Listed estate agency group sees profits rise but turnover dip as it prepares for continued ‘subdued’ market

Hunters Property, the York-headquartered franchised sales and lettings agency business, has reported moderate increases in its network incomes and profits while its turnover dropped during a year when residential sales reduced but lettings grew.

The listed firm this morning published its annual results for the year ended 31 December 2018. These showed that the firm’s network income rose 1% to £39.4m (2017: £38.9m) and its EBITDA increased by 2% to £2.28m (2017: £2.23m). Pre-tax profits increased by 5% to £2m (2017: £1.92m). 

However, group revenue decreased by 1.3% to £14m (2017: £14.2 m). Hunters said: “We expect the current subdued levels of transactions to continue in 2019. Hunters’ 2019 performance to date is in line with the Board’s expectations.”

The fall in revenue was attributed to residential sales revenue reducing against the backdrop of a market down 7% during the year. The firm’s revenue from franchisees, however, increased due to the 37 new franchisee branches that joined the Group in 2017 and a further 10 new franchisee branches that joined the Group in 2018.

Hunters proposed a 7% increase in final dividend to 1.60p, increasing its full year dividend by 9% to 2.40p (2017: 2.20p) for the year.

Hunters now has 201 branches – a fall from the 213 in 31 December 2017; but it has taken on 124 new franchisee branches in the last five years. Average Network Income per branch has risen 10% to £200,000 (2017: £182,000). Network Income for Lettings grew 13% (2017: 16%).

The firm said: “We have had a positive response from the network to our lettings book acquisition fund, which to the year-end had completed on thirteen lettings agency portfolios including four in the second half of last year. This assisted acquisition strategy as well as our focus and systems helped the lettings side of the network grow by 13% last year.

“The average combined income per independent business converting to the Hunters brand has risen by 22% to £186,000 from £153,000 in 2016. We continue to attract good quality independent businesses who see the benefits of a national brand, marketing and best-in-class training, business support, purchasing power, reduced operating costs and opportunities to grow their income.”

Hunters added: “Organically, we believe we are the fastest growing listed business in our sector having opened 124 branches, including converting 92 independent agency businesses over the last five years and a further 46 branches through acquisition in that period. Our total branch network numbers 201 branches (28th Feb 2019).”

Kevin Hollinrake, Chairman, said: “We are delighted to report another strong set of results in what has been a challenging market.  In 2018, we increased Network Income, Income per branch, Customer Service Rating and adjusted both profit before tax and earnings per share under our strategy to attract and improve businesses.  For 2019 we expect activity levels to remain subdued and the impact of the tenant fee ban disruptive in the short term. 

“We see the developments in the sector as providing further opportunities and it remains our intention to invest in our technology to keep us in the best place to benefit for the longer term. We have opened seven branches already this year and I am pleased that we are seeing an increasing number of high quality independent businesses.  I look forward to updating you further during the year.“