The Property Franchise Group – next Tuesday’s finals could show doubled profits, shares now 420p, brokers Target price 589p

03.04.2025

Look out next Tuesday morning, 8th April, for the 2024 results from The Property Franchise Group PLC (LON: TPFG), they should show doubled profits.

The company is the UK's largest multi-brand property franchisor, with a network of over 1,946 outlets delivering high-quality services to residential clients, combined with an established Financial Services business.

It is a portfolio of outstanding estate and letting agency brands encompassing the power of online and high street delivery for an exceptional service to residential clients across the UK.

The Business

The company was founded in 1986 and has since strategically grown to a diverse portfolio of 18 brands operating throughout the UK, comprising longstanding high-street focused brands and two hybrid brands.

The Property Franchise Group is also a member of two leading mortgage networks through its mortgage brokers, Brook Financial (MAB) and The Mortgage Genie (Primis).

The group’s brands are: Belvoir, CJ Hole, Country Properties, Ellis & Co, EweMove, Fine & Country, Hunters, Lovelle, Martin & Co, Mr and Mrs Clarke, Mullucks, Newton Fallowell, Nicholas Humphreys, Northwood, Parkers, The Guild of Property Professionals and Whitegates.

The group operates a pure franchise model that is tried, tested and trusted with over 350 franchise owners operating high street and hybrid agencies, with a total of over 580 branches and hybrid agents across the length and breadth of the UK.

More than 60% of the franchise owners have been trading for over five years.

The group prides itself on the comprehensive start-up training, support and investment that it offers: Support & investment; Business planning & development; Training & development; Marketing support; and On-going support.

Headquartered in Bournemouth, the company manages over 73,000 tenanted properties UK-wide.

2024 Trading Update

On Thursday, 30th January, the group issued a Trading Update for its 2024 year to end-December.

It reported significant organic and inorganic growth during the year with trading expected to be in line with market expectations.

2024 was a transformational year for the group, with the merger with Belvoir Group and the acquisition of GPEA Limited adding material scale and market reach in the group’s franchise business, a significantly strengthened Financial Services division, and a new licensing revenue stream.

Good progress has been made in the period in integrating the two new businesses and realising synergies, which started to materialise towards the end of 2024.

As a result, the group is now segmented into three distinct business divisions: Franchising, Financial Services and Licensing.

Management Comment

CEO Gareth Samples stated that:

"I am immensely proud of what the Group achieved in 2024, with the delivery of two major acquisitions, now integrated into the Group, as well as strong organic growth.

Our success has culminated in yet another record-breaking financial performance which has redefined the scale of our business and set us up for ongoing success.

FY25 has started with strong momentum and we look forward to the continued synergies from the two transformative deals, with Belvoir and GPEA, and other strategic projects initiated in the year coming to fruition in 2025, unlocking the full potential of the combined Group as it looks to its next phase of growth."

The Equity

There are some 63.75m shares in issue.

The larger holders include Gresham House Asset Management (18.23%), Richard Martin (10.42%), Close Brothers Asset Management (5.34%), Bavaria Industries Group (4.68%), Canaccord Genuity Wealth Management (4.38%), Hargreaves Lansdown (3.94%), and Otus Capital Management (3.19%).

Broker’s Views

Analysts Justin Bates and Portia Patel, at Canaccord Genuity Capital Markets, rate the group’s shares as a Buy, with a Price Target of 589p.

For the year to end-December 2024 group sales are estimated to have risen to £68.7m (£27.3m), while adjusted pre-tax profits will have doubled to £22.3m (£11.2m), earnings of 29.0p (28.4p) and an improved dividend of 17.0p (14.0p) per share.

Reflecting the bedding in of the entire Belvoir network, the analysts see the current 2025 lifting sales to £84.0m, with its profits up to £29.4m helping to lift earnings to 34.9p, together with a 20p per share dividend.

Over at Singer Capital Markets, its analyst Greg Poulton rates the group’s shares as a Buy with a 532p Target Price.

For 2024 he has estimated £67.2m sales, £22.0m profits, 28.3p earnings and 15.0p dividends per share.

This year he suggests that the group could see £85.7m sales, £30.1m profits, 35.5p earnings and a dividend of 19.0p per share.

My View

With its improving geographical spread, I believe that TPFG is on a good growth track.

Its shares, which touched 490p last August, are now at 424p and look attractive ahead of next Tuesday’s results announcement.

I now set a Target Price of 500p within 2025.

(Profile 03.04.25 @ 424p set a Target Price of 500p)