MartinCo plays down fears of buy-to-let slowdown as profits jump

 
Kasmira Jefford
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MartinCo said the buy-to-let market will continued to be fuelled by the UK's expanding population (Source: Getty)

Shares in MartinCo rose by nearly four per cent today after the franchised lettings agency group said demand from a growing nation of renters helped to boost full-year sales and profits.

The Aim-listed company, which has 287 offices operating under five brands including Martin & Co, Xperience, and Parkers, said group revenue increased by 38 per cent to £7.1m in 2015 compared with £5.2m last year.

Profit before tax was up by 42 per cent to £2.7m and while earning before interest, tax, depreciation and amortisation rose by 50 per cent, representing a return on equity of 31 per cent.

Chief executive Ian Wilson, said: “2015 was our most successful year to date demonstrating the power of our multi-brand franchise strategy. It was a year of consolidation and growth for the group which saw us open 13 new offices across our brand stable, leveraging our expertise in lettings and growing our estate agency services across our expanded network."

He added that despite George Osborne's recent tax raid on buy-to-let landlords and second home owners, including the three per cent stamp duty surcharge introduced this week, "the fundamental drivers of the private rented sector remain in place".

Read More: Buy-to-let tax: Why a landlord exodus remains unlikely

The company said the buy-to-let market would continue to be driven by the UK's expanding population, the shortage of housing stock and lack of affordability, with the number of privately rented households growing by 135 per cent over the last 30 years.

"As the appetite for income from asset purchase remains unrivalled by other sources, we envisage further growth as the private rented sector continues to offer compelling net total returns for investors," chairman Richard Martin said.

MartinCo has been growing its estate agency arm to reduce its reliance on rental market, and now has 256 offices offering an estate agency service in addition to core letting services. However lettings still account for 76 per cent of sales from management service fees, which were up 53 per cent to £6.2m last year.

The company has proposed final dividend of 4.1p, making a total for 2015 of 5.9p up 47.5 per cent on 2014 of 4p.

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