Hunters Property Plc

Preliminary Results

For the year ended 31 December 2015

Hunters Property Plc ("Hunters" or the "Company" or the "Group"), one of the UK's largest national sales and lettings estate agency businesses, is pleased to announce its preliminary results for the year ended 31 December 2015.

Financial Highlights:

·      Network Income rose 42% to £30.2m (2014: £21.2m);

·      Revenue increased by 31% to £12.0m (2014: £9.2m);

·      EBITDA increased by 46% to £1.57m (2014: £1.08m);

·      Adjusted profit before tax (excluding amortisation, acquisition costs, investment income and notional finance costs) increased by 59% to £1.42m (2014: £0.89m);

·      Earnings per share increased 55% to 2.76p (2014: 1.78p);

·      Adjusted EPS increased 31% to 4.74p (2014: 3.63p);

·      Net assets stood at £5m (2014: £1.4m);

·      Cash balance £1.2m (2014: £1.1m);

·      Final dividend proposed 1.0p, making maiden 1.5p for the year.

Operational Highlights:

·      Opened 32 new branches, including the conversion of 23 independent estate agency branches;

·      Opened 63 new branches, excluding acquisitions, over last two years;

·      Acquired the Country Properties network (23 franchised branches);

·     The network's sales and lettings income has grown by over 40% in each of the last three years with a cumulative average growth rate since 2008 of 27%;

·      As at December, network stood at 170 branches (2014: 126);

·      Independent agents who converted to Hunters, for whom 2015 was their first full year, on average increased their revenue  by 29%;

·      Launched first national TV marketing campaign;

·      Secured our key software in-house;

·      Admitted to the AIM market of the London Stock Exchange on 2 July 2015;

·      Average revenue per network branch increased by 5.6% to £178,000 (2014: £168,000);

·      Average revenue for the top 25 network branches rose by 12% to £427,000 (2014: £382,000);

·      Customer service rating 96% (2014: 95%) against a national average of 73%^[1].

Post-Year End:

·      Opened a further seven branches in Q1 (Q1 2015: eight);

·      Q1 trading is ahead of Q1 last year;

·      Robust pipeline of enquiries from agents interested in joining the network;

·      Confident in the continued growth of our network and meeting the Board's expectations for the full year.

 

Kevin Hollinrake, Chairman of Hunters Property Plc commented:

"Despite the UK property market experiencing various challenges in 2015, the Group has performed very well and I am pleased therefore to present to shareholders our first annual results as a public company.  The Company has shown impressive growth, opening 32 new branches, converting 23 existing businesses and acquiring a strong franchised network.  We continued to improve our core business, with increased revenue per branch and 96% customer satisfaction rating.

It is expected that the year ahead will see continued network growth. The first quarter has started well with seven new branches opened and revenue ahead of Q1 2015.  We are growing faster than general market activity and our pipeline of new branches is running significantly ahead of last year. I look forward to updating you as the year progresses."

 

For further details, please contact:

 

Hunters Property Plc Kevin Hollinrake, Chairman Harry Hill, Chief Executive Officer Glynis Frew, Managing Director Ed Jones, Chief Financial Officer	Tel:  01904 756 197
Smithfield Consultants Limited Alex Simmons	Tel: 020 7360 4900
Numis Securities Limited Stuart Skinner, Paul Gillam (Nominated Adviser) Tom Ballard (Corporate Broking)	Tel: 020 7260 1000

 

 

 

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015

CHAIRMAN'S REVIEW

Following our admission to the AIM market of the London Stock Exchange in July 2015, we are delighted to report our maiden full-year results as a public company.

2015 saw a step forward in pursuit of the Group's clear ambition to become the nation's favourite estate agent. We secured additional capital, added 32 new branches to the network including 23 independent businesses and added another 23 branches through the purchase of a highly successful home-counties franchised estate agency chain, Country Properties. At the end of the year the network had reached 170 branches. Having opened 63 branches in the last two years through organic growth, we are without doubt the fastest growing listed business in our sector.

Income across the network from sales and lettings ("Network Income") reached £30.2 million in 2015 (2014: £21.2 million), a 42% increase on the previous year. Our average branch revenue rose by 5.6% to £178,000 (2014: £168,000). This was a tremendous achievement against the background of a more subdued market with national activity reported as having reduced by 3.4% for the year^[2]. Our adjusted EBITDA reached £1.57 million (2014: £1.08 million), an increase of 46% on the previous year. Adjusted EPS grew 31% to 4.74p (2014: 3.63p).

Independent agents that converted to the Hunters brand, for whom 2015 was their first full year as part of the network, increased revenue per branch by 29%; a clear illustration that our quality, well known national brand and good reputation has delivered improved income for our network partners, as well as significantly reducing the cost of key repeat purchases, such as portal subscriptions, through our economies of scale and purchasing power.

We continue to invest in our people, IT, marketing and networks. We retain Investors in People status for our Group owned activities and our national training courses include accreditations from The Institute of Leadership and Management and City & Guilds. Our market-leading software, designed specifically for our business by an in-house team of former agents, continues to move forward. We have invested over £500,000 in its development and we are able now to reinvest profits generated from licence fees payable by the network to accelerate and enhance its features and improve our online functionality and customer experience. The inaugural launch of our national TV advertising campaign took place in January 2015. Website traffic for 2015 rose by over 23%.

The 'Here to get you there' marketing campaign has proved successful and will continue to be our message in the year ahead.  The Hunters (West Midlands) business acquired in 2014 continues to exceed our expectations, winning Best Medium-Sized Agent in the Midlands for the fourth year in a row. Business levels and financial results are in line with expectations.

Customer satisfaction will always be a key measure and I am delighted to confirm that we achieved a 96% customer satisfaction rating for the year. Our success in the area has been increasing year-on-year since 2012 and is significantly higher than the industry average of 73%^[3]. There is a universal commitment within the network to deliver for our customers, which underpins our belief that business owners will work harder and deliver better results than a network consisting principally of employees or self-employed operatives on short term contracts. On behalf of the Board, I would like to thank everyone in the network who has worked so hard to deliver these amazing results, and our customer service team for going well beyond the call of duty to contact our clients and listen to their experiences.

Current trading and outlook

Reports show that market activity levels so far this year are 14.1% higher compared to the same period last year^[4]. The Company's first quarter has started well, with seven new branches opened, revenue ahead of Q1 2015 and having grown faster than general market activity.  Our pipeline of new outlets is running significantly ahead of 2015. I look forward to updating you as the year progresses.

Dividend

The Company is committed to a progressive dividend policy and proposes therefore a final dividend of 1.00p per share, making 1.50p for our maiden year.

 

On behalf of the Board

Kevin Hollinrake
Chairman

27 April 2016

 

 

CHIEF EXECUTIVE'S STATEMENT

As we reported in our January trading update, the United Kingdom property market experienced various challenges during 2015, with the principal issues being consumer uncertainty in advance of the May General Election and a shortage of homes to sell or let afterwards.

Major stamp duty increases on the purchase of more expensive homes adversely affected demand, particularly for properties over £2 million, but this has had little impact on the Group as we have limited exposure to prime Central London.   Despite these tougher market conditions the Group has, aided by the additional branches added to the network throughout the year, performed very well and increased the Company's market share of homes sold and let, resulting in material increases in both turnover and pre-tax profitability.

Activity in 2016, despite an ongoing shortage of property for sale or to let, the uncertainty of the EU Referendum and ever-increasing levels of competition between traditional and online-only agents, looks promising.  We entered the year with a substantially increased pipeline, with good ongoing buyer and tenant demand and a Government that is openly very supportive of accelerated new home-building and ownership. We are therefore well set to deliver another successful year 

Delivering outstanding customer service is at the heart of our operation. At exchange of a property or at the let of a property a vendor or landlord is contacted by a member of our customer service team. In 2015, 3,121 customers provided feedback resulting in a 96% customer satisfaction rating.

Maintaining the quality of the network is key to our success. We started the year with 126 branch locations. We received 244 enquiries resulting in 32 new openings under the Hunters brand. These openings consisted of 23 conversions of existing independent estate agency businesses and nine new "cold start" locations, of which four were current franchisees expanding into new markets.

The Group implements a rigorous franchisee selection process. This ensures, as far as is possible, that new franchisees are committed to the Group's high standards. Approximately 80% are rejected at an early stage. Additionally, underperforming branches can be reinvigorated through training and support or alternatively the sale of a franchise to a new team or individual.

With the addition of 23 Country Properties franchise locations, Hunters Property Plc finished the year with a total network of 170 branches.  Expansion was inevitably linked to our ability as a network to respond to developing market conditions. For this reason the Group also established relationships with experts in both block management and the new homes sector and now have offerings for both services available nationwide.

Franchise prospects for 2016 have started well, with a proceeding pipeline of 21 new branches being processed and enquiry levels on target to exceed those of 2015. Investment has been made to improve the general branding of Hunters Franchising. A full marketing plan is in place, heavily focused on direct marketing to suitable independent businesses, increased online presence and existing franchisee expansion.

It is expected that 2016 will see continued network growth, both through conversions of existing businesses and cold starts. Hunters' market leading conversion package is designed to allow independent agencies to join with minimal cost, whilst benefiting from a full estate agency package which provides an average revenue growth of 29% in the first full year. Conversions are expected to account for a significant portion of branch growth.

Our excellent results could not have been achieved without sterling efforts from our employees and franchise colleagues. We believe that we have some truly outstanding industry professionals associated with the business and are grateful to them for their dedication to Hunters.

 

Harry Hill
Chief Executive Officer

27 April 2016

 

FINANCIAL REVIEW

Income Summary	2015 £m	2014 £m	Movement
Network Income	30.2	21.2	+42%
Turnover	12.0	9.2	+31%
EBITDA	1.57	1.08	+46%
Adjusted profit before tax	1.42	0.89	+59%
EPS	2.76p	1.78p	+55%
Adjusted EPS	4.74p	3.63p	+31%
DPS	1.50p

 

Balance Sheet Summary	2015 £m	2014 £m
Cash	1.2	1.1
Net Assets	5.0	1.4
Net Debt	1.1	1.7
Net Debt / EBITDA	0.7x	1.6x

 

Revenue

Group revenue for the financial year ended 31 December 2015 increased by 31% to £12.0 million (2014: £9.2 million). This was driven by the following factors:

·     First full-year contribution of Hunters Group Limited, since they joined the Group in July 2014. This added £1.8 million of revenue to the Group in 2015;

·     The acquisition of Country Properties, a 23 branch network in and around Hertfordshire, Bedfordshire and Cambridgeshire in May 2015, adding £0.2 million of management service fee ("MSF") revenue in 2015;

·     MSF from franchised branches, excluding Country Properties acquisition, increased by 29% following the opening of a further 32 new branches in 2015. These new branches were a mixture of new cold start branches and existing branches converting to the Hunters brand.

Adjusted EDBITDA (earnings before interest, tax, one off costs and depreciation/amortisation)

Adjusted EBITDA provides a key measure of progress made. Adjusted EBITDA for the year to December 2015 was £1.57 million, an increase of 46% on the same period last year (2014: £1.08 million).

Administrative expenses increased by £2.4 million during the year. Higher costs in 2015 were in part due to the additional running costs associated with being a publically quoted company and also the first full year of costs for Hunters Group Limited.

Adjusted profit before tax (adjusted to exclude amortisation, amortised finance costs, acquisition costs, one off costs and finance income)

Adjusted profit before tax was £1.42 million, an increase of 59% over the prior period (2014: £0.89 million).

Amortisation and acquisition costs increased significantly during the period, as the Group continued to execute its strategy of growth through acquisition.

Earnings per share

Basic earnings per share for the year ended 31 December 2015 was 2.76p (2014: 1.78p) based on a weighted average of 26,317,492 shares (2014: 21,292,330) in issue during the year.

Adjusted earnings per share

Adjusted earnings per share, excluding amortisation and acquisition costs, finance timing and investment income and using standard tax rates for the year to December 2015, was 4.74p (2014: 3.63p).

Dividends

The Board is proposing a final dividend of 1.00p per share for 2015, which subject to shareholder approval at the AGM on the 17 June 2016, will be paid to shareholders by 23 June 2016 based on the register of shareholders as at 13 May 2016. Taking this together with the interim dividend of 0.5p paid to shareholders on 28 October 2015, this equates to a total dividend for the year of 1.50p. The Company aims to pay a progressive dividend going forwards.

Liquidity

The Group had cash balances of £1.2 million at 31 December 2015 (2014: £1.1 million).

Since the year end the Group has secured further debt funding of £1.2 million to support the ongoing expansion of its franchising activities. The facility is repayable in full in April 2020, with repayments to be made in monthly instalments from 13 months after the first drawdown. Total bank facilities available to the Group are £2.9 million of which £1.7 million is drawn.

Financial Position

The Group has generated strong cashflow from operations which is expected to continue in 2016. These cashflows, together with undrawn facilities available, ensure the Group is in a strong financial position from which to carry out its strategy to grow the franchise business both organically and through acquisition in the coming year.

 

Ed Jones
Chief Financial Officer

27 April 2016

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2015

			2015					2014
	Notes		£'000s					£'000s
Revenue	3		12,045					9,175
Administrative expenses				(10,471)					(8,100)
Operating profit before depreciation, amortisation & costs of acquisition			1,574					1,075
Depreciation	13			(162)					(103)
Amortisation	12			(368)					(146)
Costs of acquisition of subsidiaries	15			(57)					(186)
Write off of loans			-						(25)
Irrecoverable VAT			-						(23)
Share-based payment expense	25			(12)				-
Operating profit	4		975					592
Finance income	7		88					7
Finance costs	8			(183)					(116)
Profit before taxation			880					483
Taxation	9			(158)					(112)
Profit for the financial year			722					371
Other comprehensive income			-					-
Total comprehensive income for the year			722					371
Profit and total comprehensive income for the financial year attributable to:
Equity holders of the parent			726					377
Non-controlling interests				(4)					(6)
			722					371
Earnings per share
Basic (pence per share)	11		2.76					1.77
Diluted (pence per share)	11		2.66					1.77

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

 

		2015			2014			2013
					as restated			as restated
	Notes	£'000s			£'000s			£'000s
Non-current assets
Goodwill	12	3,973			3,544			2,015
Other intangible assets	12	3,439			777			78
Property, plant and equipment	13	340			420			147
Investments	14	1			75			67
Deferred tax assets	23	43			63			64
		7,796			4,879			2,371
Current assets
Trade and other receivables	16	1,629			1,277			963
Cash at bank and in hand		1,211			1,146			798
		2,840			2,423			1,761
Total assets		10,636			7,302			4,132
Liabilities
Current liabilities
Borrowings	17		(1,014)			(1,101)			(429)
Obligations under finance leases	19		(37)			(27)			-
Current tax liabilities			(162)			(122)			-
Trade and other payables	19		(2,492)			(2,399)			(1,770)
			(3,705)			(3,649)			(2,199)
Non-current liabilities
Borrowings	17		(1,309)			(1,874)			(810)
Obligations under finance leases	20		(30)			(43)			-
Other payables	20		(68)			-		-
			(1,407)			(1,917)			(810)
Provisions for liabilities
Provisions	22		(75)			(151)			-
Deferred tax liability	23		(465)			(137)			(4)
			(540)			(288)			(4)
Net assets		4,984			1,448			1,119

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

		2015		2014			2013
				as restated			as restated
	Notes	£'000s		£'000s			£'000s
EQUITY
Attributable to the owners of the parent:
Called up share capital	26	1,131		-			-
Share premium account	27	2,579		-			-
Merger reserve	1.2	899		1,662			1,602
Retained earnings	28	375			(222)			(497)
		4,984		1,440			1,105
Non-controlling interests		-		8			14
Total equity		4,984		1,448			1,119
The financial statements were approved by the board of directors and authorised for issue on 27 April 2016 and are signed on its behalf by:
Mr E A Jones
Director

 

 

 

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

			2015
	Notes		£'000s
Non-current assets
Investments	14		879
Current assets
Trade and other receivables	16		2,929
Total assets			3,808
Liabilities
Current liabilities
Other payables	19			(26)
				(26)
Total assets less current liabilities			3,782
Net assets			3,782
EQUITY
Called up share capital	26		1,131
Share premium account	27		2,579
Share option reserve			12
Retained earnings	28		60
Total equity			3,782
The financial statements were approved by the board of directors and authorised for issue on 27 April 2016 and are signed on its behalf by:
Mr E A Jones
Director
Company Registration No. 09448465

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2015

		Share capital		Share premium account		Merger reserve			Retained earnings			Total equity attributable to owners of the parent			Non-controlling interests			Total equity
	Notes	£'000s		£'000s		£'000s			£'000s			£'000s			£'000s			£'000s
Balance at 1 January 2014		-		-		1,602				(384)			1,218		14			1,232
Prior year adjustment	28	-		-		-				(113)			(113)			-			(113)
As restated balance at 1 January 2014		-		-		1,602				(497)			1,105		14			1,119
Period ended 31 December 2014:
Profit and total comprehensive income for the year		-		-		-			377			377				(6)			371
Issue of subsidiary shares prior to acquisition		-		-		60			-			60			-			60
Dividends	10	-		-		-				(102)			(102)			-			(102)
Balance at 31 December 2014		-		-		1,662				(222)			1,440		8			1,448
Period ended 31 December 2015:
Profit and total comprehensive income for the year		-		-		-			726			726				(4)			722
Issue of share capital	26	1,131		2,579		104			-			3,814						3,814
Dividends	10	-		-		-				(141)			(141)			-			(141)
Credit to equity for equity settled share-based payments	25	-		-		-			12			12			-			12
Share for share exchange		-		-			(867)			-			(867)			(4)			(871)
Balance at 31 December 2015		1,131		2,579		899			375			4,984			-			4,984

 

 

 

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2015

		Share capital		Share premium account		Share option reserve		Retained earnings			Total
	Notes	£'000s		£'000s		£'000s		£'000s			£'000s
Period ended 31 December 2015:
Profit and total comprehensive income for the year		-		-		-		201			201
Issue of share capital	26	1,131		2,579		-		-			3,710
Dividends	10	-		-		-			(141)			(141)
Share based payment expense of subsidiary	14	-		-		12		-			12
Balance at 31 December 2015		1,131		2,579		12		60			3,782

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2015

		2015					2014
	Notes	£'000s					£'000s
Cash flows from operating activities
Operating profit		974					592
Adjustments for:
Share-based payment expense	25	12					-
Depreciation of property, plant and equipment	13	162					103
Gain on disposal of property, plant and equipment	4		(30)				-
Amortisation and impairment of intangible assets	12	368					146
(Release)/inception of provisions	22		(5)				36
Costs of acquisition	15	57					150
Changes in working capital:
(Increase)/decrease in trade and other receivables	16		(392)				231
Increase in trade and other payables	19	3					234
Cash generated from operations		1,149					1,492
Interest paid			(85)					(44)
Income taxes paid			(180)					(90)
Net cash inflow from operating activities		884					1,358
Investing activities
Purchase of intangible assets	12		(866)					(299)
Purchase of property, plant and equipment	13		(76)					(171)
Proceeds on disposal of property, plant and equipment		32					-
Business acquisitions, net of cash acquired	15		(1,390)					(1,086)
Payment of deferred considerations			(89)
Purchase of investments			(192)				-
Proceeds on disposal of investments		263					-
Interest received		5					1
Net cash used in investing activities			(2,313)					(1,555)
				2015					2014
	Notes	£'000s					£'000s
Financing activities
Proceeds from issue of own shares		2,700					-
Share issue costs			(558)				-
Proceeds from issue of subsidiary shares prior to acquisition	1.3	104					60
Repayment of debentures	17		(470)				-
Proceeds from borrowings	17	-					1,170
Proceeds of new bank loans		380					-
Repayment of bank loans and borrowings	17		(495)					(294)
Payment of finance leases obligations	18		(26)					(10)
Dividends paid	10		(141)					(102)
Net cash generated from financing activities		1,494					824
Net increase in cash and cash equivalents		65					627
Cash and cash equivalents at beginning of year		1,146					519
Cash and cash equivalents at end of year		1,211					1,146
Relating to:
Cash at bank and in hand		1,211					1,146
Major non-cash transactions
During the year the Group entered into a number of non-cash transactions as follows:   1. On 27 March 2015 the group enacted a share-for-share exchange to include Hunters Property Plc as the Parent, as disclosed further in note 1.2. This resulted in share capital being issued, and the company owning an investment.   2. Included within costs of issue of new shares were costs of £200,000 which were themselves settled by way of the issue of shares at a premium.
Company Statement of Cash Flows
The Company has not held any cash or cash-equivalents during the year or as at 31 December 2015. During the year it has entered into a number of equity transactions which are set out in the above but which are enacted via intercompany accounts for the Company. Accordingly, the Directors have not presented a Company Statement of Cash Flows.

 

 

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2015

1	Accounting policies
	Company information
	Hunters Property Plc ("the Company") is a public limited company domiciled and incorporated in England and Wales. The registered office is Apollo House, Eboracum Way, York, North Yorkshire, YO31 7RE. The consolidated financial information (or "financial statements") incorporate the financial information of the Company and entities (its subsidiaries) controlled by the Company (collectively comprising the "Group").   The principal activity of the Group is the provision of property services to consumers and businesses which include sales, lettings, franchising and related services.
1.1	Accounting convention
	These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, and the requirements of the Companies Act 2006.
	The financial statements are prepared in sterling, which is the functional currency of the parent company. Monetary amounts in these financial statements are rounded to the nearest £'000s.
	The financial statements have been prepared on the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.
	As permitted by s408 Companies Act 2006, the Company has not presented its own income statement and related notes. The Company's profit for the year was £201,684.
1.2	Basis of consolidation
	The Group financial information consolidates those of the Parent Company and the subsidiaries that the Parent has control of. Control is established when the Parent is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary.   Where a subsidiary is acquired/disposed of during the year, the consolidated profits or losses are recognised from/until the effective date of the acquisition/disposal. All inter-company balances and transactions between group companies have been eliminated on consolidation.   Where necessary, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those used by the Group.   Non-controlling interests, presented as part of equity, represent the portion of a subsidiary's profit or loss and net assets that are not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interest based on their respective ownership interests.
	The Group applies the acquisition method of accounting for business combinations enacted after the date of creation of the group following incorporation of Hunters Property Plc, as detailed further below. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair value of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the Group. Acquisition costs are expensed as incurred.   The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquired subsidiary's financial information prior to the acquisition. Assets acquired and liabilities assumed are measured at their acquisition-date fair values.   Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the fair value of consideration transferred, over the Group's share of the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately.   A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.   If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.
	The Group has applied the principles of merger accounting in consolidating the results, as control was only acquired by Hunters Property Plc via a share-for-share exchange on 27 March 2015. Merger accounting requires that the results of the Group are presented as if the Group has always been in its present form, and does not require a re-evaluation of fair values as at the point of acquisition. Accordingly, for the Group's comparative statement of financial position as at 31 December 2014, a merger reserve has been created which represents the difference between the net assets of the Group as at that date, and the retained profits recognised by the Group as at that date.
1.3	Going concern
	As at the year end the group has net current liabilities, but net assets overall. The nature of the Group's trade is that there exist significant intangibles which generate strong cashflows, and are expected to continue doing so. Since the year end the Group has also secured further medium-term debt funding of £1.2million; including this the Directors have further considered 12 month cashflow forecasts from the date of approval of the financial statements, and do not foresee any cashflow issues arising.   Taking these factors into account, as at the time of approving the financial statements, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4	Revenue
	Revenue represents the amount receivable for the provision of services and the sale of goods during the year, excluding VAT and trade discounts. Revenue is recognised to the extent that it is probable that economic benefits will flow to the Group and the revenue can be measured reliably.   Revenue from residential, commercial and land sales is recognised on the basis of exchange of contract.   Financial services revenue is recognised at the later of the policy inception date or confirmation of entitlement to the commission.   Revenue from commission earned as letting agents is recognised in the month in which the income is received and when there is fulfilment of all but inconsequential or perfunctory actions.   At inception of a franchisee contract, revenue is recognised upfront which matches to the estimated cost of time and knowledge to create the franchiser-franchisee contractual arrangement. No amounts are deferred as the directors are of the opinion that virtually all inception costs are incurred at the outset, and hence although contracts run for several years this policy is considered to be the fairest presentation to comply with the matching and accruals concepts.
	Revenue from franchisee management service fees are recognised monthly in arrears, calculated by reference to the terms of the contract and the value of sales attributable to each franchisee.   Deferred income arises where services are invoiced in advance of performance. The amount is released to the profit or loss in subsequent periods in reference to the stage of completion of the transaction at the reporting date.
1.5	Intangible fixed assets - goodwill
	Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identifiable and separately recognised. See Note 15 for information on how goodwill is initially determined during the period. After initial recognition, goodwill is measured at cost less accumulated impairment losses. See Note 1.9 for a description of impairment testing procedures.
1.6	Intangible fixed assets other than goodwill
	Intangible assets are initially measured at cost. Where intangible assets are acquired as part of a business combination, cost is determined by reference to a fair value estimation technique as disclosed further in note 15. After initial recognition, intangible assets are recognised at cost less any accumulated amortisation and any accumulated impairment losses.   The depreciable amount of an intangible asset with a finite useful life is allocated on a systematic basis over its useful life. Amortisation begins when the asset is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.   The amortisation period and the amortisation method for intangible assets with a finite useful life is reviewed each financial year-end. If the expected useful life of the asset is different from previous estimates, the amortisation period is changed accordingly.
	Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
	Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
	Software	3 years or over the life of the license
	Franchise development costs	Over the life of the franchise contract (typically 10-15 years)
	Brands	10 years
	Customer lists	2-12 years
1.7	Property, plant and equipment
	Property, plant and equipment are recognised as an asset only if it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.   An item of property, plant and equipment that qualifies for recognition as an asset is measured at its cost. Cost of an item of property, plant and equipment comprises the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.   After recognition, all property, plant and equipment are carried at costs less any accumulated depreciation and any accumulated impairment losses.
	Depreciation is provided at rates calculated to write down the cost of assets, less estimated residual value, over their expected useful lives on the following basis:
	Leasehold land and buildings	Straight line over the life of the lease
	Plant and machinery	25% Reducing balance
	Fixtures, fittings and equipment	25% Reducing balance or 10%-33% straight line
	Computer equipment	33% Straight line
	Motor vehicles	25% Straight line
	The residual value and the useful life of an asset are reviewed at least at each financial year-end and if expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.   Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying value of the asset and are recognised in profit or loss.
1.8	Non-current investments
	Investments in equity instruments that have a quoted market price in an active market and other equity instruments whose fair value can be reliably measured are measured at fair value; otherwise investments in equity instruments are measured at cost.
	A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.9	Impairment of non-current assets
	For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash flows. As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of the related business combination and represent the lowest level within the Group at which management monitors goodwill.   Cash-generating units to which goodwill has been allocated are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.   An asset or cash-generating unit is impaired when its carrying amount exceeds its recoverable amount. The recoverable amount is measured as the higher of fair value less cost of disposal and value in use. The value in use is calculated as being net projected cash flows based on financial forecasts discounted back to present value.   The impairment loss is allocated to reduce the carrying amount of the asset, first against the carrying amount of any goodwill allocated to the cash-generating unit, and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment loss is reversed if the asset's or cash-generating unit's recoverable amount exceeds its carrying amount.
1.10	Financial instruments
	Loans and receivables
	Financial assets are recognised in the statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instrument.   All financial assets excluding investments are classified as loans and receivables; these comprise trade and other receivables and cash and cash equivalents. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.   Financial assets are initially recognised at fair value plus directly attributable transaction costs.   After initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.   If there is objective evidence that there is an impairment loss on loans and receivables, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced either directly or through use of an allowance account.   A financial asset is derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred.
	Financial assets held for trading
	Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by IAS 39. The Company has not designated any financial assets upon initial recognition as at fair value through profit or loss.   Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.   Financial assets at fair value through profit and loss are carried in the balance sheet at fair value with changes in fair value recognised in finance revenue or finance expense in the income statement.
	Impairment of financial assets
	Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.   Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. The impairment loss is recognised in profit or loss.
	Derecognition of financial assets
	Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
	Classification of financial liabilities
	Financial liabilities include borrowings and trade and other payables.   Financial liabilities are obligations to pay cash or other financial assets and are recognised in the statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instrument.   Financial liabilities are initially recognised at fair value adjusted for any directly attributable transaction costs.   After initial recognition, financial liabilities are measured at amortised cost using the effective interest method, with the effective interest recognised as an expense in finance costs.
	Derecognition of financial liabilities
	Financial liabilities are derecognised when, and only when, the obligation specified in the contract is discharged, cancelled, or expires.
1.11	Equity instruments
	Share capital represents the nominal value of shares that have been issued. Share premium represents the excess consideration received over share capital upon the sale of shares, less any incidental costs of issue. Retained earnings include all current and prior period retained profits.   The non-controlling interest reserve is the portion of equity ownership in subsidiaries which is not attributable to the owners of the Parent Company.
	The merger reserves has arisen as described in note 1.2.
1.12	Taxation
	The tax expense represents the sum of the tax currently payable and deferred tax.
	Current tax
	The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
	Deferred tax
	Deferred taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases.   A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). However, for deductible temporary differences associated with investments in subsidiaries a deferred tax asset is recognised when the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.   Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
1.13	Provisions
	Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.   The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.   Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision in measured at present value the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
1.14	Employee benefits
	The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.   The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.   Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15	Retirement benefits
	Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16	Share-based payments
	The fair value of equity-settled share based payments to employees is determined at the date of grant and is expensed on a straight-line basis over the vesting period based on the group's estimate of shares or options that will eventually vest. Full disclosure of the calculation models is given in note 25.
1.17	Leases
	The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards of ownership of the leased asset. Where the Group is a lessee in this type of arrangement, the related asset is recognised at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease payments plus incidental payments, if any. A corresponding amount is recognised as a finance lease liability.   This liability is reduced by lease payments net of finance charges. The interest element of lease payments represents a constant proportion of the outstanding capital balance and is charged to profit or loss, as finance costs over the period of the lease.
	Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
1.18	Standards, amendments and interpretations in issue but not yet effective
	The adoption of the following mentioned standards, amendments and interpretations in future years:

 

		EU effective date - period beginning on or after
	IFRS 14 'Regulatory Deferral Accounts'	1 January 2016*
	IAS 1 (amendment) 'Presentation of Financial Statements' - Disclosure initiative	1 January 2016*
	IAS 16 (amendment) 'Property, Plant and Equipment' and IAS 38 (amendment) 'Intangible Assets' - Clarification of acceptable methods of depreciation and amortisation	1 January 2016*
	IAS 19 (amendment) 'Employee Benefits' - Defined benefit plans: employee contributions	1 February 2015
	IAS 27 (amendment) 'Separate Financial Statements' - Equity Method in Separate Financial Statements	1 January 2016*
	IFRS 10 (amendment) 'Consolidated Financial Statements' and IAS 28 (amendment) 'Investments in Associates and Joint Ventures' - Sale or contribution of assets between an investor and its associate or joint venture	1 January 2016*
	IFRS 10 (amendment) 'Consolidated Financial Statements', IFRS 12 (amendment) 'Disclosure of Interests in Other Entities' and IAS 28 (amendment) 'Investments in Associates and Joint Ventures' - Investment entities: applying the consolidation exception	1 January 2016*
	IFRS 11 (amendment) 'Joint Arrangements' - Accounting for acquisitions of interests in joint operations	1 January 2016*
	Annual improvements to IFRS (2010 - 2012)	1 February 2015
	Annual improvements to IFRS (2012 - 2014)	1 January 2016
	IFRS 15 'Revenue from Contracts with Customers'	1 January 2018*
	IFRS 9 'Financial Instruments'	1 January 2018*
	IFRS 16 'Leases'	1 January 2019*
	IAS 12 (amendment) 'Income Taxes'	1 January 2017*
	IAS 7 (amendment) 'Statement of Cash Flows'	1 January 2017*
	* These standards, amendments and interpretations have not yet been endorsed by the EU and the dates shown are the expected dates.
	Management have not yet assessed the impact from IFRS 15 'Revenue from Contracts with Customers' and IFRS 16 'Leases' on the financial statements of the Group. All other amendments are not expected to have a material impact on the Group's financial statements.

 

2	Judgements and key sources of estimation uncertainty
	The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.   Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
	Critical judgements
	The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
	Basis of consolidation
	The Group was formed on 27 March 2015 when Hunters Property PLC acquired shares in its subsidiaries through a share-for-share exchange.  This type of common control transaction falls outside the scope of IFRS 3 and therefore UK GAAP has been referred to for best practice guidance.  The result is that the Group has adopted merger accounting as a basis for the Group consolidation.
	Franchisee revenue
	Franchisee sign up fees are recognised upfront at the inception of a franchisee contract, which in the directors' opinion matches to the estimated cost of time and knowledge to create the franchiser-franchisee contractual arrangement.
	Key sources of estimation uncertainty
	The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
	Provisions
	The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date.  Each period the directors assess the risks and uncertainties surrounding the obligation and review the discount rates applied when calculating the present value.  When reviewing the discount rates the directors refer to the Group weighted average cost of capital.  Further details on the assumptions made for specific provisions are disclosed in note 22.
	Business combinations and goodwill
	The Group has made several acquisitions during the year. Judgements and estimations are made in respect of the measurement of the provisional fair values of assets and liabilities acquired and the consideration transferred. Furthermore, estimation techniques have been used to value the brand and other intangibles acquired.   The Directors test annually for impairment of the Group's intangible assets and goodwill, details of which are given in note 12.
3	Segmental reporting
	IFRS 8, Operating Segments, requires operating segments to be identified on the basis of internal reports of the Group that are regularly reviewed by the Group's chief operating decision maker. The chief operating decision maker of the Group is considered to be the Board of Directors.   The Group has operating segments: Residential Sales, Lettings, and Franchising. Due to the specific nature of the Group's market, each component of revenue naturally falls within one of these segments. The operating segments are monitored by the Group's chief operating decision maker and strategic decisions are made on the basis of adjusted segment operating results. All assets, liabilities and revenues are located in, or derived in, the United Kingdom.   The Group does not have any major customers which account for 10% or more of revenues.
	Segmental analysis of revenue
																							2015																2014
																							£'000s																£'000s
	Residential sales																						4,840																3,861
	Lettings																						2,460																1,993
	Franchising																						3,271																2,307
	Other																						1,474																1,014
	Total revenue																						12,045																9,175
	Revenue analysed by geographical market
																							2015																2014
																							£'000s																£'000s
	United Kingdom																						12,045																9,175
	Further disclosure of the segmental analysis of goodwill is made in note 12. Due to the nature of operations, the Directors, as the chief operating decision-making body, review financial information for the Group's overall business and have identified a single operating segment at cost and asset / liability levels. Accordingly, further disclosure has not been made of these elements.
4	Operating profit
																							2015																2014
																							£'000s																£'000s
	Operating profit for the year is stated after charging/(crediting):
	Depreciation of owned property, plant and equipment																						149																103
	Depreciation of property, plant and equipment held under finance leases																						13																-
	Gain on disposal of property, plant and equipment																								(30)															-
	Amortisation of intangible assets																						368																146
	Write back/(impairment) of loans																						80																	(80)
	Write off of loans																						-																	(25)
	Research and Development tax credits																								(46)															-
	Share-based payments																						12																-
	Operating lease charges (including rent)																						459																507
	The Group's subsidiary RealCube Limited has undertaken research and development activities during the year on which tax credits have been received. Expenses in relation to this are included within employment costs.
5	Auditor's remuneration
																							2015																2014
	Fees payable to the company's auditor and its associates:																						£'000s																£'000s
	For audit services
	Audit of the financial statements of the group and company																						15																-
	Audit of the company's subsidiaries																						25																28
																							40																28
	In addition to the audit fees, the Group's auditor, Mazars LLP, acted as reporting accountant for the IPO which was completed on 2 July 2015. The total expense incurred in respect of this was £100,987.   Audit fees disclosed for the prior year were incurred prior to the IPO, and were paid to another auditor.
6	Employees
	The average monthly number of persons (including directors) employed by the group during the year was:
																							2015																2014
																							Number																Number
	Sales and administration																						180																120
	Directors																						5																5
																							185																125
	Their aggregate remuneration comprised:
																							2015																2014
																							£'000s																£'000s
	Wages and salaries																						5,087																3,514
	Social security costs																						508																364
	Pension costs																						110																67
																							5,705																3,945
7	Finance income
																							2015																2014
																							£'000s																£'000s
	Interest income
	Interest on bank & similar deposits																						1																-
	Interest on other financial instruments																						3																-
	Finance income on financial assets held at amortised cost																						13																7
	Total interest revenue																						17																7
	Income from fixed asset investments
	Gain on disposal of financial assets held for trading																						71																-
	Total income																						88																7
	Investment income includes the following:
	Interest on financial assets not measured at fair value through profit or loss																						15																7
8	Finance costs
																							2015																2014
																							£'000s																£'000s
	Interest on financial liabilities measured at amortised cost:
	Interest on bank overdrafts and loans																						71																44
	Interest on finance leases																						14																-
																							85																44
	Other finance costs:
	Unwinding of discount on loans and borrowings																						89																66
	Unwinding of discount on provisions																						9																6
																							98																72
	Total finance costs																						183																116
9	Taxation
																							2015																2014
																							£'000s																£'000s
	Current tax
	UK corporation tax on profits for the current period																						221																66
	Adjustments in respect of prior periods																								(1)															5
	Total current tax																						220																71
	Deferred tax
	Origination and reversal of temporary differences																								(58)															41
	Changes in tax rates																								(4)															-
	Total deferred tax																								(62)															41
	Total tax charge																						158																112
	The charge for the year can be reconciled to the profit per the Statement of Comprehensive Income as follows:
																							2015																2014
																							£'000s																£'000s
	Profit before taxation																						880																484
	Expected tax charge based on a corporation tax rate of 20.00%																						176																97
	Tax effect of expenses that are not deductible in determining taxable profit																						31																24
	Tax effect of utilisation of tax losses not previously recognised																						-																	(66)
	Change in unrecognised deferred tax assets																								(7)															-
	Effect of change in corporation tax rate																								(4)															-
	Permanent capital allowances in excess of depreciation																								(3)															1
	Share based payment charge																						2																-
	Under provided in prior years																								(1)															5
	Other adjustments																								(36)															34
	Acquired deferred tax reversed																						-																17
	Tax expense for the year																						158																112
	During the year the UK corporation tax rate was changed from 21% to 20%, effective from 1 April 2015.   A reduction in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and to 18% (effective from 1 April 2020) was substantively enacted in October 2015 and has therefore been considered when calculating deferred tax at the reporting date. Deferred tax balances at the reporting date are measured at 19% (2014: 20%).
10	Dividends
									2015					2014									2015																2014
									per share					per share									£'000s																£'000s
	Amounts recognised as distributions to equity holders:
	Interim paid (pence per share)								0.50					0.40									141																102
	In 2014 dividends were paid from the group's parent at that date, Hunter Property Group Limited. The above is presented after allowing for a consolidation of shares which was enacted as part of the company's acquisition by Hunters Property Plc.
	The proposed final dividend for the period ended 31 December 2015 is:
																																							2015
																							Per share																Total
																																							£'000s
	Ordinary shares (pence per share)																						1.00																283
	The proposed final dividend is subject to approval by shareholders and has not been included as a liability in these financial statements.
	The calculation of the basic and diluted earnings per share is based on the following data:
																				2015																2014
	Earnings																			£'000s																£'000s
	Earnings for the purpose of basic earnings per share being net profit attributable to owners of the parent																			726																378
	Effects of dilutive potential ordinary shares																			-																-
	Earnings for the purposes of diluted earnings per share																			726																378
																				2015																2014
	Number of shares																			No.																No.
	Weighted average number of ordinary shares																			26,317,492																85,169,319
	Effect of merger accounting on number of shares																			-																		(63,876,989)
	Net weighted average number of ordinary shares for the purposes of basic earnings per share																			26,317,492																21,292,330
	Effects of dilutive potential ordinary shares																			945,051																-
	Net weighted average number of diluted potential ordinary shares for the purposes of diluted earnings per share																			945,051																-
	Weighted average number of ordinary shares for the purposes of diluted earnings per share																			27,262,543																21,292,330
	Basic earnings per share (pence per share)																			2.76																1.78
	Diluted earnings per share (pence per share)																			2.66																1.78
	In each period there were share options outstanding. As at 31 December 2015 these were in the money, and are due to expire at various stages over the next 10 years.
	The Directors use adjusted earnings before time-value interest, investment revenue, amortisation, costs of acquisition, and share-based payment expenses ("Adjusted Earnings") as a measure of ongoing profitability and performance. The calculated Adjusted Earnings for the current period of accounts is as follows:
	Profit after taxation																			726																377
	Adjusted for:
	Time-value interest costs																			99																71
	Investment revenues																				(15)																	(8)
	Amortisation																			368																146
	Costs of acquisition																			57																186
	Share-based payment expense																			12																-
	Adjusted Earnings																			1,247																772
	Basic Adjusted Earnings per share (pence per share)																			4.74																3.63
12	Intangible fixed assets
	Group	Goodwill					Software				FDG's & rebrands						Brands										Customer lists														Total
		£'000s					£'000s				£'000s						£'000s										£'000s														£'000s
	Cost
	At 1 January 2014	2,050					-				49						-										84														2,183
	Additions - separately acquired	-					-				299						-										-														299
	Additions - business combinations	1,529					-				-						465										80														2,074
	At 31 December 2014	3,579					-				348						465										164														4,556
	Additions - separately acquired	-					86				780						-										-														866
	Additions - business combinations	429					507				-						169										1,498														2,603
	Disposals	-					-					(10)						-									-																(10)
	At 31 December 2015	4,008					593				1,118						634										1,662														8,015
	Amortisation and impairment
	At 1 January 2014	35					-				6						-										48														89
	Amortisation charged for the year	-					-				39						19										88														146
	At 31 December 2014	35					-				45						19										136														235
	Amortisation charged for the year	-					40				84						58										186														368
	At 31 December 2015	35					40				129						77										322														603
	Carrying amount
	At 31 December 2015	3,973					553				989						557										1,340														7,412
	At 31 December 2014	3,544					-				303						446										28														4,321
	Franchise Development Grants (FDG's") and rebrand costs are externally incurred expenses at the inception of certain contracts with franchisees in order to assist with the transition to using the Hunters brand name. The amounts invested are amortised over the minimum life of the underlying franchise contract, typically 10 to 15 years.
	The Group tests goodwill annually for impairment, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is assessed for impairment by comparing the carrying values with the value-in-use calculation, which is determined by calculating the net present value (NPV) of future cash flows arising from the original acquired business.   The NPV of future cash flows is based on budgets and forecasts for the next 5 years to 2020, using growth rates of 3% - 6% based on past experience and outlook.  Thereafter growth is assumed to be 3% in perpetuity based on long term housing sector growth rates. A discount rate of 10% has been used based on the Group's estimated cost of capital.   The key sensitivities in assessing the value in use of goodwill are forecast cashflows and the discount rate applied. ·      A 1% reduction in forecast growth rate in perpetuity would have no impact on carrying values; ·      A 1% increase in the discount applied would have no impact on carrying values.
	The carrying amounts of goodwill have been assigned to the following cash-generating units:
																								Group
																								2015															2014
																								£'000s															£'000s
	Residential sales																							1,330															1,330
	Lettings																							561															480
	Franchising																							2,048															1,734
	Other																							34															-
																								3,973															3,544
13	Property, plant and equipment
	Group	Leasehold land and buildings					Plant and machinery				Fixtures, fittings and equipment						Computer equipment										Motor vehicles														Total
		£'000s					£'000s				£'000s						£'000s										£'000s														£'000s
	Cost
	At 1 January 2014	67					1,666				117						86										-														1,936
	Additions	90					131				5						-										-														226
	Business combinations	12					-				17						-										122														151
	Disposals		(67)					(1,490)				(117)						(86)											-														(1,760)
	At 31 December 2014	102					307				22						-											122														553
	Additions	3					54				10						-											9														76
	Business combinations	-					1				1						4											-														6
	Disposals	-					-				-						-													(48)													(48)
	Transfers		(93)					93			-						-											-														-

	At 31 December 2015	12				455						33						4								83									587
	Depreciation and impairment
	At 1 January 2014	67				1,520						117						86								-									1,790
	Depreciation charged in the year	5				66						5						-								27									103
	Eliminated in respect of disposals		(67)				(1,490)						(117)						(86)								-									(1,760)
	At 31 December 2014	5				96						5						-								27									133
	Depreciation charged in the year	6				91						11						2								52									162
	Eliminated in respect of disposals	-				-						-						-									(48)									(48)
	Transfers		(2)				2					-						-								-									-
	At 31 December 2015	9				189						16						2								31									247
	Carrying amount
	At 31 December 2015	3				266						17						2								52									340
	At 31 December 2014	97				211						17						-								95									420
	The company had no property, plant and equipment assets at 31 December 2015 or 31 December 2014.
	The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts. The depreciation charge in respect of such assets amounted to £13,125 (2014 - £0) for the year.
																								Group
																								2015								2014
																								£'000s								£'000s
	Plant and machinery																							91								53
	Motor vehicles																							-								27
																								91								80
14	Fixed asset investments
														Group																		Company
														2015										2014								2015
								Notes						£'000s										£'000s								£'000s
	Investments in subsidiaries							34						-										-								867
	Loans to subsidiaries							34						-										74								-
	Other investments in subsidiaries							34						-										-								12
	Unlisted investments													1										1								-
														1										75								879
	Included within the above is £nil (2014 - £73,451) relating to RealCube Technology Limited.  The Group has provided a undiscounted capital contribution totalling £nil (2014 - £163,518) against which £nil (2014 : £nil) was provided as irrecoverable. The loan unwound until June 2015 when it formed part of the purchase consideration for RealCube as disclosed in note 15.
	Movements in non-current investments
	Group													Loans										Shares								Total
														£'000s										£'000s								£'000s
	Cost or valuation
	At 1 January 2014													67										-								67
	Additions													80										-								80
	On business combination													-										1								1
	Unwinding of discount													7										-								7
	Impairment of capital contribution														(80)										-									(80)
	At 31 December 2014													74										1								75
	Additions													-										192								192
	Unwinding of discount													7										-								7
	Disposals													-											(192)									(192)
	Transfer to intercompany receivable														(81)										-									(81)
	At 31 December 2015													-										1								1
	Carrying amount
	At 31 December 2015													-										1								1
	At 31 December 2014													74										1								75
	Movements in non-current investments
	Company													Equity investments in subsidiaries										Other investments in subsidiaries								Total
														£'000s										£'000s								£'000s
	Cost or valuation
	At 1 January 2015													-										-								-
	Additions													867										12								879
	At 31 December 2015													867										12								879
	Carrying amount
	At 31 December 2015													867										12								879
	At 31 December 2014													-										-								-
15	Business combinations
	Acquisition of Greenrose Network (Franchise) Limited
	In May 2015 the Group acquired 100% of the voting shares of Greenrose Network (Franchise) Limited ("Greenrose").  Greenrose is an unlisted company based in England and specialising in the UK property market.  The consideration paid totalled £1,200,000, being settled by cash of £1,000,000 payable at the point of sale to the vendors, and the issue of 333,333 4p shares in Hunters Property Plc at a premium of 56p per share, with the total value of the issue being £200,000. In addition there were directly attributable costs of £39,399 inclusive of stamp duty payable on the shares.   As part of the acquisition, the Directors have identified intangible assets included within the premium paid for the acquisition, being customer lists in place with value of £951,514 and the Greenrose brand with value of £168,123. Historical data and forecasts have been used, together with a 10% discount rate (estimated by reference to a typical market participant) and an assumption of a useful life of 10 years for the brand, to estimate the notional fair value of these intangibles.   As the acquisition gave immediate access to an enhanced franchising network, which represents a key part of the Group's business model, an additional premium was paid over these notional fair values. The directors have not quantified any other elements of this goodwill and do not believe there to be any further fair value adjustments.
										Carrying value											Fair value adjustments										Fair value recognised on acquisition
	Assets									£'000s											£'000s										£'000s
	Intangible assets									-											1,120										1,120
	Property, plant and equipment									4											-										4
	Deferred tax assets									-											6										6
	Trade and other receivables									63												(30)											33
	Cash and cash equivalents									2											-										2
	Total assets									69											1,096										1,165
	Liabilities
	Trade and other payables										(66)											-											(66)
	Deferred tax liabilities										(1)											(212)											(213)
	Total liabilities									67											212										279
	Total identifiable net assets									2											884										886
	Goodwill arising on acquisition																														314
	Purchase consideration transferred																														1,200
	From the date of acquisition, Greenrose Network (Franchise) Limited contributed £276,988 of revenue, and operating profit before amortisation of £144,125. If the acquisition had taken place at the beginning of the year, revenue from continuing operations would have been £364,422, profit before amortisation would have been £142,395.

 

	From the date of acquisition, RealCube Technology Limited & RealCube Limited contributed £167,169 of revenue, and profit before amortisation charges of £18,472. If the acquisition had taken place at the beginning of the year, revenue from continuing operations would have been £314,471 and loss before amortisation from continuing operations for the Group would have been £47,023.
	The analysis of the cash flows on acquisition is:
												£'000s
	Transaction costs of the acquisition													(8)
	Cash and cash equivalents acquired with the subsidiary											15
	Cash and cash equivalents paid for the subsidiary											-
	Net cash flow on acquisition											7
	Acquisition of lettings book
	In September 2015 the Group acquired a lettings business providing landlords with residential letting agency services. The consideration paid totalled £540,000, being settled by cash of £350,000 payable at the point of sale to the vendors, the issue of 111,111 4p shares in Hunters Property Plc at a premium of 86p per share, with the total value of the issue being £100,000 and £90,000 deferred consideration as explained below. In addition there were directly attributable costs of £9,326.
			Carrying value				Fair value adjustments					Fair value recognised on acquisition
	Assets		£'000s				£'000s					£'000s
	Intangible assets		-				547					547
	Total assets		-				547					547
	Liabilities											-
	Deferred tax liabilities		-					(104)						(104)
	Total liabilities		-				104					104
	Total identifiable net assets		-				443					443
	Goodwill arising on acquisition											81
	Purchase consideration transferred											524
	From the date of acquisition, the lettings book contributed £61,556 of revenue and £22,329 of profit before tax from continuing operations of the Group.
	The analysis of the cash flows on acquisition is:
												£'000s
	Transaction costs of the acquisition													(9)
	Cash and cash equivalents acquired with the lettings book											-
	Cash and cash equivalents paid for the lettings book													(350)
	Net cash flow on acquisition													(359)
	For the acquisition, the Group entered into an agreement to make payments of a further £90,000. Payments are to be made in equal quarterly instalments for the next four years. The cost of the acquisition represents these cashflows being discounted at a 10% rate to present value as at the date of inception. The cashflows presented above represent the immediate cashflow as at the point of acquisition only.
16	Trade and other receivables
				Group									Company
				2015					2014				2015
	Amounts falling due within one year:			£'000s					£'000s				£'000s
	Trade receivables			871					615				-
	Amounts due from subsidiary undertakings			-					-				2,929
	Other receivables			266					157				-
	Prepayments and accrued income			492					505				-
				1,629					1,277				2,929

 

	Trade receivables at the reporting date are shown above net of provisions.   Trade receivables are stated net of impairment for estimated irrecoverable amounts of £124,957 (2014: £41,421). This impairment has been determined by reference to past default experience and known issues. Write offs are made when the irrecoverable amount becomes certain. The directors consider that the carrying amount of trade and other receivables approximates to their fair value.   Movement on the allowance for irrecoverable amounts on trade receivables are as follows:
		2015			2014
		£'000s			£'000s
	Beginning of the year	41			-
	Acquired on business combinations	30			-
	Provision for bad receivables	69			41
	Released during the year		(15)			-
	End of the year	125			41
	An analysis of the trade debtors before provisions is:
		2015			2014
		£'000s			£'000s
	Less than 60 days	801			613
	60 to 120 days	66			10
	More than 120 days	129			33
	Total trade receivables before provisions	996			656
	Less provisions for irrecoverability		(125)			(41)
	Net trade receivables	871			615
	The directors consider the credit quality of trade and other receivables that are neither past due nor impaired to be good.

 

17	Borrowings
				Group				Company
				2015		2014		2015
			Notes	£'000s		£'000s		£'000s
	Debenture loans			618		1,005		-
	Bank loans			1,705		1,706		-
	Directors' loans		32	-		52		-
	Other related party loans		33	-		212		-
				2,323		2,975		-
	Payable within one year:
	Debenture loans			354		448		-
	Bank loans			660		389		-
	Directors' loans			-		52		-
	Other related party loans			-		212		-
				1,014		1,101		-
	Payable after one year:
	Debenture loans			264		557		-
	Bank loans			1,045		1,317		-
				1,309		1,874		-
	All of the Group's borrowings are due for repayment within five years.

 

	The Group has 5 bank loans ongoing at the year end.   The first loan is repayable in monthly instalments and bears interest at 3.00% over Libor. At the year end a balance of £457,139 (2014 - £551,912) was outstanding on this loan.   The second loan is repayable in monthly instalments and bears interest at 2.75% over Bank of England Base Rate. At the year end a balance of £69,184 (2014 - £126,475) was outstanding on this loan.   The third loan is repayable in monthly instalments and bears interest at 3.00% over Bank of England Base Rate. At the year end a balance of £208,368 (2014 - £288,000) was outstanding on this loan.   The fourth loan is repayable in monthly instalments and bears interest at 3.75% over Bank of England Base Rate. At the year end a balance of £590,604 (2014 - £740,043) was outstanding on this loan.   The fifth loan was incepted during the year, with an initial value of £380,000 and is repayable in monthly instalments and bears interest at 3.00% over Bank of England Base Rate. At the year end a balance of £380,000 was outstanding on this loan.   All the above bank loans are secured by a fixed and floating charge over the current and future assets of the company.   Debenture loans relate to non-interest bearing loan notes issued during the year which are redeemable on the following dates: £375,000 redeemable 31 July 2016 and £295,000 redeemable 31 July 2017.  These are carried at their present value, determined using the company's discount rate of 10%, and are carried at £354,720 and £263,594 respectively. Finance costs will be recognised as the debenture loans unwind towards maturity.
18	Finance lease obligations
	Future minimum lease payments due under finance leases:
			Group						Company
			2015			2014			2015
			£'000s			£'000s			£'000s
	Within one year		44			32			-
	In two to five years		32			49			-
			76			81			-
	Less: future finance charges			(9)			(12)			-
			67			69			-
	The finance leases relate to improvements and furniture for use in the Head Office, and to motor vehicles included within non-current assets. There are no lease incentives or contingent elements attracting to the leases.

 

19	Current trade and other payables
			Group				Company
			2015		2014		2015
			£'000s		£'000s		£'000s
	Other taxation and social security		925		601		-
	Trade payables		556		489		-
	Other payables		213		658		-
	Accruals and deferred income		798		651		26
			2,492		2,399		26
20	Non-current trade and other payables
			Group				Company
			2015		2014		2015
			£'000s		£'000s		£'000s
	Other payables		68		-		-

 

21	Financial instruments
	Market and liquidity risks
	The Group trades entirely within the UK property market, and accordingly there is a risk relating to the underlying performance of that market; this creates an exposure to the risk of large-scale failure in the property trading market which would have a corresponding impact on the results of the Group. The directors monitor this risk closely with the intention to foresee downturns in trade.   Within the Group there exists a sizeable lettings division which generates a fixed percentage income based on the letting and management of properties owned by third parties, and the directors consider this to be a more secure income stream and a suitable diversification of the trade and corresponding risk, based on historic performance whereby a downturn in the property trading market creates more buoyancy within the lettings market, and vice versa. As such, the directors believe that the Group maintains sufficient liquidity and flexibility to continue trading through a potential downturn in the UK property market.   The company has a number of interest-bearing loans upon which interest is charged at a variable rate. The outstanding value of these bank loans at the year end are £1,705,295 (2014- £1,706,430), on which interest is charged at between 2.75% and 3.75% over the Bank of England base rate. The directors do not consider that the Group is exposed to a material risk from fluctuations in these interest rates; had the base rate been 2.0% higher throughout the increased interest costs would have been approximately £31,000 (2014 - £34,000).   The Group makes use of structured loans to finance its acquisitions and ongoing trading activities as an alternative to overdraft financing, due to the certainty of repayment timings and predictable lower interest rates which attract to this. Accordingly, the directors consider that the market risks arising from these interest-bearing loans are acceptable and minimal on a risk-reward profile compared to overdraft finance.   Similarly, fixed rate finance lease agreements are used to acquire property, plant and equipment; this ensures that the Group maintains its existing working capital and ensures certainty of costs at the point of acquisition of those assets.   The Group does not trade in overseas markets and has no financial instruments denominated in non-Sterling currencies, and accordingly it has no exposure to currency risks.
	Credit risk
	The Group does not make sales under the traditional credit term agreement model, with cash typically being recognised at the completion date of property or upon receipt of regular rent from tenants; credit is, however, granted to franchisees, financial services partners and survey & valuation partners.   The Group closely monitors the performance of its franchisees, on a frequent and ongoing basis. Operationally the Group are actively involved in the running of the franchising businesses, including frequent exchange of financial and key performance data, and are able to manage their own credit risk by using this knowledge to minimise exposure to potential bad debt. Additionally, franchisees are encouraged to remit via Direct Debit arrangements, which helps to maintain the Group's working capital whilst mitigating against long-term credit risk exposure.   Only reputable and accredited partners are used, and ledger balances are carefully monitored to minimise exposure to material credit risk.
	Capital management
	The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and other stakeholders. The Group manages the capital structure and makes changes in light of changes in economic conditions. In order to maintain or adjust the capital structure, the Group may adjust its borrowings and investment decisions.

 

						Group				Company
						2015		2014		2015
						£'000s		£'000s		£'000s
	Carrying amount of financial assets
	Debt instruments measured at amortised cost					-		-		2,929
	Equity instruments measured at cost less impairment					1		1		867
						1		1		3,796
	Carrying amount of financial liabilities
	Measured at amortised cost					4,025		4,843		26
	The undiscounted contractual maturity analysis for financial instruments is as follows:
	Financial assets	Demand and less than 3 months		From 3 to 12 months		From 12 months to 2 years		From 2 to 5 years		Total
	Trade and other receivables	629		45		-		98		772
	Cash and cash equivalents	1,146		-		-		-		1,146
	As at 31 December 2014	1,775		45		-		98		1,918
	Trade and other receivables	1,137		-		-		-		1,137
	Cash and cash equivalents	1,211		-		-		-		1,211
	As at 31 December 2015	2,348		-		-		-		2,348
	Financial liabilities	Demand and less than 3 months		From 3 to 12 months		From 12 months to 2 years		From 2 to 5 years		Total
	Trade and other payables	1,766		150		-		-		1,916
	Debenture loans	-		470		375		295		1,140
	Bank loans and overdrafts	97		292		389		928		1,706
	Finance leases	10		31		41		-		82
	As at 31 December 2014	1,873		943		805		1,223		4,844
	Trade and other payables	751		182		23		39		995
	Debenture loans	-		375		295		-		670
	Bank loans and overdrafts	130		477		485		614		1,706
	Other loans	-		19		-		-		19
	Finance leases	9		28		30		-		67
	As at 31 December 2015	890		1,081		833		653		3,457

 

22	Provisions for liabilities
					Group						Company
					2015			2014			2015
				Notes	£'000s			£'000s			£'000s
	Contingent acquisition costs				37			119			-
	Office dilapidations provision				38			32			-
					75			151			-
	Deferred tax liabilities			23	465			137			-
					540			288			-
	Movements on provisions apart from deferred tax liabilities:
					Contingent acquisition costs			Office dilapidations provision			Total
	Group				£'000s			£'000s			£'000s
	At 1 January 2015				119			32			151
	Additional provisions in the year				-			3			3
	Reversal of provision					(5)			-			(5)
	Utilisation of provision					(83)			-			(83)
	Unwinding of discount				6			3			9
	At 31 December 2015				37			38			75
	The contingent acquisition costs relate to amounts provided in respect of contingent payments due arising from the acquisition of Hunters Group Limited during the year to 31 December 2014. The provision is discounted to present value, with £20,000 undiscounted (£18,918 discounted) falling contingently payable during the year to 31 December 2016, and £20,000 (£17,430 discounted) falling contingently payable thereafter.
	The office dilapidations provision has been created in respect of restoration costs anticipated for an office leased by the Group. The provision is anticipated to result in an ultimate cash outflow of £75,000 by the end of 2019.

 

23	Deferred taxation
	The following is the analysis of the deferred tax balances for financial reporting purposes:
		Liabilities		Liabilities		Assets		Assets
		2015		2014		2015		2014
	Group	£'000s		£'000s		£'000s		£'000s
	Accelerated capital allowances	19		28		-		-
	Decelerated capital allowances	-		-		17		17
	Fair value adjustments to intangible assets on business combinations	446		108		-		-
	Dilapidations provision	-		-		7		6
	Other provisions and accruals	-		1		19		12
	Prior year adjustment (note 28 )	-		-		-		28
		465		137		43		63
	The company did not have any deferred tax balances as at 31 December 2015.

 

								Group			Group			Company
								2015			2014			2015
	Movements in the year:							£'000s			£'000s			£'000s
	Net liability at 1 January 2015							74				(60)			-
	Charge to profit or loss								(58)			41		-
	Effect of change in tax rate - income statement								(4)			-		-
	Acquired on business combinations							410			93			-
	Net liability at 31 December 2015							422			74			-
	Movements by category of deferred tax are as follows:
		Liability/(asset) at 1 January 2014			Credit/(Charge) to profit or loss			Effect of change in tax rate			Acquired on business combinations & other			Liability/(asset) at 31 December 2014
	Accelerated capital allowances	2			26			-			-			28
	Decelerated capital allowances	-				(2)			-			(15)			(17)
	Fair value adjustments to intangible assets on business combinations	-				(2)			-		110			108
	Dilapidations provision		(5)			(1)			-		-				(6)
	Other provisions and accruals		(31)			20		-			-				(11)
	Prior year adjustment (note 28 )		(28)			-		-			-				(28)
	Net deferred tax movement		(62)			41		-			93			74
		Liability/(asset) at 1 January 2015			Charge/(Credit) to profit or loss			Effect of change in tax rate			Acquired on business combinations & other			Liability/(asset) at 31 December 2015
	Accelerated capital allowances	28				(9)			-		-			19
	Decelerated capital allowances		(17)			-		-			-				(17)
	Fair value adjustments to intangible assets on business combinations	108				(68)			(4)			410		446
	Dilapidations provision		(6)			(1)			-		-				(7)
	Other provisions and accruals		(11)			(8)			-		-				(20)
	Prior year adjustment (note 28 )		(28)			28		-			-			-
	Net deferred tax movement	74				(58)			(4)			410		421

 

	Within RealCube Limited there exists tax losses totalling £452,414 on which no deferred tax asset is recognised, due to restrictions on the use of these losses. These losses existed at the date of acquisition by the group and have not been included as a fair value adjustment to the acquired net assets.
24	Retirement benefit schemes
			2015		2014
	Defined contribution schemes		£'000s		£'000s
	Charge to profit and loss in respect of defined contribution schemes		110		67
	A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

 

25	Share-based payment transactions
	Group	Number of share options									Weighted average exercise price
		2015				2014					2015				2014
		Number				Number					£				£
	Outstanding at 1 January 2015	931,250				931,250					0.16				0.16
	Granted	887,156				-					0.54				-
	Exercised			(23,439)				-			0.42				-
	Outstanding at 31 December 2015	1,794,967				931,250					0.28				0.16
	Exercisable at 31 December 2015	353,467				-					0.43				-
	The options outstanding at 31 December 2015 had an exercise price ranging from £0.40 to £0.73, and a remaining contractual life ranging between May 2017 and December 2025.
	The options exist at 31 December 2015 across the following share option schemes:
	Option name & date of issue	Number of shares				Exercise price per share (£)					Fair value of scheme				Vesting   period
	Employee share options	931,250				0.16					-				3 years
	Options issued January 2015	150,000				0.40					18,292				3 years
	Options issued May 2015	353,467				0.42					27,423				2 months
	Options issued December 2015	360,250				0.73					1,247				3 years
		1,794,967									46,962
	The fair value of the schemes are being expensed over the vesting period. All share options expire 10 years after the date of issue.
	Fair value of options granted
	The weighted average fair value of options granted during the year was £0.54. Fair value was measured using the Black-Scholes model.
	Inputs were as follows:
							January options					May options				December options
							£					£				£
	Weighted average share price						0.50					0.50				0.73
	Weighted average exercise price						0.40					0.42				0.73
	Expected volatility						6.00%					6.00%				2.51%
	Risk free rate						0.79%					0.67%				0.61%
	Expected dividends yields						3.75%					3.57%				2.00%

 

			Group				Company
			2015		2014		2015
			£'000s		£'000s		£'000s
	Expenses recognised in the year
	Arising from equity settled share based payment transactions		12		-		-
26	Share capital
					Group and company
					2015		2014
	Ordinary share capital				£'000s		£'000s
	Issued and fully paid
	28,286,992 Ordinary of 4p each				1,131		-
	Reconciliation of movements during the year:
							Ordinary
							Number
	At 1 January 2015						-
	Issue of fully paid shares						28,286,992
	At 31 December 2015						28,286,992
	On incorporation the company issued one Ordinary share at par.   On 27 March 2015 the company issued 21,683,252 Ordinary shares at par as part of a share-for-share exchange transaction to acquire 100% of the Group headed by Hunters Property Group Limited. The acquisition fell within the group reconstruction relief provisions of S611 of the Companies Act 2006 and accordingly no share premium was recognised on the transaction.   During the period to the year end, a further 6,603,739 shares were issued at a total premium of £3,336,651.

 

27	Share premium account
			Group						Company
			2015			2014			2015
			£'000s			£'000s			£'000s
	At beginning of year		-			-			-
	Issue of new shares		3,337			-			3,337
	Share issue expenses			(758)			-			(758)
	At end of year		2,579			-			2,579
	During the period, shares were issued at a premium of £3,336,640. Against this, costs of issue of shares of £757,904, net of taxation relief, have been set against the balance reflected in the financial statements.
28	Prior year adjustment
	During 2015 management became aware of a likely irrecoverable VAT debit dating back to prior periods.  The impact of the adjustment has been to increase other creditors by £141,000, increase the deferred tax asset by £28,000, and decrease the opening prior period reserves by £113,000.   Further, management have reclassified its doubtful debt provision regarding its previous loan investment in RealCube as a trading impairment which the Directors consider better reflects the substance of the arrangement. The impact of the restatement is to increase administrative expenses in 2014 by £80k, with no net impact on profit.
29	Guarantees and contingent liabilities
	At 31 December 2015, the Group had no contingent liabilities.   At 31 December 2015 the Group held client monies in approved bank accounts amounting to £3,496,720 (2014: £3,125,000). Neither the cash asset nor any corresponding obligation has been recognised by the Group.

 

30	Operating lease commitments
	Lessee
	Operating leases relating to land and buildings are on normal commercial terms with no rent-free periods or other incentives, and include requirements to restore sites at the end of the agreements for which amounts have been provided for. Other agreements relate to motor vehicles on terms of one to three years, with no lease incentives.
	At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
			Group				Company
			2015		2014		2015
			£'000s		£'000s		£'000s
	Land and buildings
	Within one year		614		626		-
	Between two and five years		1,937		1,615		-
	In over five years		2,265		778		-
			4,816		3,019		-
	Other
	Within one year		40		80		-
	Between two and five years		21		162		-
			61		242		-
			4,877		3,261		-

 

31	Events after the reporting date
	Acquisitions On 4 January 2016 the Group acquired a lettings book of properties under management by another estate agent for total consideration of £190,000, of which £175,000 was payable up front and the remaining £15,000 was payable by 5 April 2016. No new financing was entered into to facilitate the transaction, and no assets were acquired other than the lettings book.   As at the date of approval of the financial statements, the Directors are still assessing the fair values acquired and accordingly have not presented further information in respect of the acquisition.   Share options On 28 January 2016 awards were made under the Hunters Property Senior Executive Share Option Scheme (the "Share Scheme") to certain Executive Directors. Chief Executive, Harry Hill was separately granted share options as described below.   The Share Scheme has been introduced in order to incentivise and retain key members of the executive management team, and to drive shareholder value creation.  Share options granted over ordinary shares of 4p each in the Company ("Ordinary Shares") under the Share Scheme ("Share Options") vest, subject to the achievement of certain earnings per share performance conditions, as to one third following the end of each of the Company's current and two subsequent financial years. The exercise price of the Share Options is 4 pence per Ordinary Share.  Share Options which have vested are exercisable following the preliminary announcement of the Company's results for the second financial year after the Company's current financial year.  Subject to the rules of the Scheme, Share Options lapse 10 years after the date of grant.   The following awards were made to Executive Directors in accordance with the rules of the Share Scheme:
	Director		Number of options granted under the share scheme		% of the existing issued share capital
	Kevin Hollinrake		100,000		0.35%
	Glynis Frew		150,000		0.53%
	Ed Jones		150,000		0.53%
	Options award to Chief Executive
	On 28 January 2016 Harry Hill was granted an option over 150,000 Ordinary shares, exerciseable at a price of 4 pence per Ordinary share, which vests upon the fulfilment of certain strategic performance conditions. The option may be exerciseable in whole or in part (in tranches of not less than 25,000 Ordinary shares) at any time after it has vested. Subject to the provisions of the option agreement between the Company and Harry Hill, the option lapses 10 years after the date of grant.
32	Directors' remuneration and transactions
				2015			2014
				£'000s			£'000s
	Remuneration for qualifying services			397			274
	Remuneration recognised in share premium			33			-
	Company pension contributions to defined contribution schemes			28			26
				458			300

 

	The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2014 - 3).
	During the year to 31 December 2015 the directors received remuneration as follows:
	Director	Salary		Bonus		Benefits in kind		Pension		Total
		£'000s		£'000s		£'000s		£'000s		£'000s
	Ms G Frew	91		37		12		8		148
	Mr H Hill	50		-		-		-		50
	Mr K Hollinrake	71		-		11		10		92
	Mr E Jones	89		35		11		10		145
	Mr D Fielding	23		-		-		-		23
	Total	324		72		34		28		458
	During the year to 31 December 2014 the directors received remuneration as follows:
	Director	Salary		Bonus		Benefits in kind		Pension		Total
		£'000s		£'000s		£'000s		£'000s		£'000s
	Ms G Frew	84		4		3		8		99
	Mr K Hollinrake	86		-		2		10		98
	Mr E Jones	78		15		2		8		103
	Total	248		19		7		26		300
	During the year the Directors of the Group received dividends as follows (comparatives presented were received from Hunters Property Group Limited as explained in note 10 ):
								2015		2014
	Director							£'000s		£'000s
	Ms G Frew							9		19
	Mr H Hill							-		-
	Mr K Hollinrake							21		25
	Mr E Jones							18		20
								48		64

 

	The Directors advanced loans to the Group (detailed further in note 17 ) as follows:
				2015			2014
	Ms G Frew			£'000s			£'000s
	Brought forward			13			5
	Advanced during the year			-			9
	Repaid during the year				(13)			(1)
	Carried forward			-			13
	Mr K Hollinrake
	Brought forward			12			3
	Advanced during the year			-			351
	Repaid during the year				(12)			(342)
	Carried forward			-			12
	Mr E Jones
	Brought forward			27			17
	Advanced during the year			-			12
	Repaid during the year				(27)			(2)
	Carried forward			-			27
33	Related party transactions
	Remuneration of key management personnel
	The key management personnel are considered to be the Board of Directors and members.  Refer to note 32 for details of key management personnel remuneration.
	Transactions with related parties
	During the year the group entered into the following transactions with related parties:
				Purchase of services
				2015			2014
				£'000s			£'000s
	Group
	RealCube Limited (prior to acquisition by Group)			49			37

 

	The following amounts were outstanding at the reporting end date:
		Amounts owed by related parties
		2014
		Balance		Provision				Net
		£'000s		£'000s				£'000s
	Group
	RealCube Limited	176		80				96
	No guarantees have been given or received.
	During the year the Group entered into a share-for-share exchange whereby Hunters Property Plc acquired the shares of Hunters Property Group Limited from the Directors of the Group.
	Amounts were owed to directors of the Group's subsidiary Hunters Property Group Limited as follows:
					2015				2014
					£'000s				£'000s
	Mr J Waterhouse				-				169
	Mr M Robinson				-				43
					-				212

 

34	Subsidiaries
	Details of the company's subsidiaries at 31 December 2015 are as follows:
	Name of undertaking and country of		Nature of business	Class of	% Held
	incorporation or residency			shareholding	Direct	Indirect
	Hunters Property Group Limited	England & Wales	Estate agents	Ordinary	100.00
	Hunters Franchising Limited	England & Wales	Franchising of estate agents	Ordinary		100.00
	Hunters Partners Limited	England & Wales	Franchising of estate agents	Ordinary		100.00
	Greenrose Network (Franchise) Limited	England & Wales	Franchising of estate agents	Ordinary		100.00
	Hunters Land & New Homes Limited	England & Wales	Dormant	Ordinary		100.00
	Maddison James Limited	England & Wales	Dormant	Ordinary		100.00
	RealCube Technology Limited	England & Wales	Intermediate holding company	Ordinary		100.00
	RealCube Limited	England & Wales	Software	Ordinary		100.00
	Hunters Group Limited	England & Wales	Intermediate holding company	Ordinary		100.00
	Hunters (Midlands) Limited	England & Wales	Estate agents	Ordinary		100.00
	Hunters Survey & Valuation Limited	England & Wales	Dormant	Ordinary		100.00
	Hunters Financial Services Limited	England & Wales	Financial services	Ordinary		100.00
	Hapollo Limited	England & Wales	Lettings and management of office spaces	Ordinary		100.00
	Herriot Cottages Limited	England & Wales	Dormant	Ordinary		100.00
	The investments in subsidiaries are all stated at cost less impairment in the financial statements.