TIDMTPFG
RNS Number : 7344L
Property Franchise Group PLC (The)
10 September 2019
10 September 2019
THE PROPERTY FRANCHISE GROUP PLC
(the "Company" or the "Group")
Interim Results for the six months ended 30 June 2019
Profit up 6% and interim dividend up 8%
The Property Franchise Group, one of the UK's largest property
franchises, today announces its interim results for the period
ended 30 June 2019.
Financial Highlights
-- Revenue of GBP5.5m (H1 2018: GBP5.5m), in line with expectations
-- Management Service Fees ("royalties") increased by 5% to GBP4.6m (H1 2018: GBP4.4m)
-- Operating margin increased to 37% (H1 2018: 35%)
-- EBITDA increased by 5% to GBP2.4m (H1 2018: GBP2.3m)
-- Profit before tax increased 6% to GBP2.0m (H1 2018: GBP1.9m)
-- Strong balance sheet with a net cash position of GBP2.8m (H1 2018: GBP0.5m)
-- Interim dividend increased by 8% to 2.6p per share (H1 2018: 2.4p)
Operational Highlights
-- Tenanted managed properties increased 6% to 56,000 (H1 2018: 53,000)
-- 17 acquisitions by franchisees completed year to date,
generating annualised Management Services Fees of GBP0.2m
-- 369 trading offices (H1 2018: 377)
-- 8 new franchisees recruited and 9 new offices opened
-- Group remains heavily weighted towards lettings, accounting
for 70% of Management Service Fees (H1 2018: 69%)
Ian Wilson, Chief Executive Officer of The Property Franchise
Group, commented:
"We have delivered another strong set of results, with progress
in each of our six brands, which have all grown our most important
revenue stream, franchise management services fees over the same
period last year. Our profit has also grown, driven by the health
of our franchisees' businesses and prudent cost management.
"Historically, the Group experiences stronger trading in the
second half year, associated with heightened lettings activity in
the period from June to September. At this stage we believe that
this pattern will be maintained. Our strong balance sheet and our
continued confidence in the underlying strength of our business
model means that we are pleased to be increasing the interim
dividend by 8% to 2.6p in line with our progressive dividend
policy.
"Thanks to our franchise business model, diverse brand offering,
lettings weighting and high levels of cash generation, resulting in
a strong balance sheet, we are well-positioned to outperform our
competitors, increase market share and deliver value for all our
stakeholders in the immediate and longer term."
For further information, please contact:
The Property Franchise Group PLC
Ian Wilson, Chief Executive Officer
David Raggett, Chief Financial Officer 01202 292829
Cenkos Securities plc
Max Hartley, Callum Davidson (Nominated Adviser)
Julian Morse (Sales) 0207 397 8900
Alma PR
Susie Hudson
Rebecca Sanders-Hewett
Jessica Joynson 0203 405 0205
Chief Executive's Review
The Property Franchise Group has continued to outperform with
all of our six brands' franchisee networks achieving revenue growth
over the period, despite challenging market conditions.
Our franchisees added 1,175 tenanted managed properties in the
reporting period through our assisted acquisitions programme. These
additions, alongside the continued organic growth of the portfolio
leaves the Group managing 56,000 properties, as at the period
end.
Driving continued growth in our traditional brands
For our traditional brands the growth was driven largely by a
robust increase in lettings management service fees (MSF), which
outweighed the market weakness faced in sales. We were pleased to
see the Group's strategic weighting towards lettings showing its
resilience as expected during this time of uncertainty.
Our franchisees continue to invest in our centralised digital
marketing and, in the reporting period just pay-per-click delivered
29,490 new business leads compared to 30,474 leads in the whole of
2018. Our capability in this area is improving all the time which
means that our traditional high street agents can compete with the
perceived threat from online and hybrid competitors.
EweMove
As well as also increasing its lettings revenue our hybrid brand
EweMove demonstrated that its unique, highly customer centric
offering can defy the challenging sales market, as its sales
revenue increased. This was through existing franchisees achieving
higher sales conversion rates.
EweMove has 115 franchise territories trading at the end of the
reporting period which is broadly flat against the prior year.
However property listings have increased to 3,173 in H1 2019 (H1
2018: 3,062), which was pleasing against the backdrop of a falling
market. EweMove has improved its cash generation year on year, and
tight cost control has delivered a corresponding improvement in
profitability. We are on track to materially improve on the 2018
result for the full year.
Having examined the evidence, experienced estate agents
initially outperform inexperienced franchise recruits from other
sectors, but only in the first two years trading as a EweMove
franchisee. Consequently, we have resumed recruiting non-agents as
franchisees at EweMove provided that we are satisfied they have
transferable sales skills and access to sufficient working capital
during the build-up period.
The importance of the franchise business model
The period has been another example of the importance of our
business model in allowing us to support franchisees through new
regulation and wider macro-economic challenges.
The Government's tenant fee ban took effect on 1 June, with
these results reflecting one month's impact of the ban. Pleasingly,
post period we have seen July's letting results exceed our
expectations, with evidence of pent up tenant demand feeding
through. We continue to work closely with our franchisees on
mitigating the effects of the ban.
The Government has proposed the creation of a unitary regulatory
body for letting agents and the requirement for all practitioners
to submit to a test of professional competence. Our Group is
particularly well positioned to navigate hurdles such as these. Our
founding business, Martin & Co, built its reputation by
recruiting franchisees from disparate backgrounds and instilling,
through its training programme, all of the skills and knowledge
they needed to practise as agents. We have a strong heritage in
this capability and are well placed to continue supporting our
franchisees through increased regulatory challenges.
Outlook
Whilst we are cognisant of the UK market conditions and the
challenges we face, our franchisees are proving highly resilient,
taking up the opportunities to outpace their competitors afforded
through our centralised digital marketing and assisted acquisitions
programme.
As is appropriate, we are consciously risk-adverse at this point
in the cycle and continue to manage our operating margin in order
to further drive profitability. Notwithstanding this, our strong
net-cash position and available bank facility means that we are in
an excellent position to capitalise on opportunities in the
remainder of 2019 and into 2020. The Board remains confident of
delivering on market expectations for the full year.
Ian Wilson, Chief Executive Officer
Financial Review
Revenue
Revenue for the six months ended 30 June 2019 was GBP5.5m (H1
2018: GBP5.5m), in line with expectations. This is before the
amortisation of assisted acquisition support provided to
franchisees to incentivise the purchase of portfolios of managed
properties.
Underlying this was a strong performance from our network,
outperforming the market in sales and lettings. Management Service
Fees ("MSF") grew by 5% to GBP4.6m accounting for 85% of total
revenue, up from 80% this time last year.
Traditional Brands' MSF
Overall, our traditional brands' network continues to prosper.
In the traditional brands, lettings MSF grew by 6% to GBP2.85m and
sales MSF declined by 9% to GBP0.67m in the six months ended 30
June 2019 compared to the same period of 2018. Despite the falling
number of lettings instructions and the implementation of the
tenant fee ban on 1 June 2019, our network is growing revenue,
primarily due to their focus on acquiring portfolios of managed
properties with our assistance. Whilst it is disappointing to see
sales MSF decline, the weaknesses of the housing market are well
documented and 3% of the reduction is due to us reducing the number
of CJ Hole offices. We continue to pursue digital marketing
initiatives aimed at continuing to outperform the market.
EweMove's MSF
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 2019 was GBP1.06m (H1 2018:
GBP0.92m), a 15% increase on the same period of 2018. We include
these licence fees and completion fees within MSF.
EweMove grew house sales completions in the first six months of
2019 by 16% compared to the same period last year through existing
franchisees converting more of the fewer opportunities into sales.
Lettings completions in the first six months of 2019 increased by
12% compared to the same period last year.
Franchise Sales
Franchise sales income was GBP0.1m (H1 2018: GBP0.2m). New
recruits in the first half of this year were 8 compared to 16 for
the comparative period. All have joined EweMove so far this year of
which 63% are experienced estate agents.
Other
Other income was GBP0.74m (H1 2018: GBP0.89m), down 17% on the
six months ended 30 June 2018 mainly due to reorganisations in the
network generating fewer and lower fees so far this year.
Assisted Acquisitions
In the year to end of August 19, franchisees completed on 17
Assisted Acquisitions with a total deal value of GBP3.1m (2018 YTD:
20 Assisted Acquisitions with a total deal value of GBP3.2m). The
total number of managed properties acquired was 2,000 (2018 YTD:
2,400). Based on their historic results, these acquisitions added
GBP2.4m to annualised network revenue and increased annualised
recurring MSF by GBP0.2m (2018 YTD: GBP2.3m of annualised network
revenue and additional annualised recurring MSF of GBP0.2m).
Administrative expenses
Administrative expenses have been reduced by GBP0.15m to
GBP2.85m due to targeted cost control in what we knew would be a
challenging year.
EBITDA
The Group's EBITDA was GBP2.4m (H1 2018: GBP2.3m), an increase
of 5% over the comparative period. There were no exceptional items
or share-based payment charges in the first half of 2019 nor the
comparative period.
Operating profit
Operating profit increased 5% to GBP2.0m (H1 2018 GBP1.9m) and
operating margin was 37% (H1 2018: 35%) helped by the reduction in
administrative expenses.
Earnings per share
Earnings per share for the six months ended 30 June 2019 was
6.3p (H1 2018: 5.9p). The income attributable to owners was GBP1.6m
(H1 2018: GBP1.5m).
Profit before income tax
Profit before tax was GBP2.0m (2018: GBP1.9m), an increase of
6%.
Dividends
The Board has pursued a progressive dividend policy since the
IPO. Once again, the Company has increased the interim dividend by
8% over last year reflecting the increase in profitability and
reconfirming its commitment to that policy. The Company intends to
make an interim dividend payment of 2.6p per share on 1 October
2019 to shareholders on the register on 20 September 2019, being
the record date. The ex-dividend date will be 19 September
2019.
Cash flow
At an operational level, the Group is highly cash generative and
its cash flow has annuity like characteristics. The net cash inflow
from operating activities in the first six months of 2019 increased
11% to GBP2.2m (H1 2018: GBP2.0m).
The payments of assisted acquisitions support amounted to
GBP0.1m (H1 2018: GBP0.1m) and are explained by incentives targeted
at encouraging franchisees to acquire portfolios of tenanted
managed properties.
In the first six months of 2019 the Group made bank loan
repayments of GBP0.45m (H1 2018: GBP0.45m) and paid a final
dividend of GBP1.5m for the year ended 31 December 2018 (H1 2018:
GBP1.4m for the year ended 31 December 2017).
Overall cash balances increased by GBP1.3m to GBP3.9m (H1 2018:
GBP2.6m).
Liquidity
The Group had a net cash balance of GBP2.8m at the end of the
period (H1 2018: net cash GBP0.5m).
The Group had undrawn bank loan facilities of GBP3.8m at 30 June
2019 (30 June 2018: GBP3.0m). These are due for renewal in October
2019 and arrangements are at an advanced stage. Their renewal does
not impact the repayment terms for the two existing loans.
Financial position
The Group continues to be strongly cash generative with a
significantly enhanced net cash position affording it increasing
headroom in its dividend policy as it continues to pursue an
attractive yield for investors. At the same time our strong balance
sheet enables us to continue to fulfil the acquisition element of
our 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 2019
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
Ended Ended Ended
30.06.19 30.06.18 31.12.18
Notes GBP GBP GBP
CONTINUING OPERATIONS
Revenue 6 5,403,446 5,478,076 11,245,613
Cost of sales (524,140) (539,503) (1,080,271)
------------ ------------ ------------
GROSS PROFIT 4,879,306 4,938,573 10,165,342
Administrative expenses (2,846,388) (3,000,645) (5,783,482)
Share-based payments charge - - (49,857)
------------ ------------ ------------
OPERATING PROFIT 2,032,918 1,937,928 4,332,003
Finance income 4,235 5,256 8,968
Finance costs (24,432) (38,945) (71,494)
------------
PROFIT BEFORE INCOME TAX 2,012,721 1,904,239 4,269,477
Tax 7 (379,607) (390,882) (847,041)
------------ ------------ ------------
PROFIT AND TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD ATTRIBUTABLE
TO OWNERS 1,633,114 1,513,357 3,422,436
============ ============ ============
Earnings per share attributable
to owners 8 6.3p 5.9p 13.3p
============ ============ ============
Diluted earnings per share
attributable to owners 8 6.3p 5.9p 13.3p
============ ============ ============
THE PROPERTY FRANCHISE GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
Unaudited Unaudited Audited
As at As at As at
30.06.19 30.06.18 31.12.18
Notes GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets 10 15,033,021 15,618,215 15,324,755
Property, plant and equipment 88,549 108,581 103,584
Prepaid assisted acquisitions
support 483,325 341,911 453,836
15,604,895 16,068,707 15,882,175
----------- ----------- -----------
CURRENT ASSETS
Trade and other receivables 11 1,189,127 1,095,882 1,096,274
Cash and cash equivalents 3,917,335 2,595,620 3,857,988
----------- -----------
5,106,462 3,691,502 4,954,262
----------- ----------- -----------
TOTAL ASSETS 20,711,357 19,760,209 20,836,437
=========== =========== ===========
EQUITY
SHAREHOLDERS' EQUITY
Share capital 12 258,228 258,228 258,228
Share premium 4,039,800 4,039,800 4,039,800
Other reserves 13 2,983,861 2,934,004 2,983,861
Retained earnings 8,526,709 7,153,627 8,442,960
-----------
TOTAL EQUITY 15,808,598 14,385,659 15,724,849
----------- ----------- -----------
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings 14 500,000 1,150,000 700,000
Deferred tax 1,327,888 1,423,288 1,372,196
-----------
1,827,888 2,573,288 2,072,196
----------- ----------- -----------
CURRENT LIABILITIES
Borrowings 14 650,000 900,000 900,000
Trade and other payables 15 1,534,323 1,370,152 1,476,819
Tax payable 890,548 531,110 662,573
-----------
3,074,871 2,801,262 3,039,392
----------- ----------- -----------
TOTAL LIABILITIES 4,902,759 5,374,550 5,111,588
----------- ----------- -----------
TOTAL EQUITY AND LIABILITIES 20,711,357 19,760,209 20,836,437
=========== =========== ===========
THE PROPERTY FRANCHISE GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2019
Called up Retained Share Other reserves Total equity
share capital earnings premium (note 13)
(note 12)
GBP GBP GBP GBP GBP
Balance at 1 January 2018
(audited) 258,228 7,034,699 4,039,800 2,934,004 14,266,731
-------------------------------------- -------- ------------ ---------- --------------- -------------
Profit and total comprehensive
income - 1,513,357 - - 1,513,357
Dividends paid (note 9) - (1,394,429) - - (1,394,429)
-------------------------------------- -------- ------------ ---------- --------------- -------------
Total transactions with owners - (1,394,429) - - (1,394,429)
-------------------------------------- -------- ------------ ---------- --------------- -------------
Balance at 30 June 2018 (unaudited) 258,228 7,153,627 4,039,800 2,934,004 14,385,659
-------------------------------------- -------- ------------ ---------- --------------- -------------
Profit and total comprehensive
income - 1,909,079 - - 1,909,079
-------------------------------------- -------- ------------ ---------- --------------- -------------
Dividends paid (note 9) - (619,746) - - (619,746)
Share-based payments charge - - - 49,857 49,857
-------------------------------------- -------- ------------ ---------- --------------- -------------
Total transactions with owners - (619,746) - 49,857 (569,889)
-------------------------------------- -------- ------------ ---------- --------------- -------------
Balance at 31 December 2018
(audited) 258,228 8,442,960 4,039,800 2,983,861 15,724,849
-------------------------------------- -------- ------------ ---------- --------------- -------------
Profit and total comprehensive
income - 1,633,114 - - 1,633,114
-------------------------------------- -------- ------------ ---------- --------------- -------------
Dividends paid (note 9) - (1,549,365) - - (1,549,365)
Total transactions with owners - (1,549,365) - - (1,549,365)
-------------------------------------- -------- ------------ ---------- --------------- -------------
Balance at 30 June 2019 (unaudited) 258,228 8,526,709 4,039,800 2,983,861 15,808,598
====================================== ======== ============ ========== =============== =============
THE PROPERTY FRANCHISE GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2019
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
Ended Ended Ended
30.06.19 30.06.18 31.12.18
GBP GBP GBP
Cash flows from operating activities
Profit before income tax 2,012,721 1,904,239 4,269,477
Depreciation and amortisation charges 384,193 355,228 714,440
Share-based payments charge - - 49,857
Loss on disposal of intangible assets - 1,749 17,989
Finance costs 24,432 38,945 71,494
Finance income (4,235) (5,256) (8,968)
------------ ------------ ------------
Operating cash flow before changes
in working capital 2,417,111 2,294,905 5,114,289
(Increase) / decrease in trade and
other receivables (92,853) 21,455 21,062
Increase / (decrease) in trade and
other payables 59,642 70,656 178,998
------------ ------------ ------------
Cash generated from operations 2,383,900 2,387,016 5,314,349
Interest paid (26,568) (39,086) (75,346)
Tax paid (195,943) (395,991) (771,779)
Net cash generated from operations 2,161,389 1,951,939 4,467,224
------------ ------------ ------------
Cash flows from investing activities
Purchase of intangible assets - (10,000) (20,000)
Purchase of tangible assets (2,053) (15,042) (30,505)
Payment of assisted acquisitions support (104,859) (86,630) (248,050)
Interest received 4,235 5,256 8,968
Net cash used in investing activities (102,677) (106,416) (289,587)
------------ ------------ ------------
Cash flows from financing activities
Repayment of borrowings (450,000) (450,000) (900,000)
Equity dividends paid (note 9) (1,549,365) (1,394,429) (2,014,175)
Net cash used in financing activities (1,999,365) (1,844,429) (2,914,175)
------------ ------------ ------------
Increase in cash and cash equivalents 59,347 1,094 1,263,462
Cash and cash equivalents at the beginning
of the period 3,857,988 2,594,526 2,594,526
Cash and cash equivalents at end of
the period 3,917,335 2,595,620 3,857,988
============ ============ ============
THE PROPERTY FRANCHISE GROUP PLC
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHSED 30 JUNE 2019
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 2019 was approved by the Board and authorised
for issue on 10 September 2019. The results for 30 June 2019 and 30
June 2018 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 2018 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 2019, and uses the same accounting policies and methods
of computation applied for the year ended 31 December 2018. IFRS 16
Leases applies to the financial year beginning 1 January 2019 but
has not been applied in this interim report because the impact of
IFRS 16 is immaterial to the Group's interim financial
information.
IFRS 16 requires that almost all leases will be brought onto
lessees' balance sheets under a single model (except leases of less
than 12 months and leases of low-value assets), eliminating the
distinction between operating and finance leases. Currently, the
Group holds some non-cancellable operating leases but no finance
leases. The non-cancellable operating lease commitments meet the
definition of a lease under IFRS 16. Thus, the Group will recognise
a right-of-use asset and a corresponding liability in respect of
all these leases in its year-end accounts in the order of GBP0.05m.
The charge to be recognised in the consolidated statement of
comprehensive income is estimated to be GBP0.05m for 2019,
comprising depreciation and interest and will replace the operating
lease rentals which would have been charged had IFRS 16 not been
applied.
4. BASIS OF CONSOLIDATION
The Group's interim financial information includes those of the
parent company and its subsidiaries, drawn up to 30 June 2019.
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.
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
30.06.19 30.06.18 31.12.18
GBP GBP GBP
Management service fee 4,641,386 4,406,284 9,464,388
Franchise sales 79,842 212,265 289,808
Other 737,469 885,630 1,552,909
----------- ----------- -----------
5,458,697 5,504,179 11,307,105
Prepaid assisted acquisitions
support release (55,251) (26,103) (61,492)
5,403,446 5,478,076 11,245,613
=========== =========== ===========
All revenue is earned in the UK and no customer represents
greater than 10 per cent of total revenue in the periods
reported.
7. TAXATION
The underlying tax charge is based on the expected effective tax
rate for the full year to December 2019. The majority of the tax
arises from applying this effective tax rate to the profit on
ordinary activities.
8. 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
30.06.19 30.06.18 31.12.18
Basic earnings per share
Weighted average number of
shares 25,822,750 25,822,750 25,822,750
----------- ------------ ---------------
Profit for the period (GBP) 1,633,114 1,513,357 3,422,436
----------- ------------ ------ -----------
Earnings per share (pence) 6.3p 5.9p 13.3p
----------- ------------ ---------------
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
Ended Ended Ended
30.06.19 30.06.18 31.12.18
Diluted earnings per
share
Weighted average number
of shares 25,822,750 25,822,750 25,822,750
Dilutive effect of
share options on ordinary
shares - 349 -
25,822,750 25,823,099 25,822,750
----------- ----------- -----------
Diluted earnings per
share (pence) 6.3p 5.9p 13.3p
----------- ----------- -----------
9. DIVIDS
Unaudited Unaudited Audited
As at As at As at
30.06.19 30.06.18 31.12.18
GBP GBP GBP
Dividends (ordinary share
of GBP0.01 each) 1,549,365 1,394,429 2,014,175
Dividend per share paid 6.0p 5.4p 7.8p
10. INTANGIBLE ASSETS
Master Brands Technology Customer Goodwill Total
Franchise Lists
Agreement
GBP GBP GBP GBP GBP GBP
Cost
Balance at 1
January
2018 (Audited) 7,803,436 1,972,239 274,210 301,712 7,226,160 17,577,757
Additions - - - 10,000 - 10,000
Disposals - - - (84,205) - (84,205)
---------- ---------- ----------- --------- ---------- -----------
Balance at 30 June
2018 (Unaudited) 7,803,436 1,972,239 274,210 227,507 7,226,160 17,503,552
========== ========== =========== ========= ========== ===========
Additions - - - 10,000 - 10,000
Disposals - - - (22,567) - (22,567)
---------- ---------- ----------- --------- ---------- -----------
Balance at 31
December
2018 (Audited) 7,803,436 1,972,239 274,210 214,940 7,226,160 17,490,985
========== ========== =========== ========= ========== ===========
Additions - - - - - -
Disposals - - - - - -
========== ========== =========== ========= ========== ===========
Balance at 30 June
2019
(Unaudited) 7,803,436 1,972,239 274,210 214,940 7,226,160 17,490,985
========== ========== =========== ========= ========== ===========
Amortisation
Balance at 1
January
2018 (Audited) 1,325,528 88,968 49,118 201,846 - 1,665,460
Charge for period 206,587 33,363 39,518 22,867 - 302,335
Eliminated on
disposals - - - (82,454) - (82,454)
Balance at 30
June
2018 (Unaudited) 1,532,115 122,331 88,636 142,259 - 1,885,341
Charge for period 206,587 33,363 39,519 10,519 - 289,988
Eliminated on
disposals - - - (9,099) - (9,099)
---------- ---------- ----------- --------- ---------- -----------
Balance at 31
December
2018 (Audited) 1,738,702 155,694 128,155 143,679 - 2,166,230
Charge for period 206,587 33,363 39,518 12,266 - 291,734
Disposals - - - - - -
========== ========== =========== ========= ========== ===========
Balance at 30 June
2019 (Unaudited) 1,945,289 189,057 167,673 155,945 - 2,457,964
========== ========== =========== ========= ========== ===========
Net book value
30 June 2018 (Unaudited) 6,271,321 1,849,908 185,574 85,252 7,226,160 15,618,215
============ ========== ======== ======= ========== ===========
31 December 2018
(Audited) 6,064,734 1,816,545 146,055 71,261 7,226,160 15,324,755
============ ========== ======== ======= ========== ===========
30 June 2019 (Unaudited) 5,858,147 1,783,182 106,537 58,995 7,226,160 15,033,021
============ ========== ======== ======= ========== ===========
11. TRADE AND OTHER RECEIVABLES
Unaudited Unaudited Audited
As at As at As at
30.06.19 30.06.18 31.12.18
GBP GBP GBP
Trade receivables 237,304 157,319 113,466
Loans to franchisees 80,227 18,102 36,523
Other receivables 10,113 42,193 8,539
Prepayments and accrued
income 861,483 878,268 937,746
1,189,127 1,095,882 1,096,274
========== ========== ==========
12. CALLED UP SHARE CAPITAL
Unaudited Unaudited Audited
As at As at As at
30.06.19 30.06.18 31.12.18
GBP GBP GBP
Group
25,822,750 allotted issued
and fully paid Ordinary Shares
of 1p each 258,228 258,228 258,228
========== ========== ============
Enterprise Management Incentive ("EMI") Share Option Scheme
2017
During the year ended 31 December 2017 the Company implemented
an EMI scheme as part of the remuneration for all staff and granted
options over 2,290,000 ordinary shares at an exercise price of
GBP0.01 each which included options over 1,500,000 ordinary shares
being granted to two Executive Directors.
The options are exercisable after the approval of the financial
statements for the year ending 31 December 2019, and subject to
meeting an Earnings per Share target.
Enterprise Management Incentive ("EMI") Share Option Scheme
2018
On 1 August 2018 employees including the two Executive Directors
with options in the EMI Share Option Scheme 2017 were granted
options in a parallel scheme, over the same number of shares, and
with the same Earnings per Share target, but these are exercisable
one year later, after the approval of the financial statements for
the year ending 2020. These participants, therefore, hold two
options, one for each Scheme, and are only be able to exercise one
of their options. The total number of parallel options granted was
1,965,000.
On 1 August 2018 new employees who did not have options under
the 2017 scheme were granted options over 155,000 shares at an
exercise price of GBP0.01 each.
13. OTHER RESERVES
Merger Share Based
Reserve Payment Reserve Total
GBP GBP GBP
1 January 2018 (Audited) 2,796,984 137,020 2,934,004
30 June 2018 2,796,984 137,020 2,934,004
31 December 2018 (Audited) 2,796,984 186,877 2,983,861
30 June 2019 2,796,984 186,877 2,983,861
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.
14. BORROWINGS
Unaudited Unaudited Audited
As at As at As at
30.06.19 30.06.18 31.12.18
GBP GBP GBP
Repayable within 1 year:
Bank loan (term loan) 650,000 900,000 900,000
Repayable in more than
1 year:
Bank loan (term loan) 500,000 1,150,000 700,000
Bank loans due after
more than 1 year are
repayable as follows:
Between 1 and 2 years 400,000 900,000 400,000
Between 2 and 5 years 100,000 250,000 300,000
The term loan of GBP1.15m (30 June 2018: GBP2.05m) 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
term 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 2019 was GBP0.25m (30 June 2018:
GBP0.75m).
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 interest rate is variable during the
term at 2.5% above LIBOR and at 30 June 2019 the rate was 3.3%. The
amount outstanding at 30 June 2019 was GBP0.9m (30 June 2018:
GBP1.3m).
At 30 June 2019 the unutilised amount of the facility was
GBP3.85m (30 June 2018: GBP2.95m).
15. TRADE AND OTHER PAYABLES
Unaudited Unaudited Audited
As at As at As at
30.06.19 30.06.18 31.12.18
GBP GBP GBP
Trade payables 152,596 183,579 164,181
Other taxes and social
security 540,404 526,840 619,119
Other payables 119,545 42,924 28,113
Accruals and deferred
income 721,778 616,809 665,406
1,534,323 1,370,152 1,476,819
========== ========== ==========
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR KKLFBKKFXBBQ
(END) Dow Jones Newswires
September 10, 2019 02:01 ET (06:01 GMT)
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