The Property Franchise Group Stock

Good afternoon, and welcome to the Property Franchise Group plc Interim Results 2026 Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll.

And I would now like to hand you over to CEO, Gareth Samples. Good afternoon to you.

Good afternoon, and thank you. Good afternoon, everybody. Delighted to be able to talk to you today about our recently delivered results, another record for the group, so a record first 6 months performance. Ben and I are going to run you through that performance and talk about some of the things that we're working on in readiness for the remainder of the year and into 2027. So what we're going to cover today, highlights, financial review, our strategy and that's an ever sort of developing strategy, outlook in the sort of short and medium term. And then at the end of the presentation, give you the opportunity to ask any questions.

So straight into highlights. So just for those who are new to the story, we are the U.K.'s largest multi-brand property franchise group. We have a proven multi-brand franchise model with 18 regional and national brands operating in sales, lettings and financial services. We've been very acquisitive since inception. We've done 8 acquisitions. The 2 biggest in 2024 when we combined with our biggest competitor, Belvoir, along with the Guild and Fine & Country did that in March of 2024 and May of 2024. And since those 2 acquisitions, we created a very large property services business. So we're now from a footprint perspective, the largest in the U.K. with 1,900 businesses that are part of the group.

And as a result of the Belvoir acquisition, we also had a financial services business, which is Mortgage Advice Bureau's largest introducer and that business today run by Michelle Brook has 290 employed and self-employed financial advisers, and that business will do circa 25,000 mortgages this year. Why do people like the story? Well, 46% of our revenue is recurring. We are dominant in the letting space. So although we do sales and lettings like most of the state agency businesses, our business is very much weighted towards lettings, and that drives that recurring revenue. We have a Fine & Country international business that operates in 19 distinct countries and have recently opened in Uruguay, Barbados, Dublin, Dubai. So really good uptake on that Fine & Country international model.

We have really strong free cash generation in the first 6 months of the year, GBP 13.4 million. As a result of bringing the business together and the size we now have, we've also invested in our senior leadership team, which is highly experienced, and we have a number of group MDs that run each of the businesses. And we have a progressive dividend policy. And again, that's pushed forward again this year with a 10% increase in the interim dividend. So that gives you a little bit of understanding about the group and the scale. As a result of the coming together, we changed the way we reported. So we split the business into 3 divisions, and we're sort of adding the fourth as we've integrated the new businesses together. So franchising is our biggest division and always will be. And that's where our franchisees pay us a percentage of turnover on a monthly basis.

A big financial services business, I've already talked about, 290 financial advisers, Mortgage Advice Bureau, biggest introducer. And that's a business that over the last 5 years, we've committed to a buy-and-build strategy. So we are continually looking at opportunities to increase the size of that business. We did an acquisition in January, a business called SAFS, and it's likely we'll do another acquisition this year in that financial services space. And then we've got licensing, which is very akin to franchising. It's a recurring revenue model, but this is where estate agents, independent estate agents pay us a monthly fee for a range of services. So it's recurring. They're on a 1-year contract with a 1-year notice period. So very sticky and again, very good from a recurring revenue perspective.

And then the platform element, which we've worked on extensively over the last sort of 18 months because we've now got 1,900 branches that are part of the group, we believe the platform being able to offer distinct services and negotiating on behalf of all of our members, the keenest price for the right product and then being able to spread that across the network gives us a huge opportunity. And the first element of that sort of platform model was Privilege, and we'll touch on that a little bit later.

We've also launched MarketMore, which is an enhanced marketing services package. We're working and we'll soon launch our AI services package that will spread across the group. And there are a number of options that we're looking at in the insurance space, conveyancing space, auction space that will further enhance that sort of platform model. So think of the platform as really that sort of engine for growth going forward from an organic perspective. So utilizing the size of the group to take more of the sort of businesses spend into very cost-effective complementary products for each of the businesses. That gives you a little bit of insight into our business.

Operational highlights, our managed portfolio is the largest in the sort of estate agency space. We look after 149,000 properties on behalf of landlords, slightly down on 2025 due to the introduction of the renters rights bill, which again, we'll touch on later, but actually probably a better number than we thought. We launched a Privilege program, which had 3 elements to it. One was a compliance saver, so a range of products that a business owner needs, things like PI insurance, all at a very attractive price, and most of our network have taken that product.

A rent guarantee product that gave the landlord comfort that if a tenant didn't pay their rent, the rent guarantee product would kick in, pay the rent, pay for the core cost to evict that tenant and pay for any damage that, that tenant did while you were getting them evicted. And that's gone incredibly well. We've got nearly 50% of the total book covered, which gives both us, our franchisees and our landlords huge comfort. That's been a real success. And then the third element of Privilege is the deposit income that historically has been lodged within each of the individual businesses that we've now pulled into one centralized account that will enable us to earn interest on that money and pay our franchisees some of that money back.

Financial Services division had a record half year. They did 13,400 mortgages in the first half against 12,800 last year. We have been working on our AI solutions for probably 15 months now. And I'm delighted to say we've got 4 of those trials in place across the network and actually have some franchisees also trying that technology, and I'll give you some examples a little bit later in the presentation, but AI is moving at pace, and I think we'll launch that over the next sort of 4 to 6 weeks.

We've made a strategic investment in a survey business, Meridian, which is -- was the old Legal & General surveying business. Two reasons for that. One, it was a very, very good business. Two, it was sort of a hedge. There's talk about another sort of HIPs, Home Information Pack, type product coming back into the market to try and speed up the transaction cycle. And our view was if that was to happen, we would need to guarantee our offices some survey supply. So I think that's a really good strategic investment, and we'll work with the guys at Meridian to move that business forward over time. And then as I've already touched on, we've already done a financial services acquisition at the start of 2026. So they would be the operational highlights.

I'm now going to hand you over to Ben, who's going to talk you through the financial highlights. Ben?

Perfect. Thanks, Gareth. Good afternoon, everybody. So in terms of key financial highlights, revenue for the first half of the year was up 7% year-over-year to GBP 43.3 million. Of that GBP 43.3 million, 46% we would define as recurring. That percentage has just dipped very slightly compared to last year. And I think that demonstrates the high level of growth that we've shown in Financial Services compared to the other divisions, which has just moved that backwards very slightly because Financial Services is typically nonrecurring in nature. Adjusted profit before tax, GBP 15.5 million, up again 7% year-over-year, and we've proposed an interim dividend of 7.7p, which is up 10% year-over-year.

In terms of balance sheet and cash flow, net debt, again, improved versus this time last year, down to GBP 8.1 million, and that obviously reflects not only the dividends that we paid out during that time and the debt we've had to pay down, but also the acquisitions that Gareth alluded to earlier on. Clearly, leverage down at a very low level, which, again, we're very happy with. And cash from operations, up 2% to GBP 13.4 million. The reason why it's only up 2% compared to, say, the profitability improvement of 7% is because some of the elements that we've been looking at, particularly Privilege have a slightly or have a longer cash cycle.

So we'll talk a little bit more about Privilege later on, but very simplistically, the commission that we're earning on the rent guarantee, whilst we're able to recognize it in full at the point that the policy goes live, we're actually only receiving the cash evenly over the 12-month length of the policy. So you, in effect, got an accrued revenue with a trade receivable whilst that cash is coming through. And clearly, as we've actually penetrated more and grown the level of landlords that are on cover, that's obviously also increased the trade receivable. Still very strong, still very good cash generation, but that's why we've just seen that slight difference there. And adjusted basic EPS, again, up 8% to 19.8p. So again, overall, particularly in the backdrop of the wider market and such as some of our peers, actually a really kind of good first half set of results at a top level.

Just to go down a little bit, just to kind of give you a feel for the split between the 3 divisions. You can see that franchising still very much is the core of what we do as a business, making up well over 50% of our revenue and over 75% of our profit, then followed by financial services and then finally, licensing. And you can see those pink numbers at the bottom just showing you the revenue growth in each of those divisions. So you can see Financial Services certainly from a revenue perspective, improving significantly. And even from a profitability perspective, albeit there's been some reclassification that's making that look slightly better than it really should do, again, improving in Financial Services.

Probably the most disappointing, and we'll talk a little bit more about it later on, is the fact that licensing has largely remained flat and actually from a profitability perspective, gone backwards a little bit, and that profitability is because of some additional provisions that we've had to put in on the Fine & Country side. And we have been working at the start of H2 already in terms of a number of the initiatives that will help to improve and reverse that trend. But clearly, H1, we'd have liked to have got that in quicker. So that just gives you a very quick overview.

If we just deep dive briefly into each of the divisions. So Gareth already alluded to some of those kind of key KPIs that we monitor. And if you've seen this presentation before, what I suppose we're trying to highlight to you is what the key operational KPIs that we monitor to ensure that we're driving the right ultimate results. Breakdown of the revenue to kind of give you a feel for how that's a little bit more color for how it's made up within each of the divisions and then obviously, some of the key maybe financial results that we're seeing coming out of the other end.

So KPIs managed lets -- as Gareth already alluded to, 149,000, down very slightly, but in the context of the Renters Rights Act and the risk of landlords exiting, actually, we're happy that actually since the December year-end, it's stabilized and is flat. And certainly from this time last year, there's only a small reduction. Number of sales, again, look down and are down in terms of volume. But from a comparative perspective, H1 of 2025 had the stamp duty holiday implication, which meant that the first quarter, there was a huge rush of transactions going through. So actually, a slightly peaked comparative. And as you can see, we've still managed to achieve overall kind of MSF sales growth.

And then the third kind of key KPI which is, again, very key to us is how we're driving kind of productivity. So the average MSF in effect, almost the average revenue that we're driving per franchisee, as you can see, that's increased up to 20,600 as well. So it's not just about those key almost volume metrics. It's how much are we working with those franchisees to make sure that they're driving more revenue and therefore, we're getting more revenue in absolute terms as well. You can see in terms of the revenue split in franchising, it stayed very consistent. Lettings still makes up a significant part of our franchising business, almost 50%.

Sales has largely remained flat as has the income from our owned offices and that other is where we're seeing some of the additional Privilege income coming in. And then just on the right-hand side, again, in the context of the wider market, both in lettings with the Renters' Rights Act and some of the uncertainty around that to achieve 2% lettings growth, actually, we're reasonably happy with.

Sales growth, again, it's a reasonably kind of subdued market. And again, if you compare that to the 2025 first half, which had that stamp duty change and to still be increasing the revenue despite lower volumes just demonstrates that some of our work that we're doing with franchisees to increase the overall kind of absolute commission or the commission percentage that they are achieving on a sale is coming through and is working. And as you can see, still an incredibly strong business, both in terms of its operating margin at 56% and the recurring percentage of recurring revenue at 68%.

Just quickly then for Financial Services, similarly, number of advisers dropped very slightly since this time last year, down to 290. The number of transactions has increased up to 13,400. And again, on the productivity measure, again, really key for us to make sure we're maximizing productivity of our advisers up to 44,900 from just over 40,300. You can see there that in terms of the mix between employed advisers and business partners, actually, it's taken a bit more of a shift to employed advisers. And you will have heard us speak before that whilst business partners remains part of our model, we're very keen to be pushing the -- and focusing on those employed advisers because, again, when it comes back to productivity, there's more ability to be able to influence our employed advisers versus the business partners and therefore, drive overall profitability.

Revenue growth of 6%, the adjusted operating profit up to 20% as a result of some of the actions that we've taken with MAB and some of that reduction in the number of business partners and a small level of recurring income as a result of the nature of this particular division. And then just finally, licensing. So again, those kind of 2 key KPIs, operational KPIs that we monitor. And number of licensees actually up very slightly to 1,039. The average license fee per licensee has actually come down. That in practical terms is not because we are charging any less. It's actually because on a few examples within the Fine & Country business, we've had to put some provisions in against a couple of licensees where they are struggling in some of the -- in the market that is a bit subdued in that kind of top upper quartile. And so that's just brought down the overall result a little bit.

Again, this division is very much a tale of 2 halves and 2 businesses. You've got Fine & Country, which certainly from a licensee perspective is doing well. It's continuing to grow both domestically and internationally. It is operating in a sector -- in part of the market, which is probably finding a little bit more challenging at the moment. That kind of upper quartile over GBP 1 million kind of area is -- has definitely slowed down a little, and we're hearing that from the feedback from our Fine & Country members. And whilst the -- I suppose the beauty of the licensing model means that the pure license fee doesn't necessarily change, obviously, over the long term, if that licensee is struggling commercially, that can have challenges in terms of debt and the like, which is why we're very closely managing that.

When it comes to The Guild on the other side, that's where we've historically seen a little bit of attrition within the number of advisers. We've relaunched that proposition in the first half of this year and actually then did some pricing changes at the beginning of the second half of the year that will help to see our margin improving going forward. So certainly helping to improve that revenue -- that flat revenue growth that we saw in H1, but also importantly, trying to move that adjusted operating profit up into and over above 30%.

Just more generally and a slide that I think is really key to understand and ever more important right now to be able to demonstrate when times are a little bit more difficult. If you go back to when this business first listed and look at the dividend, the adjusted earnings per share and the adjusted profit before tax that this business has earned over that time, you can see from this slide that with the exception of the dividend paid in the COVID year, almost without exception, each one of those metrics has increased year-over-year. And we've shown this slide before, and I suppose we're demonstrating that certainly, in 2025, we continued that trend, and clearly, the first half of this year has put us in a great position to be able to deliver the consensus, which will continue that trend even further.

And I think really important to flag that that's obviously easy or easier to do in a time when the market looks great and the sales market is very buoyant and the market similarly. If you think about some of the challenges that we've been having to navigate as a business with the Renters' Rights Act and a slightly slowing down sales market and still managed to deliver this result even when perhaps some of our peers are struggling to do the same. I think it demonstrates the resilience of this business. And the reason why, again, to reiterate why it's so resilient is because of really principally 2 things. It's the fact that we are predominantly lettings and we have that high level of recurring income, which means we have the stability and consistency of income almost regardless of some of the wider economic conditions.

But also secondly, that franchise model means that if there are large movements in, say, the sales market, actually, the impact on our P&L because we're only broadly taking that 10% MSF charge is absolutely diluted. And so therefore, we're able to navigate those ups and downs with other opportunities as we see fit. And we're really excited with where we can continue to take this graph going forward.

And then probably just finally for me on the finance section, and then I'll hand back to Gareth. In terms of capital allocation, our strategy remains really quite consistent with what it has been previously when we've presented to you. Financial resilience, clearly very important for us. We've continued to pay our bank debt down. Organic growth investment, where we're able to, we look for those opportunities to invest organically. This is a principally capital-light model. It doesn't require a huge amount of organic investment. But that said, we have done small bits in AI that Gareth has already referred to, and we'll talk a little bit further about later on. And we've also been exploring some financial incentives for agent conversion, which again, Gareth will refer to later on.

Progressive dividend, obviously, as I mentioned earlier on, we've increased by 10% for the half year dividend. M&A activity, again, Gareth has alluded to the 2, the acquisition and the investment that we've done in both Smart Advice Financial Services (sic) [ Smart Advice Financial Solutions ] and Meridian. And then in terms of surplus capital, we've not done, say, any specific buyback programs or anything like that. However, because the -- we believe that the share price has been at a point that would be economically advantageous for us to buy some shares in and we've been buying some shares into our EBT to make sure that we're making the most of that current price and therefore, reducing down any future dilution to shareholders from awards to management. So that's how we've been looking at capital allocation. The strategy has very much stayed the same, and that's how we've been applying it within the first half of the year.

And I think with that, I'll hand back over to Gareth to take you through the market.

Thank you. So just an update on the market. So lettings obviously been disrupted with getting ready for Renters' Rights Act. So the first sort of 5 months of the year for us as the franchisor was very much about ensuring we were ready and then ensuring that our franchisees were trained and understood the act and understood the new processes and procedures and systems. So that was quite distracting. But overall, with everything going on in the lettings market, it's still very strong.

Rent inflation is probably slightly down on last year, running about 2%, 2.5% as opposed to 3.4% last year. But again, I think that's because everyone has been distracted in terms of getting ready. The number of properties becoming available and the demand for those properties is really good. So there's 8 people for every property that becomes vacant. So we're able to fill those properties really, really quickly. The demand for letting properties is still sound. So the fundamentals in the lettings market, irrespective of what's going on in the economy are still really, really strong, and we're really pleased about that.

Financial Services in the first 6 months of the year has been a record result, which is great. And that's partly due to increased individual productivity, which is something we talked about last year, and we're focused on having Michelle has done a really good job on that, partly to do with the improved commercials and partly to do with the fact that Michelle has been running that business now for whatever, 15 years, has built an incredible reputation in the space, has a really high-quality back book of our customers. So even when the transaction cycle reduces, she's got a big back book where she can do product transfers and remortgages that then boost those numbers up.

So we're really confident that irrespective of the market for the remainder of this year and next year, even if transactions fall slightly, we'll be able to make up the difference through the high-quality back book that Michelle has built over the long term. And then you've got sales. And sales haven't been that bad this year. We always guide all of our investors that normal for us is 1.1 million transactions. And last year was 1.15 million, so a bit better. And we think this year will be 1.05 million to 1.08 million. So slightly down on 1.1 million, but no disaster. So it's running about 5% less than last year. However, there are some sort of headwinds there that basically got worse, I guess, in the last 3 to 4 weeks.

So the key driver to housing transactions is mortgage rates. So if the 5-year mortgage rate goes above 6%, that will have a detrimental effect. On volume. If it goes above 5.5%, it will also have. So we're watching the sort of mortgage rates really, really closely. We've come out of the summer and activity is reasonable. I think our nervousness is probably the last 2 or 3 weeks with everything you've seen on the news. So we're watching that with interest. The market at the moment, excluding Central London, which we're not that represented in, is relatively good. We've got a budget coming up on October 28. So we'll see what -- if any stimulus for the housing market is included in the budget.

I think there is an understanding, and we will tell everybody that will listen to us that a strong economy requires a strong housing market. So we'll wait to see what comes in the budget. But ultimately, second half of 2026 and 2027, depending on interest rates, we think will be somewhere between 1 million and 1.1 million transactions. And if that is the case, then our numbers will be fine. The last time there was the 1 million transactions was just after the Liz Truss budget in 2023. So we're sort of going back to the activity levels from 2023. And you'll see from our numbers back then that they were still pretty positive. So that's a little bit about the market.

I think I'm now handing back to you, Ben on strategy.

Yes. So for those of you that have listened to Gareth and I previously, we've talked about a strategy which has been around how we drive sales, how we're driving lettings within the business and how we're potentially driving some of the financial services. And I think we've realized as part of the platform strategy that we've been working on, but also the evolution of the business through the combination of -- with Belvoir and GPEA 2 years ago, that actually the strategy itself is now becoming much more evolved and much more driven around that kind of platform.

And so our strategy really -- we now look at our strategy in 3 kind of key almost buckets. The first one is about growing the core business. And what do we mean by that? Well, that's looking at how we are growing the number of franchisees that we have, the number of financial advisers, the number of licensees, the size of that network and whether that's growing number of franchisees through converting agents through a better proposition, whether that's attracting new licensees, again, by the fact that we have the best proposition because of the size and scale.

But it's not just about the volume of our network, it's actually the productivity. It's the core operating performance almost of that network. So again, referencing back to what I said earlier on, how are we driving the productivity per adviser, how are we making sure that the MSF per franchisee is as high as we can make it. So that's really, I suppose, one element, which is growing that kind of core business.

The second then is how we're looking at driving cross-platform synergies. So we obviously have the 3 divisions now. And probably the best example of this and the easiest to explain is how are we making sure that the Financial Services division is being fed by the franchising division or the licensing division in terms of leads and opportunities for new mortgages or protection products. And there are a number of other examples where between the 3 divisions, there are synergies to be made, particularly around our customer data, but also the way that we're sharing services and technology in order to be able to optimize how the combined output of those 3 divisions is working.

And then the third aspect is really how we're expanding the platform. So we've talked about the benefits of having this platform and being able to push and apply products for the benefit of our network across the network. And actually, that's worked incredibly well. So what other things are there that we can look to do either organically and internally by creating it, such as our market more marketing agency proposition or acquire or invest in, such as the Meridian Survey opportunity that is an additional offering that we're able to then apply across that network. And that's really the third element. And that is also, therefore, those 3 buckets are also driving how we're thinking about acquisitions.

So certainly, obviously, in the growing the core business, it's whether there are still any franchise businesses to acquire. It's the buy and build that we've talked about previously in terms of financial services businesses. It's letting portfolios to drive that recurring income into our owned offices. But again, in expanding the platform, it's what complementary businesses are there out there that provide that either allow for us to be able to support the greater proportion of franchisees or a network members' wallet spend or be in that kind of wider ecosystem of the property buying and letting kind of process. And you can see we've made quite a lot of progress on all 3 of those aspects. within 2026, in the first half of 2026.

We've driven the productivity really and increased the number of been working on acquiring the number of advisers into financial services. We've revisited The Guild value proposition in terms of those cross-platform synergies and making sure that we're working as one combined group. Certainly, when it came to the renters rights tax, we took a group-wide approach on that to make sure that our licensees and our franchisees and where relevant the advisers were absolutely supported as best as we possibly could. We increased partner income across the group, again, by using -- utilizing those synergies.

And then on the expanding the platform side, clearly, we've invested in Meridian. We've rolled out the Privilege and further kind of driven the penetration of that product throughout the first half. So you can see how we're trying to drive this business going forward and it really being around taking the scale, growing that core business and continuing to grow that scale and applying it where we possibly can across the platform for the benefit of the overall group.

And I think with that, I'll probably move on to outlook.

Brilliant. Thanks, Ben. So some really exciting stuff to share with you all in terms of AI and those that have listened to me and Ben over the last year, 18 months will know that this was a real focus in terms of how could we utilize technology to drive either increased lead generation for our franchisees and ultimately turnover or could we look at efficiencies for our franchisees to make them more profitable. And we've made huge progress in the last 9 months. We're now at trial stage.

Some of you will know that we've got 11 owned offices as part of the group. So all of the trials we do in our own offices. So if we're going to make any mistakes, there are mistakes. And I think that's really important in terms of credibility with our franchisees. And currently, we've got 4 different AI trials going on, and I'll probably talk about a couple of them now, yes. So the first one, which I'm really excited about is property management. And again, I said last year, property management for us as a group is probably more important than it would be for others because we are predominantly a lettings business. So getting that property management triage via technology correct is sort of game changing for us.

So we turned on live about 6 weeks ago in our owned offices, the property management AI negotiator. 4 weeks ago, we had a lady at half 9 at night ring into the office and say, I've got no hot water. The virtual negotiator said, I'm sorry to hear that, let me take some details, took some details. And then said, I'm now going to transfer over to WhatsApp. I'm going to send you a link, open that link, and we'll continue the conversation. Sent the link, pressed the link, continued the conversation. The virtual neg said, please take a photo of your boiler. Please take a photo of the pipe underneath the boiler, took a photo, then advised to open one of the taps and repressurize the boiler, did that. Lady had hot water about 35 minutes later. And we've seen and listened to the call all the way through, and it was seamless. It was amazing.

You then start to think about what would that have looked like without AI. So lady who rang in at half 9 in the evening. Nobody would have been there. They left the message on the answer machine. The staff coming in, in the morning would have hopefully prioritized the answer messages, but maybe not stay by 10:30, they have had a return call. I'm not sure one of our property managers would have advised the repressurizing of the boiler. I think they may well have said we'll get a plumber out here. That plumber may have taken a day or 2 days at best, it would have been towards the end of the day after she reported the issue. So we've gone from a 30-minute situation where the lady got hot water to something that could have been 1, 2 or 3 days later that, that lady got hot water.

So -- and as I say, the actual flow of that conversation was amazing. I was blown away by better than we could have hoped for. So it's now been in all of the owned offices for about 3 weeks. And what we've learned so far is so far, without human intervention, it's been able to solve 31% of the issues that have come in. We thought between 20% and 30%. So the fact that it's over 30% is a really good thing. But it's also identified other stuff that's been really [indiscernible] as well in terms of being able to automatically get a locksmith out and stuff like that. So that is really exciting. We've got loads of our franchisees that want that. So that's really, really important.

Second trial that I'll talk about today is financial services appointment generation. So we've turned this live with our EweMove brand. So every single customer that goes through a journey with EweMove is now talked to via AI regarding their mortgage arrangements, okay? And every single customer is asked whether they need a mortgage. And for the ones that say, yes, they need a mortgage, AI then takes them on a data capture exercise. So you'll remember I talked earlier in the financial services section about individual productivity. Historically, the only way when somebody says they need mortgage right to be able to start that journey is to put them in front of the financial adviser. And that financial adviser may spend 20 minutes establishing that, that individual can't get a mortgage.

So what we're trying to do is take some of that rapport time away from the financial consultant, do some of the data capture via technology so that we are passing to the financial consultant a better quality lead with more likelihood of signing up. Now we thought we'd get something like a 6% strike rate on the number of buyers coming through the EweMove journey. And that's currently running at 18%, so 3x what we thought it was going to be. So again, that's, again, quite embryonic. We're tweaking it, the conversations. We're looking at how much more information we can take. But that is now taking information and then booking appointments into financial consultants.

So do I think we can increase productivity? Yes. Do I think I can increase efficiency? Absolutely. So those 2 things that we talk about absolutely can be proven on the financial services test case. So we're working with a bespoke partner in that AI space who's delivering tech that's unique for us. And we've got good levels of demand from our franchise network. So that will become probably from September, our next platform product. And I think we'll have 100 to 200 franchisees that want to take that technology, put it into their business and look at where that goes. The final angle on AI is this customer for life journey.

So I've talked before about the 18.5 million data records that the group has access to. And if I look back over the last 20 years, everybody has told you that data is gold, but nobody has ever been able to commercialize it. And I do believe data is gold, but you need a cost-effective way of being able to interact with that data. And I think technology finally is there that's going to enable us to do that. So building this customer for life journey with multiple touch points with each of the consumer being able to deliver really relevant incredible content to the end user with the right call to action with the right products that are going to -- I think, is a huge opportunity for this group.

And it is a big part of what we're going to be doing in the next 6 to 9 months. So we've got the people. We need to have the journey. We need the technology and then we need the strategy in terms of how we're going to communicate with those customers. But that will then deliver me valuations I can give to my franchisees, mortgage appointments I can give to my franchisees, which will increase their market share and increase their turnover. So that's the other objective with our technology.

The other piece, which I think is really exciting moving forward, the big opportunity for growth over the next 3 to 5 years is agent conversion. So we now believe we've built a proposition that is compelling. And we test drove it on our franchisees, okay? So Privilege went really well, market more, gone really well. AI services is really, really good. We also do loads of commercial deals that no individual business could go and negotiate on their own and get the rates that we get on CRMs, on portals, on insurance, everything. So we're now at a point where I genuinely believe we can give more back to a franchisee than they give to us in financial return. So I get 10% of turnover on average.

So let's say it's turning over GBP 0.5 million, I get GBP 50,000. I believe with everything I can now provide and offer, we give more than that back. And that's a unique position for a franchisor to be in. And you then look at the market outside of us, and 18,500 small independent estate agents on a day-to-day basis, have to run their own website, run their own technology department, run their own CRM, run their own commercial department, run their own compliance department, look at their marketing, all of the things they've got to do. I'm surprised they got any time to sell a house, yes. And all of that cost takes time out of the business in terms of generating income, but also cost more money than those products that I can provide at a better price to them. So I can do it better and I can do it cheaper.

So our next step, and this will be in half 2 2026, so second half of this year is to go out and start to talk to independent estate agents. Let's say there's 18,500 of them. I've currently got about 700 franchises. So if I get 1 in 20 of 18,500 to agree with me and say, yes, actually, that proposition is fantastic. Then I double the size of my franchise business, okay? So that's a really exciting growth opportunity that we want to explore. Now we've built that platform, now we've built that sort of product range. Yes, and I'm really excited about that. So that's the things we're going to be working on in the second half of the year.

And finally, just to finish with, we've got a really resilient business model. I think that slide that Ben showed you the continual sort of growth of this business when our peers, if you put some of our peers on that graph, it would look nothing like our graph should give you all confidence that we deliver every half year, every full year, and we don't believe that will change. And our full year trading is or remains in line with expectations.

So I think that's the final slide, Ben, yes?

Gareth, yes.

Okay. So one, thanks for listening, two, we're going to move on to questions, I think then.

[Operator Instructions] Gareth, Ben, if I may, I will get straight into the Q&A session. First question here has many parts to it and reads as follows. Management described the departure of Financial Services business partner hubs at the end of 2025 as managed. Could you please explain who initiated the departures and why, how many advisers were involved in the FY '25 gross revenue, retained net commission and profit contribution, whether the departure was already reflected in FY '26 forecast, whether any further hub departures are anticipated and how the lost revenue profit contribution has been replaced?

Okay. All right. Well, there's a fair amount to try and unpack there. So let me try and summarize as best as I can and try and cover off as much of that as I possibly can. So you'll remember that financial -- sorry, business partners are effectively akin to franchisees within financial services. So they are working with us as the appointed representative of MAB in order to be able to trade. So in effect, using us as the middleman because they are typically too small to be of interest to MAB to deal with directly. And that's actually a really important point for why these -- certainly 2 out of the 3 left.

The third one was actually just a mutual departure. It was only 2 advisers anyway. So it wasn't really an issue. But the 2 key business partners that moved to Mortgage Advice Bureau was effectively because they had come to the end of their 5-year agreement with ourselves, with Brook. And they had grown during that time period to a size where actually Mortgage Advice Bureau would deal with them directly. So commercially, it made more sense for those business partners to contract directly with Mortgage Advice Bureau than it did to retain with TPFG who, as you can imagine, being in the middle are taking a proportion of that value chain. And so therefore, taking it out and going directly to Mortgage Advice Bureau meant that they were going to get better terms.

Now there's a couple of things around this. So answering, I think, some of the specifics in terms of the amount of advisers that were involved, it was about 25 across those 2 businesses. In terms of the amount of revenue and the profitability, as I've talked about before, the business partners, whilst an established part of the business model up to this point is not particularly profitable because we are just taking that small chunk as the commission passes through. Unfortunately, though, under the accounting rules, we have to recognize the revenue gross.

So in terms of the amount of revenue that they reflected, it was about GBP 1 million, literally just under GBP 1 million, and the profitability was some in the region of about GBP 0.1 million. So you can see pretty small in the grand scheme of things. Was it in the 2026 forecast? Yes. But obviously, in terms of our ability to be able to replace that through some of the renegotiation that we've done with Mortgage Advice Bureau.

And the other very quick point I will make here is clearly, the right question to be asking would be why would we continue to do the business partners if they're just going to get to a certain size and then move over to Mortgage Advice Bureau. And we had the exact same conversation with Mortgage Advice Bureau and made sure that in a scenario where that does happen, that there is still some commercial benefit coming to us from Mortgage Advice Bureau.

And the final thing on this particular point is, do we expect this to be happening every month? And are there lots more to go? Those 2 came at a particular -- just came across both at the same time. It was a timing issue rather than anything else. If I look forward the next 12 months because obviously, we have visibility of when contracts are coming to an end, we have foresight as to whether these come up.

And generally, actually, the size of the businesses that we have remaining within that business partner are not sufficient enough even if they were coming to the end of their 5-year term in order to be able to contract directly with MAB. So we don't see this as being a particularly ongoing issue where we're going to see a significant amount of decrease over time, but we have also tried to protect ourselves financially. So yes, that would be the answer to that question.

That's great. Thank you for the detailed answer. Another question here asks, you'll be aware of the success of RentGuarantor Holdings plc and the rent guarantee service. Do you offer a similar product to franchisees? And if so, how is it performing?

Yes. So I mean, we've been asked this question a lot over the last couple of days, actually. So just to sort of context, the rent guarantee we offer is for landlords, and it guarantees rent in the event of a tenant not paying their rent the core cost to them and any damage that tenant does, okay? RentGuarantor is guaranteeing the tenant and it's usually for students or overseas students who need a guarantor or for people that haven't passed the traditional lettings reference or for some people that may be on benefits. So they're completely different markets.

We have a student business that does have guarantor insurance and most of the other insurers offer a product that is similar. So instead of having a mom and dad guarantee the rent in the event of default, you take out an insurance policy with RentGuarantor that will cover that rent in the event of default, okay? And I think it's for 2 months. So we have a similar policy, but it's a very small part of our market.

Thank you, Gareth. Moving on. You did well to get better terms with Mortgage Advice Bureau. What is the background? Did you just lower the rate? Or is it a volume discount or similar? And what -- and why did they agree? Could you step up the margin further by negotiating something even better?

So obviously, we don't want to get into specific details around commercials with one of our kind of key partners. But I think what we can probably share is we have a fantastic relationship with Peter at Mortgage Advice Bureau and the entire senior management team there. We were able to negotiate a reduction in our core rate.

And how was that able to come about? Well, I think there was a general reflection despite how good that relationship is in the size and the percentage that TPFG makes up of the Mortgage Advice Bureau book and the volume and the scale that we've grown to warranted some form of commercial improvement. So it wasn't too much with Peter's arm behind his back. I think it was a general reflection of how the relationship has grown over time along with our business.

Switching gears here, a question regarding your 10% annual adjusted PBT growth target. Do you view that 10% figure as a conservative baseline with organic growth and platform execution cover the target even in quiet markets? Or do you see 10% as a realistic midterm ceiling across a full property market cycle?

Yes. No, really good question. I think 10% in terms of the stuff we're doing now, the organic growth, the rent inflation, the portfolio acquisitions at the franchisee level and indeed a franchisor level into our owned offices is reasonable. It's always been between 5% and 10% that organic growth. Obviously, as we get bigger, it gets more challenging. But I think there's so much more to be excited about. And yes, so -- but the organic might be down 1 year, but one of the initiatives may deliver more. So I think it's a realistic target for people to focus on.

I think if the agent conversion thing goes beyond our dreams, that would supercharge it. If we were able to do a big complementary acquisition, that would supercharge it. So we're looking to both those things all of the time. If AI takes stuff and 700 franchisees take it, that would supercharge it. So I think there are enough levers for us to be comfortable of achieving that level.

But let's say, we keep talking about market. Market is -- it's not easy. When you look at our peers and the results they're delivering, we are bucking the trend. So to deliver the result we have in 2026 with everything that's been going on has been a challenge, but also really, really satisfied. I hope that answers the question.

Perfect. Next up is, please, could you talk more about the potential for interest income on deposits? How much could it be? How would you share it out? And what is the time line?

Yes, I'm happy to do that. So if we just try and keep the numbers simple for the time being, so we mentioned earlier on, we've got 149,000 policies -- sorry, policies -- managed properties. I think out of that in terms of probably the total value of deposits that we could achieve is, I think a ceiling is probably in the range of about GBP 130 million. The way that we set up the scheme was always supposed to be about providing benefits to the franchisees on something that they just weren't earning any income on.

So very broadly, the insured scheme that we're using as a cost of about, let's say, 2% if I'm able to achieve a well-rounded kind of 4% on -- in terms of interest, then we're then splitting that 50-50 between ourselves and the franchisee. So let's say, 1% on GBP 130 million would therefore be about GBP 1.3 million worth of financial benefit to us a year.

I do think it's worth flagging here that whilst this is absolutely star plan, we started this, and I think we talked about it as far back as 2024. We're already rolling out. We've got about GBP 30 million in that bank account right now, and that will, over time, trend up as new deposits come into the account. that the government has signaled over the last few months that they may look to stop allowing these insured schemes to be in existence and just focus on custodial schemes where that interest isn't available.

So this is something where we're taking -- that we're continuing on with the plan. We're taking advantage of it whilst it's available. But I think it would be wrong of us to say that it's in our long-term kind of 5- to 10-year plan purely because of the messaging that's come from the government.

Perfect. I'm squeezing this last question as we reach the end of the session. But you've spoken in the past about potential acquisitions of competitors, some listed. Given the market is tougher at present, does this make it more or less likely that you can agree a deal? How would you finance a bigger deal?

So in conscious of time, I'll keep it trying really quick. So in terms of more or less likely, I suppose you would argue that potentially there are better opportunities and maybe on the face of it better values out there. That said, it's obviously very much down to the Board and the shareholders in terms of what it's willing to accept in their own, I suppose, depiction of what the perception of what the value of that business is. So I don't think it's always necessarily as simplistic as that.

But are there potentially opportunities out there? Yes. How would we finance a bigger deal? Again, depends, particularly obviously in a listed environment, how we structured it. So we could potentially, depending on whether it reflected the appropriate kind of change in value, it might be and it might warrant and drive better value for our shareholders if we were to end up ultimately a lower value but a higher level of maybe shares provided as part of the consideration. Clearly, if we try and maximize the cash element of it, that can reduce down the impact on the earnings per share, but then does similarly have an impact on the potential premium that you might have to add. So there are very much kind of levers to and that we have to consider.

In terms of how much financing is available to us, I mean, on our business alone at a GBP 30 million EBITDA that we achieved in 2025, there is, I would say, easily the ability to be able to get GBP 60 million to GBP 75 million worth of debt if we so needed it on our own performance alone before taking into account anybody else. So there are options out there.

That's great. Well, Gareth, Ben, thank you for addressing those questions from investors today. And of course, the company can review all questions submitted today, and we'll publish those responses on the platform where appropriate to do so post the meeting. But Gareth, before we direct investors to provide you with their feedback, which is particularly important to yourself and the company, could I please just ask you for a few closing comments?

Absolutely. As always, thanks for taking interest in the business. I hope you're as excited as we are about the future and the opportunities that we've got, and I look forward to updating you in the next 6 months. Thank you very much.

Fantastic. Thank you once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good afternoon to you all.

Good afternoon, and welcome to the Property Franchise Group plc Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review your questions submitted today and publish responses where appropriate to do so.

Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Gareth Samples, CEO.

Great. Thank you very much, and welcome, everybody. Good afternoon. Ben and I are going to be doing the presentation today. The items are going to cover highlights of 2025, financial review that Ben will take strategy moving forward, the outlook to the market this year and then at the end, give you the opportunity to ask any questions you'd like to ask. So highlights, I guess, 2025 yet again, a record year in a number of different parts of the business. For those of you that don't know us, we are the U.K.'s largest multi-brand property franchise business. We operate from 15 distinct brands, which is a 1,900 network of offices, both franchisees and licensees. We have a large mortgage business with 315 financial advisers working within it who last year had a record year and delivered 25,000 mortgage applications.

We operate our Fine & Country brand both in the U.K. and in 19 distinct international territories. Last year, we opened in Dubai, Uruguay, Dublin, Barbados, Sydney. So that's a growing part of the business. I guess if I take you back to 2024, 2024 was very much transformational year for us. We bought our biggest competitor, Belvoir who were very similar business to TPFG and then 2 months later, we bought the Guild of professional estate agents having the Fine & Country brands and really we have now created a business of scale. Since 2013, we've done 7 acquisitions and integrated those really successfully, and we'll show you the numbers from sort of 2014 a little bit later in the presentation that really demonstrates the sort of growth curve we've been on over the last few years.

A big part of the business is recurring revenue. We are predominantly a lettings business, 65%, 70% of our turnover comes from lettings and 51% of that revenue is recurring. So that underpins the real quality in the business. We're very capital light and generate really good levels of cash generation. So GBP 22.1 million of free cash generation in 2025 and that equated to 116% of earnings, which we were delighted about. And then a really strong dividend this year, moving it forward again to 22p that was a 22% uplift on 2024 and equates to current share price about 5.5% yield, which, again, we're delighted to be able to announce.

One of the first things we did when we pushed all the businesses together and acquired the business in 2024 is we realized we needed to be clear about the 3 divisions that were in the business. And franchising is and will always be our biggest business and Ben will take you through the numbers in terms of how that works across the group. As I touched on earlier, a really big financial services business that came with the Belvoir acquisition and Michelle Brook runs that business, has built that business from one consultant many years ago to now. The powerhouse that it is and we're one of mortgage advice bureaus, largest introducers.

And then our new division, licensing, which is similar to franchising, but certainly different. So we wanted to report differently on that. And that's our third division. And then I guess as the year has gone on, 2025, what we started to develop is this sort of platform model. So it's very much about providing services into the enlarged network. And this really demonstrates what scale brings to the party, I guess. So being able to do the research and development on behalf of our members to make sure that we pick the right products, the relevant products, the things that are going to assist our franchisees and licensees in growing their turnover over the future and negotiate really good deals for our members to be able to implement a range of services. And we'll touch on some of those later in the presentation, privilege being one of the big ones. But going forward, we've got tech services, we've got marketing, all of which will grow over the next 18 months and form part of our sort of growth strategy moving forward.

Touching on the highlights, the operational highlights from 2025. Our managed portfolio now stands at 149,000 properties, slightly back on last year, but actually, we're really happy with -- there's been talk in the press about an exodus of landlords and for sure some have left the space. But to only drop by 3% or 4% in the year, we were delighted with that. So we are still the largest manager of properties in the U.K. looking after 149,000. I think Connells look after about 120,000 and then you've got Lomond and Leaders Romans Group about 80,000 and then LSL about 4,0,000. So significantly bigger than most in the property management space. And then we had a really good year in sales last year. We completed on 35,000 transactions. That was a record year for us. And there's still more growth potential in that area as we bring more and more franchisees to the party and get them to become better at selling houses.

We launched our first sort of platform service, which was Privilege, and we'll talk about Privilege a little bit later, but that was a set of specific lettings products to sort of take into consideration the Renters' Rights Act and try and protect our landlords and our franchisees in the event of tenants increasing. Touch on the Financial Services division, record year, 25,000 mortgage applications, largest contributor to the Mortgage Advice Bureau network. And you'll have noticed in January, we also acquired another business, Smart Advice Financial Services that has added 35 additional financial service consultants into that business. So very much committed to our buy-and-build strategy in the financial services space.

In licensing, Fine & Country had a really good year, 13 new licenses sold in the year, and 8 of those, as I touched on earlier, were international licenses and we've got a strategic plan over the next 3 years to really look at that international piece and look at how we can expand that out. We strengthened the leadership team during 2025. I think the business that we now run is far greater than prior to the acquisitions and making sure we have the right Board and the right senior leadership team is critical in terms of the next 3 to 5 years growth.

So we've made really good progress with the senior leadership team. That frees Ben and I to look at additional acquisitions, strategy, investor relations, and that's worked really well for us over the last 6 months. And then significant progress in and for those that were here last year in the AI space. So we are now -- we've built some products. We've got them in trial in some of our own offices, and we're making really good progress in terms of developing those products that will be fit for our licensees and our franchisees to adopt into their business. So again, we'll touch on a little bit more about that later in the presentation.

So the operational highlights. I'm now delighted to hand you over to Ben, my CFO, who will talk you through the financial highlights. Ben?

Perfect. Thanks, Gareth. So in terms of financial highlights, starting off with revenue, we delivered in 2025, GBP 84.3 million. That's up 25% year-over-year on a reported basis. Clearly, 2024, the comparative year was when we did the acquisition, so that's the year-over-year percentage. So looking at the pro forma growth, the real kind of underlying growth, that number for revenue was 9%, so still kind of really positive. Of that, as Gareth has already alluded to, 51% is recurring, very slight dip compared to 2024, which was 52%. And that's really just seeing the full 12 months of the significant financial services division that came along with Belvoir, which is less recurring in nature.

And in terms of adjusted profit before tax, we delivered GBP 31 million, which year-over-year, again, on a reported basis is up 39%. But when you strip that out and you look at it on a pro forma basis with the real kind of underlying growth, it's 22%, which obviously fantastic and higher than the revenue really as a result of, I suppose 2 factors. One is the cost synergies that we've been working on post acquisition and the integration benefits that we've seen coming through, but also some of the revenue that we'll talk about today has helped, has dropped largely to the bottom line.

In terms of the overall adjusted profit before tax margin, we reported 33% back in 2024 and that's actually climbed to just under 37% as part of our ongoing task challenge to try and move ourselves back to 40%, which is where we were prior to the Belvoir acquisition that had financial services, which is a historically lower margin. Dividend, 22p, which is up 22% year-over-year and from a cash perspective, ended the year with net debt of GBP 2.3 million context of that, some of you will remember that we took out GBP 20 million worth of debt to fund the second acquisition in 2024, the acquisition of GPEA. And already within that kind of 18-month period, we've been able to bring that net debt down to GBP 2.3 million, which is a testament to the cash generation of the business.

Clearly, also at that level of net debt very lowly levered at 0.1x. And you can see the cash generated from operations during the year of GBP 22.1 million up significantly and will have contributed to our ability to be able to do that. The adjusted basic EPS, again up to 40.3p, up 27% year-over-year. So in terms of certainly at the top level, really, really happy with the results, really proud of what we've been able to achieve. If you just drop down to a divisional level. And this slide is just giving you a bit of a feel for how our revenue and our profitability mix is made up between those 3 divisions that Gareth outlined earlier on. And I think probably the 2 key messages to take away from this slide are franchising is still absolutely the core of what we do as a business. It makes up over 60% of our revenue.

But as you can see from those charts, makes up over 75% of our overall profitability. And that's at the core of what we do as a business but also, you can see with those -- underneath those charts and those numbers which are demonstrating the pro forma growth in revenue, adjusted operating profit and EBITDA across all of those 3 divisions, you can see real strong growth across -- certainly profitability across all 3 divisions, which again, we're really happy with. Licensing a little lower than we had expected or that we have looked to achieve, and I'll talk a little bit more about that when we deep dive into that particular division.

So just a quick slide on each of the divisions just to give you a bit of a feel for how they've performed and what we've been looking at. And one of the key things I suppose I want to be able to give you as investors is understanding what operational KPIs are very much relevant to that particular division, what the mix of the revenue kind of looks like and then actually how are we performing in the financials within that division. In terms of key KPIs, Gareth has already referred to the number of managed lets, the number of sales, but also a key operational metric that we monitor is the average MSF per franchisee, which again, is a demonstration of how successful our franchisees are being. And that's increased to just over GBP 40,000 per franchisee on average in 2025, which is up compared to 2024, which was GBP 36,000.

Revenue mix within franchising and really comes from 4 fundamental areas. It comes from lettings MSF. And you can see in those charts that remains, again, very much core to the franchising division. You then got sales MSF, so the amount paid by franchisees on commissions that relate to sales activity. That's actually increased certainly in proportion to the previous year. And I think that's really as a result of it being a strong sales year within 2025, but also some of the initiatives that we've put into place to improve the general sales proposition, particularly in the Belvoir business, which was perhaps a little bit behind where TPFG had been historically. And you've then got the income from the 11 owned offices. Again, we're just trying to build and go from strength to strength and that the remaining, which is lots of other, I suppose, incremental income, part of which is actually some of the platform elements that Gareth was alluding to earlier on. Overall profit margin for this division is 59% and recurring is 68%. So really kind of financially strong business.

Just jumping on to financial services. So again, those key KPIs that we monitor post the acquisition of Smart Advice Financial Solutions that we did in January, we're at 315 advisers, completed 25,000 mortgages during 2025. And again, another kind of key operational metric that we keep an eye on is the productivity, so revenue per adviser, which was up from GBP 70,000 last year to GBP 83,000 per adviser and is the result of great work that we've been doing both internally and also with Mortgage Advice Bureau in order to be able to improve productivity and our consultants.

Next, we've got 2 elements, fairly similar businesses that we spoke about, which is the employed advisers, commissions and revenue generated from employed advisers and revenue generated from our business partners who are a little bit more akin to franchisees that are independent businesses that are using our status as an appointed representative of MAB in order to be able to trade compliantly and you can see that swung a little bit more towards employed advisers, which I suppose demonstrates our focus around that particular area given our ability to be able to drive productivity much greater than we can in the business partners section.

Adjusted operating profit within this segment -- within this division is strictly 18% based on that kind of gross revenue number. I think what's worth understanding here is because the way that we have to account for the commissions coming in, we have to account for them at a gross commission before any of the pay aways that we have to do as part of the arrangement. And actually, if you look at a net commissions number, which we think is almost more appropriate kind of revenue comparison, you've got -- you actually see an operating margin much closer to 63%, which is, again, very similar to kind of franchising and I think much more realistic in terms of demonstrating the opportunity and the strength of the division.

Just jumping on to licensing. So again, key KPIs that we monitor a number of licensees that we've got dropped a little bit overall in the year, predominantly as a result of seeing a little bit of a reduction. I'll talk about that a little bit more in a second. And secondly, also the average fee, the average license fee per licensee. You'll remember that licensing is slightly different to franchising in the respect that it's not dependent on the success of the licensee. It's not a percentage of their income. It is a flat price fee, which is collected on a recurring basis. So getting that fee right, making sure that we're maximizing the value proposition and therefore, maximizing our ability to be able to price accordingly is strategically is absolutely key.

You can see in terms of the split between Fine & Country again stay very, very similar between 2024 and 2025 and in terms of the adjusted operating profit, making about 28% and recurring, again, because it's that recurring license fee is 74% within this particular division, so particularly high. We'll talk a little bit more about the Guild, I think, in a moment, but the key thing that we're trying to do around there is updating the value proposition. It's a little bit dated. We've got the capability of the wider group now and the commercial deals that are available to it, we should be able to apply into that value proposition; a, to make it more attractive to licensees, but also secondly, give us the ability to be able to price accordingly.

So moving out to the divisions and just talking a little bit more about cash. We've already said about the level of net cash generated from operations, which was GBP 22.1 million. And you just see the kind of the key movements from the starting bank balance to the final bank balance of GBP 10.9 million in the table on the left-hand side. Nothing in particularly exciting within there. We have the remaining deferred consideration on GPEA that we paid back in May 2025. And actually, that was reduced by GBP 1.35 million after some negotiation with the original seller. We had a payment down of loans, but we also drew some of the RCF in order to be able to fund some activity and we paid GBP 12 million worth of dividends as well as actually seeing a bit of cash inflow from the sale of some shares in the employee benefit trust.

Free cash flow per share landed at 34.2p, again, up compared to 2024, which is at 30p. So again, really kind of happy with that result. And I suppose just to talk about the performance over the kind of the last 11 years. I think this is a really important slide for us because something that not necessarily unfairly, but we generally kind of perceived to be because we're in the property industry and we operate within that sector, we must absolutely be at the whims of the property market and the macroeconomic impact of the ups and downs that, that property market goes through and therefore, our earnings and our profitability being linked to that.

And I think what we're trying to demonstrate really with this chart in particular, is actually we aren't as cyclical as you might expect but we don't believe we're cyclical at all. If you look at our dividend paid, our adjusted earnings per share, our adjusted profit before tax as metrics over the last 11 years since 2014, with the exception of the dividend being paid in the COVID year when it was kind of held back to retain cash for obvious reasons, every single one of those metrics has climbed every single year. And you can see the CAGRs that have been achieved over those 3 metrics on the left-hand side as well, 17% dividend, 16% EPS, 28% of the adjusted PBT. And I think if you were to compare us to more corporate property agency estate agency business, you would see a lot more cyclicality.

And the reason why you don't see it within our business is that franchising model is the lean towards the lettings piece of that high level of recurring income, which gives us that strength year after year to be able to see out or mitigate any of the property market fluctuations that, as I say, allows us to kind of continue on that pretty steady growth curve, which actually you can see over the last 5 years, we started to accelerate.

And the final number really on this slide, which will move quite nicely into the next one is just trying to give you a bit of a feel for the potential cash generation of this business. I mentioned a couple of times that we generated just over GBP 22 million worth of cash in 2025. Even if I just took that number and times it by 3 to demonstrate the next 3 years, that's GBP 66 million worth of cash for us to play with and deploy for the purposes of returning best value to the shareholders. So I think probably worth at that point talking about our capital allocation and what our thoughts are. So clearly, financial resilience of the business is absolutely first and foremost. We look to pay down debt as best as we can. You saw the net debt was down at 2.3 leverage really low, and we'll continue to do that.

Organic growth investment. In reality, this is an incredibly capital-light business. There isn't a huge amount to invest even with some of the things that Gareth has mentioned around AI and the privilege program, the amount of investment that we've had to put in certainly from a cash perspective has been quite minimal really in the grand scheme of things.

Dividends -- business has historically always paid a progressive dividend is something that we and the Board are very keen to continue going forward. Historically, on average, paid circa kind of 50% over the last 2 years, we got that to about 56%. And I think we'll see that kind of continuing going forward. And then really after that, it's down to our acquisition appetite. And I suppose there's been some debate as to whether there needs to be other forms of returns to shareholders, whether we were to do a special dividend or a buyback. And I think our view is that with the platform that we're generating and the ability to be able to sell these additional services into the franchisees for their benefit and also for ours, actually, our money is much better placed at the moment to build on that platform to build on our financial services, buy-and-build strategy and also to look at other potential opportunities in terms of lettings book into our own offices. So that's really where our primary focus is going to be certainly over the next 12 months.

I think with that, I will probably hand you back over to Gareth so he can talk you through our strategy.

Great. Thanks, Ben. We'll touch on the market first. So obviously, 2026, we were thinking was going to run very similarly to 2025. If I look at the lettings market, the guidance we sort of gave back end of last year is U.K. rents expected to rise by 2% to 3% of rent inflation, slightly lower on last year. Clearly, we've got the Renters' Rights Act that comes into force on the 1st of May. So we're doing an awful lot work, we have been for the last 2 years, but the final bits of work this year. So we've got all the offices ready from a paperwork perspective, a changing process perspective, and that's worked really well for us. And what we do think is there will be a shift towards a more balanced tenant market going forward. So lettings, we think will be nice and steady this year. There's still good demand for property. There's still a shortage of good quality rental property. So most of those fundamentals that we've seen over the last 5 years will remain.

Financial services, we think we're in for another good year. There is a massive remortgage book this year based on 2021 and 2022's sales market. So if you remember back to COVID, coming out of COVID, everybody seemed like they wanted to move, and we did really, really well from a mortgage perspective in 2020, '21 and '22. And all of those mortgages are now coming up for renewal. So all of those 5-year fixed mortgages are coming up. So I think the estimate is GBP 320 billion worth of remortgage activity in 2026 and 2027. And if I look at last year, that was about GBP 250 billion. So big uptick on that.

Sales market, we were predicting a very similar year, 1.1 million transactions, maybe 1.15 million transactions. And we see no reason today to change that. But we are obviously aware of what's going on in the Middle East and the change in mortgage rates being pulled and mortgage rates starting to slightly increase. So we've got to watch and brief on that. We've seen no downturn in activity over the last 3 weeks, but we need to be aware of it. It looks like it's going to go on longer than initially anticipated and that may have some negative impact on the sales market during the year. So that's a little bit about first 10 weeks of the markets, generally positive. We've then got the Renters' Rights Act and, what is it? It's the end of fixed term tenancies. It removes no-fault evictions and it brings in hefty fines for noncompliance, okay?

We very much welcome regulation. I think it makes us as the professional managers of property more visible and more necessary. So we're embracing the changes. I don't agree with all of them, but we're embracing the changes, and we spent a lot of time over the last 12 months training our franchisees and making sure they're ready and that's gone incredibly well. And some of the things we've put in place in the last 6 months to mitigate the renter or the potential pitfalls of the Renters' Rights Act, I'm going to talk about now. So we've launched something called the Privilege scheme and that has 3 elements to it. First element is to try and protect all of our landlords and all of our franchisees for potentially an increase in rent arrears. So -- and this becomes one of those sort of platform products that we touched on earlier.

So rent guarantee is the ability to ensure against rent arrears and for the insurance policy to pay out the rent to the landlord. And by doing that, that will ensure that the franchisee gets their management commission and selfishly, we'll also get our MSF. So we have sold in the last 6 months about 60,000 policies to our 150,000 landlords. That policy guarantees the rent, guarantees to pay the core cost, the eviction costs to get that tenant out of that property and also commits to pay for any damage that's done by that tenant during the eviction process, okay? And that policy costs the landlord GBP 300. The franchisee makes good money on that policy. But our biggest nervousness was court time.

So if you take the average property in the U.K., the average rent is about GBP 1,300 per calendar month. To get a tenant into court, once they stopped paying the rent, we think will take between 9 and 15 months going forward, okay? So let's call that 10 months that's GBP 13,000 in lost rent to process the eviction court papers and to get court work cost somewhere between GBP 4,000 and GBP 6,000, that's GBP 19,000. And there's a likelihood there will be some damage in that property once you finally evict the tenant. So we're saying for landlords, that's potentially a GBP 20,000 liability lost income. Not many landlords could absorb a GBP 20,000 loss in income and still pay the mortgage and still keep the portfolio running effectively.

So I think we've done the right thing. It's been embraced really well by the franchisees, got really good uptake. It's been embraced really well by the landlord. So still work to do. We still got the next 10 weeks to sell the remainder of the landlord database that hasn't taken it up yet. And we've also started to launch that to our licensee. So really important part of that sort of platform range of services and has gone really, really well. Second part Privilege is a sort of compliance saver program for business owners, for our franchisees. And it's a range of products like PI, AML credits, audit, Propertymark costs, Propertymark One tickets. So about GBP 6,000 worth of value packaged up by us and Propertymark and retail back to the franchisee about GBP 1,500 an office. And we have 97% of our offices take that product. So that's worked really, really well, and that's driven savings at a franchisee level.

And then the final part is we have finally managed to get the TDS to develop a deposit product for our franchisees that will enable us to collect all of the deposits into one account as opposed to having 700 individual franchisee accounts and start to earn interest on the back of that, and we will be able to share that interest earned between us and our franchisees. So really relevant products that will either make the franchisee money or save the franchisee money. And that's been received really, really well. The other thing that we've done to combat the Renters' Rights Act is we've ran over the last 9 months about 80 landlord evenings. So the private rented sector in the U.K. has about 4.5 million properties in it.

In terms of people like me, so managing agents, 2.25 million, so 50% of the 4.5 million properties are dealt with property managers like me and then 2.25 million are dealt with by self-managing landlords. So we've taken upon ourselves to get out there into the offices and to educate self-managing landlords about the Renters' Rights Act. And what's been really interesting is one most landlords' complete lack of knowledge about the Renters' Rights Act after we've done our presentation about the changes and the fines and they are terrified with Renters' Rights Act. And every single event, we have people at the end queuing to talk to us about taking on their properties, culminating the other week in Huddersfield with one landlord coming up and saying, "Look, I don't want to look after these anymore myself. Can you look after them for me?" And the franchisee said, "yes, absolutely. No problem at all". How many properties have you got? And he said 77. So a really big landlord, doesn't want to deal with the compliance of 77 properties going forward.

So we see that very much as an opportunity. I think what it's taught us is we need to be the voice of the sector and we're working towards that and we'll carry on with these evenings, but we will do podcasts and e-mails shots to make sure that we continue to educate the self-managing well, all landlords, but self-managing landlords, and we see that very much as a lead generation tool to increase our portfolio size. So that's one area that we've learned over the last 12 months.

Second area, we're going to focus on is how do we develop the next generation of buy-to-let investors. So, everybody says, "Oh, it's not as good as it used to be," and that's absolutely correct. But if you look at the returns, it's like any asset class, be it shares, be it building society interest, Bitcoin, gold, ultimately, it has its place for some people but nobody's sort of championing the sort of next generation buy-to-let investors. So we're going to take it upon ourselves to be the voice of the next generation of buy-to-let investors and really move that forward. That also then leads me into one of the growth opportunities that we're going to execute on in 2026, which is developing a landlord concierge specialist buy-to-let business. Okay. We're already big in financial services, not so big in buy-to-let. We've got 150,000 landlords, and we have no buy-to-let offering for them.

And I think with the size we are the biggest in the U.K. We will be able to deal direct with lenders to drive exclusive mortgage products in either a company structure or an individual buy-to-let structure. So we're very committed to building that buy-to-let business going forward. We'll do a trial in 2026 and really launch that in 2027, along with a range of other landlord services that will be really useful for all of our landlords and help aid retention of that lettings book. So that's what we're doing in terms of the Renters' Rights Act. I think it's been a really useful year in terms of learning about what we can do to sort of drive the buy-to-let space forward over the next five years. So really, really positive initiatives.

If I then move on to our growth strategy generally and some of this we've touched on before, some of it's new. So, if I look at lettings, obviously, rent inflation has always played a reasonably sized part in our growth year-on-year. In addition to that, we are encouraging our franchisees to continue to buy those portfolios from their competition. And first 10 weeks of the year are showing really positive signs, far more activity this year than last year. And Ben, when he came into the business, has done a really good deal with Barclays to provide funding to the franchisees, which has been embraced really well and the early signs in terms of the rates we're able to get our franchisees from Barclays is significantly cheaper than the funding sources they had prior to Ben doing his work with Barclays.

So we expect to see an upturn in the number of portfolio acquisitions we will do over the next 3 years. We set a sort of internal target to 6,000 a year, which is punchy, but as I say I think that's there now we've got the funding agreed. And then obviously, big part is Privilege. Privilege will continue to drive our franchisees' income and our own income in terms of us taking that MSF with the increased income. So good growth opportunity for lettings.

In terms of sales, again, those of you who have joined me before, I've always said we've not ever punched our weight, if you like, in the sales arena. Although last year was a record year, we can still grow. Even if the market contracts a bit in 2026, we can still do more because every single year we've got more offices embracing sales. So I think we will continue with that growth initiative to become better in the sales arena and to take more market share locally and drive the income that way. Financial services, Ben's touched on, we will continue the buy-and-build strategy. So we bought Smart Financial in January. That's a really good business. If I could do two or three of them a year, I absolutely would. So we're out there looking for other businesses that would be suitable to come into the group. Criteria for me is they've got to be profitable, and they've got to have at least 20 financial consultants working within them. So we'll continue to have those conversations.

Then looking at ways in which we can increase Financial Adviser productivity. That's a really big measure. And some of the stuff we're doing in AI, which I'll come on to, we believe will dramatically improve individual financial consultant productivity over the next 18 months. So they're the growth initiatives within Financial Services. Then Licensing, probably twofold. So modernizing the proposition within The Guild, making that, bringing that up to the sort of modern day, launching Privilege into the licensees, along with expanding Fine & Country internationally, and filling in the gaps that we've got in the UK. So really focused on that value proposition for licensees along with the products that we can offer at a reduced price to all of the licensees for software, for marketing services, for canvassing, for print, all of those things, looking to drive those forward as well.

And then we come onto the platform model, and the platform is, as I say, we've got insurance services which is contained within Privilege. We're going to have tech services, which is all about AI, and we're really excited about that, and we'll touch on that now. So we have probably been working on AI for the last 12 months and you know what our role within this sort of offering is to go out and do the R&D, the research and development on the market. What we did at a very early stage is looked at where this best fit the business, okay. We're a lettings business, so we thought property management. We have a lot of leads coming in because we've got 15 million data records, so being able to deal with triaging lead activity. Then a virtual assistant in an office to be able to take calls and do data capture and be able to do fulfillment.

So we've got trials in place at the moment, in our owned offices. Our virtual assistant we've called Steve. Steve is taking phone calls. He's fulfilling customer requirements, so be able to book viewings, able to book valuations, able to book mortgage appointments. In the first sort of 8 to 10 weeks in the owned offices, he's currently producing a result that's 28% better than the humans, which is really interesting. That's one trial. We're beginning to then roll that out to the franchisees.

The second and probably most important one is property management. Again, we identified really early that the property management is probably one of our franchisees' biggest costs and biggest jobs. So being a heavily focused lettings business, we focused on that from an AI perspective. If you think about property management, it's quite predictable. So my boiler is not working. I've got no hot water. I've lost my keys. I've smashed a window. My garden needs cutting. A variety of similar requests going in across the whole of the franchise group. So if we can triage those initial inquiries via technology, that could save an enormous amount of money from a wage bill perspective for our franchisees. So very much looking at getting that launch probably in the next six to eight weeks, understanding what the initial results are, and then really driving that forward across the franchisees and the licensees. So AI we see as a big part of 2026 and an even bigger part of 2027. I guess the two things, can it save money?

Okay, where are the efficiencies? Where can AI be used from an efficiencies perspective, both for us as a franchisor and for our franchisees? And then lead generation. How can we develop more income-earning activity for our franchisees to drive their businesses forward? They're the two criteria we're looking at. We're working with some incredible partners who are helping us build this technology, and then we'll take it out as part of the platform offering to be able to put that into our franchisees and licensees businesses. The final part is acquisition. So buy-and-build strategy in financial services, absolutely. In terms of franchise businesses, there's only two big ones. Winkworth, listed, not for sale. LSL, listed, not for sale. So unlikely to do them.

So then looking at where we could acquire businesses is in the services arena, and we're talking to a few businesses at the moment. Where we can buy a profitable business that we can then promote across the 2,000 office network to increase the profits, we would absolutely look to do that in the right circumstances. The people we've talked to so far, we can buy those businesses at 4, 6x profit, and we believe we can put them into the network and drive a much better profitable result. So absolutely, we would look to do that, and we will update you over the next six months.

And then the other side from an acquisitions' perspective would be buying lettings portfolios into our owned offices. So we've got some really big owned offices in York and Manchester, Birmingham, Leicester, that we have the opportunity to buy portfolios and always practice what we preach to our franchisees. Really focused on trying to buy some of those portfolios into the letting offices over '26 and '27. So it's overall, lots of opportunity. We've appointed a COO to help Ben and I develop and deliver some of these initiatives. As I say, we think ultimately, there's so much opportunity the scale has provided the business that we can really start to drive that forward over the next three years.

Outlook, touched on this earlier. Q1, we're trading in line with expectations. Iran focusing -- is on everybody's mind, is on the news every day. So we'll keep a watching brief on that. Boost the revenue synergies via the group scale and platform strength. As I say, I think the biggest, not surprise, but the biggest sort of, plus in the last 12 months is understanding the power of this business and Ben's consistent delivery slide earlier. We built this business from a starting point of GBP 5 million adjusted PBT back in 2020, and we delivered GBP 31 million last year. So it's the exciting piece now is what can we deliver with GBP 31 million worth of firepower? That's really exciting in terms of the growth that we can push through over the next 3 to 5 years. We're actively pursuing acquisition opportunities and always will because of the cash generation we have.

Growth supported by diversified revenue streams and strengthened leadership. I think we're really well-positioned to take advantage of the market conditions in 2026.

Thanks for listening. We've gone through a lot there. We're now going to open it up for questions.

[Operator Instructions]

I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q&A can be accessed by our investor dashboard.

As you can see, we have received a number of questions throughout today's presentation. If I may just start off with the first question here, which reads as follows: What is the organic growth outlook for the next five years, given limited franchisee businesses left to acquire?

Okay. I think we may have covered that in the presentation, but absolutely the platform model. Looking at services that we can spread across our 1,900 offices, so the franchisees, the licensees, that really give them a competitive advantage at a price that's affordable, that's really important. That will drive income into the franchisor but also revenue at a franchisee level, of which we'll take the MSF from. So organically, I think the numbers in the market that we talked about on Monday or Tuesday is between 7% and 10%. Acquisitions will play a part. I wouldn't call acquisitions organic. Smaller acquisitions will bolt in. The financial services acquisitions will add to that organic piece, along with the letting book acquisitions in the owned offices adding to that organic piece. Our ambition is always to try and get organic growth at 10%. That's what we'd like to deliver year on year.

That's great, thank you. I believe keeping the share count low and generating double-digit EPS, at least 12%, is one of the best ways of generating shareholder value. Are the board considering aggressive opportunistic buybacks to create shareholder value?

I'm happy to take that one. I think at this point in time, and we go back to that platform model and the opportunity that we've already been able to demonstrate with just some examples, Privilege being one of them, AI about to kind of come through, that shows that actually we can create some really meaningful shareholder value through utilizing that platform and we want to continue to do that really as the first priority. Gareth's talked about some of the acquisitions and the benefits that those acquisitions would have across all three divisions, and we believe that's certainly at this point the best way to be driving shareholder value. If we were to get to a point potentially in 12 months' time, 18 months' time where we've not done the acquisitions, we've not found those that kind of sit within the realms of what we'd want to transact on, and we've got an ever-growing cash balance, then yes, of course, we will continue to assess whether or not buybacks are the better option. Certainly right now, acquisitions are where we're focused.

Yes. Again, we'll generate so much cash. It'll be one or the other if you think about it. Hopefully we can do the acquisitions and see better growth. But if not, we are accruing cash every single month and would need to, I guess, a higher dividend or a buyback.

Thank you. Just turning to the next question. Do we think the big increase in EPS is a one-off due to the Belvoir purchase and growth will go back to historical levels?

It's a pretty sizable increase and yes, there is an element of that which is the full year effect of Belvoir coming through. I come back to what Gareth I think was saying in terms of what we -- what we're going to be looking for in terms of that kind of organic growth going forward, and that's what we'd be looking to normalize. It's still attractive levels of EPS growth, but clearly not the same kind of big jump that's being driven by really primarily an acquisition.

Thank you. A question around dividends. How do you decide on the level of dividend?

I'll take this one again. I suppose there's a couple of key elements that the board considers. One is that kind of dividend yield, that clearly that's very much a moving piece depending on where the share price is at any one point in time but we certainly want to be in a position where we've got a dividend yield of at least 4%, so that's something that we're monitoring. Second one is obviously dividend cover and making sure that we're above that kind of 1.5 absolute baseline. Then I suppose thirdly, and something that probably drives it slightly more, is looking at it from a percentage of earnings ratio. So as I mentioned earlier on, historically we've been around kind of 50%, and the last kind of couple of years we've just upped that a little bit up to 56%. Those are the three kind of certainly elements of the discussion that we have at a board level and where we get to in terms of the final proposition.

Do we see any more large takeovers or just natural growth?

There's only two. We touched on those. One may happen, it may not happen. I think the acquisitions we can do can build quite nicely. If I can deliver GBP 2 million worth of additional profit a year for GBP 8 million to GBP 10 million worth of cost, that's quite attractive coupled with our organic growth. I don't think we necessarily need a big acquisition. If I look at Winkworth, it's not that big. It's GBP 2 million to GBP 2.5 million of adjusted profit before tax. And I think I can do that in a different way. I think we can still be acquisitive, but it won't be like a Hunters deal or the Belvoir deal. Those businesses are few and far between.

That's great. Are we keeping AIM status?

Sorry, say that again.

Are we keeping AIM status?

Absolutely. I think, when I look back pre -- towards the 2025 -- from June to December 2025, we were a net beneficiary for sure of AIM. We were one of the top 25 customer companies on AIM. We had a lot of IHT money came into the stock in the second half of last year. It drove the share price really well towards that GBP 6. It's been disappointing to see it drop off but we have no intention of moving to main market. We are happy with AIM today. We need to see it perform, but there's been a lot going on recently but we are very happy with AIM and believe we will be there certainly in the medium term.

The next question we have here reads: How would the business adapt in a rising inflation and interest rate environment, which the board of executives have just indicated is likely on the horizon?

I think probably the best way to answer this is actually say that we're already, I suppose well equipped to be able to deal with that type of environment. Those types of conditions are likely, if anything, to obviously impact perhaps house sale transactions within the UK. Just to give you a bit of a feel for perhaps how maybe exposed we are in terms of the housing market from a sales perspective, the average number of transactions in any given year is 1.1 million on average. Good year is 1.2 million. A poor year, 1 million. That's very kind of journalistic bookends. The reality is that with everything else staying equal in terms of our market share, if the market drops to 1 million transactions, because of the reasonably low proportion that we have in terms of sales business, because as I mentioned earlier on, we're predominantly or more focused certainly on lettings, the impact to our profitability is somewhere in the region of about GBP 0.75 million.

That's certainly from a franchising position and even on the Financial Services side, which you might expect to be a little bit more susceptible to it, we also have the benefit of a fantastic back book, which enables us to be able to make sure we're continuing to drive income through the business, even when you've got potentially new mortgages coming or softening a little bit because of a softening property market and that will be even more the case within '26, where we're anticipating a really big remortgage market because it's kind of circa five years after that 2021 big transaction year at that point in time. So we're already pretty well positioned for it and as Gareth mentioned earlier on, think that in terms of 2026, it's a good outlook for us.

I think also is that long-term resilience. If you look at that slide and look at the years you've had Brexit, you've had tenant fee ban, you've had COVID, you've had the Liz Truss moment, you've had Ukraine. And each and every one of those has had some impact on inflation, cost of living, Liz Truss, the mortgage rates. And again, demonstrating that resilience and that consistent delivery through that period. And yes 2026 has already got some challenges, but we're good at overcoming those challenges. I think that's the strength of having lots of small business owners as franchisees. They have no choice. They've got to get on with today, they've got to deal with the market, and they've got to make a living and I think that's the resilience of that franchise model.

That's great. Just the last question we've got here reads: what is the strategy for Fine & Country?

It's an incredible brand. I don't know whether everybody saw the TV program, Britain's Most Expensive Houses, but we dominated that program. It's upper quartile. We've got most of the UK, Scotland, Ireland filled in. There's a few gaps, but not much. So it's a really strong brand in the UK. We're looking at how can we build this internationally. I touched on where we've opened up last year, so Uruguay, Barbados, Sydney, Dubai, they're big areas. We're then looking at how can we take the UK model to other countries like France and Italy. So in France, we say we've got France, but we've got Cannes. Well, that's not France. How can I have 20 or 30 in France, Fine & Country licensees? The same with Italy and the same with Spain.

I had a conversation this week with interest from Australia, so a region of Australia Perth from a franchise, established franchise business that wants a mid to upper market offering, and they're very interested. They would take up to 40 licenses. So I think there's definitely potential. We've got a really good Fine & Country team that are passionate about the brand. They've got their conference next week at the Belfry, and that runs for three days. International franchise licensees come on the Thursday. The UK on the Friday. They've got an exhibition on the Saturday at the new Belfry Conference Center, so looking forward to attending that. But yes, it's a really good business. Got a really good reputation. The TV program has definitely upped the profile and the interest in the brand. So I think that's got real good growth opportunity over the next few years.

That's great. Thank you for answering all those questions you can from investors. And Of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Gareth, could I please just ask you for a few closing comments?

Absolutely. So we're really excited about the next three years. I think we've bought the businesses, we've understood them, we've got the growth opportunities, and now we're going to go and push forward and drive that growth. As always, I'd like to thank all of you for your time and taking an interest in our business. As I say, we're really excited about the future, and hopefully that's come across today. Thanks for your time.

That's great. Thank you for updating investors today. Could I please ask investors not to close the session, as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team, we'd like to thank you for attending today's presentation, and good afternoon to you all.

Good afternoon, and welcome to the Property Franchise Group PLC Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll.

I'd now like to hand you over to Gareth Samples, CEO. Good afternoon, sir.

Good afternoon, and thank you for taking the time and travel to attend our half year results presentation today. We're delighted to be able to talk about record first half performance, and we're going to cover today highlights of the year, financial review that Ben, my CFO, is going to take you through our strategy for the years ahead, a summary and outlook and then give you the opportunity to ask any questions you'd like to ask.

So today, Ben and I, I'm the Chief Executive Officer for those of you who haven't met me and Ben is our CFO. So a little bit about the group, we've been on a pretty rapid sort of growth strategy over the last 5 years. We are now the U.K.'s largest multi-brand property franchise group. We entered the AIM top 100 in June of last year, we now moved our market cap on to about GBP 360 million, which puts us about 25th in the most valuable AIM company. So really moving forward.

We've got a proven multi-brand franchise model. We look after 18 unique brands, 5 of those are national, 10 of those are regional, and we've got one international franchise brand. We're the largest network in the U.K. in terms of property businesses. We look after 1,900 businesses across the group. We have a financial services business with 300 financial advisers. We're Mortgage Advice Bureau's biggest introducer. We'll do 25,000 mortgages this year and about GBP 4 billion worth of lending.

We have diversified revenue streams, but with high recurring revenue. So 47% of all of our revenue is recurring, which is really high. We've got really strong cash generation in the first 6 months of this year, GBP 13.2 million cash from operations. We've had a successful acquisition strategy across both TPFG and Belvoir, actually over the last 10 to 12 years with 9 completed acquisitions across the group.

We've got a progressive dividend policy, and we increased our dividend last year. I'm delighted to say, we're going to do that again at the half year. So 17% increase in our divi from 6% to 7%. And probably one of the greatest achievements over the last 12 months has been putting in place a highly experienced leadership team that really do run the business day-to-day and give Ben and I the bandwidth to look at strategy, Investor Relations. And that's been a huge plus for both of us. And those group MDs are considered real experts in the field, and we're really lucky to have that sort of senior leadership team supporting the business on a day-to-day basis.

So I think, overview, we've got a track record of delivering growth underpinned by a resilient business model with considerable opportunity arising from the group's increased scale and reach, and we'll touch on a bit more of that later in the presentation. We said back in April that we're going to report in 3 distinct divisions. So we've got franchising. That will always be our biggest revenue stream. You can see some of the brands there on that slide. The franchising revenue accounts for 54% of total group revenue.

Second biggest revenue stream is financial services. We're part of Mortgage Advice Bureau. We also have a small business that's attached to Primis and that accounts for 30% of our total revenue. And then we've got licensing, our new business that we acquired in May of last year. Fine & Country, the upmarket top quartile estate agent looking after properties over GBP 1 million. The Guild of Property Professionals, a network of 800 estate agents that buy a range of services from us to be members of the Guild. And that income stream represents about 16% of the group's total revenue. So that gives you an idea of the scale of the group and where that money comes from.

In terms of the key highlights for the first 6 months of this year. So we've had a record set of results, and we say that every 6 months, partly because of the acquisitions, partly because we've been really successful over the last few years. So a record half with significant financial and operational progress.

Our revenue grew to GBP 40 million, which was up 50% on a year ago. Our EBITDA jumped 65% to GBP 15.7 million. And as I touched on earlier, we're delighted to be able to report a 17% increase in dividends to 7p. 47% of recurring income and GBP 13.2 million worth of cash generated from operations.

In terms of synergies, we said at the start of March last year that we believe there was GBP 2.5 million worth of synergies in the two acquisitions we did last year. And we've made really good progress in the first 6 months of this year, bang on target to complete that GBP 2.5 million worth of synergies by the end of the year.

We've launched our biggest initiative across the franchise business this year, and we'll talk about the Privilege campaign. But that really has demonstrated the new scale that the group has. I think when you put 2 or 3 business together, you hope that 2 and 2 equals 5. I think the opportunity that we now have almost feels like 2 and 2 equals 8 and 9. So lots of work to execute on that opportunity, but opportunity all the same.

And we touched on last time the exciting opportunity that AI brings to the business. We've got 14 million data records across the group and utilizing technology to deal with those leads better, more efficiently, more effectively to deliver better quality leads back to our franchise partners is a huge opportunity that we're working on. And again, a little bit later in the presentation, we'll touch on some of the detail around that. So they are the key highlights for the first half of the year.

I'd now like to hand over to Ben Dodds, our new CFO, who will take you through the financial highlights. So Ben, over to you.

Thanks, Gareth. So as Gareth referred to earlier on, from a revenue perspective, really kind of positive first half of the year. We've delivered GBP 40.3 million worth of revenue, which is a 50% increase year-over-year. There's obviously the acquisition effect within that driving that really high number. But if you take those out, actually the underlying business on a pro forma basis has grown and the revenue has grown by 8%. So again, strong underlying growth.

Of that revenue, 47% is from recurring sources. So again, kind of hovering around that circa 50% mark that we generally kind of have as an internal target. And adjusted profit before tax reported GBP 14.5 million, which is up 59% year-over-year. Again, there being some acquisition effects within that kind of variance year-over-year. And if you strip those out, the underlying profitability has improved by 18%. Clearly, the difference between that revenue growth and the adjusted profitability, adjusted profit before tax growth being where the synergies that Gareth has already kind of referred to are helping to improve that overall margin.

Dividend, we're going with a 7p interim dividend, which is a 17% increase over the 6p that we announced this time last year. And closer to the balance sheet and cash flow, net debt at the end of June was GBP 10.9 million, an improvement obviously over 12 months ago of GBP 3.4 million. Included within the first 6 months, we've obviously had to pay the deferred consideration on the Guild and Fine & Country acquisition that we did last year and all of that is encapsulated within that net debt figure, holding our leverage again really low at 0.5x, which again, we're really happy with.

Cash from operations, GBP 13.2 million, which has increased significantly over last year and just demonstrates the cash generation that we're making in that kind of conversion of profitability and our adjusted basic EPS improving 18% to 18.3p. So that's the key financial highlights.

One of the things I think is just worth kind of sharing with you is how that kind of revenue and profitability is made up on a divisional basis. So certainly, you can see on the left-hand side, franchising making up 54% of our revenue, financial services making up 30% and then licensing with the remaining 16%. And again, when you then look at the adjusted operating profit on the right-hand side, you can see that franchising with that, I suppose, greater margin that we get out of franchising really kind of driving the total share of profitability at 77% with financial services then at 12% and licensing at 11%.

So just deep diving very quickly into each of the individual divisions for a moment. And I think it's worth just very quickly for those that are new to the business, touching on what is the kind of incredibly high-level business model of each of these kind of divisions. Franchising probably one that's most well understood and is fundamentally where we have franchisees who are lettings or estate agents who are offering letting sales, financial services to their clients, principally with a focus on lettings certainly historically, and we as a business are earning management service fees. So in effect, a percentage of revenue model on those revenues earned by franchisees.

You can see in the chart on the right-hand side broadly how the revenue kind of breaks down within the franchising division. So we split those management service fees between lettings and sales. And again, you can see based on that kind of historic lean towards lettings, lettings remains a big proportion really of that overall franchising revenue.

Second then to that is the management services that we make on sales activity within the network and then we have our owned offices and other income. And you can see generally across the board, actually, we've grown all of those elements from H1 '24 to H1 2025. When you look a little bit deeper, lettings MSF on a pro forma basis, again, taking into account the acquisitions has grown by 4% probably not quite as strong as we would like in an ordinary year, but when taking into account some of the environment at the moment around the Renters Rights Bill, which we'll touch on a little bit later on, actually still a really kind of positive result.

Sales growth within the year has been fantastic at 18%, partly driven by some of the stamp duty changes that we saw in the first quarter. And you can see that level of recurring income, particularly in franchising is very high, very much driven by that kind of lettings MSF proportion that comes through. Adjusted operating margin for this division is at 58%. So it's a very kind of healthy division financially.

Just very briefly touching on the priorities. So talking about the Privilege program, which Gareth will refer to, I think, a little bit later on and what we're doing around the rollout there, really continuing to drive the sales opportunity, particularly within the Belvoir business where it was a little bit core historically, and we needed to improve it, launching some AI offerings around call handling and property management, which will again help both drive the profitability of the franchisees and ultimately provide us a commercial opportunity as well and ultimately maximizing the sales opportunity from the pipeline that we've managed to build at GBP 43.5 million at the end of June, which is the largest that we've ever had on our sales pipeline. So really strong for that division.

Financial services, so again, simplistically from a model perspective, we have 293 financial advisers who are in effect working with retail customers to arrange mortgages and protection products, and we are earning a commission based on that arrangement and that commission is fundamentally the revenue that flows into the business. You can see it's grown by 54% year-over-year from H1 to -- H1 '24 to H1 '25. And again, there will be an element of acquisition effects within there. So the underlying improvement was 14%. So again, really, really strong, supported by that sales activity that we had seen in H1. So it's very much kind of tied to that, but again remains an important part of our business.

Priorities, again, very much kind of focused around what we're doing on productivity per adviser. So how are we driving the amount of revenue that each adviser is achieving within a period higher and higher and doing that through process improvement, but also some of the AI projects again that we'll refer to. And it's again, just looking at how we continue to recruit business partners and other employed advisers as we go forward in order to be able to deal with the lead generations coming through.

Just finally on licensing. So probably the newest division to the business and was really the fruition of one of the acquisitions that we did in May of last year. It's very similar in respect to that of franchising, but the principal kind of difference is that instead of it being a percentage of revenue model, this is about a recurring fixed fee in order to be able to operate under that particular brand.

Fine & Country is at upper quartile and estate agency brand that's operating both U.K. but importantly as well internationally, and the Guild is similar to that almost a member organization that gives access to a range of different products and services to independent, so operating under their own brand, estate and lettings agents.

Again it's continued to build. So if we compare H1 '24 to H1 '25, we've obviously seen some pretty significant growth year-over-year, again, taking into account the acquisition. So pretty significant growth at 514%, bearing in mind there's only 1 month of that within 2024. Again, if you strip that out and have a look at what the pro forma growth is, that's 5% year-over-year. And that's the story really, I suppose, of 2 halves.

The Fine & Country is a business growing really strongly, both domestically within the U.K. and internationally, and that's driving that growth. Guild requires, I think, a bit more work. We're just seeing a little bit of attrition on members at the moment, but there's a fantastic kind of value proposition piece to be done there, which we think will provide a significant amount of opportunity going forward. That's clearly a priority for us in H2 to deliver along with our revamped international strategy that we've been working on Fine & Country.

In terms of cash, so just touching on it, again, we're an incredibly cash-generative business. We generated cash from operations of GBP 13.2 million in H1 '25 compared to GBP 3.7 million in H1 '24 and free cash flow per share of 12.8p compared to 3.7p in H1 of 2024. So really cash generative. You can see there in terms of the, what we call the, reconciliation of movements from the start -- sorry, from the end of last year through to the end of June this year, major kind of movements that sit within there. We had the deferred consideration on the acquisition, as I say, the Guild and Fine & Country.

We had some additional kind of tax impact as a result of going from being a large company to a very large company in the eyes of HMRC, which just increased the amount of pure cash tax paid within the year, which had an additional effect. We obviously paid the dividends that we -- the full year dividend earlier on in the year, and we also sold some shares within the employee benefit trust that ultimately meant that we ended up with GBP 7.3 million worth of cash by the end of the year.

Capital allocation. So I think it's always worth touching on this, but really kind of hasn't principally changed versus what we've talked about previously. First priority is always financial resilience. It's about keeping a strong balance sheet, paying down debt and keeping our leverage low as we can, particularly outside of any kind of acquisitions that we're doing. Then it's about looking at how are we investing in our own organic growth. The reality is actually the capital investment required for this business to kind of deliver some of these growth opportunities is pretty small. So actually, the cash outlay for this is fairly minimal, but it obviously is a kind of key priority for us.

And then it's about the progressive dividend. We've continuously paid a dividend really since the listing point. We paid out at 56% in 2024. And obviously, we've kind of continued on with that progressive strategy for what we have announced in terms of interim dividend. M&A activity, particularly as we, I suppose, now moving out of this period of the integration that we've done with Belvoir last year and the Guild and Fine & Country just means that we're now, I suppose, open and looking at what further options might be there available to us. And ultimately, any surplus capital, we'd look to try to return to shareholders through whether it's buybacks or special dividends. So again, very consistent with what we've talked about previously.

And probably just the final slide to close from my perspective. If you look at the last 10 years, the general, I suppose, assessment is that because we're operating within the property sector that we must be quite a cyclical business. Now when you look at the 3 key measures of dividend, adjusted earnings per share and adjusted profit before tax, every year since 2014, you can see in that graph that with the exception of the dividend around COVID, this business has delivered growth in each one of those metrics continuously over that period.

And particularly over the last 5 years, started to build up and try and build up some increased momentum, particularly around the adjusted profit before tax. And that's in a landscape of COVID, Brexit and closer to home within the industry, the tenant feedback. So that kind of cyclicality actually really doesn't exist within our business, and that's principally because of that franchise model where we're taking that smaller proportion of the overall income, and therefore, we're a lot more sheltered from any major kind of downside risks, which enable us to be able to kind of fill those small gaps with other income as it comes through.

And just finally, when we talk about the -- obviously, the impressive level of growth that you can see there, but also thinking about the cash generation that's going to come from this business going forward. We've talked, I think, historically about the fact that when you add the original kind of businesses that have come together through last year and you look at the amount of cash that they generated over a 3-year period, that was GBP 64 million between 2021 and 2023. That will have only increased in 2024 and is similarly only increasing in 2025 and gives us as a management team, fantastic opportunities to be able to look at how we utilize that cash for the benefit ultimately of shareholder value in line with that capital allocation strategy that we've just talked about. So I think that's probably all from me there, and I'll pass back over to Gareth to talk through strategy.

Brilliant. Thanks, Ben. And before we go into strategy, more of the market updates, 2025 has been really busy. In sales, we always guide on normal being 1.1 million transactions, and if you go back to 2023, it fell below that to about 1.5 million. 2024 is bang on 1.1 million transactions. We believe that will be just short of 1.2 million transactions in 2025. So overall, it's been a really good year. You've seen that from the MSF uplift 18% up so far year-on-year. We've still got a strong pipeline. The summer has been good. So there's still people buying houses. Interest rates are still pretty low. So we're seeing good signs of activity in the sales market, and we hope that continues.

Financial services has benefited from that transactional volumes from the sales market, but also there's a big backlog of remortgages and product transfers going back to COVID times. So we expect in 2025 lending to increase to GBP 260 billion, and that's an 11% uplift on 2024. But more importantly, in 2026, that number jumps to GBP 320 billion. So lots of remortgage and product transfer business to be done next year. And obviously, the base rate reduced in August. So the mortgage market is very strong.

And then lettings, we guided last year that we believed rent inflation would slow down in 2025 and it has. We believe that would be between 3% and 4% in the year, and it's running slightly above 4%. So a little bit better than we thought, but still pretty strong. And demand continues to outstrip supply. So for every property that comes to market, we've got 10 suitable tenants that would rent it. So across all of the markets we operate in, we've got pretty buoyant marketplaces at the moment. So we're really encouraged by that for the remainder of 2025.

Obviously, there's some headwinds with the Renters Rights Bill. That we thought that would be in by now, to be fair. Labor committed when they came to power within weeks. We're still waiting. It was in the House of Commons yesterday. They rejected every recommendation from the House of Lords and have now gone back to the House of Lords. But we think it will be implemented, it will [indiscernible] relatively quickly and it will be implemented in April or June of next year.

So what are we doing about it? Well, we're trying to retain as many landlords as possible. There are people leaving the space. And our job is to try and sell them to landlords that want to increase their portfolio size. And we're having reasonable success of that. In addition to that, we're running educational evenings for self-managing landlords. So inviting landlords to come into our office, presenting to them about the Renters Rights Bill. And what's really clear really quickly is they have no idea about the sort of penal fines if they don't make themselves compliant, that they could face. So they've worked really, really well.

We want to put ourselves very much as the thought leader in the space, the educator within the space, and we're running podcasts and as I say, landlord evenings to make sure that we get our message across, we're utilizing LinkedIn, social media. And as we get closer to the bill coming in, we will ramp up those landlord evenings and those podcasts. So that's the Renters Rights Bill and the impact that's having on us at the moment.

And then you've got the growth strategy. And again, those people that have followed the story will be familiar with these 6 growth drivers. And we touched on earlier the leadership team that we've put in place. And this is very much what they do day-to-day. They're driving these initiatives with our franchisees to make them better, okay? And if I look at where we can see growth, organic growth in the lettings arena, first part of organic growth is the rent inflation. So we believe we'll see 4% a year over the medium term. That will deliver on our lettings book about GBP 750,000 worth of additional bottom line improvement. So that's nice to have.

We also encourage all of our franchisees to acquire their local competition. And [ Ben's ] done a deal with Barclays where we've got really preferential rates for our franchisees to be able to go and acquire their local competition. So we're pushing them to really look at that and drive those acquisitions.

And then again, we touched on earlier, Privilege, which is our 3-pronged support package for our franchisees. The biggest part of that is to -- is a rent indemnity policy that we've encouraged all of our franchisees to talk to all of their landlords and get them covered. And that cover will give them cover against rent arrears, eviction costs should they have a tenant that doesn't pay their rent and any damage that tenant does. So for a relatively small cost, we can guarantee the landlords income, the franchisees' income and the franchisor's income. So we've mandated that policy across the group.

Our franchisees are selling that and making good margins on those policies. But most importantly, most of our network will be covered by a rent indemnity policy, which gives everybody full protection. So we're excited about that and the income that can drive into the group.

We've got recruitment. So we've got an aging population of franchisee, and we need to refresh that. And we will have 50 new -- sorry, 50 businesses come to the market each year for the next 5, 10 years, because of that aging population. So we've set up a department that specializes in finding the next generation of franchisees. And when a franchisee wants to sell their business, they have 3 options. First option, and this is one we don't like is to bring family in so sons and daughters, but they don't tend to work quite as hard as mom and dad. So we don't like that, and we refuse that in most situations.

They can incentivize management. So if they've got a strong management team that's done well, they can incentivize them through shares, and take a back step in the business and go play more golf or go on holiday a little bit more. And we don't mind that option, but it's not our preferred. And our preferred option is they go and sell completely and they bring in a new franchisee. And we help them do that, and we charge them a fee when they sell their business and the incoming franchisee also pays us a fee. So recruitment will become one of the biggest important drivers moving forward.

What we find with a new franchisee taking over a business is in year 1, total income increases by 21%, okay? And that's because partly they've got debt, they have to borrow money to buy the business. But partly, they're motivated and they are working a bit harder and they embrace all of the growth initiatives that we recommend. So that will become a big department and a big part of our business over the next 5 years.

Sales, we've talked again historically about underperforming in the sales arena and Belvoir are exactly the same. They underperform. So there's a big opportunity to drive our sales result and take additional market share and our group have managing directors and our operations directors work with our franchisees to upskill them in the sales arena to take additional market share and drive additional turnover.

Acquisitions, we've touched on the letting book acquisitions. This is more about the acquisitions we, as a franchisor would make. We've talked about the 2 targets in the franchise space, those being Winkworth and LSL. So they've got franchise businesses. And of course, if they were looking to sell, we'd be interested in those businesses. But other than those 2, there's not much left, we bought most of the others.

So we're then looking at acquisition targets that complement the business that we've got. So services that are offered to estate agents, things like tenant referencing or Board directors, where we can buy a profitable business and spread that business across our 2,000 outlets to improve profitability and take more of the estate agent spend. So again, looking at profitable businesses around the edges that would complete our service offering. So there are things we're looking at, at the moment.

And then financial services, we've talked about improving the individual productivity of each financial consultant through the use of technology, and I'll touch on that in the next section. But we're also going to support that and continue the buy-and-build strategy that Michelle and Dorian started in 2017. So we will continue to buy financial services businesses with at least 20 financial consultants operating in that business, and they must be profitable. That are the criteria that we're looking for. We'll definitely do one acquisition this year, and we'll look to do a couple a year, I think, going forward. So that buy-and-build strategy in financial services is very much still alive.

And then digital marketing and AI, and this is the bit, I guess, we're really excited about. We've got 14 million data records currently. We've got 4,000 leads a day that go unanswered. And we've got technology that's changing quite quickly through the introduction of automation, AI. So we've worked really hard over the last 9 to 12 months with businesses that offer these services, truly understanding where the opportunity exists for us and coming up with some real use cases where we can either make our franchisees more efficient through cost savings, utilizing technology or where we can deliver additional lead generation through a digital marketing strategy that gives better quality leads back to our franchisees.

And we're really, really close. We spent the last 9 months perfecting those sort of case studies. We're working with 3 technology companies on some specific projects. And we believe by the end of this year, we'll have at least 2 of those 3 projects in trial. And to give you one example of what that looks like, I'll talk about property management. Property management, we do because we're predominantly a lettings business. And property management is pretty predictable because tenants ring in and they say, I've lost my keys or my boiler stopped working or I've got no hot water or windows being smashed or my garden is a mess.

And we have humans that deal with those inquiries and those queries. If we can utilize technology to triage those initial inquiries, we believe because it's quite predictable, we can solve some of those issues without any of those problems touching a human. And we've got a franchisee in letting that's got 2,000 properties under management. They've got 18 property managers, and that's a big cost to that franchisee. If we can utilize technology to save even 20% of that, then we can save the franchisee GBP 200,000, GBP 250,000 a year straight to the bottom line. Would they then pay for that white label technology? Of course, they would.

So they are the things we're working on to try and make the franchisee more profitable, more efficient, more effective moving forward. You've then got lead generation, so 14 million data records, sending the right message at the right time with the right call to action, generating leads for valuation, financial services, lettings and then utilizing tech to better qualify those.

At the moment, if I generate a financial services lead, I hand that to a financial consultant. And it's probably too early, so they get a lot of leads that go nowhere. If I can utilize technology to better qualify those prospects, I'm giving the financial consultant a much better lead that's going to deliver a better outcome, and that's where we will see the individual productivity and profitability of each financial consultant start to embrace.

So really excited about where technology can really assist our business in terms of cost reduction or business generation. And I think because of our scale, we're dealing with businesses that nobody else would be able to deal with, and they want to deal with us because we've got 2,000 offices. So we get the very best technology with companies, the single offices couldn't afford to contract with that will give us a better outcome in terms of the technology that we ultimately use. And then that will be another income stream for us because we will then be able to commercialize that technology and sell that to our franchisees. So that's a little bit about our growth strategy.

In terms of summary and outlook, the year has been really good. We've acquired 2 really big businesses. We've successfully integrated them into the group, and we're beginning to see the sort of real benefits that scale delivers for us. I think we've got a proven track record of growth, and we've got a really strong balance sheet, which is really positive.

We've launched our biggest ever initiative, the Privilege program to our 700 franchisees, and that's already delivering that sort of growth opportunities for our franchisees and delivering better bottom line performances for our franchisees. We are, of course, aware that there's a budget and that budget, there's not a lot of positive stuff in the newspaper. So we are absolutely aware that there may be some budget bits that are anti the housing market. However, we've had that before.

I think if you look at -- go back to the slide that Ben presented where you see that constant growth, we've had negative situations before that we've navigated incredibly successfully. And I think that's a real strength of the franchise community. They're running their business on a day-to-day basis. They're very nimble. They have to navigate the issues that they face, and they're very good at doing it.

AI, we've talked about, they have initiatives to drive improved profitability. The strong senior leadership team, I hope gives you confidence. The bandwidth we've now got is better than it's ever been. The quality of people we've got running the business day-to-day better than we've ever had. And that gives us the bandwidth to move forward and continue the drive that we've been on over the last 5 years.

And finally, full year trading remains in line with expectations. It was a big ask at the start of the year, a big jump. You saw that graph going from 22 to 30. We're on target to deliver that 30, which I'm delighted about. So without any further ado, that's the end of the presentation. Thank you for listening. We're now going to go to questions.

Gareth, Ben, thank you very much for your presentation this afternoon. [Operator Instructions] Today, I'd like to remind you the recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via investor dashboard. As you can see, we received a number of questions throughout today's presentation. And if I may just start off with the first question here, which reads as follows.

Will you be moving from AIM soon?

That's a really good question. We get asked that by a lot of shareholders and the answer is no. I think we've been a real net beneficiary of the uncertainty with companies saying they might go to main or they're going to go to main and clearly, a lot of private equity taking businesses off AIM. We believe we're a really strong business. We are by market cap, I think the 24th, 25th biggest business on AIM. We are attracting shareholders we would only dreamt about seeing 18 months ago and AIM has been really good for us in the last 12 to 18 months. So no ambition to move to main, yet.

The next question we have here reads, what are the biggest risks or threats to continued growth?

You want to take that?

So I suppose, principally, one of the key focuses, obviously, for us as a business is our lettings -- part of the lettings business and our lettings book. And obviously, the Renters Rights Bill definitely, I suppose, provides a challenge to landlords in terms of them assessing the returns that they're making and perhaps some of the risks. And obviously, if we can't manage that expectation or that kind of sentiment from a landlord perspective, there is a potential that obviously, we might see some further attrition. I think turning that into an opportunity, actually, we've already seen, I suppose, an element of that.

The Privilege program that we've talked a lot about today was, I suppose, had 2 real objectives. It was about trying to mitigate some of that risk about demonstrating to landlords that we could reduce some of the potential challenges that Renters Rights Bill might bring whilst also providing an additional income stream for our franchisees and us as the franchisor. So it's definitely something that we need to continue to monitor going forward, given how big a chunk the lettings element makes of our business. But I actually think it's something that we can take more of an opportunity out of rather than anything else.

Just moving on here. Will the licensing to independent estate agents gobble up some of the MSF?

I don't think so. I mean [indiscernible] has been talked about for probably 5 or 6 years, and it was back on the agenda about 3, 4 months ago. So we're pro licensing and qualifications. And we've invested heavily in a technology platform, a training platform that enables staff to take their industry exams that will sort of take some of the pressure off when licensing comes in. So no, we're pro-licensing. We've got everything set to be able to deal with it. We've got a good training department. So yes, bring it on.

How much revenue is recurring versus transactional?

So we briefly touched on this earlier on, it's 47% in the first half of the year. That has dropped a little bit, and I've seen a similar question, which I'll deal with at the same time, which is why has it dropped? In the financial services division, that has a lower proportion of recurring revenue because of its very nature. And so therefore, getting in effect, a full period impact of the much greater financial services business that we acquired as a result of the Belvoir acquisition has meant that it's just diluted down some of that recurring revenue. Now it's had a particularly strong first half as well. So I think it's probably diluted it slightly more than actually what a normalized position would be, which is probably going to be much closer to that, say, high 40s -- high 40% and circa kind of 50%.

The next question we have here reads, do you have any concerns about possible property taxes being announced in the forthcoming budget?

I think everybody has to be fair. So yes, there's talk about taxing rental income the other week. But I think what's not helpful is this constant speculation about which taxes, I think I'd much prefer they went back on the manifesto commitment and just put 2p on income tax or something. But we don't know what's going to be there. It is all speculation, wealth tax, property tax, rental income tax. We've got to wait until November. But yes, it's a concern.

Just moving on here. Are there adjacent markets or services you're considering entering?

I think I probably touched on the acquisition piece I talked about earlier where we're looking at where our partners, our franchisees spend their money, can we buy a profitable company offering services into estate agents in general, push that across our franchise network, give them a better deal than they can get themselves and increase profits of the business we bought. So we'll look at that. We'll consider that. As I said, if there was loads of franchise businesses to buy, we'd carry on buying those. But I think we can enhance the service and enhance the proposition to our franchise network and deliver acquisition growth. So yes, we'll keep you posted on that.

How worried and prepared are you about the possibility of a cyber attack?

So I think we constantly review our cyber procedures. We have an annual audit in respect of, I suppose, our setup, our cybersecurity that's conducted by an independent third party. And obviously, we look to make any changes that they recommend as part of that assessment. I think it's very much a moving feast. I mean technology moves on, the potential cyber attackers are coming up with more initiatives, new initiatives as to how they do these types of attacks. So I think the onus is on us is ready to have it as a, I suppose, a constant and monitored priority for us as a business to just make sure we're mitigating and minimizing any potential risks of something coming through.

Perfect. We've got 2 questions here from an investor, but I'll read the first one here, which reads as follows. Can you elaborate on the drivers of the 18% PF growth in sales MSF, which considerably faster than overall housing market volume growth?

Yes, I can. So we mentioned earlier on, and I think we have done historically that the Belvoir business didn't have a particularly good sales offering. So in addition, I suppose, to the general kind of benefit we would have seen as a result of the improved market, we have, on top of that, been working to relaunch Belvoir's sales offering, which we've done successfully, and we did at the -- within the first half of the year. And obviously, that's also provided some benefit over and above, let's say, what the market has seen on just that kind of stamp duty impact.

I think there's also one other point, which is landlord selling. So obviously, we're the landlord agent. So if the landlord has sold, we've probably done more landlord sales this year, and that will have also driven it. Final point is we're not very good at it. So the disproportionate growth is more likely for us than maybe someone like Connells.

And the second part reads, within franchising, you had a very strong growth in own offices and other. Can you elaborate on the drivers of this and whether you expect these growth rates to continue for the rest of the year?

So I think on a year-over-year basis, we did have improved or we did see growth within owned offices. However, quite a chunk of that is to do with the acquisitions. When you strip that out, actually, the growth was not necessarily particularly exciting. It's something that we want to look at further in terms of the performance of our owned offices kind of going forward.

And I think the last question we have here reads, congrats on the great delivery. Why not go more aggressively for LSL and Wink from an M&A perspective? What multiple do you think would be fair?

Good question. So we're still integrating the 2 we did last year, I suppose, so there's a bit of that. They're both really good businesses. In terms of multiples, I mean, they're both listed. So you've got LSL, I don't know, GBP 300 million, you've got Winkworth at GBP 25 million. So yes, that gives you some idea about the value or how they're valued currently and then you can maybe look at whatever premium. So definitely would do them. Definitely think they are good businesses. And yes, I think we've got a lot of opportunity within the businesses that we've got. We want to get that right, not bite off more than we can chew, get that right this year and then maybe look next year to another acquisition.

Gareth, Ben, thank you for answering all those questions came from investors. And of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to yourself and the company, Gareth, could I please just ask you for a few closing comments?

Absolutely. Firstly, thank you for your interest in our business. We've had an unbelievable sort of 18 months, 2 years. We're delighted with the way the business is performing. And really just want to thank you for your interest and look forward to speaking to you again in 6 months' time.

Perfect. Thank you for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company.

On behalf of the management team of the Property Franchise Group PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.