Property Franchise Group Plc · LSE:TPFG
Property Franchise — The Property Franchise Group — FY2022 Earnings Presentation
29 slides from Property Franchise's earnings presentation, May 1, 2023
Slide 1: Full Year Results 2022
Full Year Results 2022 The UK’s largest property franchisor Strong financial performance ahead of market expectations THE PROPERTY FRANCHISE GROUP PLC – Full Year Results 2022
Slide 2: TPFG: The UK's largest property franchisor
TPFG: The UK’s largest property franchisor Nine property brands Significant scale Our Purpose 577 To support our franchisees, helping Trading territories (Incl EweMove) them to become more successful 189 Our Vision EweMove territories contracted To achieve an increasing 76,000 UK market share of let
Slide 3: A record year for the Group
A record year for the Group Delivered on investment Strong organic growth in Operating profit and growth objectives lettings revenues: increased 40% with strong financial underpinned by our for the second year in performance, quality of service and a row to £9.3m significantly increasing market stre
Slide 4: Financials
Financials THE PROPERTY FRANCHISE GROUP PLC – Full Year Results 2022
Slide 5: Financial overview
Financial overview Group revenue1 up 13% to £27.2m (2021: £24.0m) Profit before tax up 38% to £8.8m (2021: £6.4m) Management Service Fees up 8% to £15.9m (2021: Net cash of £1.7m (net debt 2021: £2.7m) £14.7m) Dividends paid and declared for FY22 up 12% to Adjusted EBITDA3 up 14% to £11.8m (2021: £1
Slide 6: Revenue
Revenue Revenue : £27.2m Revenue : £24.0m 16% 15% 2% 6% 2% 1% Year ended Year ended 31 December 31 December 2022 58% 20% 2021 61% 19% Management Owned offices Financial Services Management Owned offices Financial Services service fees service fees Franchise sales Other Franchise sales Other THE PROP
Slide 7: Group MSF split
Group MSF split MSF : £15.9m MSF : £14.7m 1% 1% Year ended 44% Year ended 46% 31 December 31 December 53% 55% 2022 2021 Lettings MSF Sales MSF Lettings MSF Sales MSF Financial Services MSF Financial Services MSF THE PROPERTY FRANCHISE GROUP PLC – Full Year Results 2022
Slide 8: Cash
Cash Net cash generated from operations (£m) Summary of key movements in cash in last six months: 10 8.9 9.0 8 Cash at 31 December 2021 £8.4m 5.4 6 4.5 4.7 4.4 4 Net cash from operations £9.0m 2.4 2 Bank loan repaid (£6.1m) 0 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 Dividends paid (£3.8m) Free cash
Slide 9: A period of significant growth
A period of significant growth THE PROPERTY FRANCHISE GROUP PLC – Full Year Results 2022
Slide 10: 5 year trends
5 year trends +143% growth +69% growth +105% growth +123% growth Turnover (£m) MSF (£m) Profit before tax (£m) Adjusted PBT (£m) 30 27.2 18 10 12 15.9 8.8 10.7 24.0 16 14.7 25 10 9.4 14 8 20 12 6.4 9.7 8 9.4 9.4 6 10 4.8 15 4.3 6 5.3 11.2 11.4 11.5 8 4.0 4.8 4.9 4 10 6 4 4 5 2 2 2 0 0 0 0 2018 2019
Slide 11: 5 year trends
5 year trends +131% growth +69% growth +114% growth +55% Adjusted EBITDA (£m) EPS fully diluted (pence) Adjusted EPS fully diluted Dividend per share (pence) 14 25 (pence) 14 13.0 22.5 11.8 30 28.4 11.6 12 26.9 12 10.4 20 10 25 10 8.4 8.7 14.4 8 15 13.3 20 8 12.1 11.3 15.9 16.5 5.3 5.7 15 13.3 6 5.1
Slide 12: 5 year trends
5 year trends ROCE strong & ROCI strong & +137% growth Highly cash generative improving improving Net Assets (£m) Net cash (£m) Return on capital employed Return on capital invested 10 8.8 30% 50% 40 37.2 8 25% 24% 41% 35 33.4 25% 22% 40% 30 6 20% 32% 4.0 20% 17% 30% 25 4 30% 27% 20.6 2.3 24% 1.7 15
Slide 13: Market update & growth initiatives
Market update & growth initiatives THE PROPERTY FRANCHISE GROUP PLC – Full Year Results 2022
Slide 14: High street-led brands (excluding Hunters)
High street-led brands (excluding Hunters) Lettings MSF (£) Sales MSF (£) 610,000 400,000 590,000 570,000 350,000 550,000 300,000 530,000 510,000 250,000 490,000 470,000 200,000 450,000 430,000 150,000 410,000 100,000 390,000 370,000 50,000 350,000 330,000 - 2019 2021 2022 2019 2021 2022 THE PROPERT
Slide 15: Market update
Market update • Total residential sales • Rental demand • Net migration, rising transactions in the UK continues to outstrip mortgage costs and lack of declined from c.1.5m supply new build set to continue in 2021 to c.1.25m in driving rental inflation in 2022 • Increasing drive 2023 towards • Resid
Slide 16: Our resilient and growth-focused Group
Our resilient and growth-focused Group Why are we well-positioned? Robust business and a market leader Strongly cash Very experienced Clear and focused with a proven generative with a net senior management growth strategy franchise model and cash position team adding value growth track record Core s
Slide 17: Strategic growth initiatives
Strategic growth initiatives Through assisted acquisitions Continuing the growth to and local organic growth EweMove become the most Lettings growth recruitment geographically represented national franchise brand Via provision of additional Acquisition of franchise brands Develop sales support and t
Slide 18: 2022 update
2022 update • 76,000 managed properties • 44 new territories added in 2022 • Assisted acquisitions brought 1,890 • Total at 189 under contract tenanted properties into the network and EweMove Lettings growth £2.1m of revenue recruitment • c.55/44 lettings/sales • Hunters and Mortgage Genie integrate
Slide 19: Our industry-leading executive team
Our industry-leading executive team Ellie Hall Rob Smith Glynis Frew Adam Noonan MD of Martin & Co MD of Hunters and Franchise Training and Commercial Director (Midlands and North) Whitegates Development Director • Marketing • Acquisition of • Residential sales • Training specialist • IT lettings bu
Slide 20: Outlook
Outlook THE PROPERTY FRANCHISE GROUP PLC – Full Year Results 2022
Slide 21: Outlook
Outlook Whilst cognisant of Q1 has been Experienced Ultimate goal the backdrop, ahead of team continues remains to management’s to support our support our we are expectations in group of franchisees in confident in terms of both franchisees, with order to help the execution revenue and further growt
Slide 22: Q&A
Q&A THE PROPERTY FRANCHISE GROUP PLC – Full Year Results 2022
Slide 23: Appendix
Appendix THE PROPERTY FRANCHISE GROUP PLC – Full Year Results 2022
Slide 24: Income statement summary
Income statement summary 2022 2021 £’000 £’000 Key movements : Revenue 27,158 24,042 Cost of sales (5,575) (3,697) • Revenue • +13% to £27.2m Gross profit 21,583 20,345 Administrative expenses (11,876) (12,719) • Adjusted EBITDA Share-based payments charge (411) (970) • +14% to £11.8m Operating prof
Slide 25: Balance sheet summary
Balance sheet summary Key movements: • Net cash of £1.7m at 31 December 2022 (2021: net debt £2.7m) • Term loan repaid (£6.1m) 2022 2021 £’000 £’000 Assets Non-current assets Intangible assets 44,958 46,498 Property, plant and equipment 162 217 Right-of-use assets 1,613 1,568 Prepaid assisted acquis
Slide 26: The Property Franchise Group: Timeline of our Milestones
The Property Franchise Group: Timeline of our Milestones SOLD 1986 1995 2007 2012 2013 Martin & Co founded First franchise 100 franchised Launched Martin & Co PLC in 1986 in Yeovil launched in 1995 offices trading sale service listed on AIM 2021 2020 2019 2017 2016 2014 Launched new 58,000 Re-brand
Slide 27: Business model
Business model Martin & Co Ellis&Co Whitegates Parkers CJ Hole EweMove Hunters Est. 1987 Acquired in 2014 Acquired in 2014 Acquired in 2014 Acquired in 2014 Acquired in 2016 Acquired in 2021 143 offices 15 offices located 29 offices across Midlands 16 offices along M4 16 offices in South West 189 te
Slide 28: The Board
The Board Paul Latham Gareth Samples David Raggett Non-Executive Chairman Chief Executive Officer Chief Financial Officer Richard Martin Phil Crooks Dean Fielding Non-Executive Director Independent Independent Non-Executive Director Non-Executive Director THE PROPERTY FRANCHISE GROUP PLC – Full Year
Slide 29: High-Street Led Brands/ EweMove
High-Street Led Brands/ EweMove FY22 FY21 High-Street High-Street EweMove Total EweMove Total Led Led* Network Trading territories (at year end) 414 163 577 432 158 590 Managed properties (at year end) 72,500 3,500 76,000 71,000 3,000 74,000 Properties let (No.) 33,600 1,700 35,300 32,300 1,300 33,6
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