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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Property Franchise Group Plc (the) | LSE:TPFG | London | Ordinary Share | GB00BH0WFH67 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -3.00 | -0.87% | 342.00 | 335.00 | 345.00 | 345.00 | 340.00 | 345.00 | 94,568 | 16:35:01 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Real Estate Agents & Mgrs | 27.16M | 7.23M | 0.2256 | 15.07 | 108.94M |
From Apr 2019 to Apr 2024
TIDMTPFG
RNS Number : 6872Q
Property Franchise Group PLC (The)
14 September 2017
THE PROPERTY FRANCHISE GROUP PLC
(the "Company" or the "Group")
Interim Results for the six months ended 30 June 2017
Group revenue up 28%
Interim dividend increased by 5%
The Property Franchise Group, one of the UK's largest property franchises, today announces its interim results for the period ended 30 June 2017.
Financial Highlights
-- Revenue increased by 28% to GBP4.7m (H1 2016: GBP3.7m) -- Management Service Fees (royalties) increased by 19% to GBP3.8m (H1 2016: GBP3.2m) -- Operating margin* of 31% (H1 2016: 42%) -- Profit before tax** increased by 36% to GBP2.1m (H1 2016: GBP1.6m)
-- Strong balance sheet with a cash position of GBP2.3m (H1 2016: GBP4.5m) and debt of GBP3m (H1 2016: GBP1.8m)
-- Basic earnings per share** increased by 30% to 7.4p per share (H1 2016: 5.7p) -- Interim dividend increased by 5% to 2.1p per share (H1 2016: 2.0p)
Operational Highlights
-- 383 trading offices up 94 from H1 2016 -- Tenanted managed properties increased to 50,000 (H1 2016: 46,000) -- 20 new franchisees recruited (H1 2016: 7) -- 18 new offices opened (H1 2016: 4)
-- Group remains heavily weighted towards lettings, accounting for 70% of Management Service Fees (H1 2016 74%)
* excludes exceptional items
** includes exceptional items
Ian Wilson, Chief Executive Officer of The Property Franchise Group, commented:
"We have delivered a strong performance at our traditional high street brands, which grew market share despite the general challenging market backdrop.
"In line with our strategy, we have also invested in experienced individuals and technology capabilities, translating insights gained from our online business, EweMove, to our five traditional high street brands. The Company has continued to support our franchisees operationally and financially with local acquisition opportunities, as smaller competitors decide to exit the lettings market.
"With the appointment of a new Managing Director for EweMove and a new focus on recruiting experienced estate agents as EweMove's local franchisees, management is confident of rapidly improving trading performance in this strategically important subsidiary."
For further information, please contact:
Hot Features
Premium
The Property Franchise Group PLC
Ian Wilson, Chief Executive Officer
David Raggett, Chief Financial Officer 01202 292829
Cenkos Securities plc 0207 397
Max Hartley (Nominated Adviser), Alex Aylen (Sales) 8900
Bell Pottinger
020 3772
David Rydell 2500
07825 521
Eve Kirmatzis 527
Chief Executive's Review
The Group has delivered a robust performance during the first half of the year and the board is pleased to announce a 5% increase in the interim dividend to 2.1p per share in line with our progressive dividend policy.
Growth across our traditional high street brands has been strong with revenue growing 4% year-on-year to GBP3.8m. We have maintained tight cost controls in the traditional brand businesses, where profits are up 22% to GBP2.0m. Lettings Management Service Fees ("MSF") increased by 5% (GBP0.1m) and sales MSF remained unchanged despite a higher comparative following the Stamp Duty induced "spike" in transactions in April 2016. Group revenue remains heavily weighted towards lettings at 70% with sales and financial services representing 29% and 1% respectively.
Our franchisees have completed on seven local acquisitions in the period from 1 January to 31 August 2017, adding 1,482 to the Group's portfolio of tenanted managed properties. An additional four offices have been added to the franchise network as at 31 August 2017 as a result of re-branding these acquired businesses. This has resulted in additional fee income (at a franchisee level) of approximately GBP2m over a full 12-months based on the trading run rate.
As announced on 6 September 2017, the disruption caused by the early departure of the EweMove co-founders on 30 June 2017, has meant that EweMove's trading position is behind management expectations. EweMove has recorded losses at the half year to 30 June of GBP0.3m against a target loss of GBP0.1m, on revenues of GBP0.9m. Despite this, the Board remains committed to its strategy of rapidly scaling EweMove, which the Board believes will contribute significantly to earnings in the medium term. The appointment of a new Managing Director in Nick Neill, a successful EweMove franchisee, means the brand now has focused and dedicated leadership.
EweMove has over 100 franchisees. Progress so far has been promising with the brand recruiting 18 new franchisees in the first six months of 2017 and recording MSF up 35% year-on-year to GBP0.6m.
Investment in our technology is an important part of our strategy and during the period we launched new brand websites for Whitegates, Parkers and Martin & Co, representing 85% of our total traditional office network. The new sites were designed in conjunction with Fountain, a Google Award Winning Business Partner agency.
We have also invested in experienced individuals to improve the leadership of our franchisees, including the appointment of two Managing Directors, one for Martin & Co and one for the Xperience & Whitegates brands, as well as a Group Marketing Director, all of whom bring a wealth of experience.
The Group has a strong operating margin of 31% and a solid balance sheet with net debt of GBP0.7m. The board remains confident about the outlook for the lettings market in relation to maintaining its ability to meet its objective of progressive dividend payments. In the first half of this year dividend cover was 3.5 (H1 2016: 2.8).
The lettings market faces a changing commercial environment with Government initiatives increasing the tax burden on private buy-to-let landlords taking effect in April 2018 and an intended total ban on tenant fees in England & Wales. However, we successfully managed to navigate our business through the Scottish total tenant fee ban in 2012 and we are engaged in several initiatives to ensure that Group revenue continues to grow both organically, from improved digital marketing and through local acquisitions by assisting franchisees operationally and financially. With regard to our past experience, we feel confident that the Group will be able to ameliorate the changing conditions to ensure minimal long term impact to the Group.
Ian Wilson, Chief Executive Officer
Financial Review
Revenue
Revenue for the six months ended 30 June 2017 was GBP4.71m (H1 2016: GBP3.67m), an increase of GBP1.04m (28%) over the comparative period. The addition of EweMove contributed GBP0.91m (24%) to the increase in revenue and the traditional brands contributed GBP0.13m (4%) to the increase.
Traditional brands
MSF for the traditional brands were split 78% from Lettings, 21% from Sales and 1% from Financial Services. Lettings MSF increased by 5% (GBP0.13m) in the six months to 30 June 2017 compared to the same period of 2016. Sales MSF was unchanged compared to the same period of 2016, which is a good result given the comparative period included the spike in sales prior to the stamp duty increase in April 2016 (H1 2016 increased by 24% over H1 2015).
Other income increased by GBP0.1m (15%) from the previous period, comprising of a GBP0.2m increase in revenue from support services provided to franchisees and a GBP0.1m decrease in Franchise Sales revenue.
EweMove
EweMove franchisees pay a monthly licence fee and a completion fee per transaction. The total of the licence fees and completion fees for the six months ended 30 June 2017 was GBP0.55m, which is a 35% increase on the same period of 2016 (prior to our acquisition). We refer to these licence fees and completion fees as MSF.
Franchise Sales income was GBP0.2m, unchanged from the six months ended 30 June 2016, from 18 new franchisees recruited.
Administrative expenses
Administrative expenses have increased by GBP0.75m. The main elements of this increase are GBP0.8m costs relating to the EweMove business, GBP0.2m amortisation relating to EweMove and a GBP0.3m reduction in traditional brand costs (mainly staff costs).
Exceptional items
The net exceptional income of GBP0.7m in the six months ended 30 June 2017 all relates to EweMove.
On acquisition, the Founders of EweMove received GBP5m in cash and GBP3m via the issue of ordinary shares in the Group. The Founders were entitled to a further GBP7m conditional upon the achievement of Group targets in the financial year ended 31(st) December 2018. However, following the decision by the Founders to depart, the Group is paying the Founders GBP1m in total via two instalments payable on 31 July 2017 and 31 December 2017 in full and final settlement.
Management assessed the likelihood of the targets being achieved at last year end and valued the deferred consideration at GBP2.2m. As a result of crystallising the deferred consideration at GBP1m, an exceptional gain of GBP1.2m has been recognised.
Following evidence suggesting that the business value of EweMove may have been impaired, a revaluation was undertaken. This has resulted in an impairment charge of GBP0.5m against goodwill.
Operating profit
Operating profit includes exceptional items, share based payment charges and amortisation charges relating to acquired businesses. It has increased by 38% to GBP2.15m (H1 2016: GBP1.56m),
Operating profit before exceptional items decreased 5% to GBP1.47m (H1 2016 GBP1.56m) and operating margin, on the same basis, was 31% (H1 2016: 42%). Underlying this reduction is the fact that EweMove has yet to scale up its revenues and generate a profit. That said, the underlying trends and actions the management have instigated do mean we are confident in improving the revenue contribution from EweMove hereon.
EBITDA
The Group's EBITDA before exceptional items was GBP1.8m (H1 2016: GBP1.7m), an increase of GBP0.1m (5%) over the comparative period.
Earnings per share
Earnings per share for the six months ended 30 June 2017 was 7.4p (H1 2016: 5.7p). The income attributable to owners was GBP1.9m (H1 2016: GBP1.2m).
Dividends
The Board intends to continue to pursue a progressive dividend policy providing an attractive yield to shareholders. The Group has increased the interim dividend by 5% over last year and intends to make an interim dividend payment of 2.1p per share on 6 October 2017 to shareholders on the register on 22 September 2017.
Cash flow
The net cash inflow from operating activities in the first six months of 2017 was GBP1.8m (H1 2016: GBP1.3m).
In the first 6 months of 2017 the Group made bank loan repayments of GBP0.45m (H1 2016: GBP0.25m) and paid a final dividend of GBP1.2m for the year ended 31 December 2016 (H1 2016: GBP0.9m for the year ended 31 December 2015).
Overall cash increased in the first six months of 2017 by GBP0.2m (H1 2016: GBP0.2m).
Liquidity
The Group had cash balances of GBP2.3m at 30 June 2017 compared to GBP4.5m at 30 June 2016. The reduction being mainly due to the acquisition of EweMove on 5 September 2016 which resulted in a net cash outflow of GBP3m; the cash consideration was GBP5m of which GBP2m was drawn down on the Santander loan facility.
The Group had unutilised bank loan facilities of GBP2.05m at 30 June 2017 (30 June 2016: GBP3.25m).
Financial position
The Group continues to be strongly cash generative. This combined with its robust balance sheet and unutilised bank loan facility puts it in a strong position to continue to fulfil the acquisition element of its strategic plan and to pursue the fulfilment of EweMove's potential
David Raggett, Chief Financial Officer
THE PROPERTY FRANCHISE GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2017
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
Ended Ended Ended
30.06.17 30.06.16 31.12.16
Notes GBP GBP GBP
CONTINUING OPERATIONS
Revenue 6 4,714,186 3,669,836 8,301,375
Cost of sales (540,670) (161,286) (570,912)
------------ ------------ ------------
GROSS PROFIT 4,173,516 3,508,550 7,730,463
Administrative expenses (2,702,565) (1,950,127) (4,217,399)
------------ ------------ ------------
1,470,951 1,558,423 3,513,064
Exceptional items 7 679,146 - (254,945)
------------ ------------ ------------
OPERATING PROFIT 2,150,097 1,558,423 3,258,119
Finance income 20,086 32,039 52,909
Finance costs (52,641) (37,697) (119,106)
------------
PROFIT BEFORE INCOME
TAX 2,117,542 1,552,765 3,191,922
Tax expense 8 (233,232) (307,804) (197,576)
------------ ------------ ------------
PROFIT AND TOTAL
COMPREHENSIVE INCOME
FOR THE PERIOD ATTRIBUTABLE
TO OWNERS 1,884,310 1,244,961 2,994,346
============ ============ ============
Earnings per share
(pence) 9 7.4p 5.7p 13.0p
============ ============ ============
Diluted earnings
per share (pence) 9 7.4p 5.4p 12.8p
============ ============ ============
THE PROPERTY FRANCHISE GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
Unaudited Unaudited Audited
As at As at As at
30.06.17 30.06.16 31.12.16
Notes GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets 11 16,125,244 5,898,112 16,820,336
Property, plant
and equipment 118,265 134,981 125,984
16,243,509 6,033,093 16,946,320
----------- ----------- -----------
CURRENT ASSETS
Trade and other
receivables 12 1,156,232 994,976 1,477,047
Cash and cash
equivalents 2,256,750 4,507,698 2,045,621
----------- -----------
3,412,982 5,502,674 3,522,668
----------- ----------- -----------
TOTAL ASSETS 19,656,491 11,535,767 20,468,988
=========== =========== ===========
EQUITY
SHAREHOLDERS'
EQUITY
Share capital 13 258,228 220,000 253,008
Share premium 7,016,584 3,790,000 6,929,723
Other reserves 14 (138,483) 116,665 (75,422)
Retained earnings 5,809,528 3,835,214 5,078,584
-----------
TOTAL EQUITY 12,945,857 7,961,879 12,185,893
----------- ----------- -----------
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings 15 2,050,000 1,250,000 2,500,000
Deferred tax 1,524,045 557,312 1,475,481
Provisions 17 - - 2,179,146
-----------
3,574,045 1,807,312 6,154,627
----------- ----------- -----------
CURRENT LIABILITIES
Borrowings 15 900,000 500,000 900,000
Trade and other
payables 16 2,038,468 903,822 1,150,243
Tax payable 198,121 362,754 78,225
-----------
3,136,589 1,766,576 2,128,468
----------- ----------- -----------
TOTAL LIABILITIES 6,710,634 3,573,888 8,283,095
----------- ----------- -----------
TOTAL EQUITY AND
LIABILITIES 19,656,491 11,535,767 20,468,988
=========== =========== ===========
THE PROPERTY FRANCHISE GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2017
Called Retained Share Other Total
up share earnings premium reserves equity
capital (note
(note 14)
13)
GBP GBP GBP GBP GBP
Balance at 1 January
2016 (audited) 220,000 3,492,253 3,790,000 134,560 7,636,813
-------------------------------- ---------- ------------ ---------- ---------- ------------
Profit and total comprehensive
income - 1,244,961 - - 1,244,961
-------------------------------- ---------- ------------ ---------- ---------- ------------
Dividends paid (note
10) - (902,000) - - (902,000)
Deferred tax on share
based payments - - - (17,895) (17,895)
-------------------------------- ---------- ------------ ---------- ---------- ------------
Total transactions
with owners - (902,000) - (17,895) (919,895)
-------------------------------- ---------- ------------ ---------- ---------- ------------
Balance at 30 June
2016 (unaudited) 220,000 3,835,214 3,790,000 116,665 7,961,879
-------------------------------- ---------- ------------ ---------- ---------- ------------
Profit and total comprehensive
income - 1,749,385 - - 1,749,385
-------------------------------- ---------- ------------ ---------- ---------- ------------ Issue of share capital Share capital - acquisition consideration 23,216 - 2,976,784 - 3,000,000 Share capital - exercise of options 9,792 - 162,939 - 172,731 -------------------------------- ---------- ------------ ---------- ---------- ------------ Dividends paid (note 10) - (506,015) - - (506,015) Deferred tax on share based payments - - - (192,087) (192,087) -------------------------------- ---------- ------------ ---------- ---------- ------------ Total transactions with owners 33,008 (506,015) 3,139,723 (192,087) 2,474,629 -------------------------------- ---------- ------------ ---------- ---------- ------------ Balance at 31 December 2016 (audited) 253,008 5,078,584 6,929,723 (75,422) 12,185,893 -------------------------------- ---------- ------------ ---------- ---------- ------------ Profit and total comprehensive income - 1,884,310 - - 1,884,310 -------------------------------- ---------- ------------ ---------- ---------- ------------ Issue of share capital Share capital - exercise of options 5,220 - 86,861 - 92,081 -------------------------------- ---------- ------------ ---------- ---------- ------------ Dividends paid (note 10) - (1,153,366) - - (1,153,366) Deferred tax on share based payments - - - (93,061) (93,061) Share option charge - - - 30,000 30,000 Total transactions with owners 5,220 (1,153,366) 86,861 (63,061) (1,124,346) -------------------------------- ---------- ------------ ---------- ---------- ------------ Balance at 30 June 2017 (unaudited) 258,228 5,809,528 7,016,584 (138,483) 12,945,857 ================================ ========== ============ ========== ========== ============
THE PROPERTY FRANCHISE GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2017
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
Ended Ended Ended
30.06.17 30.06.16 31.12.16
GBP GBP GBP
Cash flows from operating
activities
Profit before income tax 2,117,542 1,552,765 3,191,922
Depreciation and amortisation
charges 307,171 133,013 354,247
Profit on disposal of intangible
assets - - 7,811
Net exceptional income (679,146) - -
Share option charge 30,000 - -
Finance costs 52,641 37,697 119,106
Finance income (20,088) (32,039) (52,909)
------------ ------------ ------------
Operating cash flow before
changes in working capital 1,808,120 1,691,436 3,620,177
Decrease/(increase) in trade
and other receivables 320,815 (101,092) (504,453)
Decrease in trade and other
payables (110,058) (11,415) (52,309)
------------ ------------ ------------
Cash generated from operations 2,018,877 1,578,929 3,063,415
Interest paid (60,835) (39,416) (88,668)
Tax paid (153,030) (264,709) (602,833)
Net cash generated from operations 1,805,012 1,274,804 2,371,914
------------ ------------ ------------
Cash flows from investing
activities
Purchase of subsidiary undertakings
net of cash acquired - - (4,821,051)
Purchase of intangible assets (96,517) (2,990) (91,621)
Purchase of tangible assets (6,168) (8,539) (13,960)
Proceeds from sale of intangible
assets - 18,330 36,660
Interest received 20,088 32,039 52,909
Net cash (used in)/generated
from investing activities (82,597) 38,840 (4,837,063)
------------ ------------ ------------
Cash flows from financing
activities
Issue of ordinary shares 92,080 - 172,731
Repayment of borrowings (450,000) (250,000) (600,000)
Drawdown of bank loan - - 2,000,000
Equity dividends paid (1,153,366) (902,000) (1,408,015)
Net cash (used in)/generated
from financing activities (1,511,286) (1,152,000) 164,716
------------ ------------ ------------
Increase/(decrease) in cash
and cash equivalents 211,129 161,644 (2,300,433)
Cash and cash equivalents
at the beginning of the period 2,045,621 4,346,054 4,346,054
Cash and cash equivalents
at end of period 2,256,750 4,507,698 2,045,621
============ ============ ============
THE PROPERTY FRANCHISE GROUP PLC
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHSED 30 JUNE 2017
1. GENERAL INFORMATION
The principal activity of The Property Franchise Group plc and its subsidiaries is that of a UK residential property franchise business. The Group operates in the UK. The company is a public limited company incorporated and domiciled in the UK. The address of its head office and registered office is 2 St Stephen's Court, St Stephen's Road, Bournemouth, Dorset, UK.
2. GOING CONCERN
The interim financial information has been prepared on the basis that the Group is a going concern.
When assessing the foreseeable future the directors have looked at a period of 12 months from the date of approval of the interim financial information. The directors have a reasonable expectation that the Group has adequate resources to continue to trade for the foreseeable future and, therefore, consider it appropriate to prepare the Group's interim financial information on a going concern basis.
3. BASIS OF PREPARATION
The consolidated interim financial information for the six months ended 30 June 2017 was approved by the Board and authorised for issue on 13 September 2017. The results for 30 June 2017 and 30 June 2016 are unaudited. The disclosed figures are not statutory accounts in terms of Section 435 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2016 on which the auditors gave an audit report which was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union.
This interim report has been prepared on a basis consistent with the accounting policies expected to be applied for the year ending 31 December 2017, and uses the same accounting policies and methods of computation applied for the year ended 31 December 2016.
4. BASIS OF CONSOLIDATION
The Group's interim financial information includes those of the parent company and its subsidiaries, drawn up to 30 June 2017. 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.
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.
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 with the Group's accounting policies.
5. SEGMENTAL REPORTING
The board of Directors, as the chief operating decision-making body, review financial information for and make decisions about the Group's overall franchising business and have identified a single operating segment, that of property franchising.
THE PROPERTY FRANCHISE GROUP PLC
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHSED 30 JUNE 2017
6. REVENUE
The Directors believe there to be three material income streams relevant to property franchising which are split as follows:
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
Ended Ended Ended
30.06.17 30.06.16 31.12.16
GBP GBP GBP
Management service
fee 3,815,842 3,199,985 6,874,542
Franchise sales 261,668 195,266 412,448
Other 636,676 274,585 1,014,385
4,714,186 3,669,836 8,301,375
=========== =========== ==========
All revenue is earned in the UK and no customer represents greater than 10 per cent of total revenue in the periods reported.
7. EXCEPTIONAL ITEMS
The net exceptional income in the six months ended 30 June 2017 of GBP679,146 all relates to EweMove. It consists of the reduction in deferred consideration payable of GBP1,179,146 and an impairment charge of GBP500,000 against goodwill following a revaluation due to evidence suggesting that the business's value may have been impaired.
The exceptional costs in the year ended 31 December 2016 consist of GBP149,598 acquisition costs for Ewemove and GBP105,347 redundancy costs as a result of restructuring the Group.
8. TAXATION
The underlying tax charge is based on the expected effective tax rate for the full year to December 2017. The majority of the tax arises from applying this effective tax rate to the profit on ordinary activities.
THE PROPERTY FRANCHISE GROUP PLC
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHSED 30 JUNE 2017
9. EARNINGS PER SHARE
Earnings per share is calculated by dividing the profit for the financial period by the weighted average number of shares during the period.
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
Ended Ended Ended
30.06.17 30.06.16 31.12.16
Basic earnings per share
Weighted average number
of shares 25,477,256 22,000,000 23,017,702
----------- ----------- -----------
Profit for the period
(GBP) 1,884,310 1,244,961 2,994,346
----------- ----------- -----------
Earnings per share (pence) 7.4p 5.7p 13.0p
----------- ----------- -----------
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
Ended Ended Ended
30.06.17 30.06.16 31.12.16
Diluted earnings per share
Weighted average number
of shares 25,477,256 22,000,000 23,017,702
Dilutive effect of share
options on ordinary shares 2,518 857,644 457,132
25,479,774 22,857,644 23,474,834
----------- ----------- -----------
Diluted earnings per share
(pence) 7.4p 5.4p 12.8p
----------- ----------- -----------
10. DIVIDS
Unaudited Unaudited Audited
As at As at As at
30.06.17 30.06.16 31.12.16
GBP GBP GBP
Dividends (ordinary
share of GBP0.01 each) 1,153,366 902,000 1,408,015
Dividend per share 4.5p 4.1p 6.1p
THE PROPERTY FRANCHISE GROUP PLC
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHSED 30 JUNE 2017
11. INTANGIBLE ASSETS
Master Brands Technology Customer Goodwill Total
Franchise Lists
Agreement
GBP GBP GBP GBP GBP GBP
Cost
Balance at 1
January 2016
(Audited) 4,075,085 571,000 - 261,254 1,388,217 6,295,556
Additions - - - 2,990 - 2,990
----------- ---------- ----------- --------- ---------- -----------
Balance at 30
June 2016
(Unaudited) 4,075,085 571,000 - 264,244 1,388,217 6,298,546
=========== ========== =========== ========= ========== ===========
Additions
- acquired
separately - - - 88,631 - 88,631
Additions
- acquired
business
combinations 3,728,351 1,401,239 92,704 - 5,837,943 11,060,237
Disposals - - - (36,050) - (36,050)
----------- ---------- ----------- --------- ---------- -----------
Balance at 31
December 2016
(Audited) 7,803,436 1,972,239 92,704 316,825 7,226,160 17,411,364
=========== ========== =========== ========= ========== ===========
Additions
-acquired
separately - - 96,517 - - 96,517
Disposals - - - (20,585) - (20,585)
Impairment - - - - (500,000) (500,000)
=========== ========== =========== ========= ========== ===========
Balance at 30
June 2017
(Unaudited) 7,803,436 1,972,239 189,221 296,240 6,726,160 16,987,296
=========== ========== =========== ========= ========== ===========
Amortisation
Balance at 1
January 2016
(Audited) 190,170 - - 91,050 - 281,220
Charge for period 81,502 - - 37,712 - 119,214
----------- ---------- ----------- --------- ---------- -----------
Balance at 30
June 2016
(Unaudited) 271,672 - - 128,762 - 400,434
Charge for period 140,682 22,242 6,180 37,712 - 206,816
Eliminated on
disposals - - - (16,222) - (16,222)
----------- ---------- ----------- --------- ---------- -----------
Balance at 31
December 2016
(Audited) 412,354 22,242 6,180 150,252 - 591,028
Charge for period 205,780 33,363 9,270 40,552 - 288,965
Disposals - - - (17,941) - (17,941)
=========== ========== =========== ========= ========== ===========
Balance at 30
June 2017
(Unaudited) 618,134 55,605 15,450 172,863 - 862,052
=========== ========== =========== ========= ========== ===========
Net book value
30 June 2016
(Unaudited) 3,803,413 571,000 - 135,482 1,388,217 5,898,112
============ ========== ======== ======== ========== ===========
31 December
2016 (Audited) 7,391,082 1,949,997 86,524 166,573 7,226,160 16,820,336
============ ========== ======== ======== ========== ===========
30 June 2017
(Unaudited) 7,185,302 1,916,634 173,771 123,377 6,726,160 16,125,244
============ ========== ======== ======== ========== ===========
THE PROPERTY FRANCHISE GROUP PLC
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHSED 30 JUNE 2017
11. INTANGIBLE ASSETS (CONTINUED)
Business combinations acquired September 2016
At 30 June 2017, in light of evidence suggesting that EweMove's carrying value may have been impaired a revaluation was undertaken. As a result, an impairment charge of GBP500,000 was made against the goodwill arising on acquisition.
12. TRADE AND OTHER RECEIVABLES
Unaudited Unaudited Audited
As at As at As at
30.06.17 30.06.16 31.12.16
GBP GBP GBP
Trade receivables 149,169 119,995 280,637
Loans to franchisees 49,900 215,276 203,036
Prepayments and
accrued income 909,845 636,108 987,197
Other receivables 47,318 23,597 6,177
1,156,232 994,976 1,477,047
========== ========== ==========
13. CALLED UP SHARE CAPITAL
Unaudited Unaudited Audited
As at As at As at
30.06.17 30.06.16 31.12.16
Group GBP GBP GBP
25,822,750 allotted
issued and fully paid
Ordinary Shares of
1p each 258,228 220,000 253,008
==========
On 9 June 2017 options over 1,500,000 shares were granted to two executive directors at an exercise price of 1 pence per share. The options are exercisable after the approval of the financial statements for the year ending 31 December 2019, and subject to meeting certain targets for Earnings per Share.
THE PROPERTY FRANCHISE GROUP PLC
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2017
14. OTHER RESERVES
Merger Share Based
Reserve Payment Total
Reserve
GBP GBP GBP
1 January 2016
(Audited) (179,800) 314,360 134,560
30 June 2016 (179,800) 296,465 116,665
31 December 2016
(Audited) (179,800) 104,378 (75,422)
30 June 2017 (179,800) 41,317 (138,483)
Merger reserve
The merger reserve relates to the acquisition of Martin & Co (UK) Limited by The Property Franchise Group PLC. This did not meet the definition of a business combination and therefore, falls outside of the scope of IFRS 3. This transaction was accounted for in accordance with the principles of merger accounting as set out in Financial Reporting Standard 6 - Acquisitions and Mergers.
Share-based payment reserve
The share based payments reserve comprises charges made to the income statement in respect of share-based payments and related deferred tax impacts under the Group's equity compensation scheme.
15. BORROWINGS
Unaudited Unaudited Audited
As at As at As at
30.06.17 30.06.16 31.12.16
GBP GBP GBP
Repayable within
1 year:
Bank loan (term
loan) 900,000 500,000 900,000
Repayable in more
than 1 year:
Bank loan (term
loan) 2,050,000 1,250,000 2,500,000
Bank loans due
after more than
1 year are repayable
as follows:
Between 1 and 2
years 900,000 500,000 900,000
Between 2 and 5
years 1,150,000 750,000 1,600,000
The term loan of GBP2.95m (31.12.16: GBP3.4m) is secured with a fixed and floating charge over the Group's assets and a cross guarantee across all companies in the Group.
The Company has a loan facility of GBP5m, and has drawn down two terms loans under this facility, referred to below as 'Loan 1' and 'Loan 2'.
Loan 1 - GBP2.5m drawn down on 30 October 2014 and is repayable over 5 years in equal instalments. Interest is charged quarterly on the outstanding amount and the rate is fixed at 4.08%. The amount outstanding at 30 June 2007 was GBP1.25m (2016: GBP1.75m).
Loan 2 - GBP2m drawn down on 5 September 2016 and is repayable over 5 years in equal instalments. Interest is charged quarterly on the outstanding amount, the rate is variable during the term at 2.5% above LIBOR, at 30 June 2017 the rate was 2.8%. The amount outstanding at 30 June 2017 was GBP1.7m.
At 31 December 2016 the unutilised amount of the facility was GBP1.6m and on 30 June 2017 the unutilised amount of the facility was GBP2.05m.
THE PROPERTY FRANCHISE GROUP PLC
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2017
16. TRADE AND OTHER PAYABLES
Unaudited Unaudited Audited
As at As at As at
30.06.17 30.06.16 31.12.16
GBP GBP GBP
Trade payables 252,878 166,034 253,027
Accruals and deferred
income 344,130 346,277 447,016
Other taxes and
social security 405,631 367,920 423,475
Other payables 35,829 23,591 26,725
Deferred consideration 1,000,000 - -
2,038,468 903,822 1,150,243
========== ========== ==========
17. PROVISIONS
On 5 September 2016 the Group acquired 100% of the issued share capital of Ewemove . The initial consideration was GBP5m in cash and GBP3m via the issue of ordinary shares in the Group. A further amount of up to GBP7m ( the "Deferred Consideration") was due to the vendors upon approval of the financial results for the year ended 31 December 2018 and subject to various targets for Group financial performance being met.
A renegotiation has taken place and the deferred consideration will now be GBP1m, with GBP0.5m payable on 31 July 2017 and GBP0.5m payable on 31 December 2017. This has now been recognised in trade and other payables.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QXLFFDKFLBBE
(END) Dow Jones Newswires
September 14, 2017 02:00 ET (06:00 GMT)
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