continued to be strong in EweMove with 17 new territories sold in the half and there was a significant increase in resales elsewhere in the Group, with 13 in the high street led franchises. This resulted in revenue from franchise sales increasing by 58% to £0.2m.

There were record Management Service Fees (MSF) from its franchised network which increased by 3% to £7.7m. The increase of £0.2m resulted from an increase in lettings MSF of 12% to £4.8m and a reduction in Sales MSF of 11% to £2.9m. Lettings MSF contributed 61% of all MSF in the period. This increased contribution from lettings helped drive recurring revenues up to 65% of total group revenue.

Its hybrid brand EweMove, which charges a monthly licence fee per territory occupied and a fee per completed transaction, generated a record 13% increase in revenue to £2.4m (H1 2022: £2.1m). There were 194 occupied territories at the end of the period (H1 2022: 178) of which 179 were trading (H1 2022: 166) with the remainder yet to complete pre-trading requirements.

TPFG's nine owned offices in Hunters did not fair quite so well as the franchised network in the period with a poorer start to the year driven by a reduced sales agreed pipeline. Hunters contributed revenue of £2.2m, down 12% annually.

The update said: “There has been a revised approach to sales this year which has delivered revenue improvements in recent months and an increased sales agreed pipeline. 

“These actions together with our continued desire to buy lettings businesses, with Michael Searchers Property Management Limited acquired in January 2023, are expected to deliver an improved full year result.”

https://www.londonstockexchange.com/news-article/TPFG/interim-results/16119674