Final Results

About this update from Property Franchise Group Plc

[{"type":"text","content":"\n \n 8 April 2025 \n   \n THE PROPERTY FRANCHISE GROUP PLC \n (\"TPFG\", the \"Company\" or the \"Group\") \n   \n Final Results \n   \n Transformational year with significantly enhanced scale and 29% increase in full year dividend \n   \n The Property Franchise Group PLC, the UK's largest multi-brand property franchisor, is pleased to announce its Final Results for the year ended 31 December 2024 (\"FY24\"). \n   \n Financial Highlights \n   \n \n \n \n \n ·      \n \n \n Group revenue increased 146% to £67.3m (2023: £27.2m), 6% like for like increase to £28.7m 1 with 52% (£35m) of revenue from recurring revenue sources \n \n \n \n \n \n \n \n ·      Management Service Fees (\"MSF\") increased 76% to £28.3m (2023: £16.1m) \n \n \n \n \n \n \n \n ·      Financial Services income increased to £19.2m (2023: £1.5m) \n \n \n \n \n \n \n \n ·      Licensing income of £7.2m, £5.2m of which is recurring \n \n \n \n \n ·      \n \n \n Adjusted EBITDA 2 increased 99% to £24.1m (2023: £12.1m) \n \n \n \n \n ·      \n \n \n Adjusted profit before tax 2 increased 99% to £22.3m (2023: £11.2m), like for like increase to £13.0 m 1 \n \n \n \n \n ·      \n \n \n Adjusted basic earnings per share 2 increased 7% to 31.7p (2023: 29.7p) \n \n \n \n \n ·      \n \n \n Net debt of £9.1m after borrowing £20.0m to fund acquisitions (2023: net cash £5.1m) \n \n \n \n \n ·      \n \n \n Cash generated from operations increased to £14.7m (2023: £9.0m) \n \n \n \n \n ·      \n \n \n Final dividend of 12p, making full year dividend 18p per share, up 29% (2023: 14p) \n \n \n \n \n   \n 1 Like for like comparison excluding the impact of the acquisition of Belvoir Group on 7 March 2024, and GPEA on 31 May 2024 \n 2 Before share-based payments charge, exceptional items, amortisation arising on consolidation and unwinding of discounting on acquisition deferred consideration \n   \n Operational Highlights \n \n \n \n \n \n ·      \n \n \n Merger with Belvoir in March 2024 and acquisition of GPEA in May 2024 \n \n \n \n \n ·      \n \n \n Managed portfolio of 153,000 properties (2023: c.78,000) \n \n \n \n \n ·      \n \n \n Sales pipeline increased to £33.4m (2023: £23.1m) \n \n \n \n \n ·      \n \n \n Financial Services division delivered 23,000 mortgages in 2024 after acquisition of Brook Financial Services via Belvoir \n \n \n \n \n ·      \n \n \n Licensing division now includes 1,043 licensees through the acquisition of GPEA \n \n \n \n \n ·      \n \n \n Enhanced Board and senior leadership team to support the next phase of growth \n \n \n \n \n ·      \n \n \n Launched new AI-driven marketing tools to enhance lead generation and franchisee support \n \n \n \n \n ·      \n \n \n Synergies of £0.4m realised in 2024 with more to come in 2025 \n \n \n \n \n   \n Outlook \n   \n \n \n \n \n ·      \n \n \n Focused on completing the full integration of Belvoir and GPEA, delivering on the synergies and opportunities anticipated from the increased scale and capabilities \n \n \n \n \n ·      \n \n \n Well positioned to navigate market conditions anticipated in 2025 due to changing government legislation \n \n \n \n \n ·      \n \n \n The strength of the Group's franchise model and diversified revenue streams, along with its enhanced leadership team, provides a strong platform from which to grow and the Board is confident in realising the full potential of the enlarged Group \n \n \n \n \n   \n Chief Executive Officer, Gareth Samples, commented : \"I am delighted to be reporting another set of record financial results in what has been a truly transformational year for the Group. The period under review has seen us successfully deliver two substantial acquisitions and make headway in realising the resultant synergies whilst concurrently delivering strong organic growth and executing against our strategy. \n   \n \"The Property Franchise Group has a track record of growth and now, with our increased scale and capability, we are a significantly stronger business, able to offer even greater value and growth potential. I am incredibly excited for what lies ahead, with a clear strategy and an exceptional team in place to realise the full potential of the enlarged Group.\" \n   \n Analyst Presentation \n   \n An analyst presentation will be held at 10.00am today. Should you wish to attend, please contact [email protected] for joining details. \n   \n Investor presentation \n   \n The Company is hosting a live private investor presentation and Q&A session at 4.00pm today on the Investor Meet Company platform. All private investors interested in attending are asked to register using the following link:  https://www.investormeetcompany.com/property-franchise-group-plc-the/register-investor \n   \n   \n For further information, please contact: \n   \n \n \n \n \n The Property Franchise Group PLC   \n Gareth Samples, Chief Executive Officer \n Ben Dodds, Chief Financial Officer \n \n \n 01202 405 549 \n [email protected] \n   \n \n \n \n \n Canaccord Genuity Limited  (Nominated Adviser and Joint Broker) \n Max Hartley \n Harry Rees \n \n \n 020 7523 8000 \n   \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Singer Capital Markets  (Joint Broker) \n Rick Thompson \n James Fischer \n \n \n 020 7496 3000 \n   \n   \n \n \n   \n \n \n \n \n   \n Alma Strategic Communications  \n Justine James \n Joe Pederzolli \n Kinvara Verdon \n \n \n   \n 020 3405 0209 \n [email protected] \n \n \n   \n \n \n \n \n   \n About The Property Franchise Group PLC: \n   \n The Property Franchise Group PLC (AIM: TPFG) is the UK's largest multi-brand property franchisor, with a network of over 1,946 outlets delivering high quality services to residential clients, combined with an established Financial Services business. \n   \n The Company was founded in 1986 and has since strategically grown to a diverse portfolio of 18 brands operating throughout the UK, comprising longstanding high-street focused brands and two hybrid brands. The Property Franchise Group is also a member of two leading mortgage networks through its mortgage brokers, Brook Financial (MAB) and The Mortgage Genie (Primis). \n   \n TPFG's brands are: Belvoir, CJ Hole, Country Properties, Ellis & Co, EweMove, Fine & Country, Hunters, Lovelle, Martin & Co, Mr and Mrs Clarke, Mullucks, Newton Fallowell, Nicholas Humphreys, Northwood, Parkers, The Guild of Property Professionals and Whitegates. \n   \n Headquartered in Bournemouth, the Company was listed on AIM on the London Stock Exchange in 2013 and entered the AIM 100 in July 2024. \n   \n More information is available at  https://thepropertyfranchisegroup.co.uk/ \n   \n   \n Chair statement \n   \n Overview of performance \n   \n The execution of two strategic acquisitions contributed significantly to the Group's performance, adding material scale across three divisions: the largest property franchise business in the UK; a substantially strengthened Financial Services division; and a new Licensing division. Our diverse portfolio of 18 brands, operating throughout the UK and now internationally, have 153,000 rental properties under management and completed over 30,000 sales, reinforcing our leading position. \n   \n Integration of the Belvoir Group and GPEA has been a key focus in order to fully capitalise on the synergies available and the Group saw notable progress on realising these synergies towards the end of 2024. The Board approached these acquisitions with a clear strategy and structured integration plan. Significant progress has already been made in aligning our operational framework and enhancing governance structures to ensure they are right-sized for the company that The Property Franchise Group is today, and for the continued delivery of long ‑ term value for our shareholders. \n   \n Significant growth with strong recurring revenue \n   \n Group revenue increased 147% to £67.3m, reflecting both organic and acquisitive growth. Recurring revenue continued to be a material contributor and represented 52% (£35m) of revenue, providing us with good visibility on future earnings. \n   \n The Group continued to be highly cash generative in the period. The Group borrowed £20.0m to fund the acquisition of GPEA, however at 31 December 2024 this has reduced to a net debt position of £9.1m, representing leverage of 0.4 times. Looking ahead, net debt is anticipated to materially reduce in the current year. While the focus of the Board is to continue integrating the new businesses into the Group so as to fully realise the synergies of the two acquired businesses, our cash generative profile gives us the ability to consider pursuing acquisition opportunities which would further enhance the portfolio of the business. \n   \n Strengthened Board \n   \n The expanded Board reflects the growing scale and complexity of the business, with three Executive Directors and five Non-Executive Directors. In the year, the Board was delighted to welcome Michelle Brook as an Executive Director, Jon Di-Stefano as our Senior Independent Director and Paul George as an independent Non-Executive Director. Post period end, on 2 January 2025, we were delighted to announce the formal appointment of Ben Dodds to the Board as Chief Financial Officer. The experience of the Board members matches the needs of the business, bringing valuable expertise in franchising, estate agency, housebuilding, construction and financial services, as well as added depth to the Board's corporate governance experience. \n   \n I would like to take this opportunity to express the Board's gratitude to David Raggett, who stepped down as Chief Financial Officer following a successful transition period with Ben. David played a key role in the Group's substantial growth over the past 12 years, and we are pleased that he will continue to support the business on a number of ongoing projects. On behalf of the Board, I would like to thank David for his commitment and contributions and wish him the very best for the future. \n   \n Throughout the year the contributions of our Board members have been instrumental in ensuring the ongoing execution of our strategic objectives as well as ensuring high standards of corporate governance. With the right balance of skills and experience, the Board is well positioned to guide the business through its next phase of growth. \n   \n Three distinct divisions and an evolved growth strategy \n   \n Following the acquisitions, the Group is now segmented into three distinct divisions: \n   \n Franchising: Core to the Group, operating 15 brands managing 153,000 rental properties and achieving over 30,000 sales during 2024, making it the biggest property franchise business in the UK. \n   \n Financial Services: The integration of Brook Financial Services, an authorised representative of the Mortgage Advice Bureau, has substantially strengthened the Financial Services division. In 2024, the team facilitated over 23,000 mortgages valued at over £4bn. \n   \n Licensing: Comprises Fine & Country, where both UK and international licensees pay a fixed fee to trade under the brand whilst receiving marketing and regulatory support, and The Guild of Property Professionals, which offers its 749 members a well ‑ established brand that provides access to group buying power and regulatory guidance in return for an annual fee. \n   \n Each division is well positioned for growth and ongoing execution against our growth strategy, focused on six key growth pillars: Lettings, Sales, Financial services, Group acquisitions, Recruitment and Digital Marketing and Artificial Intelligence (further details can be found in our Annual Report). \n   \n Dividends \n   \n The Board remains committed to its progressive dividend policy whilst maintaining strong dividend cover as part of its overall capital allocation policy. \n   \n The Board is pleased to recommend a 29% increase in our total dividend to 18p per share (2023: 14p), reflecting the strength of our performance and ongoing cash generation. The proposed final dividend will be paid on 2 June 2025, subject to shareholder approval, continuing our track record of delivering value to our investors. \n   \n Environmental, Social and Governance (\"ESG\") \n   \n 2024 was a pivotal year for The Property Franchise Group in terms of our approach to ESG. The ambitious building blocks that were put in place in 2023 with the ESG Committee at Board level, as well as the ESG Steering Group at an operational level (both chaired by Claire Noyce, Non ‑ Executive Director), delivered some outstanding results in 2024. The ESG Steering Group was one of the first initiatives to bring together best practice across the enlarged brand portfolio. \n   \n 2024 is the second year in which ESG specialists Inspired ESG carried out an assessment of the Group. Pleasingly, significant progress was delivered across all categories. The highest performer was social, showcasing the Group's commitment to employees and communities, while significant improvements were recorded across the environmental section. \n   \n Calculation of our SECR energy consumption and GHG emissions was completed by an independent third party, Orbis Advisory, who are helping us to do our part to fight climate change. \n   \n As would be expected, the Board is delighted to have adopted the 2023 edition of the QCA Corporate Governance Code with effect from 1 January 2025. \n   \n Further detail is available in our Annual Report which also details our ESG targets for 2025, which are aspiring and match the determined enthusiasm across the Group in the way in which we are engaging with each other, the wider community and all of our stakeholders. \n   \n Outlook \n   \n Looking ahead, the focus is on realising the full benefits of last year's acquisitions and continuing to drive organic growth. The evolving legislative landscape, including the Renters Rights Bill and likely interest rates reduction, presents both challenges and opportunities. With scale, expertise, and deep market knowledge, The Property Franchise Group is well-equipped to support landlords and franchisees in navigating regulatory changes which our CEO, Gareth Samples, talks more about in his statement. \n   \n With strong progress made in 2024 and a clear strategic vision for 2025 and beyond, the Board remains confident in the opportunity ahead. The strength of our leadership team, the resilience of our business model, and the dedication of our franchisees, licensees, financial advisers and employees provide confidence in our ability to sustain our momentum and continue delivering value for our shareholders. \n   \n Paul Latham \n Non-Executive Chair \n 7 April 2025 \n \n \n   \n CEO statement \n   \n A stronger business delivering increased value across our divisions \n   \n 2024 is marked by the transformational acquisition of Belvoir Group PLC and the acquisition of The Guild of Property Professionals and Fine & Country, underpinned by robust organic growth. Completing the two acquisitions in the year has resulted in the significant scaling of the Group as a whole and has materially accelerated our growth journey. \n   \n Since my appointment in April 2020, The Property Franchise Group has grown from a market cap of £42m to c.£260m today, which I am delighted has moved the Group into the FTSE AIM 100 Index. This achievement is testament to the success of the Group's strategic execution over recent years, consistently delivering record results, increasing market share and capitalising on opportunities. \n   \n Following the corporate activity in the first half of 2024, there has been a clear focus on integrating the newly acquired businesses. We have made considerable headway in realising the synergies from the two deals, leveraging our new scale to drive increased value back to our franchisees and licensees. We are at the forefront of digital marketing and AI, delivering value across the Group through increased efficiencies and enhanced products and services, including several new initiatives planned for 2025. \n   \n Franchising delivers exceptional growth in both scale and market reach \n   \n Franchising remains the largest division within the Group, with lettings at its core. Franchisees are now able to avail themselves of our increased scale and improved capabilities, providing greater value and enhanced recruitment. \n   \n Lettings Management Service Fees (\"MSF\") delivered a notable year of growth, with revenue up 93% to £19.0m, building on the solid performances of previous years and significantly bolstered by the acquisition of Belvoir. The Group now manages over 153,000 rental properties (2023: c.78,000). Our newly combined scale was maintained despite challenging market conditions. The Group minimised landlord attrition on account of the value placed on the enhanced services our franchisees are able to offer to landlords from being part of our Group, coupled with strong relationships with their local landlord base. This is enabling us to offset the risk of landlords wanting to exit the market. \n   \n Sales MSF performed better than anticipated in the year, growing 48% to £9.3m (2023: £6.3m). The Bank of England lowering interest rates in August, together with more market certainty following the election result in July, led to a particularly strong second half of the year which has continued into 2025. Meanwhile, we continue to expand our sales offering across our historically lettings-biased franchise network. \n   \n Total MSF on a like-for-like basis (excluding acquisitions) increased 11%, demonstrating continued organic growth within the original core business. \n   \n EweMove, the Group's market disruptor brand, continues to grow, attracting a further 36 new franchisees to join its brand in the year (2023: 31), with total revenue increasing 17% year on year to £5.7m. \n   \n Financial Services division substantially strengthened \n   \n The acquisition of Belvoir substantially increased the scale of our Financial Services division, with the addition of Brook Financial Services, an authorised representative of the Mortgage Advice Bureau (\"MAB\"). Our expanded Financial Services division principally earns commission through advisers selling mortgage and protection products via our status as an appointed representative of both the MAB and Primis mortgage networks. \n   \n The division performed well in the year, delivering £19.2m of income. Over 2024, the division delivered 23,000 mortgages with a combined value of over £4bn. There was an uptick in mortgage volumes in the second half of 2024 due to improved productivity of our advisers and the decrease in Bank of England base rate, with lenders expecting further decreases during the course of 2025. \n   \n The acquisition of Belvoir added c.300 financial consultants to the Group and we see an opportunity to grow revenue by increasing lead generations through our investments in AI and digital marketing. \n   \n Licensing - complementary and recurring new revenue stream \n   \n Licensing is a new revenue stream for the Group from the acquisition of GPEA. This includes: \n   \n \n \n \n \n ·      \n \n \n Fine & Country, where income is generated from the licence fees paid by UK and international licensees, in addition to fees from property-related services, such as marketing and regulatory support; and \n   \n \n \n \n \n ·      \n \n \n The Guild of Property Professionals, which supports its network of 749 members, who pay annual membership for support and access to marketing and industry training in addition to group buying power and regulatory guidance. \n \n \n \n \n   \n Total revenue from Licensing for 2024, since the acquisition completed on 31 May 2024, was £7.2m, of which £5.2m is recurring. Since the acquisition, Fine & Country has continued to grow its business, with the addition of 20 new UK licensees and four new international offices. \n   \n We see growth from this division in the near term in two main respects: firstly, providing enhanced products and services to members by leveraging the Group's wider portfolio, thereby increasing revenue in line with the higher quality of our offering; and secondly, growing our core Franchising division by selling into the newly acquired licensed territories. \n   \n Changeable market dynamics but a proven ability to grow \n   \n In 2024, the Group accounted for 10% of sales and 7% of managed lettings in the UK; whilst considerable, there is still significant opportunity to expand the Group's market share, utilising our greater scale to generate increased revenue, develop new products and capitalise upon the market opportunity. \n   \n 2025 is expected to be a challenging year for the property market, particularly with the introduction of new government legislation expected to impact the sales and lettings markets. That said, as a result of the Group's valuable expertise in the market, this also presents an opportunity, as we are at the forefront of industry developments and have the capability to help franchisees navigate any challenges. \n   \n Growth strategy \n   \n The Group's franchise model provides a solid foundation for growth, which is now complemented by the new opportunities in our enlarged Financial Services division and the newly acquired Licensing division. \n   \n Integration continues to be a key focus from which the Group will benefit from the opportunities our greater scale now affords us combined with the synergies achieved through integration, of which £0.4m has been achieved in 2024, with more to come in 2025. \n   \n With six key growth pillars across Lettings, Sales, Financial Services, Group Acquisitions, Recruitment and AI and Digital Marketing strategy, we see increasing opportunity as we continue to implement synergies and further leverage our scale and capabilities. \n   \n We expect to drive lettings growth using our market position to develop products and services to provide enhanced support and income opportunities to franchisees, such as our Rent Guarantee product launching in 2025, and we will continue to explore and promote managed property acquisitions. \n   \n With a focus on support around sales activity, we continue to unlock franchisees' potential across the existing network by upskilling and providing highly effective tools, including a blockchain network to provide digital property data. \n   \n Our Financial Services division is launching new financial services programmes across our expanded brand network and benefiting from the cross-divisional lead generation with our franchisees and licensees. We are also focused on growing through expanding our network of advisers and improving adviser productivity. \n   \n We will continue with our Group acquisition strategy, exploring strategic consolidations and alliances within the property sector and identifying alternative property-related income streams that complement the Group. Within Financial Services, we will pursue a Buy & Build strategy to grow our adviser numbers and expand our market reach. \n   \n To accelerate growth across our divisions, we will continue to drive recruitment and develop our AI and digital marketing strategy to deliver greater financial value internally and to our franchisees and members. Central to this is our growing number of secure data records, enabling new digital marketing initiatives. \n   \n A confident outlook and clear focus on realising value \n   \n The key focus for 2025 is completing the full integration of the newly acquired businesses into the Group and delivering on the synergies and opportunities anticipated from the increased scale and capabilities, which are augmenting as we grow from our new enlarged position. \n   \n While 2025 sees incoming government legislation, opportunities exist for lettings and sales businesses to continue to grow in 2025, as more landlords are converted to the managed property model to benefit from the value we can provide. We also entered 2025 with strong demand for our Financial Services business, with more favourable mortgage rates and a robust sales pipeline. \n   \n The strength of the Group's franchise model and diversified revenue streams, along with its enhanced leadership team, provides an excellent platform from which to grow and the Board is confident in realising the full potential of the enlarged Group. \n   \n Gareth Samples \n Chief Executive Officer \n 7 April 2025 \n   \n \n \n   \n CFO statement \n   \n Summary \n   \n I am pleased to report on an evolutionary year for the Group which has translated into a transformed set of accounts with revenue, profit, cash flow and the balance sheet changing demonstrably in absolute terms compared to 2023 as a result of the two acquisitions. We have subsequently structured the business into three key divisions to improve transparency on performance and this will continued to be refined over time. \n   \n Our key measures of performance of lettings income and sales income have increased in both absolute terms and on a like for like basis, resulting from continuing rental inflation, a boost in sales activity from improved mortgage affordability and of course the acquisitions themselves. In addition to these measures, financial services commissions and licensing revenue have become much more important as a proportion of total revenue and have both delivered in line with expectations since the acquisitions. \n   \n In 2024, our primary focus was on integrating the acquired businesses and working towards realising the anticipated cost synergies, where we have made strong progress. \n   \n We have once again increased dividends to shareholders, reflecting our strong performance and cash generation, and demonstrating our commitment to a progressive dividend policy. \n   \n Looking ahead to 2025, we will continue maximising value from our acquisitions, completing the final stages of restructuring, and leveraging our expanded scale to unlock new revenue opportunities. \n   \n Acquisitions \n   \n During the year the Group completed two major acquisitions. \n   \n The first the acquisition of Belvoir Group PLC which was announced on 10 January 2024. The transaction was recommended by the boards of both companies on the basis of creating a leading property franchise business, benefiting from increased scale. Post acquisition, TPFG shareholders owned 51.75% and Belvoir shareholders 48.25% of the enlarged Group. Each Belvoir share was valued at approximately 277.4p, comprising an equity value of Belvoir's entire issued ordinary share capital of approximately £103.5m and TPFG's entire issued ordinary share capital of approximately £111.0m. In addition, there was £3.7m of cash paid bringing the total consideration to £107.2m. \n   \n The second was an acquisition of the entire issued share capital of GPEA Limited, trading as The Guild of Property Professionals (\"The Guild\") and Fine & Country, for a total consideration of approximately £20m, the consideration having been split with £15m payable on completion and a further £5m payable in cash 12 months after completion in May 2025. \n   \n Both acquisitions fit within the Group's strategy to acquire accretive businesses with complementary and recurring revenue streams which deliver network expansion and extend geographic reach. \n   \n Revenue \n   \n Group revenue for the financial year ended 31 December 2024 was £67.3m (2023: £27.2m), an increase of £40.1m over the prior year. This includes the addition of revenue from Belvoir of £31.3m, and GPEA of £7.2m. Total revenue on a like-for-like basis was £28.7m reflecting the continued organic growth of the original business. \n   \n Within our Franchising division, Management Service Fees (\"MSF\"), our key underlying revenue stream, increased 76% to £28.3m (2023: £16.1m), of which £10.4m has come through from the Belvoir business since acquisition. Lettings MSF continues to be dominant making up 67% of total MSF in 2024 with sales MSF at 33%. On a like-for-like basis MSF grew by 11% demonstrating continued growth within the original business. \n   \n Revenue within our Financial Services division rose significantly to £19.2m (2023: £1.5m) as a result of the addition of the Brook Financial Services business, being part of the Belvoir acquisition. This made Financial Services a much greater proportion of total revenue at 29% (2023: 5%). \n   \n The acquisition of GPEA in June 2024 added a new Licensing division to the Group which delivered £7.2m of revenue in the subsequent 7 months of trading. \n   \n Operating Profit \n   \n Headline operating profit increased by 64% to £15.2m (2023: £9.3m) with an operating margin of 23% (2023: 34%). Adjusted operating profit before exceptional items, amortisation of acquired intangibles, share-based payment charges and unwinding of discounting on acquisition deferred consideration increased by 101% to £23.1m (2023: £11.5m) with an adjusted operating margin of 34% (2023: 42%). Operating profit on a like-for-like basis was £11.0m. \n   \n Operating margins have decreased as a result of the higher proportion of revenue being derived from Financial Services. Adjusted Operating margin in Financial Services was 14%, in line with expectations, compared to Franchising of 56%. \n   \n Cost synergies anticipated as part of the acquisitions have been partly realised during the year with £0.4m of savings realised in 2024, with further savings to be achieved through both annualisation and further operational changes planned for H1 2025. An assessment of the share-based payment charges was made on 31 December 2024 resulting in £0.9m being charged to the profit and loss account (2023: £0.8m). Further details can be found in notes 4, 5 and 30 to the consolidated financial statements. \n   \n Adjusted EBITDA \n   \n Adjusted EBITDA for 2024 was £24.1m (2023: £12.1m), an increase of £12.0m (99%) over the prior year. \n   \n Profit before tax \n   \n Profit before tax increased to £14.3m (2023: £9.0m). Adjusted profit before tax increased by 100% from £11.2m to £22.3m having removed exceptional items of £2.7m (2023: £nil), amortisation of acquired intangibles of £4.3m (2023: £1.4m), share-based payment charges of £0.9m (2023: £0.8m) and unwinding of discounting on acquisition deferred consideration of £0.2m (2023: £nil). Adjusted profit before tax on a like-for-like basis was £13.0m. \n   \n Taxation \n   \n The effective rate of corporation tax for the year was 29% (2023: 18%). The total tax charge for 2024 was £4.2m (2023: £1.6m). The increase compared to 2023 is as a result of both disallowable exceptional costs from the acquisition, and a full financial year at the revised corporation tax rate of 25%. \n   \n Earnings per share \n   \n Under the terms of the acquisition of Belvoir, each Belvoir share was entitled to receive 0.806377 new TPFG shares. This resulted in the issuance of 30.1m new shares being the primary reason for the considerable change in share capital from 32,255,007 at December 2023 to 63,752,008 at December 2024. \n   \n Basic earnings per share (\"EPS\") for the year was 17.7p (2023: 23.0p), a decrease driven primarily by exceptional costs resulting from the acquisitions and based on the average number of shares in issue for the period of 54,477,151 (2023: 32,142,942). \n   \n Diluted EPS for the year was 17.6p (2023: 22.0p), a decrease of 19% based on the average number of shares in issue for the period plus an estimate for the dilutive effect of option grants vesting, being 57,897,032 (2023: 33,561,469). \n   \n Adjusted basic EPS for the year was 31.7p (2023: 29.7p), an increase of 7% and adjusted diluted EPS for the year was 31.4p (2023: 28.4p), an increase of 11%. \n   \n The profit attributable to owners increased by 36% to £10.1m (2023: £7.4m). \n   \n Cash flow \n   \n The Group is very cash generative. The net cash inflow from operating activities in 2024 was £14.7m (2023: £9.0m). Cash conversion against earnings was 145% in 2024 (2023: 122%). \n   \n The net cash outflow from investing activities was £15.8m (2023: £0.4m). Of the £15.8m, £14.3m related to the purchase of GPEA Limited net of cash acquired. \n   \n The Group borrowed £20.0m from Barclays to fund the acquisition of GPEA in May 2024. This was made up of a revolving credit facility (\"RCF\") of £6.0m and a term loan of £14.0m repayable over three years. The RCF was fully repaid during 2024, and £0.8m of the term loan was repaid, leaving the Group with £13.2m of bank debt. \n   \n Capital allocation \n   \n Our capital allocation strategy remains unchanged. Our first priority is continuing to make investments that support profitable organic growth within the business, whether this be new product initiatives or additional operational efficiencies (such as our AI programme). Our second priority is to consider the appropriate timing of repaying the bank debt taken last year to acquire GPEA, to minimise interest costs and maximise earnings per share. Our third priority is our commitment to return capital to shareholders through a progressive dividend policy. Finally, we will continue to consider accretive acquisition opportunities within both core and complementary areas. \n   \n Dividends \n   \n The Board remains committed to its progressive dividend policy whilst maintaining strong dividend cover as part of its overall capital allocation policy. It has considered the trade-off between debt repayment and returning shareholder value and concluded that with moderate leverage of 0.4x and acquisition debt anticipated to be fully repaid in 2026, a progressive dividend that reflects the increased performance and cash generation of the Group was appropriate. \n   \n As a result, the Board is pleased to announce a proposed final dividend of 12.0p (2023: 7.4p), which, with the interim dividend of 6.0p, brings the total dividend for 2024 to 18.0p (2023: 14.0p). It will be paid on 2 June 2025 to all shareholders on the register on 9 May 2025 conditional on shareholder approval at the AGM. Shares will be marked ex-dividend on 8 May 2025. The total amount payable is £7.7m (2023: £4.6m). On adjusted basic EPS, dividend cover is 1.8x (2023: 2.1x). \n   \n Liquidity \n   \n The Group had cash balances of £4.2m on 31 December 2024 (2023: £7.6m) and after deducting the term loan balance of £13.2m mentioned above, net debt was £9.1m (2023: net cash of £5.1m) resulting in moderate leverage of 0.4x. \n   \n Key performance indicators \n   \n The Group uses a number of key financial and non-financial performance indicators to measure performance, which are regularly reviewed by the Board to ensure that they remain relevant to the Group's operations. These have been discussed in detail in the annual report and accounts for the year.   \n   \n Financial Position \n   \n The Consolidated Statement of Financial Position remains strong with total assets of £204.0m (2023: £57.7m) with the increase being as a result of the two acquisitions within the year. \n   \n Total liabilities increased to £59.9m (2023: £16.9m), of which £13.2m relates to the acquisition debt, £22.1m to deferred tax liabilities and £4.9m to deferred consideration on the GPEA acquisition. \n   \n The Group finished the year with the total equity attributable to owners of £144.1m (2023: £40.8m), an increase of 253% over the prior year. It achieved a ROCE of 11% (2023: 21%) and a ROCI of 12% (2023: 28%), both of which have been impacted by having only part year earnings from the acquisitions but the full balance sheet impact. \n \n \n   \n Consolidated statement of comprehensive income \n for the year ended 31 December 2024 \n   \n \n \n \n \n \n \n \n Notes \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \n \n \n \n \n Revenue \n \n \n 7 \n \n \n 67,310 \n \n \n 27,278 \n \n \n \n \n Cost of sales \n \n \n \n \n \n (22,339) \n \n \n (5,400) \n \n \n \n \n Gross profit \n \n \n \n \n \n 44,971 \n \n \n 21,878 \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Administrative expenses \n \n \n 8 \n \n \n (26,139) \n \n \n (11,831) \n \n \n \n \n Exceptional administrative expenses \n \n \n 8 \n \n \n (2,720) \n \n \n - \n \n \n \n \n Share-based payments charge \n \n \n 9, 30 \n \n \n (875) \n \n \n (783) \n \n \n \n \n Total administrative expenses \n \n \n \n \n \n (29,734) \n \n \n (12,614) \n \n \n \n \n Operating profit \n \n \n 10 \n \n \n 15,237 \n \n \n 9,264 \n \n \n \n \n Finance income \n \n \n 11 \n \n \n 262 \n \n \n 20 \n \n \n \n \n Finance costs \n \n \n 11 \n \n \n (1,195) \n \n \n (357) \n \n \n \n \n Other gains and losses \n \n \n 19 \n \n \n - \n \n \n 87 \n \n \n \n \n Profit before tax expense \n \n \n \n \n \n 14,304 \n \n \n 9,014 \n \n \n \n \n Tax expense \n \n \n 12 \n \n \n (4,172) \n \n \n (1,644) \n \n \n \n \n Profit and total comprehensive income for the year \n \n \n \n \n \n 10,132 \n \n \n 7,370 \n \n \n \n \n   \n Profit and total comprehensive income for the year attributable to: \n \n \n \n \n \n \n \n \n \n \n \n \n \n Owners of the parent \n \n \n \n \n \n 10,192 \n \n \n 7,395 \n \n \n \n \n Non-controlling interest \n \n \n \n \n \n (60) \n \n \n (25) \n \n \n \n \n \n \n \n \n \n \n 10,132 \n \n \n 7,370 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Earnings per share attributable to owners of parent \n \n \n 13 \n \n \n 17.7p \n \n \n 23.0p \n \n \n \n \n Diluted Earnings per share attributable to owners of parent \n \n \n 13 \n \n \n 17.6p \n \n \n 22.0p \n \n \n \n \n \n   \n   \n   \n \n \n   \n Consolidated statement of financial position \n 31 December 2024 \n \n \n \n \n \n \n \n Notes \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \n \n \n \n \n Assets \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Intangible assets \n \n \n 15 \n \n \n 180,001 \n \n \n 43,757 \n \n \n \n \n Property, plant and equipment \n \n \n 16 \n \n \n 837 \n \n \n 181 \n \n \n \n \n Right-of-use assets \n \n \n 17 \n \n \n 3,353 \n \n \n 1,525 \n \n \n \n \n Prepaid assisted acquisitions support \n \n \n 18 \n \n \n 216 \n \n \n 230 \n \n \n \n \n Other receivables \n \n \n 20 \n \n \n 4,791 \n \n \n 210 \n \n \n \n \n   \n \n \n \n \n \n 189,198 \n \n \n 45,903 \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Trade and other receivables \n \n \n 20 \n \n \n 10,623 \n \n \n 4,134 \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n 4,163 \n \n \n 7,642 \n \n \n \n \n   \n \n \n \n \n \n 14,786 \n \n \n 11,776 \n \n \n \n \n Total assets \n \n \n \n \n \n 203,984 \n \n \n 57,679 \n \n \n \n \n Equity \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Shareholders' equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n Called up share capital \n \n \n 21 \n \n \n 638 \n \n \n 323 \n \n \n \n \n Share premium \n \n \n 22 \n \n \n 4,129 \n \n \n 4,129 \n \n \n \n \n Own share reserve \n \n \n 24 \n \n \n (3,832) \n \n \n (420) \n \n \n \n \n Merger reserve \n \n \n 23 \n \n \n 117,497 \n \n \n 14,345 \n \n \n \n \n Other reserves \n \n \n 24 \n \n \n 1,083 \n \n \n 1,673 \n \n \n \n \n Retained earnings \n \n \n \n \n \n 24,643 \n \n \n 20,765 \n \n \n \n \n \n \n \n \n \n \n 144,158 \n \n \n 40,815 \n \n \n \n \n Non-controlling interest \n \n \n \n \n \n (63) \n \n \n (3) \n \n \n \n \n Total equity attributable to owners \n \n \n \n \n \n 144,095 \n \n \n 40,812 \n \n \n \n \n Liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Borrowings \n \n \n 25 \n \n \n 10,111 \n \n \n -- \n \n \n \n \n Other payables \n \n \n 26 \n \n \n 1,428 \n \n \n -- \n \n \n \n \n Lease liabilities \n \n \n 17 \n \n \n 3,048 \n \n \n 1,647 \n \n \n \n \n Deferred tax \n \n \n 27 \n \n \n 22,058 \n \n \n 4,394 \n \n \n \n \n Provisions \n \n \n 28 \n \n \n 278 \n \n \n 181 \n \n \n \n \n \n \n \n \n \n \n 36,923 \n \n \n 6,222 \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Borrowings \n \n \n 25 \n \n \n 3,111 \n \n \n 2,500 \n \n \n \n \n Trade and other payables \n \n \n 26 \n \n \n 15,869 \n \n \n 6,319 \n \n \n \n \n Lease liabilities \n \n \n 17 \n \n \n 802 \n \n \n 395 \n \n \n \n \n Tax payable \n \n \n \n \n \n 3,184 \n \n \n 1,431 \n \n \n \n \n   \n \n \n \n \n \n 22,966 \n \n \n 10,645 \n \n \n \n \n Total liabilities \n \n \n \n \n \n 59,889 \n \n \n 16,867 \n \n \n \n \n Total equity and liabilities \n \n \n \n \n \n 203,984 \n \n \n 57,679 \n \n \n \n \n   \n The financial statements were approved and authorised for issue by the Board of Directors on 7 April 2025 and were signed on its behalf by: \n   \n Ben Dodds \n Chief Financial Officer \n \n Company statement of financial position \n 31 December 2024 (Company No: 08721920) \n   \n \n \n \n \n \n \n \n Notes \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \n \n \n \n \n Assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n Investments \n \n \n 19 \n \n \n 189,820 \n \n \n 60,966 \n \n \n \n \n Property, plant and equipment \n \n \n \n \n \n 76 \n \n \n -- \n \n \n \n \n Deferred tax asset \n \n \n 27 \n \n \n 484 \n \n \n 820 \n \n \n \n \n \n \n \n \n \n \n 190,380 \n \n \n 61,786 \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other receivables \n \n \n 20 \n \n \n 1,484 \n \n \n 1,476 \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n 135 \n \n \n 2,337 \n \n \n \n \n \n \n \n \n \n \n 1,619 \n \n \n 3,813 \n \n \n \n \n Total assets \n \n \n \n \n \n 191,999 \n \n \n 65,599 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n Shareholders' equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n Called up share capital \n \n \n 21 \n \n \n 638 \n \n \n 323 \n \n \n \n \n Share premium \n \n \n 22 \n \n \n 4,129 \n \n \n 4,129 \n \n \n \n \n Own share reserve \n \n \n 24 \n \n \n (3,832) \n \n \n (420) \n \n \n \n \n Merger reserve \n \n \n 23 \n \n \n 135,487 \n \n \n 32,335 \n \n \n \n \n Other reserves \n \n \n 24 \n \n \n 1,083 \n \n \n 1,673 \n \n \n \n \n Retained earnings \n \n \n \n \n \n 28,147 \n \n \n 23,371 \n \n \n \n \n Total equity \n \n \n \n \n \n 165,652 \n \n \n 61,411 \n \n \n \n \n   \n Liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Borrowings \n \n \n 25 \n \n \n 3,111 \n \n \n -- \n \n \n \n \n \n \n \n \n \n \n 3,111 \n \n \n -- \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Borrowings \n \n \n 25 \n \n \n 10,111 \n \n \n 2,500 \n \n \n \n \n Trade and other payables \n \n \n 26 \n \n \n 13,125 \n \n \n 1,688 \n \n \n \n \n \n \n \n \n \n \n 23,236 \n \n \n 4,188 \n \n \n \n \n Total liabilities \n \n \n \n \n \n 26,347 \n \n \n 4,188 \n \n \n \n \n Total equity and liabilities \n   \n \n \n \n \n \n 191,999 \n \n \n 65,599 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n As permitted by Section 408 of the Companies Act 2006, the income statement of the Parent Company is not presented as part of these financial statements. The Parent Company's profit for the financial year was £11.1m (2023: £8.1m). \n   \n The financial statements were approved and authorised for issue by the Board of Directors on 7 April 2025 and were signed on its behalf by: \n   \n   \n Ben Dodds \n Chief Financial Officer \n   \n \n \n \n   \n   \n   \n Consolidated statement of changes in equity \n for the year ended 31 December 2024 \n   \n \n \n \n \n   \n \n \n \n   \n   \n \n \n \n \n   \n   \n \n \n \n \n Attributable to owners \n \n \n \n \n   \n   \n \n \n \n \n   \n   \n \n \n \n \n \n   \n \n \n Called up share \n capital \n £'000 \n \n \n Retained \n earnings \n £'000 \n \n \n Share \n premium \n £'000 \n \n \n Own share \n  reserve \n £'000 \n \n \n Merger \n reserve \n £'000 \n \n \n Other \n reserves \n £'000 \n \n \n Total \n equity \n £'000 \n \n \n Non-controlling \n interest \n £'000 \n \n \n Total \n equity \n £'000 \n \n \n \n \n Balance at 1 January 2023 \n \n \n 320 \n \n \n 17,399 \n \n \n 4,129 \n \n \n (348) \n \n \n 14,345 \n \n \n 1,316 \n \n \n 37,161 \n \n \n 22 \n \n \n 37,183 \n \n \n \n \n Profit and total comprehensive income \n \n \n -- \n \n \n 7,395 \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n 7,395 \n \n \n (25) \n \n \n 7,370 \n \n \n \n \n Dividends \n \n \n -- \n \n \n (4,283) \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n (4,283) \n \n \n -- \n \n \n (4,283) \n \n \n \n \n Shares issued on share option exercises \n \n \n 3 \n \n \n 254 \n \n \n -- \n \n \n (72) \n \n \n -- \n \n \n (524) \n \n \n (339) \n \n \n -- \n \n \n (339) \n \n \n \n \n Share-based payments charge \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n 783 \n \n \n 783 \n \n \n -- \n \n \n 783 \n \n \n \n \n Deferred tax on share-based payments \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n 98 \n \n \n 98 \n \n \n -- \n \n \n 98 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Total transactions with owners \n \n \n 3 \n \n \n (4,029) \n \n \n -- \n \n \n (72) \n \n \n -- \n \n \n 357 \n \n \n (3,741) \n \n \n -- \n \n \n (3,741) \n \n \n \n \n Balance at 31 December 2023 \n \n \n 323 \n \n \n 20,765 \n \n \n 4,129 \n \n \n (420) \n \n \n 14,345 \n \n \n 1,673 \n \n \n 40,815 \n \n \n (3) \n \n \n 40,812 \n \n \n \n \n Profit and total comprehensive income \n \n \n -- \n \n \n 10,192 \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n 10,192 \n \n \n (60) \n \n \n 10,132 \n \n \n \n \n Dividends \n \n \n -- \n \n \n (9,012) \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n (9,012) \n \n \n -- \n \n \n (9,012) \n \n \n \n \n Share issued on acquisition of Belvoir Group \n \n \n 301 \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n 103,152 \n \n \n -- \n \n \n 103,453 \n \n \n -- \n \n \n 103,453 \n \n \n \n \n Shares issued on share option exercises \n \n \n 14 \n \n \n 2,698 \n \n \n -- \n \n \n (3,412) \n \n \n -- \n \n \n (1,544) \n \n \n (2,244) \n \n \n -- \n \n \n (2,244) \n \n \n \n \n Share-based payments charge \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n 875 \n \n \n 875 \n \n \n -- \n \n \n 875 \n \n \n \n \n Deferred tax on share-based payments \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n 79 \n \n \n 79 \n \n \n -- \n \n \n 79 \n \n \n \n \n Total transactions with owners \n \n \n 315 \n \n \n (6,314) \n \n \n -- \n \n \n (3,412) \n \n \n 103,152 \n \n \n (590) \n \n \n 93,151 \n \n \n -- \n \n \n 93,151 \n \n \n \n \n Balance at 31 December 2024 \n \n \n 638 \n \n \n 24,643 \n \n \n 4,129 \n \n \n (3,832) \n \n \n 117,497 \n \n \n 1,083 \n \n \n 144,158 \n \n \n (63) \n \n \n 144,095 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n Company statement of changes in equity \n for the year ended 31 December 2024 \n   \n \n \n \n \n \n \n \n Called up share \n capital \n £'000 \n \n \n Retained \n earnings \n £'000 \n \n \n Share \n premium \n £'000 \n \n \n Own share reserve \n £'000 \n \n \n Merger \n reserve \n £'000 \n \n \n Other \n reserves \n £'000 \n \n \n Total \n equity \n £'000 \n \n \n \n \n Balance at 1 January 2023 \n \n \n 320 \n \n \n 19,276 \n \n \n 4,129 \n \n \n (348) \n \n \n 32,335 \n \n \n 1,316 \n \n \n 57,028 \n \n \n \n \n Profit and total comprehensive income \n \n \n - \n \n \n 8,124 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 8,124 \n \n \n \n \n Dividends \n \n \n - \n \n \n (4,283) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (4,283) \n \n \n \n \n Shares issued on share option exercises \n \n \n 3 \n \n \n 254 \n \n \n -- \n \n \n (72) \n \n \n - \n \n \n (524) \n \n \n (339) \n \n \n \n \n Share-based payments charge \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 783 \n \n \n 783 \n \n \n \n \n Deferred tax on share-based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 98 \n \n \n 98 \n \n \n \n \n Total transactions with owners \n \n \n 3 \n \n \n (4,029) \n \n \n -- \n \n \n (72) \n \n \n -- \n \n \n 357 \n \n \n (3,741) \n \n \n \n \n Balance at 31 December 2023 \n \n \n 323 \n \n \n 23,371 \n \n \n 4,129 \n \n \n (420) \n \n \n 32,335 \n \n \n 1,673 \n \n \n 61,411 \n \n \n \n \n Profit and total comprehensive income \n \n \n -- \n \n \n 11,090 \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n 11,090 \n \n \n \n \n Dividends \n \n \n - \n \n \n (9,012) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (9,012) \n \n \n \n \n Share issued on acquisition of Belvoir Group \n \n \n 301 \n \n \n -- \n \n \n -- \n \n \n -- \n \n \n 103,152 \n \n \n -- \n \n \n 103,453 \n \n \n \n \n Shares issued on share option exercises \n \n \n 14 \n \n \n 2,698 \n \n \n -- \n \n \n (3,412) \n \n \n -- \n \n \n (1,544) \n \n \n (2,244) \n \n \n \n \n Share-based payments charge \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 875 \n \n \n 875 \n \n \n \n \n Deferred tax on share-based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 79 \n \n \n 79 \n \n \n \n \n Total transactions with owners \n \n \n 315 \n \n \n (6,314) \n \n \n -- \n \n \n (3,412) \n \n \n 103,152 \n \n \n (590) \n \n \n 93,151 \n \n \n \n \n Balance at 31 December 2024 \n \n \n 638 \n \n \n 28,147 \n \n \n 4,129 \n \n \n (3,832) \n \n \n 135,487 \n \n \n 1,083 \n \n \n 165,652 \n \n \n \n \n   \n \n \n   \n Consolidated statement of cash flows \n for the year ended 31 December 2024 \n   \n \n \n \n \n \n \n \n Notes \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash generated from operations \n \n \n A \n \n \n 18,597 \n \n \n 11,324 \n \n \n \n \n Interest paid \n \n \n \n \n \n (659) \n \n \n (255) \n \n \n \n \n Tax paid \n \n \n \n \n \n (3,257) \n \n \n (2,048) \n \n \n \n \n Net cash from operating activities \n \n \n \n \n \n 14,681 \n \n \n 9,021 \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Purchase of Belvoir Group net of cash acquired \n \n \n   \n \n \n (1,730) \n \n \n -- \n \n \n \n \n Purchase of GPEA net of cash acquired \n \n \n   \n \n \n (14,255) \n \n \n -- \n \n \n \n \n Disposal of investment in shares \n \n \n \n \n \n 143 \n \n \n 81 \n \n \n \n \n The Mortgage Genie deferred consideration paid \n \n \n \n \n \n -- \n \n \n (138) \n \n \n \n \n Purchase of intangible assets - Customer lists \n \n \n \n \n \n -- \n \n \n (201) \n \n \n \n \n Disposal of intangible assets \n \n \n \n \n \n 125 \n \n \n 53 \n \n \n \n \n Purchase of tangible assets \n \n \n \n \n \n (192) \n \n \n (114) \n \n \n \n \n Payment of assisted acquisitions support \n \n \n \n \n \n (114) \n \n \n (115) \n \n \n \n \n Interest received \n \n \n \n \n \n 263 \n \n \n 20 \n \n \n \n \n Net cash used in investing activities \n \n \n \n \n \n (15,760) \n \n \n (414) \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Issue of ordinary shares \n \n \n \n \n \n 14 \n \n \n 3 \n \n \n \n \n Equity dividends paid \n \n \n \n \n \n (9,012) \n \n \n (4,283) \n \n \n \n \n Purchase of shares by Employee Benefit Trust \n \n \n \n \n \n (3,412) \n \n \n (72) \n \n \n \n \n Net settlement of share options \n \n \n \n \n \n -- \n \n \n (270) \n \n \n \n \n Bank loans and RCF drawn \n \n \n \n \n \n 20,000 \n \n \n -- \n \n \n \n \n Bank loans and RCF repaid \n \n \n \n \n \n (9,278) \n \n \n (2,500) \n \n \n \n \n Principal paid on lease liabilities \n \n \n \n \n \n (580) \n \n \n (431) \n \n \n \n \n Interest paid on lease liabilities \n \n \n \n \n \n (132) \n \n \n (96) \n \n \n \n \n Net cash used in financing activities \n \n \n \n \n \n (2,400) \n \n \n (7,649) \n \n \n \n \n (Decrease) / increase in cash and cash equivalents \n \n \n \n \n \n (3,479) \n \n \n 958 \n \n \n \n \n Cash and cash equivalents at beginning of year \n \n \n \n \n \n 7,642 \n \n \n 6,684 \n \n \n \n \n Cash and cash equivalents at end of year \n \n \n \n \n \n 4,163 \n \n \n 7,642 \n \n \n \n \n   \n   \n \n   \n   \n Notes to the consolidated statement of cash flows \n for the year ended 31 December 2024 \n   \n A. Reconciliation of profit before income tax to cash generated from operations \n   \n \n \n \n \n \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n \n \n \n \n \n Profit before income tax \n \n \n 14,304 \n \n \n 9,014 \n \n \n \n \n Depreciation of property, plant and equipment \n \n \n 221 \n \n \n 95 \n \n \n \n \n Amortisation of intangibles \n \n \n 4,390 \n \n \n 1,531 \n \n \n \n \n Amortisation of prepaid assisted acquisitions support \n \n \n 126 \n \n \n 183 \n \n \n \n \n Amortisation of right-of-use assets \n \n \n 531 \n \n \n 234 \n \n \n \n \n Profit on disposal of assets \n \n \n (46) \n \n \n (89) \n \n \n \n \n Share-based payments charge \n \n \n 875 \n \n \n 783 \n \n \n \n \n Gain on revaluation of listed investment \n \n \n -- \n \n \n (87) \n \n \n \n \n Finance costs \n \n \n 1,195 \n \n \n 357 \n \n \n \n \n Finance income \n \n \n (263) \n \n \n (20) \n \n \n \n \n Operating cash flow before changes in working capital \n \n \n 21,333 \n \n \n 12,001 \n \n \n \n \n Increase in trade and other receivables \n \n \n (1,775) \n \n \n (319) \n \n \n \n \n Decrease in trade and other payables \n \n \n (961) \n \n \n (358) \n \n \n \n \n Cash generated from operations \n \n \n 18,597 \n \n \n 11,324 \n \n \n \n \n   \n   \n   \n \n   \n   \n   \n Company statement of cash flows \n for the year ended 31 December 2024 \n   \n \n \n \n \n \n \n \n Notes \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash generated from operations \n \n \n B \n \n \n 5,815 \n \n \n (1,337) \n \n \n \n \n Interest paid \n \n \n \n \n \n (659) \n \n \n (256) \n \n \n \n \n Net cash generated from / (used in) operating activities \n \n \n \n \n \n 5,156 \n \n \n (1,593) \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Purchase of Belvoir Group \n \n \n \n \n \n (3,737) \n \n \n -- \n \n \n \n \n Purchase of GPEA \n \n \n \n \n \n (14,398) \n \n \n -- \n \n \n \n \n Acquisition-related costs \n \n \n \n \n \n (2,303) \n \n \n -- \n \n \n \n \n Purchase of tangible assets \n \n \n \n \n \n (82) \n \n \n -- \n \n \n \n \n The Mortgage Genie - deferred consideration \n \n \n \n \n \n -- \n \n \n (138) \n \n \n \n \n Interest received \n \n \n \n \n \n -- \n \n \n -- \n \n \n \n \n Equity dividends received \n \n \n \n \n \n 14,850 \n \n \n 9,651 \n \n \n \n \n Net cash (used in) / generated from investing activities \n \n \n \n \n \n (5,670) \n \n \n 9,513 \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Issue of ordinary shares \n \n \n \n \n \n 14 \n \n \n 3 \n \n \n \n \n Equity dividends paid \n \n \n \n \n \n (9,012) \n \n \n (4,283) \n \n \n \n \n Purchase of shares by Employee Benefit Trust \n \n \n \n \n \n (3,412) \n \n \n (72) \n \n \n \n \n Net settlement of share options \n \n \n \n \n \n -- \n \n \n (270) \n \n \n \n \n Bank loan and RCF drawn \n \n \n \n \n \n 20,000 \n \n \n -- \n \n \n \n \n Bank loan and RCF repaid \n \n \n \n \n \n (9,278) \n \n \n (2,500) \n \n \n \n \n Net cash used in financing activities \n \n \n \n \n \n (1,688) \n \n \n (7,122) \n \n \n \n \n (Decrease) / increase in cash and cash equivalents \n \n \n \n \n \n (2,202) \n \n \n 798 \n \n \n \n \n Cash and cash equivalents at beginning of year \n \n \n \n \n \n 2,337 \n \n \n 1,539 \n \n \n \n \n Cash and cash equivalents at end of year \n \n \n \n \n \n 135 \n \n \n 2,337 \n \n \n \n \n \n   \n \n \n   \n Notes to the company statement of cash flows \n for the year ended 31 December 2024 \n   \n B. Reconciliation of profit before income tax to cash generated from operations \n   \n \n \n \n \n \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \n \n \n \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit before income tax \n \n \n 10,234 \n \n \n 7,555 \n \n \n \n \n \n \n \n Depreciation of property, plant and equipment \n \n \n 5 \n \n \n -- \n \n \n \n \n \n \n \n Share-based payments charge \n \n \n 584 \n \n \n 613 \n \n \n \n \n \n \n \n Gain on revaluation of listed investment \n \n \n -- \n \n \n (22) \n \n \n \n \n \n \n \n Finance costs \n \n \n 1,062 \n \n \n 261 \n \n \n \n \n \n \n \n Equity dividend received \n \n \n (14,850) \n \n \n (9,651) \n \n \n \n \n \n \n \n Operating cash flow before changes in working capital \n \n \n (2,965) \n \n \n (1,244) \n \n \n \n \n \n \n \n Increase in trade and other receivables \n \n \n 329 \n \n \n (94) \n \n \n \n \n \n \n \n Increase in trade and other payables \n \n \n 8,451 \n \n \n 1 \n \n \n \n \n \n \n \n Cash generated from / (used in) operations \n \n \n 5,815 \n \n \n (1,337) \n \n \n \n \n \n \n \n   \n   \n \n \n   \n Notes to the consolidated and company financial statements \n for the year ended 31 December 2024 \n   \n 1. General information \n   \n The principal activity of The Property Franchise Group PLC and its subsidiaries is that of a UK residential property franchise, licensing and financial services business. The Group operates in the UK. The Company is a public limited company incorporated and domiciled in the UK and listed on AIM. The address of its head office and registered office is 2 St Stephen's Court, St Stephen's Road, Bournemouth, Dorset, BH2 6LA, UK. \n   \n 2. Basis of preparation \n   \n These consolidated financial statements have been prepared in accordance with UK adopted international accounting standards and, as regards the Parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006. The consolidated financial statements have been prepared under the historical cost convention modified to include the revaluation of certain investments at fair value. \n   \n The preparation of financial statements in accordance with UK adopted international accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 5. \n   \n The presentational currency of the financial statements is in British pounds and amounts are rounded to the nearest thousand pounds. \n   \n Going concern \n The Group has produced detailed budgets, projections and cash flow forecasts. These have been stress tested to understand the impacts of reductions in revenue and costs. The Directors have concluded after reviewing these budgets, projections and forecasts, making appropriate enquiries of the business, that there is a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future and will meet the banking covenants required by the new facility drawn down in May 2024. Accordingly, they have adopted the going concern basis in preparing the financial statements. \n   \n Changes in accounting policies \n a) New standards, amendments and interpretations effective from 1 January 2024 \n We do not consider there to be any relevant new standards, amendments to standards or interpretations, that are effective for the financial year beginning on 1 January 2024, which would have had a material impact on the financial statements. \n \n b) New standards, amendments and interpretations not yet effective \n We do not consider there to be any relevant new standards, amendments to standards or interpretations that have been issued, but are not effective for the financial year beginning on 1 January 2024, which would have had a material impact on the financial statements. \n   \n The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.                \n   \n 3. Basis of consolidation \n   \n The Group financial statements include those of the Parent Company and its subsidiaries, drawn up to 31 December 2024. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. \n   \n The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred. \n   \n Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform to the Group's accounting policies. \n   \n 4. Significant accounting policies \n   \n Revenue recognition \n Performance obligations and the timing of revenue recognition \n Revenue represents income, net of VAT, from the sale of franchise agreements, resale fees, Management Service Fees (\"MSF\") levied to franchisees monthly based on their turnover, lettings and residential sales income from a small number of owned offices, licence fees levied to Fine & Country licensees monthly, membership fees levied to The Guild members monthly, financial services commissions in respect of mortgages and income protection products, and other income being the provision of ad hoc services and ongoing support to franchisees, licensees and members. \n   \n Franchising division \n   \n Franchises excluding EweMove: \n Fees from the sale of franchise agreements are not refundable. These fees are for the use of the brand along with initial training and support and promotion during the opening phase of the new office. As such, the Group has some initial obligations that extend beyond the receipt of funds and signing of the franchise agreement so an element of the fee is deferred and released as the obligations are discharged, usually between 1 to 4 months after receipt of funds, which is the typical period of on-boarding for new franchisees. \n   \n Resale fees are recognised in the month that a contract for the resale of a franchise is signed. Upon signing of the contract all obligations have been completed. \n   \n Management Service Fees are recognised on a monthly basis and other income is recognised when the services and support is provided to the franchisee. There are no performance obligations associated with levying the Management Service Fees beyond providing access to the systems, brand and marketing support. For ad hoc services and support, all performance obligations have been fulfilled at the time of revenue recognition. \n   \n EweMove: \n Fees from the sale of franchise agreements for the EweMove brand are not refundable. Some new franchisees pay a higher fee to include the first 12 months' licence fee; in this scenario, the licence fee element of the initial fee is deferred and released over the first 12 months of trading of the franchise where no monthly licence fees are payable. The franchise fee is for the use of the brand along with initial support and promotion during the opening phase of the new franchise. As such, the Group has some initial obligations that extend beyond the receipt of funds and signing of the franchise agreement so an element of the fee is deferred and released as the obligations are discharged, usually between 1 to 4 months after receipt of funds, which is the typical period of on-boarding for new franchisees. \n   \n Management Service Fees consist of monthly licence fees and completion fees. Licence fees are recognised on a monthly basis, completion fees are recognised when sales or lettings transactions complete and other income is recognised when the services and support are provided to the franchisee. There are no additional performance obligations associated with levying the licence fee and completion fees beyond providing access to the systems, brand and marketing support. For ad hoc services and support, all performance obligations have been fulfilled at the time of revenue recognition. \n   \n Owned offices: \n Revenue from the sale of residential property is recognised, net of vat, at the point the Group has performed its performance obligation to see the transaction through to the exchange of contracts between a buyer and a vendor. \n   \n Revenue from lettings represents commission earned from operating as a lettings agent, net of vat. Where the performance obligation relates to the letting of a property, the revenue is recognised at the point the property has been let. Where the performance obligation relates to the management of a lettings property, revenue is recognised over the period the property is managed. \n   \n Financial services commissions: \n Financial services commissions received are recognised upon receipt, being a point in time when the Group has met its obligations in delivering a customer to the mortgage and / or insurance partners. A provision is made for the best estimate of future clawbacks resulting from insurance policies being subsequently cancelled. There is no vat applicable to financial services commissions. \n   \n Licensing division: \n Licence fees and membership fees are recognised on a monthly basis and other income is recognised when the services and support is provided to the licensee / member. There are no performance obligations associated with levying the licence and membership fees. For ad hoc services and support, all performance obligations have been fulfilled at the time of revenue recognition. \n   \n Rental income: \n Rental income represents rent received from short-term licensing arrangements entered into to make use of a small amount of vacant office space. The Group's obligation is to provide office accommodation through the period of the licence. Revenue is recognised over the period of the licence. \n                                                                           \n Operating profit \n Profit from operations is stated before finance income, finance costs and tax expense. \n   \n Business combinations \n On the acquisition of a business, fair values are attributed to the identifiable assets and liabilities and contingent liabilities unless the fair value cannot be measured reliably in which case the value is subsumed into goodwill. Where the fair values of acquired contingent liabilities cannot be measured reliably, the assumed contingent liability is not recognised but is disclosed in the same manner as other contingent liabilities. \n   \n Goodwill is the difference between the fair value of the consideration and the fair value of identifiable assets acquired. Goodwill arising on acquisitions is capitalised and subject to an impairment review, both annually and when there is an indication that the carrying value may not be recoverable. \n   \n Intangible assets \n Intangible assets with a finite life are carried at cost less amortisation and any impairment losses. Intangible assets represent items which meet the recognition criteria of IAS 38, in that it is probable that future economic benefits attributable to the assets will flow to the entity and the cost can be measured reliably. \n   \n In accordance with IFRS 3 Business Combinations, an intangible asset acquired in a business combination is deemed to have a cost to the Group of its fair value at the acquisition date. The fair value of the intangible asset reflects market expectations about the probability that the future economic benefits embodied in the asset will flow to the Group. \n   \n Amortisation charges are included in administrative expenses in the Statement of Comprehensive Income. Amortisation begins when the intangible asset is first available for use and is provided at rates calculated to write off the cost of each intangible asset over its expected useful life, on a straight-line basis, as follows: \n \n \n \n \n Brands - CJ Hole, Parkers, Ellis & Co \n \n \n Indefinite life \n \n \n \n \n Brands - EweMove \n \n \n 21 years \n \n \n \n \n Brands - Hunters, Country Properties, Mullucks, Belvoir, Northwood, Newton Fallowell, Nicholas Humphreys, Lovelle, Mr & Mrs Clarke, The Guild of Property Professionals and Fine & Country \n \n \n 20 years \n \n \n \n \n Customer lists - lettings books \n \n \n 12 years \n \n \n \n \n Customer lists - franchise development grants \n \n \n 15 years \n \n \n \n \n License and member agreements - The Guild of Property Professionals and Fine & Country \n \n \n 21 years \n \n \n \n \n Master franchise agreements - Whitegates, CJ Hole, Parkers, Ellis & Co \n \n \n 25 years \n \n \n \n \n Master franchise agreements - Hunters,Country Properties, Mullucks, Belvoir, Northwood, Newton Fallowell, Nicholas Humphreys, Lovelle, Mr & Mrs Clarke \n \n \n 21 years \n \n \n \n \n Master franchise agreements - EweMove \n \n \n 15 years \n \n \n \n \n Technology - Ewereka \n \n \n 5 years \n \n \n \n \n Technology - websites, CRM system and software \n \n \n 3 years \n \n \n \n \n   \n Acquired trade names are identified as separate intangible assets where they can be reliably measured by valuation of future cash flows. The trade names CJ Hole, Parkers and Ellis & Co are assessed as having indefinite lives due to their long trading histories. \n   \n Acquired customer lists are identified as a separate intangible asset as they are separable and can be reliably measured by valuation of future cash flows. This valuation also assesses the life of the particular relationship. The life of the relationship is assessed annually. \n   \n Customer lists acquired as part of the Hunters and Belvoir acquisition relate to lettings books and are being written off over an expected useful life of 12 years. \n   \n Acquired master franchise agreements, licence agreements and member agreements (collectively referred to as \"Customer relationships\") are identified as a separate intangible asset as they are separable and can be reliably measured by valuation of future cash flows. The life of the relationship is assessed annually. The agreements are being written off over an expected useful life of 15-25 years as historical analyses shows that, on average, 4%-10% of franchises/licensees/members will change ownership per annum. \n   \n Subsequent to initial recognition, intangible assets are stated at deemed cost less accumulated amortisation and impairment charges, with the exception of indefinite life intangibles. \n   \n Impairment of non-financial assets \n In respect of goodwill and intangible assets that have indefinite useful lives, management is required to assess whether the recoverable amount of each exceeds their respective carrying values at the end of each accounting period. \n   \n In respect of intangible assets with definite lives, management is required to assess whether the recoverable amount exceeds the carrying value where an indicator of impairment exists at the end of each accounting period. \n   \n The recoverable amount is the higher of fair value less costs to sell and value in use. \n   \n Impairment losses represent the amount by which the carrying value exceeds the recoverable amount; they are recognised in the income statement. Impairment losses recognised in respect of cash generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash generating unit and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis. Where an indicator of impairment exists against a definite life asset and a subsequent valuation determines there to be impairment, the intangible asset to which it relates is impaired by the amount determined. \n   \n An impairment loss in respect of goodwill is not reversed should the valuation subsequently recover. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. \n   \n An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. \n   \n The master franchise agreement is assessed separately for impairment as an independent asset that generates cash inflows that are largely independent of those from other assets. \n   \n Investment in subsidiaries \n Investments in subsidiaries are stated in the Parent Company's balance sheet at cost less any provisions for impairments. \n   \n Equity investments \n Investments in the Group balance sheet represent listed investments which are measured at market value and unlisted investments which are measured at cost. Listed investments are revalued at fair value through the profit and loss account based on the quoted share price. \n   \n Property, plant and equipment \n Items of property, plant and equipment are stated at cost of acquisition less accumulated depreciation and impairment losses. Depreciation is charged so as to write off the cost of assets over their estimated useful lives on the following bases: \n \n \n \n \n Fixtures, fittings and office equipment \n \n \n 15% - 25% reducing balance or 10% - 33% straight line \n \n \n \n \n Computer equipment \n \n \n over 3 years \n \n \n \n \n Leasehold buildings and short leasehold improvements \n \n \n over the lease term \n \n \n \n \n   \n Right-of-use assets \n Right of use assets relate to operating leases that have been brought onto the balance sheet under IFRS 16. They are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for: \n • lease payments made at or before commencement of the lease; \n • initial direct costs incurred; and \n • the amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased asset \n   \n Subsequent to initial measurement, right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term. \n   \n Lease liabilities \n Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the Group's incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate. \n   \n Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. \n   \n Prepaid assisted acquisitions support \n Prepaid assisted acquisitions support represents amounts payable to franchisees in relation to their acquisition of qualifying managed property portfolios and amounts payable to brokers for assisting with the acquisition of those portfolios. The payments are recognised as an asset and amortised to the profit and loss account over 5 years. The amounts payable to franchisees are amortised as a reduction in revenue, whereas amounts payable to brokers are amortised through cost of sales. \n   \n Income taxes \n Income tax currently payable is calculated using the tax rates in force or substantively enacted at the reporting date. Taxable profit differs from accounting profit either because some income and expenses are never taxable or deductible, or because the time pattern that they are taxable or deductible differs between tax law and their accounting treatment. \n   \n The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except if it arises from transactions or events that are recognised in other comprehensive income or directly in equity. \n   \n Deferred tax \n Deferred income taxes are calculated using the liability method on temporary differences, at the tax rate that is substantively enacted at the balance sheet date. Deferred tax is generally provided on the difference between the carrying amount of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets. \n   \n Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date. Changes in deferred tax assets or liabilities are recognised as a component of the tax expense in the income statement. For share-based payments the deferred tax credit is recognised in the income statement to the extent that it offsets the share-based payments charge, with any remaining element after offset being shown in the Statement of Changes in Equity. \n   \n Financial assets \n The Group and Company only have financial assets comprising trade and other receivables and cash and cash equivalents in the Consolidated Statement of Financial Position. \n   \n These assets arise principally from the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. \n   \n Cash and cash equivalents \n Cash and cash equivalents are defined as cash balances in hand and in the bank (including short-term cash deposits). \n   \n Loans to franchisees \n Impairment provisions against loans to franchisees are recognised based on an expected credit loss model. The methodology used to determine the amount of provision is based on whether there has been a significant increase in credit risk since initial recognition of these financial assets and is calculated by considering the cash shortfalls that would be incurred and probability of these cash shortfalls using the Group's model. Where a significant increase in credit risk is identified, lifetime expected credit losses are recognised; alternatively, if there has not been a significant increase in credit risk, a twelve-month expected credit loss is recognised. Such provisions are recorded in a separate allowance account with the loss being recognised within operating expenses in the statement of comprehensive income. On confirmation that the franchisee loan will not be collectable, the gross carrying value of the asset is written off against the associated provision. \n   \n UIC debtor \n The Group recognises amounts withheld by Mortgage Advice Bureau from weekly commission payments in respect of unearned indemnity commission (\"UIC\") as a financial asset. This financial asset has no credit terms and management assesses that the credit risk and probability of default are low. As such no provision for impairment is made. \n   \n On a weekly basis the estimated clawback of commission recoverable from our advisers arising on the cancellation of life assurance policies within four years of inception is accounted for within other debtors. An assessment is made on the recoverability of these amounts and the Board has determined the expected credit loss within twelve months to be insignificant. \n   \n Impairment of financial assets \n Impairment provisions for current and non-current trade receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process, the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within administrative expenses in the Consolidated Statement of Comprehensive Income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision. \n   \n Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, 12 month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised. \n   \n Financial liabilities \n Financial liabilities are comprised of trade and other payables, borrowings and other short-term monetary liabilities, which are recognised at amortised cost. \n   \n Trade payables, other payables and other short-term monetary liabilities are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. \n   \n Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. \n   \n Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates. \n   \n UIC refund liability \n As there is a potential for clawback on financial services commissions, revenue is recognised only to the extent that it is highly probable that it will not reverse in future periods. The unearned indemnity commission (\"UIC\") refund liability is recognised for indemnity commission if the highly probable test for revenue recognition has not been met. A refund liability is made against new written policies on a weekly basis to reflect the estimated clawback by Mortgage Advice Bureau (Holdings) PLC. These clawbacks arise on the cancellation of life assurance policies within four years following inception. \n   \n Share-based payments \n The Group and Company issue equity-settled share-based payments to employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is amortised through the Consolidated Statement of Comprehensive Income over the vesting period of the options, together with a corresponding increase in equity, based upon the Group and Company's estimate of the shares that will eventually vest. \n   \n Fair value is measured using the Black-Scholes option pricing model taking into account the following inputs: \n ·  the exercise price of the option; \n ·  the life of the option; \n ·  the market price on the date of the grant of the option; \n ·  the expected volatility of the share price; \n ·  the dividends expected on the shares; and \n ·  the risk free interest rate for the life of the option. \n   \n The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. \n   \n At the end of each reporting period, the Group and Company revise its estimates of the number of options that are expected to vest based on the non-market conditions and recognise the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity. \n   \n 5. Critical accounting estimates and judgements and key sources of estimation uncertainty \n   \n The Company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. \n   \n Intangible assets recognised on acquisition and their valuation \n When valuing the intangibles acquired in a business combination, management estimate the expected future cash flows from the asset and choose a suitable discount rate in order to calculate the present value of those cash flows. Separable intangibles valued on acquisitions made in the year were £77.8m (2023: £nil) as detailed further in note 15 and note 32. \n   \n Impairment of intangible assets \n The Group is required to test, where indicators of impairment exist or there are intangible assets with indefinite lives, whether intangible assets have suffered any impairment. The recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the choice of a discount rate in order to calculate the present value of the cash flows. Key assumptions for the value in use calculation are described in note 15. \n   \n Recoverability of loans to franchisees \n The recoverability of loans to franchisees is assessed by management by assessing the credit risk of each loan. A Board approved model is used to determine if there has been a significant increase in credit risk by comparing the carrying value of the loan to the underlying valuation of the franchisee using a revenue multiple and an assessment of current trading performance. The multiple is determined by historical data. \n   \n UIC refund liability \n The refund liability relates to the estimated value of repaying commission received upfront on life assurance policies that may lapse in a period of up to four years following inception. The potential liability for unearned indemnity commission is assessed by management based on an estimation of the level of policy cancellation and the associated clawback of commission. The estimate is based on historical trends of cancellation in different scenarios and the liability is calculated as the sum of the range of probabilities of clawback in the different scenarios. \n   \n Share-based payment charge (\"SBPC\") \n   \n The aggregate fair value expense of each grant is determined through using the Black Scholes model and an estimate for the attainment of the performance conditions, where they exist. All the options granted have a non-market-based performance condition, earnings per share, and a market-based performance condition, total shareholder return. \n   \n In order to estimate the likely achievement of the performance conditions, management has used the actual results for FY23, the budget for FY24 and projections of earnings for future years as well as taking into account available market data, performance trends and listed company valuation metrics. \n   \n The share-based payment charge in relation to the performance-based options granted in 2022 assumes that performance will generate vesting of 100% of the maximum number of shares available under those options. The charge is £0.4m. If the adjusted EPS performance condition was 0% achieved, the cumulative charge would decrease by £0.4m. \n   \n The share-based payment charge in relation to the performance-based options granted in 2023 assumes that performance will generate vesting of 75% of the maximum number of shares available under those options. The charge is £0.2m. If the adjusted EPS performance condition was 100% achieved, the cumulative charge would increase by £0.04m and if the adjusted EPS performance condition was not achieved at all, so 0%, the cumulative charge would decrease by £0.1m. \n   \n The share-based payment charge in relation to the performance-based options granted in 2024 assumes that performance will generate vesting of 0% of the maximum number of shares available under those options. The charge is £0.1m. If the adjusted EPS performance condition was 100% achieved, the cumulative charge would increase by £0.3m. \n   \n 6. Segmental reporting \n   \n The Directors consider there to be 3 operating segments in 2024 (2023 : 2), being Property Franchising, Financial Services and Licensing (2023: Property Franchising and Financial Services). \n   \n For the year ended 31 December 2024: \n \n \n \n \n \n \n \n \n \n \n \n \n \n Property \n Franchising \n \n \n \n \n \n   \n Financial Services \n \n \n \n \n \n Licensing \n \n \n \n \n \n   \n Total \n \n \n \n \n \n \n \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n £'000 \n \n \n \n \n \n £'000 \n \n \n \n \n \n £'000 \n \n \n \n \n Revenue \n \n \n \n \n \n \n \n \n 40,899 \n \n \n \n \n \n 19,202 \n \n \n \n \n \n   \n 7,209 \n \n \n \n \n \n 67,310 \n \n \n \n \n Segment profit before tax \n \n \n \n \n \n \n \n \n 22,380 \n \n \n \n \n \n 3,269 \n \n \n \n \n \n 1,784 \n \n \n \n \n \n 27,433 \n \n \n \n \n PLC central overheads \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (4,373) \n \n \n \n \n Exceptional administrative expenses \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (2,720) \n \n \n \n \n Acquired intangibles amortisation \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (4,228) \n \n \n \n \n Share based payments charge \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (875) \n \n \n \n \n Finance costs and income \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (932) \n \n \n \n \n Other gains and losses \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n Profit before tax \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 14,305 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n                                                 \n   \n For the year ended 31 December 2023: \n \n \n \n \n \n \n \n \n \n \n \n \n \n Property \n Franchising \n \n \n \n \n \n   \n Financial Services \n \n \n \n \n \n Licensing \n \n \n \n \n \n   \n Total \n \n \n \n \n \n \n \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n £'000 \n \n \n \n \n \n £'000 \n \n \n \n \n \n £'000 \n \n \n \n \n Revenue \n \n \n \n \n \n \n \n \n 25,776 \n \n \n \n \n \n 1,502 \n \n \n \n \n \n   \n - \n \n \n \n \n \n 27,278 \n \n \n \n \n Segment profit before tax \n \n \n \n \n \n \n \n \n 13,323 \n \n \n \n \n \n 352 \n \n \n \n \n \n - \n \n \n \n \n \n 13,675 \n \n \n \n \n PLC central overheads \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (2,185) \n \n \n \n \n Exceptional administrative expenses \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n Amortisation on acquired intangibles \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (1,443) \n \n \n \n \n Share based payments charge \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (783) \n \n \n \n \n Finance costs and income \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (337) \n \n \n \n \n Other gains and losses \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 87 \n \n \n \n \n Profit before tax \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 9,014 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n   \n There was no inter-segment revenue in any period. \n   \n   \n 7. Revenue \n \n \n \n \n \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \n \n \n \n \n Property Franchising segment: \n   \n Management Service Fees \n \n \n 28,321 \n \n \n 16,099 \n \n \n \n \n Owned offices - lettings and sales fees \n \n \n 6,987 \n \n \n 4,902 \n \n \n \n \n Franchise sales, support and other services \n \n \n 5,591 \n \n \n 4,775 \n \n \n \n \n \n \n \n 40,899 \n \n \n 25,776 \n \n \n \n \n Financial Services segment: \n \n \n \n \n \n \n \n \n \n \n Financial Services commissions \n \n \n 19,202 \n \n \n 1,502 \n \n \n \n \n Licensing segment: \n \n \n \n \n \n \n \n \n \n \n Licence and membership fees \n \n \n 5,240 \n \n \n - \n \n \n \n \n Support and other services \n \n \n 1,969 \n \n \n - \n \n \n \n \n \n \n \n 7,209 \n \n \n - \n \n \n \n \n \n \n \n 67,310 \n \n \n 27,278 \n \n \n \n \n   \n All revenue is earned in the UK and no customer represents greater than 10% of total revenue in either of the years reported. \n   \n See note 20 for details of accrued income and note 26 for details of deferred income. \n   \n See note 18 for the value of prepaid assisted acquisitions support amortised as a deduction from Management Service Fees. \n \n 8. Administrative expenses \n Administrative expenses relate to those expenses that are not directly attributable to any specific sales activity. \n   \n Administrative expenses for the year were as follows: \n \n \n \n \n \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \n \n \n \n \n Employee costs \n \n \n 13,940 \n \n \n 6,526 \n \n \n \n \n Marketing and digital costs \n \n \n 2,151 \n \n \n 1,032 \n \n \n \n \n Depreciation and amortisation \n \n \n 5,140 \n \n \n 1,860 \n \n \n \n \n Other administrative costs \n \n \...

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