Martin & Co does not envisage effect from no longer charging letting fees

Estate agent Martin & Co’s revenue increased last year as it expanded its footprint across Britain, and maintained that its business would not be affected by the government’s plan to scrap lettings fees.

For calendar 2016, revenue increased 15% to £8.2m compared to the previous year, while the AIM-listed company expanded its footprint as it now trades from 377 officers and added 16 new franchisees to serve about 48,000 tenanted managed properties.

The company remains heavily weighted towards lettings, which accounted for 74% of management service fees in 2016 and chief executive Ian Wilson said that the he does not “envisage the government's recent interventions in the buy-to-let sector significantly impacting” the company.

Chancellor Philip Hammond said in November 2016 that there would be a ban on letting fees “as soon as possible”, in a bid to help the ‘just about managing’, which would save 4.3m households hundreds of pounds a year.

Wilson said that buy-to-let investors have “generally reduced gearing in their portfolios over the years since 2008 and are believed to be able to absorb rising interest rates” and that the company is “well positioned to sell investment properties if investors decide to exit”, and its research suggests “that larger buy-to-let investors would purchase this stock”.

“Early indications from the mortgage industry show that investors are beginning to incorporate their activities into trading companies to avoid the stamp duty surcharge and to retain the benefit of interest tax relief on buy-to-let loans.”

He added: “We remain positive about the outlook for our core lettings business, from which 74% of our franchise royalty income is derived."

Martin & Co said that trading was in line with expectations and that its performance in the final months of 2016 was “robust”, despite challenging market conditions in the wake of the Brexit vote. This was due to organic growth in management services fees, the expansion of its franchisees network and tight cost control measures, while the EweMove acquisition made a modest contribution to earnings.

At the of the last year, the company had £2m in cash, down from £4.3m partly due to the acquisition of online estate agency EweMove in September 2016. The company also has unused loan facilities of £1.6m.

Wilson said: “The acquisition of EweMove marked an important milestone for the group and means we now have a national estate agency ‘challenger’ brand. It's deliberately designed to be ‘non-traditional’ and has its own distinctive culture built around exemplary customer service.

The company said it is committed to a progressive dividend policy with the next dividend expected to be declared in May.

Shares in Martin & Co were up 9.08% to 141.80p at 1031 GMT.