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Cost savings on portals subscriptions lure more independents to join large network

Land Insight to 17 April NS

The high costs of portals are specifically given as a reason why small independents could be interested in converting to the Hunters brand.

Hunters yesterday reported robust results for last year.

In its report, Hunters chairman and co-founder, the MP Kevin Hollinrake, said independent agents who have converted to the brand have made more money than they used to “as well as significantly reducing their key operating costs, such as portal subscriptions, through our economies of scale and purchasing power”.

He reiterated the point a few sentences later, saying that the “subdued” levels of transaction are likely to play in Hunters’ favour this year.

He said: “We would expect this market to provide us with an enhanced opportunity to expand our branch network further and strengthen our brand.

“The case to encourage independent operators becomes even more persuasive in providing a way to be part of a stronger group that can also offer significant cost reductions, particularly in terms of portal charges for Rightmove, Zoopla and OnTheMarket.

“We are already seeing an improved level of enquiries from high quality independent businesses.”

Hunters, now almost entirely a franchise business, follows Belvoir and The Property Franchise Group this week in saying that it expects consolidation in the agency sector.

Hunters recruited 37 new branches last year, including the conversion of 15 independents, and the acquisition of the Besley Hill franchise network in the south-west.

As at the end of the financial year on December 31 there were 213 branches, with an average income of £182,000 – down from £190,000 the year before.

Overall network income rose, with the increase in branches, to £38.9m.

Headquarters income rose by 3% to £14.2m, with adjusted pre-tax profits of £1.94m.

Hollinrake said these were robust results in challenging conditions.

He said: “We have out-performed the market each year over the last three years by on average 10%.

“Our model is about both the number and the underlying performance of our branches.

“We invest a great deal of time and resource helping to improve each branch’s revenue.

“Our out-performance against the market per branch reflects that investment, those improvements and then the underlying increased strength of the component parts of our network.”

He went on: “Our business and our network partners commit to deliver for our customers.

“This underpins our belief that business owners will work harder and deliver better results than a network of employees, self-employed operatives on short-term contracts or those engaged to simply list a home rather than actually selling or letting a property.”

Hunters chief executive Glynis Frew said that she expects more growth of the network this year, mainly through conversions to the brand.

She said the forthcoming tenants’ fees ban is driving many of the enquiries.

Hunters is proposing a dividend of 1.5p per share.

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Source:: Cost savings on portals subscriptions lure more independents to join large network