A trading update to the City has revealed that EweMove made losses of £300,000 on turnover of £900,000 in the first half of this year.
As a result, this afternoon’s statement said, underlying profits for the Property Franchise Group this year will be below market expectations.
PFG bought the business a year ago in a £15m deal – although the figure reduced to £9m when founders David Laycock and Glenn Ackroyd walked away just months later without their earn-outs.
This morning in EYE, chief executive Ian Wilson totally denied rumours that the EweMove business had been sold to Countrywide or was on the market at all.
He insisted that he would still buy EweMove today and that it had been a “bit of a bargain”.
This afternoon’s RNS is in full below:
“The Property Franchise Group Plc today announces that trading for the first six months ended 30 June 2017 has been encouraging. Revenue for the period was approximately £4.7m and profit before tax was approximately £2.1m including exceptional items.
“Our traditional high street brand businesses have continued to perform well with revenue up 4% year-on-year to £3.8m and profits up 22% to £2.0m.
“The disruption caused by the early departure of the EweMove co-founders on 30th June 2017, as announced on 29th March 2017, has meant that EweMove’s trading position is behind management expectations with (unaudited) losses for EweMove at the half year to 30th June 2017 of £0.3m against a target loss of £0.1m, on revenues of £0.9m.
“As a result, the management expects underlying profits for the full year for the Group to be below market expectations.
“The Board remains committed to EweMove, which it believes continues to offer significant growth prospects in the medium term.
“EweMove has over 100 franchisees and the Group’s strategy remains to scale the business over the next two years.
“The business recruited 18 new franchisees in the first six months of 2017 and Management Services Fees revenue is up 35% year-on-year to £0.6m.
“The Group will announce its interim results on 14th September 2017.”
Following the statement, shares in PFG went down 10%.