The losses that its online agent EweMove made in the first half of its financial year have been “substantially reversed”.
That’s according to a trading update from its parent company The Property Franchise Group (TPFG) for the year to December 31, 2017, issued yesterday ahead of its full-year results on April 10, 2018.
TPFG, which also owns the Martin & Co, CJ Hole, Ellis & Co, Parkers and Whitegates brands, said its revenue increased by 23% to £10.2m during the year, while its network of offices expanded to 403 (made up of 283 traditional brands and 120 EweMove) up from 377 in 2016.
EweMove recruited 31 new franchisees during the 2017, with another six franchisees for its more traditional brands.
Despite the prospect of the introduction of a tenant fees ban in spring 2019, TPFG said it was still eyeing expansion in the private rented sector and did not expect there to be any adverse impact on trading for the financial year to December 31, 2018.
TPFG remains heavily weighted towards lettings, which accounts for 70% of management service fees (against 74% in 2016).
Nonetheless, chief executive Ian Wilson said that 2017 was a tougher year of trading than 2016, particularly for sales in London.
He added: “Our network continues to grow, with our traditional brands having performed very well, and benefitted from website improvements applied using insights gained from EweMove.
“These improvements generated 17,000 new business leads for franchisees from pay-per-click campaigns, with website lead volumes increasing between 200% and 550% year-on-year in Q4 17.
“The trading losses incurred at our EweMove subsidiary in H1 17 were substantially reversed in H2 17 trading, during which period EweMove traded profitably.
“Franchisee recruitment continues to be an area of focus at EweMove, particularly the number of experienced estate agents being recruited.
“The new managing director at EweMove, having joined in June 2017, has made a very positive impact, turning around profitability and supporting the business development of existing franchisees.”
EweMove, bought for £9m in September 2016, lost £300,000 on revenues of just £900,000 in the first half of 2017, while the two founders left in June of that year.
Nick Neill, the York franchisee, was subsequently appointed managing director.