One of the UK’s largest property franchises
Annual Report and Accounts 2014
MartinCo PLC Annual Report and Accounts 2014 STRATEGIC REVIEW
1 Highlights of the year
2 Who we are and what we do
4 Chairman’s statement
6 Market opportunities
8 Our business franchise model
9 Chief Executive’s statement
10 Our strategy and progress
11 How we measure ourselves
12 Financial Review
14 How we manage risk
15 Corporate social responsibility
GOVERNANCE
16 Board of Directors
18 Corporate governance statement
20 Directors’ report
22 Directors’ remuneration report
24 Report of the independent auditors
FINANCIAL STATEMENTS
25 Consolidated statement of  
comprehensive income
26 Consolidated statement of financial position
27 Company statement of financial position
28 Consolidated statement of changes in equity
29 Company statement of changes in equity
30 Consolidated statement of cash flows
31 Notes to the consolidated statement  
of cash flows
32 Company statement of cash flows
33 Notes to the Company statement  
of cash flows
34 Notes to the consolidated  
financial statements
51 Shareholder Information
Contents
MARTINCO PLC
Welcome to
MartinCo PLC is the holding group for three master property 
franchises operating a network of 282 offices stretching 
from Falmouth to Inverness. The Directors believe that 
MartinCo PLC is now the 4th largest (by office numbers) 
residential estate agency and lettings business in the UK.
The vision is to use its successful franchise model 
to build a significant share of the UK lettings and 
estate agency market using multiple property 
brands, some of which are strong within a regional 
catchment, and to grow organically through recruiting 
new franchisees and supplement this growth by 
making tactical acquisitions. 1
Annual Report and Accounts 2014
1
HIGHLIGHTS
of the year
“Step-change in the 
size of the Group’s  
network as the result  
of a major acquisition  
in the year.”
Ian Wilson
Chief Executive Officer
Operating proﬁt* (£m)
2010 2010 2011 2012 2013 2014
1.2
1.3
1.4
1.6
2.0
Proﬁt  before tax (£m)
2010 2010 2011 2012 2013 2014
1.2
1.3
1.4
0.9
1.9
Net assets (£m)
2011 2012 2013 2014
0.9 0.3
0.7
5.0
6.3
2010
Financial Highlights†
Revenue
£5.2m 25%
(2013: £4.1m)
Management Service Fees
£4.1m 16%
(2013: £3.5m)
Operating Profit*
£2.0m 26%
(2013: £1.6m)
Profit before Tax and  
Operating Profit
£1.9m 115%
(2013: £0.9m) 
Net Assets
£6.3m 26%
(2013: £5.0m)
Operational Highlights
* Before acquisition costs
† Excluding discontinued operations
Revenue (£m)
2010 2010 2011 2012 2013 2014
5.2
2.9
3.6
4.3
4.1
 Xperience acquisition increases 
footprint significantly - office numbers 
increased 49% from 189  
to 282 in 49 new locations
 Number of tenanted managed 
properties increased from 30,623  
to 32,210 at Martin & Co. Total across 
the Group was more than 42,000 at 
year end
 Total of 14 new Martin & Co 
franchisees recruited, six new offices 
opened (Inverness, Guisborough, 
Sunderland, Fitzrovia, Wilmslow & 
Sheffield)
 23 offices with annual fee income over 
£500k of which 11 are Martin & Co and 
12 are Xperience brands
 Group remains heavily weighted 
toward lettings market, accounting  
for 78% of Management Services Fees 
revenue
 Strong cash position of £3.4m  
at year end with £5m (£2.5m undrawn) 
debt facility agreed  
during the period 2
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2
WHO WE ARE
At a Glance
and what we do
The Group operates as a pure franchise 
model primarily focused on residential 
lettings and property management 
services to private clients.
 Based on the 2011 census the 
Group now contains 55% of total 
UK private rental households 
within it’s occupied franchised 
territories, and of these it 
manages 1.58%
 The Group competes for  
rental instructions against 
Countrywide, LSL, Connells 
and Foxtons
 The newly acquired CJ Hole brand 
is ranked the No.1 agent based on 
independent customer 
satisfaction surveys in Bristol 
(allagents.co.uk) and No. 16 in 
the whole of the UK
 94% of Martin & Co landlord 
clients would recommend its 
service
42,000+
Properties under management 
282
Offices 
243
Offices now offer estate agency 
232
Franchisees
49
New franchise territories occupied by 
the year end
14
New franchisees recruited
Brand stable
 Martin & Co
Martin & Co was established as a brand in 
1986 and began franchising in 1995. It is a 
national brand with 193 offices widely 
distributed across the UK.
The business mix of Martin & Co is 94% 
lettings and 6% estate agency by revenue, 
and estate agency revenue grew by 138% 
year-on-year in 2014.
The most significant change in the past year 
is that the Martin & Co brand is no longer the 
sole trading brand of MartinCo PLC. 
 “Xperience”
Legal & General established Legal & General 
Franchising Ltd in 1992 in order to facilitate 
the transition from a model of directly 
owned and managed estate agency 
operations to a franchise model. Thirteen 
years later the brand “Xperience” was 
adopted to describe the whole of the 
property franchise business of Legal & 
General and selected to communicate the 
many years of accumulated experience 
within its four established regional brands; 
Ellis and Co, Parkers, CJ Hole and Whitegates.
The Whitegates master franchise is owned by 
Whitegates Estate Agency Ltd, and the 
master franchises for Ellis and Co, Parkers 
and CJ Hole are owned by Xperience 
Franchising Ltd (formerly Legal and General 
Franchising Ltd).
The Group operates as a pure franchise model 
primarily focused on residential lettings and 
property management services to private clients. 
It also has a developing income stream from estate 
agency services.
Traditionally, Martin & Co recruits new 
franchisees from a wide pool (83% do not come 
from a property background) and provide 
intensive training and “hands-on” support. The 
focus on lettings emanated from growth in this 
sector and the attraction of a recurring 
commission income stream from a portfolio of 
tenanted managed properties. After the financial 
crisis of 2008, the business recorded its peak 
flow of new franchisees and retail banks 
continued to lend support to its start-ups 
because of the strength of its franchise model.
The business added an estate agency service in 2012 
principally to service investment property trades by 
its existing clients. More recently the service has 
been promoted to the general house buying public 
including an innovative “online” advertising service 
as a defensive play against the virtual estate agents 
who operate without high street premises.
A listing on AIM in December 2013 raised £4m  
of fresh capital to invest in a lettings business 
acquisition programme to supplement organic 
growth. In October 2014 MartinCo PLC purchased  
the entire property franchise business of Legal & 
General, which operated as four franchise brands. 3
Annual Report and Accounts 2014
3
 Martin&Co
 Whitegates
 CJ Hole
 Parkers
 Ellis&Co
New instructions
*
 
(year to December 2014)
 8,772 Connells Group
LSL
Martin & Co
Foxtons
Countrywide
 37,264
 20,471
 20,713
 28,898
 Ellis & Co:
Ellis and Co opened its first office in Swiss 
Cottage, north-west London in 1850. The 
business expanded substantially in the 1960s 
and 70s before a period of retrenchment. It now 
has 20 offices within the M25 and 1 office in 
Tonbridge, Kent.
 CJ Hole:
CJ Hole was founded in Clifton, Bristol by 
Charles Joseph Hole in 1867 as a rent collection 
business. 
Over the years, the focus of the business 
changed towards selling property as the 
company began to expand. Today, CJ Hole is a 
major force within the estate agency market in 
the South West with 19 offices throughout 
Bristol, Somerset and Gloucestershire; 2 of 
which were added in 2015.
 Parkers:
Established in Gloucester in 1948, today Parkers 
is a dominant force in the South of England with 
a network of 15 offices along the M4 corridor.
 Whitegates:
Established in 1978, Whitegates is an estate 
agency with 36 offices across the North of 
England, including Yorkshire, Midlands, North 
East, North West and Wrexham in North Wales. 
Whitegates derives approximately half of its 
income from lettings activity.
Awards
The Group provides lettings, estate agency and property management 
services to its clients through its network of franchised offices.
Martin & Co won “Gold” for “Best Large Letting Chain” at the ESTAS (Estate & 
Letting Agency Awards) in both 2009 and 2012 as well as “Silver” in 2013 and 
“Bronze” in the 2014. In 2013 Martin & Co won “Silver” in the Sunday Times 
“Lettings Agency of the Year” and again in 2014.
CJ Hole won “Gold” in the Sunday Times South West “Lettings Agency of 
the Year” in 2012 and 2014.
Ellis & Co won “Gold” in the Sunday Times “London Estate Agency of the 
Year” in 2013.
* Source: The Guild of Estate Agents 4
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4
CHAIRMAN’S
Richard Martin.
Statement
“Our maiden year as a publicly traded 
company has seen strong delivery 
on the acquisition strategy which 
was a cornerstone of our  
IPO proposition to investors.”
I am delighted to report strong progress on a 
number of fronts. Following the fund raise of 
£4m at IPO our investors’ expectations were 
that we would execute a “buy and build” 
strategy targeting competitor lettings 
businesses. Our stated goal was to build our 
portfolio and reach 40,000 tenanted managed 
properties within two years of the listing.
At our first Board meeting of 2014 we approved 
an approach to Legal & General plc to acquire 
its entire property franchise business 
(“Xperience”). The Board could see merit in 
acquiring not only a substantial portfolio of 
tenanted managed properties (circa 10,000) but 
additionally 89 franchised offices across four 
well-respected brands with real depth to their 
appeal within specific regional markets. We 
concluded the Xperience acquisition in late 
October and in the final two months of the 
financial year it contributed £150,000 to our 
pre-tax profits.
When I founded Martin & Co in Yeovil in 1986 it 
began life as an estate agency. Later I realised 
that the strong demand for rented properties 
could provide my business with a recurring and 
accretive monthly income. When the franchise 
launched in 1995 we focused primarily on 
lettings because the rental market was 
expanding rapidly and serviced by relatively few 
professional letting specialist companies and 
none with a national brand profile.
Martin & Co has since demonstrated that the 
residential lettings industry has remained stable 
through economic cycles. This, combined with 
the strength of our brand, makes the Group 
attractive to people who wish to become 
franchisees and build their own lettings 
businesses. The Group’s strong support network 
has been essential to the continued 
development of our franchisees and helping 
them build a successful franchise business.
In 2012, the Group introduced an estate agency 
service to enhance the Martin & Co brand. With 
the property market cycle turning in our favour 
the management team felt the timing was right 
to accelerate the roll out of the service. I’m 
delighted to say that by the close of 2014 we 
had 155 Martin & Co offices offering an estate 
agency service, now joined by 88 offices from 
the Xperience brands. The Martin & Co estate 
agency business achieved a 138% year-on-year 
increase in Management Service Fee revenue 
and the Directors believe that there is 
significant potential for further development of 
this income stream.
In conclusion I believe that the decision of our 
Board to under take an IPO has been vindicated 
by the early results. We have recruited 14 new 
franchisees compared to 3 in 2013, we have 
already exceeded our target of 40,000 tenanted 
managed properties, and we enter 2015 with a 
business which is 49% greater in size judged by 
the number of trading offices, up from 189 to 
282.
I would like to thank the whole team and our 
franchisees for their commitment to the 
Group’s business. With the support of its new 
shareholders MartinCo PLC has completed its 
first year as a publicly traded company and as 
the UK’s economic recovery begins to gather 
momentum, we look forward to the future with 
confidence.
I am delighted to announce that the Board has 
recommended a final dividend of 2.7p per 
ordinary share for 2014.
The Strategic Report is contained on pages  
9 to 15. It was approved by the Board on  
30 March 2015.
Richard Martin
Chairman
Key strengths
 Pure franchise business model
 Truly national office footprint
 Core market (residential lettings) 
enjoying steady growth
 Cash generative with a  
strong balance sheet
 Experienced management 5
Annual Report and Accounts 2014
5
The acquisition of 
Xperience has added 
considerable value, 
increasing our UK 
footprint by 89 offices. 6
Annual Report and Accounts 2014
6
The UK private rental market is in a strong growth phase and growth 
has been strongest in the territories which the Group has occupied.
The competitor landscape is characterised by:
 Very limited number of large-scale businesses
 Only six high-volume national coverage letting businesses – 
Countrywide, LSL, Connells Group, MartinCo, Belvoir and Hunters
 Estimate of 27,000 letting agencies in the UK but most very 
small scale
 Around 16,000 agencies offering estate agency services 
OPPORTUNITIES
Market
In 2012-13, the private rented sector 
overtook the social rented sector  
to become the second largest  
tenure in England.
In 2012-13, the private rented sector overtook 
the social rented sector to become the second 
largest tenure in England. Of the estimated 22.0 
million households in England 18% (4.0 million) 
were private renters. This translates into a 
doubling in size of the private rented sector 
since 1999.
Underlying tenant demand remains strong and 
the number of households renting in England is 
expected to increase by 232,000 per year until 
2033 according to DCLG Housing Projections.
The profile of renters remains skewed towards 
the relatively young, with 16% of all private 
renters aged 16-24, and a further 36% aged 
25-34 in 2010-11. This is also the group that is 
finding it harder to raise the finance necessary 
to purchase a home.
In 2012-13, the average length of residence for 
owner occupiers was 17.3 years, for social renters 
it was 11.3 years, while for private renters the 
average length of residence was just 3.8 years. 
This means that the number of letting 
transactions is approximately 1.0m annually in 
England of which it is believed 66% are handled 
by letting agents.
The Private Landlord Survey 2010 revealed that 
the proportion of transactions handled by 
agents has been rising in recent years* and 
reflects the fact that the majority of landlords 
are private individuals (89%).
The burden of increasing Government regulation 
in the sector means private landlords turn to 
agents for professional advice. However, perhaps 
a more potent factor has been the rise of the 
internet property portals (Rightmove, Zoopla et 
al) which do not allow private advertisers.
* 66% of rental transactions involved an agent up from 37% in 1993-4 – Department of Communities and Local Government 
(DCLG), Rugg J & Rhodes D ‘The Private Rented Sector: its contribution and potential’ Centre for Housing Policy, University of York 
(2008); Resolution Foundation, Louisa Darian ‘Renting in the Dark: Creating a lettings market that works for tenants’ (2011) 7
Annual Report and Accounts 2014
7
2001 Census
Rented from landlord/ 
letting agency
Rented from landlord/ 
letting agency
Rented from other Rented from other
Other (including homeowners) Other (including homeowners)
9%
3%
88%
2011 Census
Private rented Private rented
Living rent free Living rent free
Other (including homeowners) Other (including homeowners)
17%
1%
82%
2001 Census
Rented from landlord/ 
letting agency
Rented from landlord/ 
letting agency
Rented from other Rented from other
Other (including homeowners) Other (including homeowners)
9%
3%
88%
2011 Census
Private rented Private rented
Living rent free Living rent free
Other (including homeowners) Other (including homeowners)
17%
1%
82%
Growth in the rental market
 The private rented sector was characterised 
by long-term decline in the 20th Century
 The trend reversed in the 1990s and from a 
low of 9% of UK households living in private 
rented in 1999 has risen to 18% in 2012-13, a 
doubling from 2.0m to 4.0m in England over 
15 years
 Savills forecast 5.7m UK households in private 
rented by 2018
 Savills and Rightmove estimate that rents 
paid on private rented properties were £48bn 
in 2011 rising to £70bn in 2017. Implying 7.4% 
per annum growth in revenue opportunities 8
Annual Report and Accounts 2014
8
BUSINESS
Our
franchise model
Our proposition
All franchisees receive initial training and 
mentoring, followed by ongoing access to regional 
training programmes, business development 
advice, legal and IT systems support, marketing 
campaigns and use of the brand website, 
assistance with recruiting specialist staff, obtaining 
start-up and expansion funding and business 
acquisitions. In return, the Group charges a 
management service fee of 9% levied on all fee 
income, for Martin & Co franchisees, and 7.5% 
(currently) for franchisees of Xperience.
In addition, Martin & Co franchisees contribute 
1% of fee income into a national marketing fund 
and the franchisees themselves decide on the 
purpose of the fund. In Xperience Franchising 
Limited the franchisees contribution is £2,500 
per annum per office and in Whitegates Estate 
Agency Ltd its £2,000 per annum per office.
New franchisees at Martin & Co come from a 
wide variety of backgrounds. Xperience 
franchisees are typically career estate agents 
and letting agents who converted to franchisees 
having formerly run a Legal & General owned 
estate agency office. Typically a new franchisee 
launches in branded high street office premises 
with a member of staff and a branded vehicle.
A franchisee can only exit via a controlled sale 
to another franchisee approved by the Group (a 
‘resale’) and a resale typically improves fee 
income of the business by 30% within 12 
months of the change of franchisee.
We have built a stable footprint of experienced 
franchisees with the financial capacity and 
managerial capability for further business 
development.
*  60% of the Groups franchisees have been franchising for 
5+ years.
 
 
 
 
 
Franchisee
selection
Business
planning
Acquisition
programme
Launch
and support
Digital marketing
IT helpdesk,
marketing, staff
recruitment
National supplier
agreements
Structured
training/mentoring
programme FRANCHISE
network
Martin & Co
Key strengths
 Five-year franchise, exclusive 
postcode territory
 New franchise territories 
cumulatively profitable by 
Year 3
 Franchise renewal subject to 
qualifying conditions
 Group control over branding, 
records and standards
 Very high levels of franchisee 
retention* 9
Annual Report and Accounts 2014
9
CHIEF EXECUTIVE’S
Ian Wilson.
Statement
“The fund raising at IPO allowed us  
to execute cleanly the acquisition of 
Xperience, and this will have major  
long-term benefits for the Group.” 
The acquisition of Xperience has extended the 
Group’s footprint and added 44 locations where 
we had not formerly traded. It strengthened the 
Group’s management, with the appointment of 
the Xperience Managing Director, Michael 
Stoop, to the new position of Group Managing 
Director. Michael brings a lifetime of estate 
agency and franchise experience to his remit of 
driving lettings and estate agency revenue 
across all five brands.
The Group has assisted its franchisees 
operationally and in some cases financially with 
a number of smaller scale acquisitions 
throughout the year adding approximately 850 
properties to the tenanted managed property 
portfolio. In addition, the Group purchased the 
right to manage a portfolio of 374 properties in 
Saltaire, Yorkshire and appointed its franchisee 
to carry out the trade.
In line with its declared IT strategy, the rollout 
of cloud-based operational software to all 
Martin & Co offices was completed.
The objective of discontinuing company owned 
offices was achieved with the last remaining 
company owned and operated office 
(Worthing) being sold to a franchisee 
in December.
The relatively young Martin & Co estate agency 
business made good progress with a 138% 
year-on-year increase in Management Services 
Fee revenue and the number of Martin & Co 
offices offering the estate agency service 
increased during the period from 97 to 155. The 
Xperience acquisition adds another 88 offices 
offering this estate agency service.
The £5m loan facility arranged with Santander 
(£2.5m utilised at year end) and announced in 
October means that together with the £3.4m 
cash at year end the Group enjoys a strong 
financial position and other acquisitions will be 
pursued where these represent good value for 
shareholders.
Whilst public uncertainty in the prelude to a 
General Election can dampen housing market 
activity, nevertheless there are strong drivers 
which point toward increased lettings activity. 
A raft of pension reforms come into force on 6 
April 2015 and it is the Directors’ belief that 
these reforms will release pension funds 
which will be invested into buy-to-let 
properties. With net migration running 
consistently, despite Government policy 
intervention, at 300,000 per annum, and 
restrictions on mortgage lending particularly 
affecting the young, it is the cash-rich older 
generation who can afford the 25% deposits on 
buy-to-let properties and there will be no 
shortage of tenants to occupy them. The Group 
remains largely lettings-led with a national 
The acquisition is expected to be 
immediately earnings accretive.
footprint, diluting the effect of more difficult 
trading conditions in the London market.
I am particularly pleased by the rapid growth of 
the Group in its IPO maiden year. My only 
frustration would be that the scale of the 
Xperience acquisition of necessity distracted us 
from other opportunities and the deal took 10 
months to conclude and therefore had a very 
limited impact on 2014 profit.
I am very positive about the outlook for our 
enlarged Group. We now have multiple 
franchise brands each capable of further 
development, and one of which (CJ
Hole) is already a market leader within its 
geographical catchment of Somerset, Bristol & 
Gloucestershire. Our core lettings business, 
where 78% of our franchise royalty income is 
derived, remains in good health and we will see 
steady organic growth supplemented by tactical 
acquisitions. We are now the UK’s 4th largest 
lettings and estate agency business (judged by 
office numbers) and by imparting our Martin & 
Co letting expertise into the newly acquired 
Xperience offices, and with our new Group 
Managing Director, Michael Stoop imparting his 
lifetime of estate agency expertise into Martin 
& Co, we occupy a position of strength from 
which we can leverage advantage for our 
investors during 2015.
Ian Wilson
Chief Executive Officer
Strategic report 10
Annual Report and Accounts 2014
10
STRATEGY
Our
and progress
Our mission is to be the dominant 
property franchise group in the UK. 
Growing our range of services, our 
network, and our client base.
The Group expects to continue to grow its share 
of the UK private rental market. The Board 
believes that 55% of UK private rented sector 
households are now contained within territories 
occupied by the Group’s franchisees. Mainly as 
a result of the Xperience acquisition the Group 
now trades in 49 new territories and it will 
continue to recruit new franchisees, convert 
competitors to join its franchise brands, and 
make selective acquisitions to move toward its 
goal of 500 occupied territories.
Strategic priority Progress in 2014 KPI measure
Acquisitions
Assist franchisees in acquiring 
competitors’ lettings portfolios in 
new and existing territories.
Extend office network.
• Franchisees acquired 845 properties in a number of small scale acquisitions.
• Acquired 2 master franchise agreements increasing the managed portfolio by 
10,000 properties and increasing the number of offices by 89.
• Total portfolio 42,177 at the year-end.
• Number of new offices.
• Number of acquisitions.
• Managed property portfolio.
Organic growth – lettings
Provide more intensive support to 
existing franchisee network.
• Completed roll-out of new operational software with greater functional capability.
• New Training Academy offering subsidised regional training courses to franchisees.
• Internal recruitment team placed 146 specialist staff.
• Managed property portfolio.
Estate agency
Continue the development of its 
residential sales service to take 
advantage of a cyclical up-turn in 
UK house sales.
• New Group Managing Director with a lifetime of Estate Agency experience.
• Offices offering estate agency services increased from 97 to 243.
• Martin & Co sales completed increased to 1,355 (2013: 597).
• Martin & Co income increased 138% year on year.
• Number of offices providing 
estate agency services.
• Sales completed.
• Management service fees from 
estate agency services.
Franchise owners and Head Office staff at the 
2014 Annual Conference
The Group will continue to develop a supportive 
environment in which motivated individuals can 
secure their financial future using a franchise 
model.
Our timeline
• Founded by Richard Martin • First franchise opened in 
Crieff, Perthshire
• Reached 50 franchised 
offices
• Reached 100 franchised 
offices
• First generated £10m of 
network fee income
• First business award 
– The Negotiator Franchisor 
of the Year
• First office to let 100 
properties in a month 
(Nottingham)
1986 1995 2003 2007 2008
Strategic report 11
Annual Report and Accounts 2014
11
Oces providing an
estate agency service
97
243 2014
2013
72 2012
Sales completed
597
1,355 2014
2013
2012: 85
2009 2010 2011 2012 2013 2014
MEASURE
How we
ourselves
Our Key Performance Indicators (KPIs) highlight how we measure up against our 
primary profit drivers.
The portfolio of managed properties continues to increase as landlords appreciate the 
value of our full lettings service with the Martin & Co network showing a 5.2% increase 
in its managed property portfolio in 2014. Moreover the acquisition of Xperience meant 
the Group finished the year with a total managed portfolio of 42,177.
The roll-out of our Estate Agency service is almost complete with 155 Martin & Co 
offices offering the services at 31 December 2014. Xperience has added a further 88 
offices offering the services.
In 2014 the Martin & Co network achieved 1,355 sales completed (2013: 597), an 
increase of 127% and Martin & Co (UK) Ltd generated management service fees of 
£243k (2013: £102k), an increase of 138%.
Managed properties
(000s)
2010 2010 2011 2012 2013 2014
42.0
Martin & Co.
Xperience
9.8
22.3
25.8
28.2
30.6
32.2
• Awarded Best Large  
Lettings Chain 
(ESTAS)
• Reached 150 
franchised offices
• First generated 
£20m of network fee 
income
• Surpassed 20,000  
properties under 
management
• First generated 
£30m of network fee 
income 
• Launch of Estate 
Agency
• Awarded Best Large 
Lettings Chain 
(ESTAS)
• Surpassed 30,000  
properties under 
management
• IPO on AIM creating 
MartinCo PLC
• Surpassed 40,000 
properties under 
management
• Acquisition to create 
Group with five 
brands and 282 
offices
A FRANCHISE FULL OF OPPORTUNITY
Strategic report 12
Annual Report and Accounts 2014
12
FINANCIAL
David Raggett.
Review
“The Group’s successful acquisition of 
Xperience increases its earnings potential 
through an enlarged managed lettings 
portfolio and estate agency footprint.”
In June 2014, the Group acquired its first 
portfolio of 374 managed lettings properties in 
Saltaire for £0.3m. This has been managed for 
the Group by Martin & Co Saltaire under a 
management services agreement and achieved 
its budgeted returns. However, portfolios that 
meet the Group’s criteria have been difficult to 
find either because of the sales price or issues 
with the quality of the portfolio. On 
21 November 2014 T G Fisheries Ltd, the 
franchisee operating Martin & Co Saltaire, 
notified the Group of its intention to purchase 
the portfolio of properties it was managing on 
behalf of the Group in accordance with the 
services agreement signed between the parties. 
At the year-end this asset is classified as held 
for resale. The sale was completed on 
30 January 2015 resulting in the portfolio being 
disposed of for its net book value of £0.3m. This 
element of our acquisition strategy will play a 
minor role for the foreseeable future.
At the end of October 2014, the Group acquired 
Xperience, consisting of two companies - 
Xperience Franchising Limited and Whitegates 
Estate Agency Limited from Legal and General 
Estate Agencies Limited for consideration of 
£6.1m. Xperience had net assets of £1.1m on 
acquisition including £1.0m of cash. It was 
acquired debt free and with no intercompany 
loans. Xperience is a franchise lettings and 
estate agency business comprising four highly 
regarded high street brands CJ Hole, Parkers, 
Ellis & Co and Whitegates operating in specific 
regions of the UK from 89 offices. It has 
increased the number of territories in which the
Group is represented by 44. Moreover, it has 
brought with it a management team of 
considerable experience in this sector and its 
Managing Director is now our Group Managing 
Director. For more information see note 29.
Xperience was the first corporate acquisition 
for the Group generating profit before tax of 
£0.15m on sales of £0.3m in the two months 
to 31st December 2014 as a result of economies 
of scale made possible by the acquisition.
In December 2014 the final company owned 
office, Worthing, was sold to an existing 
franchisee for £0.2m marking the end of the 
Group’s strategy of running company owned 
offices (of which there were five in 2013). 
During the year this owned office generated 
£0.2m (2013: £0.8m) of revenue and profit 
before tax of £nil (2013: £0.2m).This has been 
classified as discontinued operations in the 
Consolidated financial statements. For more 
information see note 30.
Revenue
Group revenue for the financial year to 
31 December 2014 was £5.2m (2013: £4.1m), 
an increase of £1.1m (25%) over the prior year. 
This was driven by strong growth in 
Management Service Fees (royalties) of £0.6m 
(16%) and franchise sales of £0.2m (140%) 
over the prior year.
Management Service Fees increased £0.3m 
through organic growth and the acquisition of 
Xperience (Xperience Franchising Limited and 
Whitegates Estate Agency Limited) added a 
further £0.3m. The sale of franchises 
contributed an increase in revenue of £0.2m 
through the induction of 14 new Martin & Co 
franchisees, 5 of which were new offices 
(2013: 4 new Martin & Co franchisees, 2 of 
which were new offices). Management Service 
Fees represent the Group’s main source of 
income and accounted for 78% (2013:84%) of 
revenue from continuing operations with the 
remainder being franchise sales and ancillary 
services to support MSF generation.
2014 2013
Continuing
£m
Discontinued
£m
Total
£m
Continuing
£m
Discontinued
£m
Total
£m
Revenue 5.2 0.2 5.4 4.2 0.8 5.0
Admin expenses 2.8 0.2 3.0 2.3 0.7 3.0
Operating profit* 2.0 – 2.0 1.6 0.2 1.8
Profit before tax* 2.1 – 2.1 1.6 0.2 1.8
* before exceptional costs
Strategic report 13
Annual Report and Accounts 2014
13
Operating profit before exceptional items
Operating profit, before exceptional items was 
£2.0m for the year ended 31 December 2014, 
an increase of £0.4m (26%) over the prior year.
This was the first full year of administrative 
expenses for MartinCo PLC which amounted to 
£0.3m (2013: £nil). Thus, the underlying growth 
in the Group’s operating profit from Martin & 
Co (UK) Ltd and Xperience was £0.7m (43%) 
over the prior year of which Xperience 
contributed £0.15m.
Total administrative expenses were £2.8m an 
increase of £0.5m (20%) over the prior year. 
The costs of being a plc contributed £0.3m to 
the increase and the costs attributable to 
Xperience, another £0.1m. There were 
administrative cost savings in Martin & Co  
but these were offset by a larger franchisee 
support team adding £0.1m.
Exceptional items
The exceptional costs reported in the 
Consolidated statement of comprehensive 
income are £0.2m (2013:£0.7m) and all relate 
to the Xperience acquisition on 31 October 
2014 whereas in 2013 they all related to the 
placing and listing on AIM.
Profit before tax
The profit before tax was £1.9m for the year 
ended 31 December 2014, an increase of £1.0m 
(115%) over the prior year.
Taxation
The effective rate of corporation tax for the 
year was 21.6% (2013:39%) due to the 
exceptional costs not being allowable as a 
deduction from profits. The total tax charge for 
2014 is £416k (2013: £411k) of which £411k 
relates to continuing activities and £5k to 
discontinued activities.
Earnings per share
Earnings per share for the year was 6.9p (2013: 
3.5p). The profit attributable to owners was 
£1.5m (2013: £0.6m).
Dividends
The Board is proposing a final dividend of 2.7p 
per share for 2014 which, together with the 
interim dividend of 1.3p per share paid to 
shareholders on 30 September 2014, equates to 
a total dividend for the financial year of 4.0p.
Subject to shareholder approval at the AGM, 
the final dividend will be paid on 11 May 2015  
to all shareholders on the register at the close  
of business on 24 April 2015.
Cash flow
The net cash inflow from operating activities in 
2014 was £1.5m (2013: £1.3m) before 
exceptional costs of £0.2m (2013: £0.7m) as the 
Group continued to generate strong operating 
cash inflows.
The net cash used in investing activities was 
£5.0m (2013: £0.1m inflow):
• On 3 June 2014, the Group purchased a 
portfolio of 374 managed lettings properties 
in Saltaire for £0.3m.
• On 31 October 2014 the Group bought all 
the shares in Xperience Franchising Limited 
and Whitegates Estate Agency Limited for 
consideration of £6.1m. The companies had 
net assets of £1.1m on acquisition including 
cash of £1.0m (the net assets acquired are 
not shown separately in the Consolidated 
statement of cash flows instead being 
included under their respective constituent 
headings). Net cash outflow of £5.1m
• The Worthing office was sold on 30 
December 2014 and together with the 
collection of deferred consideration from 
three offices sold in 2013, generated a cash 
inflow of £0.4m (2013: £0.3m).
The total consideration for Worthing was 
£0.2m (2013: £0.7m). The Group agreed to 
defer consideration on the sale of Worthing as it 
had for three of the office disposals in 2013 so 
that £0.3m (2013: £0.4m) of deferred 
consideration existed at 31st December 2014.
The cash inflow resulting from the new facilities 
agreed with Santander UK plc in October 2014 
of £2.5m and the interim dividend payment on 
30th September 2014 of £0.3m resulted in net 
cash inflows from financing activities of £2.2m.
Liquidity
The Group had cash balances of £3.4m at the 
31 December 2014 compared to £4.8m for the 
prior year.
Financial position
The Group is strongly cash generative which, 
together with the funds yet to be received on 
the sale of owned offices and its new facilities 
with Santander UK plc, puts it in a strong 
position to assist its franchisees in acquiring 
managed lettings portfolios and to fulfil the 
acquisition element of its strategic plan.
David Raggett
Chief Financial Officer
Strategic report 14
Annual Report and Accounts 2014
14
MANAGE
How we
risk
“We regularly review, evaluate and prioritise 
risks to ensure that appropriate measures are 
in place to manage these effectively.”
Risk area Potential impact Mitigation
No guarantee of growth
There is no certainty that the Group will be 
successful in executing its strategy for growth.
Existing franchisees need to grow on average at 
10% or more to achieve our growth plan for 
lettings and manage that growth so as to continue 
to have profitable businesses.
• Reduced operating profit from acquired 
portfolios.
• Reduced growth in Management Service Fees.
• Focus of senior management team on finding 
and completing acquisitions.
• Recruitment of five Regional Franchise 
Managers to support and develop franchisees’ 
growth.
• Experienced and long-serving management 
team with a track record of growth
Market conditions
Rents need to stay at current levels or rise, the 
stock of rentable properties needs to stay at 
current levels or rise, the average length of 
tenancies needs to stay at current levels or fall.
The number of people wishing to rent needs to 
continue to rise and landlords to be willing to pay 
the current levels of commission to lettings 
agents.
• Franchisees income reduces leading to less 
income from Management Service Fees.
• Franchisees income grows at slower rates 
thereby reducing the growth rate of 
Management Service Fees.
• Monthly management data collected from 
franchisees assists us in predicting future trends 
and developing mitigating actions.
• Market data obtained from third parties assists 
us in predicting future trends and developing 
mitigating actions.
Competition for property portfolios
The group plans to expand by finding and buying 
portfolios in partnership with franchisees and in 
territories where no representation exists today or 
alternatively in larger existing territories. We are 
not the only franchisor in our sector pursuing this 
strategy and we also face competition from 
well-known estate agents.
• We may not be able to secure acquisitions at the 
values that meet our criteria.
• We pay more for acquisitions than we would 
have ideally intended to.
• Our payback period increases.
• Reduced operating profit from acquired 
portfolios.
• Circa 27,000 letting agents, all with potential 
portfolios to buy, so there should be sufficient 
supply.
• Contracted with a specialist provider to assist in 
acquiring portfolios.
Ability to find, recruit and retain  
skilled franchisees
An inability of the Group to attract new 
franchisees with the necessary skills, expertise and 
resources to purchase resales of existing territories 
and “cold start” in new territories.
• Slower growth through inability to increase 
market representation.
• Not achieving average 30% uplift in earnings 
seen in the first year of a resale.
• Lower franchise resale fees.
• Experienced franchise recruitment department.
• Strong demand for resales.
• A strong offering and one of the lowest rates of 
Management Service Fees amongst our 
competitors.
Reputational risk to our brand
A strong brand is key to being successful in the 
sector as it is for many other sectors and central to 
that is the reputation of the Group and its 
franchisees. There are circa 14,500 lettings agents 
in the UK, with varying levels of service and 
compliance with legal.
• Failure by the franchisees to meet the 
expectations of landlords, and tenants or to fall 
short of the standards set by the Group may 
have a material impact on reputation.
• Loss of landlords and inability to recruit new 
franchisees.
• The Group strives to make sure that its 
franchisees achieve the service levels set down 
for them and remain compliant with the law by 
regular auditing and training.
• The recruitment of five Regional Managers to 
monitor and enforce brand compliance.
The Board considers that the risks detailed below represent the key risks to achieving the 
Group’s strategy and objectives. There could be additional risks and uncertainties which 
are not known to the Board and there are risks and uncertainties which are currently 
deemed to be less material, which may adversely impact on the achievement of the 
Group’s strategy and objectives.
Strategic report 15
Annual Report and Accounts 2014
15
RESPONSIBILITY
Corporate social
“The Board is committed to the 
development of the business in  
a socially responsible way.”
People
The Group is committed to equal opportunities. 
Recruitment and promotion are undertaken on 
the basis of merit, regardless of gender, race, age, 
marital status, sexual orientation, religion, 
nationality, colour or disability. If an employee 
becomes disabled during the course of their 
employment, adjustments are made where 
possible to enable the employee to carry on 
working despite their disability.
Headquartered in Bournemouth, Dorset, the 
Group comprises 42 employees at 31 December 
2014 including 14 who are field based around the 
UK, and an executive team of 7 (including 2 
Board Directors). All of whom are dedicated to 
supporting our franchisees.
Conduct of business
The Group strives to conform to all relevant 
legislation and codes of practice and this is 
monitored regularly at Board level.
The Board understands that the Group’s 
conduct of its business can have social and 
environmental impacts and considers these 
impacts and what can be done to minimise any 
detriment in its decision making.
The Group is committed to social and 
environmental awareness throughout its 
operations, notwithstanding the relatively low 
environmental impact of the Group’s activities. 
The Group takes its obligation to its customers, 
employees, suppliers and the local community 
very seriously.
Anti-bribery policy
The Group adopts a zero tolerance towards 
bribery.
Communications
The Board recognises and places significant 
importance on the Group’s communications 
with its shareholders. The Group will publish an 
interim financial statement for its half-year 
results and a full report for its full-year results. 
All reports will be mailed to shareholders and 
are accessible via the Company’s website at 
www.martinco.com/investor-relations.
The below table demonstrates the departments 
and duties conducted by staff at head office:
Franchising Franchise Support IT
• Recruit new franchisees to join one of its brands 
as a cold start or to purchase an existing business.
• Manage franchise recruitment cycle-new 
franchises, estate agency re-brands and 
business acquisitions.
• Organise contracts and coordinate funding.
• Manage the franchise renewal process.
• Support, motivate, and inspire franchise owners 
to increase performance, income and market 
share. Rectify any areas of concern.
• Assist franchise owners to take on additional 
franchise territories and open second shops.
• Managing the launch of new franchises.
• Champion new techniques.
• Build and maintain the Martin & Co website, 
oversee the other brands websites and build 
associated websites.
• Franchisee operating software development.
• Customer database management.
• Application and systems integration.
• Franchisee reporting of business information.
• Billing systems.
Brand Standards Finance Helpdesk Support
•  Audit and compliance.
• Protect the brand names.
• Ensure all offices are registered and maintain 
professional memberships.
• Maintain the standard letter templates.
• Provide general technical telephone support to 
franchise owners.
• Maintain and develop the standard terms and 
conditions to be used through the franchise 
networks.
•  Manage the day today finances for the Group.
• Budgeting, forecasting, treasury and 
management accounting.
• Financial reporting and tax compliance..
• Evaluation of potential acquisitions.
• Evaluation of franchisees’ financial 
performances.
• Commercial contract negotiations and 
finalisation.
• Facilities Management.
• HR.
• Support the use of Jupix across the 
Martin & Co network.
• Support the use of Brief Your Market (BYM) 
throughout the business.
• Manage incoming queries relating to business 
systems including the website, admin site, 
emails, BYM and Jupix.
• Manage incoming queries regarding 
operating issues.
• Make outward bound calls to encourage 
improved use of Jupix and thereby improved 
management of their businesses.
Training Recruitment Marketing
•  Create, plan and deliver training to all franchise 
networks. Including:
 – Business systems, classroom training for new 
franchise owners, negotiator and business 
generation, management courses and legal.
• Recruitment and talent acquisition for Martin & 
Co franchise offices and the Group.
• Supporting and advising the franchise owners 
through the recruitment life cycle.
• Ensure the highest calibre individuals are 
recruited.
•  Digital marketing strategy and content.
• Developing campaigns to drive new enquiries.
• Social media.
• Copywriting and content creation.
• Participating and assisting the National 
Marketing Committees’ of the franchise 
networks with campaigns.
• Market data and analysis.
The Strategic report contained on pages 9 to 15 was approved by the Board and signed on its behalf by:
David Raggett
Chief Financial Officer
30 March 2015
Strategic report 16
Annual Report and Accounts 2014
16
DIRECTORS
Board of
Richard Martin 
Chairman
After leaving Bristol Technical School, Richard became an 
apprenticed sterotyper for the Bristol Evening Post in 1967. In 
1975 he moved to The Western Gazette, another newspaper in 
the same group based in Yeovil. Ahead of the introduction of 
computerisation into the industry, Richard moved into the 
commercial side and in 1981, became trained in advertising 
design and sales. After a few years he gained promotion to 
Advertising Manager for the Group’s free press titles distributed 
throughout Somerset, Dorset, Devon and Wiltshire.
Following the profitable sale of a retail business in early 1986, 
which Richard set up and was managed by his wife Kathy, he left 
the newspaper business to pursue his interest in property and forge 
a career in estate agency. Richard founded Martin & Co in 1986 in 
Yeovil. In 1995, Martin & Co became a franchise operation and the 
brand has grown from strength to strength since.
Ian Wilson
Chief Executive Officer
Ian has worked in the property industry for 30 years. After 
graduating from Bristol Polytechnic with a Degree in Housing, 
Ian’s first job was to manage one of the UK’s most deprived 
housing estates in the north east of England. When the 
Conservative Government introduced the Housing Act 1988 
which set the legal framework for a resurgence of the private 
rented sector, Ian was working as a Fair Rent Officer and shortly 
after applied to Halifax Property Services in Newcastle-upon-
Tyne to become its first Area Lettings Manager. Ian moved to 
General Accident Property Services as a Regional Lettings 
Manager and subsequently was promoted to National Lettings 
Manager. Ian moved to Connells as its first Lettings Director 
and in the course of business met Richard Martin, who invited 
Ian to join Martin & Co as Managing Director. 17
Annual Report and Accounts 2014
17
Paul Latham 
Non-Executive Director
Paul Latham is a Chartered Surveyor. Until 2014, he sat on the 
Residential Board for the Royal Institution of Chartered 
Surveyors of which he was Chair until 2011. Paul served as 
Deputy Group CEO of LSL Property Services plc until 2010 
having been part of the management buyout in 2004, which 
ultimately saw the business successfully list on the London 
Stock Exchange in 2006. During this period Paul was managing 
director of a number of the LSL group’s subsidiary businesses 
including e.surv Chartered Surveyors and also sat on a number 
of external company boards and trade bodies. Subsequently 
Paul served as a Non-Executive Director of LSL until 2012.
David Raggett 
Chief Financial Officer
David holds a Degree in Economics and Accounting from 
Reading University where he was under the tutorship of 
Professor Christopher Nobes. Since qualifying with PWC as a 
Chartered Accountant he has spent his whole working life in 
franchising as franchisor and franchisee. Initially David held 
financial responsibility for several Ford franchises before, in the 
mid 90s, moving to Porsche’s UK headquarters. Here he held 
financial responsibility for its distribution, retail and financial 
services businesses at various times, as well as being their 
Company Secretary and, for several years, Head of Legal. In 
2007 David took up the role of Finance Director for the 
Motability Scooter and Powered Wheelchair Scheme to restore 
its financial stability, to improve its offering and to expand its 
customer base. After successfully turning the Scheme around 
and leading it into new ownership, David took some time out 
before deciding to venture back into franchising. David joined 
the Group in February 2013. 18
Annual Report and Accounts 2014
18
Corporate governance statement
Compliance
The Directors recognise the importance of sound corporate governance and intend to comply with the Corporate Governance Guidelines,  
to the extent appropriate for a Company of its nature and size.
The Corporate Governance Guidelines were devised by the Quoted Companies Alliance (“QCA”), in consultation with a number of significant 
institutional small company investors, as an alternative corporate governance code applicable to AIM companies. An alternative code was proposed 
because the QCA considers the UK Corporate Governance Code to be inappropriate for many AIM companies.
The Corporate Governance Guidelines state that, “The purpose of good corporate governance is to ensure that the Company is managed in an efficient, 
effective and entrepreneurial manner for the benefit of all shareholders over the longer term.”
The Board of Directors will meet at least 9 times a year to review the Group’s strategy and oversee the Group’s progress towards its goals. The Board has 
established audit and remuneration committees. However, it only has one independent Non-Executive Director, a matter which the Board is working to 
correct as it strives towards congruence with the Corporate Governance Guidelines.
The Board
The Board comprises the Chairman, 1 independent Non-Executive Director and 2 Executive Directors who are the Chief Executive Officer and the Chief 
Financial Officer of the Company. The CFO is also the Company Secretary.
The Board is responsible for the overall performance of the Group, which includes the broad strategic direction, development and control of the Group. 
The policies and strategies of the Group are formulated by the Board and the detailed considerations about the day-to-day operations are delegated to 
an executive team under the leadership of the Chief Executive Officer.
The Board regularly monitors the implementation of strategy and policy decisions to ensure that the operation of the Group is at all times in line with 
the Group’s objectives.
The Board has regular contact with its advisors to keep up to date on corporate governance matters. The Company Secretary ensures that Board 
procedures are followed and that applicable rules and regulations are complied with. The Group purchases appropriate insurance cover in respect of  
legal action against its Directors.
The Chairman’s main function is to manage the Board so that the Group is run in the best interests of its stakeholders. It is also the Chairman’s 
responsibility to ensure the Board’s integrity and effectiveness.
Non-Executive Directors/Board independence
The Company is fortunate in having the services of a Non-Executive Director, Paul Latham, and is actively searching for a second Non-Executive Director. 
The Group appreciates the important contribution to its strategic development that Non-Executives can make.
Board Committees
The Board has delegated specific responsibilities to the Audit and Remuneration Committees. The Board considers that all the members of each 
committee have the appropriate experience. All Board Committees have their own terms of reference.
Remuneration Committee
The Remuneration Committee is chaired by Paul Latham and its other member is Ian Wilson. It will meet at least twice a year and is responsible for 
advising on the remuneration policy for Directors only.
The Remuneration Committee has responsibility for determining, within agreed terms of reference, the Group’s policy on the remuneration of senior 
executives and specific remuneration packages for Executive Directors including pension payments and compensation rights. It is also responsible for 
making recommendations for grants of options under the Share Option Plan.
The remuneration of Non-Executive Directors is a matter for the Board. No Director may be involved in any discussions as to their own remuneration.
Details of the level and composition of the Directors’ remuneration are disclosed in the Directors’ Remuneration Report on pages 22 and 23. 19
Annual Report and Accounts 2014
19
Audit Committee
The Audit Committee is chaired by Paul Latham and assisted by David Raggett. It has met twice in 2014 and will continue to meet at least twice a year. 
It is responsible for ensuring that the financial performance of the Company is properly measured, reported on and monitored.
In the financial year ended 31 December 2014 the audit committee discharged its responsibilities by:
• reviewing the Group’s draft financial statements and interim results statement prior to Board approval and reviewing the external auditor’s detailed 
reports thereon;
• reviewing the appropriateness of the Group’s accounting policies;
• reviewing the internal and external due diligence performed for acquisitions;
• reviewing the potential impact on the Group’s financial statements of certain matters; 
• reviewing the external auditor’s plan for the audit of the Group’s accounts, which included key areas of audit focus, key risks, the proposed audit fee 
and approving the terms of engagement for the audit; and
• reviewing the processes for identifying the risks to the business and managing those risks.
The Audit Committee has the primary responsibility for making a recommendation to the Board on the appointment, re-appointment and removal of 
the external auditor. In making the recommendation on the re-appointment of the external auditor, they will assess cost effectiveness, independence 
and objectivity of the external auditor. It is responsible for ensuring that an appropriate relationship between the Group and the external auditors is 
maintained, including reviewing non-audit services and fees. The Board will include a resolution in the next AGM proposing the re-appointment of the 
external auditor and authorising the Board to determine the audit fee.
The Board meets regularly with the external auditor for the purpose of discussing matters relating to the financial reporting and internal controls of the 
Group. Furthermore, the audit committee’ Chairman meets the external auditors to discuss matters relating to the committee’s remit and any issues 
arising from the audit. The external auditor also assists the Board in ensuring that appropriate accounting policies, internal controls and compliance 
procedures are in place.
Internal Control
The Board acknowledges that it is responsible for the Group’s system of internal control and for reviewing its effectiveness. Such a system is designed  
to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against 
material misstatement or loss.
The Board has established clear operating procedures and responsibility structures. These procedures include:
• Monthly financial reporting against budget and the prior year; 
• Day-to-day financial control of operations; 
• Annual budgeting and quarterly forecasting; 
• The monitoring and assessment of risk; 
• Performance monitoring and the taking of remedial action; and 
• Planning, reviewing, approving and monitoring major projects.
Relations with shareholders
The Group is committed to maintaining good communications with shareholders and the Martinco.com website provides up-to-date information on  
the Group.
The AGM is an important opportunity to meet and communicate with its investors and for them to raise with the Board any issues or concerns they  
may have and the Group dispatches the Notice of AGM at least 21 days before the meeting. Registered shareholders have direct access to the Group  
and receive a copy of the Annual Report, which contains the full financial statements of the Group. 20
Annual Report and Accounts 2014
20
Directors’ report
The Directors present their Annual Report and audited financial statements for the financial year ended 31 December 2014.
Principal activities
The principal activity of the Group during the year was the sale of franchises and the support of franchisees in supplying residential letting, sales and 
property management services within the UK.
Results for the financial year and business review
The Group achieved a profit before tax, and exceptional costs from continuing operations of £2.1m in the financial year as compared to £1.6m for the 
prior year. The results are shown in the Group statement of comprehensive income on page 25. A full review of the Group’s business is included in the 
Strategic Report.
The Group’s objectives and policies with regards to financial risk management are set out in note 28 to the Consolidated financial statements.
The exceptional costs for the year relate entirely to the purchase of Xperience and amounted to £0.2m (2013:£0.7m).
The profit before tax for the year was £1.9m (2013: £0.9m).
Future developments
The future developments of the Group are included in the Strategic Report.
Dividends
The Group paid its maiden interim dividend for the financial year ended 31 December 2014 of 1.3p per share on 30 September 2014.
The Board recommends a final dividend for the financial year ended 31 December 2014 of 2.7p per share to be paid on 11 May 2015 to all shareholders 
on the register at the close of business on 24 April 2015 subject to shareholders approval on 7 May 2015 (2013: £nil).
Directors
The Directors shown below have held office during the year: 
R W Martin 
I Wilson 
D A Raggett 
P M Latham 
The Directors’ remuneration and the Directors’ interests in the Group are disclosed in the Directors’ Remuneration Report.
The Group maintains Directors and Officers liability insurance, which gives appropriate cover against any legal action that may be brought.
Going concern
The Group and Company’s financial statements have been prepared on a going concern basis. In order to approve the Xperience deal the Group produced 
detailed budgets, projections and cash flow forecasts. The Directors have concluded after reviewing these budgets, projections and forecasts and making 
appropriate enquiries of the business that the Group has adequate resources to continue in operational existence, and execute its plan for acquisition 
growth, for the foreseeable future.
In October 2014, the Group agreed a £5m loan facility with Santander UK plc of which £2.5m remains unutilised and available to the Group for 
development and expansion of operations.
For these reasons, the Directors continue to adopt the going concern basis in preparing the financial statements.
Auditor
Baker Tilly UK Audit LLP has expressed their willingness to continue in office. In accordance with section 489 of the Companies Act 2006, a resolution  
to reappoint Baker Tilly UK Audit LLP will be proposed at the Annual General Meeting.
The Directors confirm that:
• So far as each Director is aware, there is no relevant audit information of which the Group and Company’s auditor is unaware, and; 
• The Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information 
and to establish that the auditors are aware of that information. 21
Annual Report and Accounts 2014
21
Statement of Directors’ Responsibilities
The directors are responsible for preparing the Strategic Report and the Directors’ Report and the financial statements in accordance with applicable  
law and regulations.
Company law requires the Directors to prepare Group and Company financial statements for each financial year. The Directors are required by the AIM 
Rules of the London Stock Exchange to prepare group financial statements in accordance with International Financial Reporting Standards (“IFRS”) as 
adopted by the European Union (“EU”) and have elected under company law to prepare the Company financial statements in accordance with IFRS as 
adopted by the EU.
The financial statements are required by law and IFRS adopted by the EU to present fairly the financial position of the Group and the Company and the 
financial performance of the Group. The Companies Act 2006 provides in relation to such financial statements that references in the relevant part of  
that Act to financial statements giving a true and fair view are references to their achieving a fair presentation.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state  
of affairs of the group and the company and of the profit or loss of the group for that period.
In preparing the Group and Company financial statements, the directors are required to:
a. select suitable accounting policies and then apply them consistently; 
b. make judgements and accounting estimates that are reasonable and prudent; 
c. state whether they have been prepared in accordance with IFRSs adopted by the EU; and
d. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and the Company’s 
transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the 
financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Company and 
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. 
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
By Order of the Board
David Raggett
Chief Financial Officer
30 March 2015 22
Annual Report and Accounts 2014
22
Directors’ remuneration report
Remuneration Committee
The remuneration of each Director is determined by the Remuneration Committee. It is chaired by Paul Latham and its other member is Ian Wilson.
Policy on remuneration of Directors
The Remuneration Committee has responsibility for determining, within agreed terms of reference, the Group’s policy on the remuneration of senior 
executives and specific remuneration packages for Executive Directors including pension payments and compensation rights. It is also responsible for 
making recommendations for grants of options under the Share Option Plan.
The remuneration of Non-Executive Directors is a matter for the Board. It consists of fees for their services in connection with Board and Committee 
meetings. No Director may be involved in any discussions as to their own remuneration.
The Remuneration Committee aims to ensure that the remuneration packages offered are competitive and designed to attract, retain and motivate 
Directors of the right calibre.
The main remuneration components are:
Basic salary or fees
Basic salary or fees for each Director are determined by the Remuneration Committee, taking into account the performance of the individual and 
information from independent sources on the rates of salary for similar posts. The salaries and fees paid to Directors by the Group were £300k (2013: 
£191k).
Annual bonus
The Company has a formal bonus scheme which was effective for the Executive Directors from 18 December 2013. Bonuses were paid to the Directors  
by the Group of £112k (2013: £112k).
Pension
There were no contributions made to Directors’ pensions in the year (2013: £nil).
Share options
No options over shares of the Company were granted in 2014 (2013: 1,566,000 shares). See note 31 of the Financial Statements for further details.
Company policy on contracts of service
The Executive Directors of the Company do not have a notice period in excess of 12 months under the terms of their service contracts. Their service 
contracts contain no provisions for pre-determined compensation on termination, which exceeds 12 months’ salary and benefits in kind. Non-Executive 
Directors do not have service contracts with the Company, but have letters of appointment which can be terminated on 3 months’ notice.
Termination date
Richard Martin 3 months’ notice
Ian Wilson 12 months’ notice
David Raggett 12 months’ notice
Paul Latham 3 months’ notice
Company policy on external appointments
The Company recognises that its Directors are likely to be invited to become non-executive directors of other companies and that exposure to such 
non-executive duties can broaden their experience and knowledge, which will benefit the Group. Executive and Non-Executive Directors are therefore, 
subject to approval of the Company’s Board, allowed to accept non-executive appointments, as long as these are not with competing companies and  
are not likely to lead to conflicts of interest. Executive and Non-Executive Directors are allowed to retain the fees paid.
Taxable benefits
The Directors are not entitled to taxable benefits such as a company car, car allowance or private medical insurance. 23
Annual Report and Accounts 2014
23
Directors’ emoluments
The figures below represent emoluments earned by Directors from the Group during the financial year and relate to the period of each Director’s 
membership of the Company’s and Subsidiary’s Boards.
Salary & fees
£’000
Bonus
£’000
Total 2014
£’000
Total 2013
£’000
Executive Directors:
Richard Martin 40 — 40 9
Ian Wilson 120 84 204 201
David Raggett 100 28 128 91
260 112 372 301
Non-Executive Directors:
Paul Latham 40 — 40 2
40 — 40 2
Total Remuneration 300 112 412 303
Appointment
No Directors were appointed to or resigned from the Board during the year.
Directors’ interests
The interests of the Directors in the shares of the Company were as follows:
MartinCo PLC ordinary 1p shares.
31 December 2014 Shares Options
Directors:
Richard Martin 8,460,000 —
Ian Wilson 650,000 979,200
David Raggett 20,000 392,400
Paul Latham 25,000 —
By order of the Board
Paul Latham
Non-Executive Director
30 March 2015 24
Annual Report and Accounts 2014
24
Report of the independent auditor
to the members of MartinCo PLC
We have audited the Group and Parent Company financial statements (“the financial statements”) on pages 25 to 50. The financial reporting framework 
that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union and, 
as regards the Parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has 
been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no 
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s 
members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As more fully explained in the Statement of Directors’ responsibilities set out on page 21, the directors are responsible for the preparation of the financial 
statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in 
accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing 
Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at: 
http//www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and the parent’s affairs as at 31 December 2014 and of the Group’s  
profit for the year then ended; 
• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
• the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied  
in accordance with the Companies Act 2006; and 
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are 
prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches  
not visited by us; or 
• the parent company financial statements are not in agreement with the accounting records and returns; or 
• certain disclosures of Directors’ remuneration specified by law are not made; or 
• we have not received all the information and explanations we require for our audit.
David Clark
Senior Statutory Auditor
For and on behalf of Baker Tilly UK Audit LLP, Statutory Auditor
Chartered Accountants
25 Farringdon Street
London, EC4A 4AB
30 March 2015 25
Annual Report and Accounts 2014
25 25 25
Consolidated statement of comprehensive income
for the year ended 31 December 2014
Notes
2014
£
2013
£
Continuing operations
Revenue 7 5,176,174 4,144,318
Cost of sales (354,145) (201,031)
Gross profit 4,822,029 3,943,287
Administrative expenses 8,9 (2,789,131) (2,328,066)
Operating profit before exceptional items 2,032,898 1,615,221
Exceptional items 10 (158,741) (742,517)
Operating profit 1,874,157 872,704
Finance income 12 51,140 11,476
Finance costs 12 (22,295) –
Profit before income tax 1,903,002 884,180
Income tax 13 (411,541) (372,183)
Profit and total comprehensive income for the year from continuing operations 1,491,461 511,997
Discontinued operations
Profit and total comprehensive income for the year from discontinued operations 30 18,565 126,820
Profit and total comprehensive income for the year attributable to owners 1,510,026 638,817
Earnings per share – Continuing 14 6.9p 2.8p
Earnings per share – Discontinued 14 0.0p 0.7p
Total Earnings per share 14 6.9p 3.5p
Diluted Earnings per share – Continuing 14 6.6p 2.7p
Diluted Earnings per share – Discontinued 14 0.0p 0.6p
Total Diluted Earnings per share 14 6.6p 3.3p 26
Annual Report and Accounts 2014
26 26 26
Consolidated statement of financial position
31 December 2014
Notes
2014
£
2013
£
Assets
Non-current assets
Intangible assets 17 6,270,173 75,000
Property, plant and equipment 18 92,158 84,486
Deferred tax asset 27 — 34,654
6,362,331 194,140
Current assets
Trade and other receivables 20 965,319 865,569
Cash and cash equivalents 3,367,259 4,817,520
4,332,578 5,683,089
Assets of a disposal group classified as held for sale 30 254,846 215,129
4,587,424 5,898,218
Total assets 10,949,755 6,092,358
Equity
Shareholders’ equity
Called up share capital 21 220,000 220,000
Share premium 22 3,790,000 3,790,000
Other reserves 23 (61,406) (138,926)
Retained earnings 2,328,153 1,104,127
Total equity attributable to the owners 6,276,747 4,975,201
Liabilities
Non-current liabilities
Borrowings 24 2,000,000 –
Deferred tax 27 791,136 –
2,791,136 –
Current liabilities
Borrowings 24 500,000 –
Trade and other payables 25 1,046,530 653,270
Tax payable 335,342 415,779
1,881,872 1,069,049
Liabilities of disposal group classified as held for sale 30 — 48,108
Total liabilities 4,673,008 1,117,157
Total equity and liabilities 10,949,755 6,092,358
The financial statements were approved and authorised for issue by the Board of Directors on 30 March 2015 and were signed on its behalf by:
David Raggett
Chief Financial Officer 27
Annual Report and Accounts 2014
27 27 27
Company statement of financial position
31 December 2014
(Company No: 08721920)
Notes
2014
£
2013
£
Assets
Non-current assets
Investments 19 24,100,284 17,990,000
Deferred tax asset 27 118,394 40,874
24,218,678 18,030,874
Current assets
Trade and other receivables 20 344,496 25,267
Cash and cash equivalents 13,469 3,349,676
357,965 3,374,943
Total assets 24,576,643 21,405,817
Equity
Shareholders’ equity
Called up share capital 21 220,000 220,000
Share premium 22 3,790,000 3,790,000
Other reserves 23 17,928,494 17,850,974
Retained earnings 35,466 (750,576)
Total equity 21,973,960 21,110,398
Liabilities
Non-current liabilities
Borrowings 24 2,000,000 –
Current liabilities
Borrowings 24 500,000 –
Trade and other payables 25 102,683 295,419
602,683 295,419
Total liabilities 2,602,683 295,419
Total equity and liabilities 24,576,643 21,405,817
The financial statements were approved and authorised for issue by the Board of Directors on 30 March 2015 and were signed on its behalf by:
David Raggett
Chief Financial Officer 28
Annual Report and Accounts 2014
28 28 28
Consolidated statement of changes in equity
for the year ended 31 December 2014
Called up share
capital
£
Retained
earnings
£
Share
premium
£
Other
reserves
£
Total
equity
£
Balance at 31 December 2013 179,900 717,810 – (179,800) 717,910
Profit and total comprehensive income – 638,817 – – 638,817
Issue of share capital
7 October 2013 100 – – – 100
17 December 2013 40,000 – 3,960,000 – 4,000,000
Share issue costs – – (170,000) – (170,000)
Dividends – (252,500) – – (252,500)
Deferred tax on share based payments – – – 40,874 40,874
Total transactions with owners 40,100 (252,500) 3,790,000 40,874 3,618,474
Balance at 31 December 2013 220,000 1,104,127 3,790,000 (138,926) 4,975,201
Profit and total comprehensive income – 1,510,026 – – 1,510,026
Dividends – (286,000) – – (286,000)
Deferred tax on share based payments – – – 77,520 77,520
Balance at 31 December 2014 220,000 2,328,153 3,790,000 (61,406) 6,276,747 29
Annual Report and Accounts 2014
29 29 29
Company statement of changes in equity
for the year ended 31 December 2014
Called up share
capital
£
Retained
earnings
£
Share
premium
£
Other
reserves
£
Total
equity
£
Balance at 7 October 2013
Loss and total comprehensive income – (750,576) – – (750,576)
Issue of share capital
7 October 2013 100 – – – 100
10 December 2013 179,900 – – 17,810,100 17,990,000
17 December 2013 40,000 – 3,960,000 – 4,000,000
Cost of share issue – – (170,000) – (170,000)
Deferred tax on share based payments – – – 40,874 40,874
Total transactions with owners 220,000 – 3,790,000 17,850,974 21,860,974
Balance as at 31 December 2013 220,000 (750,576) 3,790,000 17,850,974 21,110,398
Profit and total comprehensive income – 1,072,042 – – 1,072,042
Dividends – (286,000) – – (286,000)
Deferred tax on share based payments – – – 77,520 77,520
Total transactions with owners – (286,000) – 77,520 208,480
Balance as at 31 December 2014 220,000 35,466 3,790,000 17,928,494 21,973,960 30
Annual Report and Accounts 2014
30 30 30
Consolidated statement of cash flows
for the year ended 31 December 2014
Notes
2014
£
2013
£
Cash flows from operating activities
Cash generated from operations 1 1,937,611 885,657
Interest paid (203) –
Tax paid (609,292) (341,486)
Net cash from operating activities 1,328,116 544,171
Cash flows from investing activities
Purchase of Subsidiary undertakings net of cash acquired 2 (5,065,902) –
Purchase of intangible assets (326,317) (222,475)
Purchase of tangible assets (17,520) (39,669)
Proceeds from sale of intangible assets 341,576 258,956
Proceeds from sale of tangible assets 24,646 50,160
Interest received 51,140 11,497
Net cash (used in)/ generated from investing activities (4,992,377) 58,469
Cash flows from financing activities
Share issue – 3,830,100
Bank loan 2,500,000 –
Net cash outflow on Directors’ Loans – (1,509)
Equity dividends paid (286,000) (252,500)
Net cash generated from financing activities 2,214,000 3,576,091
(Decrease)/Increase in cash and cash equivalents (1,450,261) 4,178,731
Cash and cash equivalents at beginning of year 4,817,520 638,789
Cash and cash equivalents at end of year 3,367,259 4,817,520 31
Annual Report and Accounts 2014
31 31 31
Notes to the consolidated statement of cash flows
for the year ended 31 December 2014
1. Reconciliation of profit before income tax to cash generated from operations
2014
£
2013
£
Cash flows from operating activities
Profit before income tax 1,926,502 1,049,417
Depreciation and amortisation charges 74,087 (98,565)
Profit on disposal of intangible assets (4,007) –
Finance costs 22,295 –
Finance income (51,140) (11,497)
Operating cash flow before changes in working capital 1,967,737 939,355
(Increase)/Decrease in trade and other receivables (107,279) 6,117
Increase/(Decrease) in trade and other payables 77,153 (59,815)
Cash generated from operations 1,937,611 885,657
2014
£
2013
£
Continuing operations
Profit before tax 1,903,002 884,180
Adjustments for:
 Depreciation of property, plant and equipment 13,283 15,890
 Profit on disposal of property, plant and equipment – (10,210)
 Amortisation 60,804 32,577
 Finance costs 22,295 –
 Finance income (51,140) (11,497)
Changes in working capital
 Increase in trade and other receivables (117,941) (58,004)
 Increase in trade and other payables 125,261 55,334
Cash inflow from continuing operations 1,955,564 908,270
Discontinued operations
Profit before tax 23,500 165,237
Adjustments for:
 Profit on disposal of intangible assets (4,007) (136,822)
Changes in working capital:
 Decrease in trade and other receivables 10,662 64,121
 Decrease in trade and other payables (48,108) (115,149)
Cash (outflow) from discontinued operations (17,953) (22,613)
Cash generated from operations 1,937,611 885,657
2. Purchase of Subsidiary undertakings net of cash acquired
During the year the Group obtained control of Xperience Franchising Limited and Whitegates Estate Agency Limited.
XFL
£
WEAL
£ 
Total
£ 
Consideration 5,118,973 991,311 6,110,284
Less: Cash acquired (995,088) (49,294) (1,044,382)
Purchase of Subsidiary undertakings net of cash acquired 4,123,885 942,017 5,065,902 32
Annual Report and Accounts 2014
32 32 32
Company statement of cash flows
for the year ended 31 December 2014
Notes
2014
£
2013
£
Cash flows from operating activities
Cash generated from operations 1 (901,396) (480,424)
Interest paid (203) –
Net cash from operating activities (901,599) (480,424)
Cash flows from investing activities
Investment in subsidiary companies (6,110,284) –
Interest received 11,676 –
Equity dividends received 1,450,000 –
Net cash used in investing activities (4,648,608) –
Cash flows from financing activities
Share issue – 3,830,100
Proceeds from borrowings 2,500,000 –
Equity dividend paid (286,000) –
Net cash generated from financing activities 2,214,000 3,830,100
(Decrease)/Increase in cash and cash equivalents (3,336,207) 3,349,676
Cash and cash equivalents at beginning of year 3,349,676 –
Cash and cash equivalents at end of year 13,649 3,349,676 33
Annual Report and Accounts 2014
33 33 33
Notes to the Company statement of cash flows
for the year ended 31 December 2014
1. Reconciliation of loss before income tax to cash generated from operations
2014
£
2013
£
Cash flows from operating activities
Profit/(Loss) before income tax 997,783 (750,576)
Finance costs 22,295 –
Finance income (11,676) –
Equity dividend received (1,450,000) –
Operating cash flow before changes in working capital (441,598) (750,576)
Increase in trade and other receivables (244,970) (25,267)
(Decrease)/Increase in trade and other payables (214,828) 295,419
Cash generated from operations (901,396) (480,424)
2. Non cash flow transactions
During 2013 MartinCo PLC acquired 100% of Martin & Co (UK) Limited in a non-cash transaction by issuing ordinary shares. 34
Annual Report and Accounts 2014
34 34 34
Notes to the consolidated financial statements
for the year ended 31 December 2014
1. General information
The principal activity of MartinCo PLC and its Subsidiaries is that of a UK residential property franchise business. The Group operates in the UK. The 
Company is a public limited company incorporated and domiciled in the UK. The address of its head office and registered office is 2 St Stephen’s Court, 
St Stephen’s Road, Bournemouth, Dorset, UK.
2. Basis of preparation
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards and IFRS Interpretations 
Committee (IFRS IC) as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated 
financial statements have been prepared under the historical cost convention. As set out in note 23, the acquisition of Martin & Co (UK) Ltd in 2013 was 
accounted for as if it had been owned for the whole period.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to 
exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or 
areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 5.
The presentational currency of the financial statements is in British pounds and amounts are rounded to the nearest pound.
Going Concern
The Group has produced detailed budgets, projections and cash flow forecasts. The Directors have concluded after reviewing these budgets, projections 
and forecasts, making appropriate enquiries of the business and having considered uncertainties under the current economic environment, that there is a 
reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future. Accordingly, they have adopted the 
going concern basis in preparing the Financial Statements.
New standards, amendments and interpretations issued
Principal standards, amendments and interpretations that became effective in 2014 but have no effect on the Group’s operations:
• IFRS 10 ‘Consolidated Financial Statements’ (effective for annual periods beginning on or after 1 January 2014) 
• IFRS 11 ‘Joint arrangements’ (effective for annual periods beginning on or after 1 January 2014) 
• IFRS 12 ‘Disclosure of interests in other entities’ (effective for annual periods beginning on or after 1 January 2014) 
• IAS 27 ‘Consolidated and Separate Financial Statements’ (effective for annual periods beginning on or after 1 January 2014) 
The following standards and interpretations, that may be relevant to the Group operations that have not been applied in the Financial Statements, were 
in issue:
• IFRS 9 ‘Financial Instruments’ (effective for annual periods beginning on or after 1 January 2015, not yet endorsed).
• IAS 19 (revised) Employee Benefits – (effective for annual periods beginning on or after 1 July 2014).
• IFRS 15 ‘Revenue from contracts with customers’ (effective for annual periods beginning on or after 1 January 2017, not yet endorsed).
The Directors anticipate that the adoption of these standards and interpretations would not have a material impact on the Financial Statements of the Group.
3. Basis of consolidation
The Group financial statements include those of the parent company and its subsidiaries, drawn up to 31 December 2014. Subsidiaries are all (including 
structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from 
its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the 
date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
On 31 October 2014 the Company acquired the entire issued share capital of Xperience Franchising Limited and Whitegates Estate Agency Limited for a 
consideration of £6,110,284.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the 
fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. Identifiable 
assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition 
date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-
controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also 
eliminated. When necessary amounts reported by subsidiaries have been adjusted to conform with the Group’s accounting policies. 35
Annual Report and Accounts 2014
35 35 35
4. Significant accounting policies 
Revenue recognition
Revenue represents income, net of VAT, from the sale of franchise agreements, management service fees, levied to franchisees monthly based on their 
turnover, and the provision of training and ongoing support to franchisees.
Fees from the sale of franchise agreements are not refundable and are recognised upon the earlier of the receipt of funds or the signing of the franchise 
agreement. These fees are for the use of the brand along with initial training and support and promotion during the opening phase of the new office. 
Management service fees are recognised on a monthly basis, with other fees recognised when the training and support is provided to the franchisee.
Revenue also includes fees generated by offices operated by the Group. These offices invoice landlords on a monthly basis and so recognise the income 
during the period in which the work is carried out.
Operating profit
Profit from operations is stated before investment income, finance costs and other gains and losses.
Intangible assets – goodwill
Goodwill (being the difference between the fair value of consideration paid and the fair value of the identifiable assets at the date of acquisition) is 
capitalised. Goodwill is not amortised, but subject to an annual review for impairment (or more frequently if necessary). Any impairment is charged to 
the profit or loss as it arises.
An impairment loss is recognised for the amount by which the carrying value of goodwill exceeds its recoverable amount, which the Directors assess on a 
‘value in use’ basis. To determine the value in use, management estimates expected future cash flows from trading operations, each business being one 
cash generating unit, and determines a suitable growth rate in order to calculate the present value of those cash flows. The discount factor reflects 
management’s assessment of the risk profile of the business.
Discontinued operations 
Non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. 
This condition is regarded as met only when the sale is highly probable and the asset is available for sale in its immediate condition. Management must 
be committed to the sale, which should be expected within one year from the date of classification as held for sale.
Immediately before classification as held for sale, the assets are remeasured and recognised at the lower of their carrying amount and their fair value less 
costs to sell if their carrying amount essentially derives from their sale rather than their continued use. Assets classified as held for sale are not 
depreciated. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are included in the income 
statement. Gains are not recognised in excess of any cumulative impairment loss.
Profit after tax from operations qualifying as discontinued operations are presented separately as a single amount on the income statement. The assets 
held for resale and the liabilities held for resale are shown separately on the balance sheet. Results from operations qualifying as discontinued operations 
as of the balance sheet date for the latest period presented, that have previously been presented as results from continuing operations, are represented 
as results from discontinued operations for all periods presented.
In conditions where the classification of non-current assets as held for sale are no longer met, classification as held for sale ceases. Accordingly, results of 
operations, previously presented in discontinued operations, are reclassified and included in continuing operations for all periods presented. Non-current 
assets that cease to be classified as held for sale are remeasured at the lower of their carrying amount before classification as held for sale, adjusted for 
any depreciation, amortisation or revaluations that would have been recognised had the asset not been classified as held for sale, and its recoverable 
amount at the date of the subsequent decision to sell.
Business combinations
On the acquisition of a business, fair values are attributed to the identifiable assets and liabilities and contingent liabilities unless the fair value cannot be 
measured reliably in which case the value is subsumed into goodwill. Where the fair values of acquired contingent liabilities cannot be measured reliably, 
the assumed contingent liability is not recognised but is disclosed in the same manner as other contingent liabilities.
Goodwill is the difference between the fair value of the consideration and the fair value of identifiable assets acquired. Goodwill arising on acquisitions is 
capitalised and subject to an impairment review, both annually and when there is an indication that the carrying value may not be recoverable.
Intangible assets 
Intangible assets with a finite life are carried at cost less amortisation and any impairment losses. Intangible assets represent items which meet the 
recognition criteria of IAS 38, in that it is probable that future economic benefits attributable to the assets will flow to the entity and the cost can be 
measured reliably.
In accordance with IFRS 3 Business Combinations, an intangible asset acquired in a business combination is deemed to have a cost to the Group of its fair 
value at the acquisition date. The fair value of the intangible asset reflects market expectations about the probability that the future economic benefits 
embodied in the asset will flow to the Group. 36
Annual Report and Accounts 2014
36 36 36
4. Significant accounting policies continued 
Amortisation charges are included in administrative expenses in the Statement of Comprehensive Income. Amortisation begins when the intangible 
asset is first available for use and is provided at rates calculated to write off the cost of each intangible asset over its expected useful life, as follows:
Brands Indefinite life
Customer lists 5 - 25 years 
Master franchise agreements 25 years 
Acquired customer relationships are identified as a separate intangible asset as they are separable and can be reliably measured by valuation of future 
cash flows. This valuation also assesses the life of the particular relationship. The life of the relationship is assessed annually. Customer relationship 
assets are being written off over a remaining life of 5 to 25 years.
Acquired franchise master agreements are identified as a separate intangible asset as they are separable and can be reliably measured by valuation of 
future cash flows. The life of the relationship is assessed annually. Master franchise agreements are being written off over a remaining life of 25 years as 
historical analyses shows that, on average, 4% of franchises will change ownership per annum.
Acquired trade names are identified as separate intangible assets where they can be reliably measured by valuation of future cash flows. The trade names 
which have been identified separately are assessed as having indefinite lives due to their long trading histories.
Subsequent to initial recognition, intangible assets are stated at deemed cost less accumulated amortisation and impairment charges.
Investment in subsidiaries
Investments in subsidiaries are stated in the parent company’s balance sheet at cost less any provisions for impairments.
Property, plant and equipment
Items of property, plant and equipment are stated at cost of acquisition less accumulated depreciation and impairment losses.
Depreciation is charged so as to write off the cost of assets over their estimated useful lives on the following bases:
Fixtures, fittings and office equipment 15% reducing balance
Motor vehicles 25% reducing balance
Short leasehold improvements over the lease term
Income taxes
Current tax is the tax currently payable based on the taxable profit for the year.
Deferred tax
Deferred income taxes are calculated using the liability method on temporary differences, at the tax rate that is substantively enacted at the balance 
sheet date. Deferred tax is generally provided on the difference between the carrying amount of assets and liabilities and their tax bases. However, 
deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a 
business combination or affects tax or accounting profit. Tax losses available to be carried forward as well as other income tax credits to the Group are 
assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying 
deductible temporary differences will be able to offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax 
rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date. 
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the profit/loss.
Operating lease commitments
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged to profit/loss on a 
straight-line basis over the period of the lease.
Cash and cash equivalents
Cash and cash equivalents are defined as cash balances in hand and in the bank (including short-term cash deposits).
Financial assets
The Group only has financial assets classified as loans and receivables. The loans and receivables comprise trade and other receivables and cash and cash 
equivalents in the Consolidated Statement of Financial Position. Cash and cash equivalents (which exclude any client account monies) include cash in 
hand and deposits held at call with banks.
Loans and receivables
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally 
through the provision of services to franchisees (e.g. trade receivables), but also incorporate other types of contractual monetary asset. They are initially 
recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost 
using the effective interest rate method, less provision for impairment.
Notes to the consolidated financial statements
for the year ended 31 December 2014 continued 37
Annual Report and Accounts 2014
37 37 37
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default 
or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a 
provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired 
receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised 
within administrative expenses in the income statement. On confirmation that the trade receivable will not be collectable, the gross carrying value of 
the asset is written off against the associated provision.
Financial liabilities
Financial liabilities are comprised of trade payables, borrowings and other short-term monetary liabilities, which are recognised at amortised cost.
Trade payables and other short-term monetary liabilities, are initially recognised at fair value and subsequently carried at amortised cost using the 
effective interest method.
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference 
between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using 
the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility 
will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the 
facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
Share options
The Company issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the 
date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the 
vesting period, together with a corresponding increase in equity, based upon the Company’s estimate of the shares that will eventually vest.
Fair value is measured using the Black-Scholes option pricing model taking into account the following inputs:
• the exercise price of the option; 
• the life of the option; 
• the market price on the date of the grant of the option; 
• the expected volatility of the share price; 
• the dividends expected on the shares; and 
• the risk free interest rate for the life of the option.
The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions 
and behavioural considerations.
5. Critical accounting estimates and judgements and key sources of estimation uncertainty
The Company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical 
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual 
experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material 
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Impairment of goodwill
The Group is required to test, where indicators of impairment exist, whether goodwill has suffered any impairment. The recoverable amount is 
determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the choice of a discount rate  
in order to calculate the present value of the cash flows. Key assumptions for the value in use calculation are described in note 17.
Revenue recognition
Initial franchise fees are recognised upon the earlier of receipt of funds or the signing of the contract. The initial fees are non-refundable and are for the 
use of the brand along with initial training and support and promotion of the new office. The Directors therefore believe that the benefits are transferred 
upon signing the contract and so revenue is recognised at this point. Future benefits from the contract are dealt with in the monthly MSF fee which is 
spread across the term of the franchise agreement.
Valuation of separable intangibles on acquisition
When valuing the intangibles acquired in a business combination, management estimate the expected future cash flows from the asset and choose a 
suitable discount rate in order to calculate the present value of those cash flows. Separable intangibles valued on acquisitions made in the year were 
£4.6m as detailed further in note 17.
Non-current assets (or disposal groups) held for sale
Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale 
transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell. 38
Annual Report and Accounts 2014
38 38 38
6. Segmental reporting
The board of Directors, as the chief operating decision-making body, review financial information for and make decisions about the Group’s overall 
franchising business and have identified a single operating segment, that of property franchising.
7. Revenue
The Directors believe there to be three material income streams relevant to property franchising which are split as follows:
2014
£
2013
£
Management Service Fee 4,048,575 3,477,855
Franchise sales 423,779 176,683
Other 703,820 489,780
5,176,174 4,144,318
All revenue is earned in the UK and no customer represents greater than 10 per cent of total revenue in either of the years reported.
8. Administrative expenses
Administrative expenses relate to those expenses that are not directly attributable to any specific sales activity.
Administrative expenses for the year were as follows:
2014
£
2013
£
Continuing operations:
Employee costs (see note 9) 1,852,466 1,480,025
Property costs 67,773 63,741
General administrative costs 868,892 784,300
2,789,131 2,328,066
9. Employees and Directors
Average numbers of employees (including Directors), employed during the year:
2014 2013
Continuing operations:
Administration 29 25
Management 7 5
36 30
Employee costs (including Directors) during the year amounted to:
2014
£
2013
£
Continuing operations:
Wages and salaries 1,676,377 1,356,824
Social security costs 176,089 123,201
1,852,466 1,480,025
Key management personnel are defined as Directors and executives of the Group. Details of the remuneration of the key management personnel are 
shown below:
2014
£
2013
£
Wages and salaries 694,911 560,409
Social security costs 69,937 64,914
764,848 625,323
Details of the Directors’ emoluments are disclosed in the Directors Remuneration Report on pages 22 to 23. The share based payments charge for the 
current year and the prior year was nil.
10. Exceptional items
The exceptional items represent costs relating to the acquisition of Xperience Franchising Limited and Whitegates Estate Agency Limited in the year 
whereas in 2013 they represented the flotation costs incurred in the listing of the Group on the Alternative Investment Market.
Notes to the consolidated financial statements
for the year ended 31 December 2014 continued 39
Annual Report and Accounts 2014
39 39 39
11. Operating profit
2014
£
2013
£
The operating profit from continuing operations is stated after charging/(crediting):
Depreciation 13,283 12,274
Amortisation 60,804 32,577
Profit on disposal of fixed assets – (10,210)
Auditor’s remuneration (see below) 123,863 159,500
Staff costs (note 9) 1,852,466 1,480,025
Operating lease expenditure 47,311 27,844
Audit services
– Audit of the Company and consolidated accounts 18,500 15,000
– Audit of the Subsidiaries pursuant to legislation 45,000 20,000
Tax services
– compliance services 2,500 –
– advisory services 10,363 7,500
Other non-audit services – advisory services 47,500 117,000
123,863 159,500
Comprising:
Audit services 63,500 35,000
Non-audit services: 60,363 124,500
123,863 159,500
12. Finance income and costs
2014
£
2013
£
Finance income:
Bank interest 38,781 141
Other similar income 12,359 11,335
51,140 11,476
2014
£
2013
£
Finance costs:
Bank interest 22,295 –
22,295 –
13. Taxation
2014
£
2013
£
Current tax 411,541 376,723
Deferred tax credit – (4,540)
Total tax charge in statement of comprehensive income 411,541 372,183
The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The difference is explained below:
2014
£
2013
£
Profit on ordinary activities before tax 1,903,002 884,180
Profit on ordinary activities multiplied by the effective standard rate of corporation tax in the UK of 21.5% 
(2013: 23.25%) 409,145 205,572
Effects of:
Expenses not deductible for tax purposes 19,325 173,695
Tax chargeable at different rates — 145
Depreciation in excess of capital allowances (18,803) (9,103)
Losses carried forward 1,874 1,874
Total tax charge in respect of continuing activities 411,541 372,183 40
Annual Report and Accounts 2014
40 40 40
14. Earnings per share
Earnings per share is calculated by dividing the profit for the financial year by the weighted average number of shares during the year.
2014
£
2013
£
Earnings per ordinary share
Profit from continuing operations 1,491,461 511,997
Profit from discontinued operations 18,565 126,820
1,510,026 638,817
Diluted earnings per ordinary share
The charge relating to share-based payments is immaterial and therefore the earnings used in the diluted earnings per ordinary share calculation are the 
same as that shown above.
2014
Number
2013
Number
Weighted average number of shares
Number used in basic earnings per share 22,000,000 18,325,833
Dilutive effect of share options on ordinary shares 832,818 845,817
Number used in diluted earnings per share 22,832,818 19,171,650
15. Profit/(Loss) of Parent Company
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these financial 
statements. The Parent Company’s profit for the financial year was £1,072,042 (2013: loss £750,576)
16. Dividends
2014
£
2013
£
Interim and Final dividend (ordinary shares of £0.01 each) 286,000 252,500
Dividend per share 1.3p 1.4p
The dividend per share is calculated using the same weighted average number of shares as used in the calculation of earnings per share.
17. Intangible assets
Master Franchise 
Agreement
£
Brands
£
Customer Lists
£
Goodwill
£
Total
£
Cost –
Brought forward 1 January 2013 – – 654,532 75,000 729,532
Additions – – 222,475 – 222,475
Transferred to assets held for sale – – (877,007) – (877,007)
Carried forward 31 December 2013 – – – 75,000 75,000
Additions – acquired separately – – 326,317 – 326,317
Additions – acquired business combinations 4,075,085 571,000 225,204 1,313,217 6,184,506
Transferred to assets held for sale – – (271,000) – (271,000)
Carried forward 31 December 2014 4,075,085 571,000 280,521 1,388,217 6,314,823
Amortisation
Brought forward 1 January 2013 – – 132,551 – 132,551
Charge for year – – 32,577 – 32,577
Transferred to assets held for sale – – (165,128) – (165,128)
Carried forward 31 December 2013 – – – – –
Charge for year 27,167 – 33,637 – 60,804
Transferred to assets held for sale – – (16,154) – (16,154)
Carried forward 31 December 2014 27,167 – 17,483 – 44,650
Net book value
At 31 December 2014 4,047,918 571,000 263,038 1,388,217 6,270,173
At 31 December 2013 – – – 75,000 75,000
Notes to the consolidated financial statements
for the year ended 31 December 2014 continued 41
Annual Report and Accounts 2014
41 41 41
The carrying amount of goodwill relates to three cash generating units, and reflects the difference between the fair value of consideration transferred 
and the fair value of assets and liabilities purchased.
Goodwill is assessed for impairment by comparing the carrying value to the value in use calculations. The value for the goodwill purchased from Martin 
& Co Management of £75,000 has been estimated using cash flow projections based on detailed budgets and forecasts over the period to 31 December 
2016. Thereafter revenue growth has been assumed to decline to a long-term growth rate of 2.25%. A discount rate of 10% has been applied; being the 
Directors’ estimate of the Martin & Co (UK) Limited’s cost of capital. The budgets and forecasts are based on historical data and the past experience of 
the Directors in this sector as well as the future plans of the business.
The carrying value of the goodwill arising on the acquisitions of Xperience Franchising Limited (“XFL”) and Whitegates Estate Agency Limited (“WEAL”)  
is based on actual cash flows to 31 December 2014 and further projections through to 31 December 2016. Thereafter projected revenue growth was 
assumed to decline linearly to a long-term growth rate of 2.25%.
The cashflows arising were discounted by the weighted average cost of capital plus an additional risk premium for the increased risk profile of franchise 
rights when compared to the risk of each company. These discount rates were 16.0% for XFL and 17% for WEAL, the latter higher rate reflecting WEAL’s 
smaller size and more volatile earnings. This resulted in a total value for each company of the identifiable intangibles assets.
The total consideration paid for the two companies of £6,110,284 was allocated to each company by management based on their respective EBITDAs.
The Directors do not consider goodwill to be impaired. The Directors believe that no reasonably possible change in assumptions will cause the value in 
use to fall below the carrying value and hence impair the goodwill.
The brand names under which XFL trades of C J Hole, Parkers and Ellis & Co have been in existence for between 67 years and 150 years. Management see 
them as strong brands with significant future value and has deemed them to have indefinite useful lives as there is no foreseeable limit to the period over 
which the assets are expected to generate net cash inflows for the Group.
The Relief-from-Royalty-Method was used to value the brand names. Looking at independent research of royalty rates, management selected pre-tax 
royalty rates of between 3% and 5% for the above brand names.
The after tax royalty rates were then applied to the projected cash flows of each brand up until December 2029. The projected cash flows being the 
actual cash flows to 31 December 2014 and further projections through to 31 December 2016. Thereafter projected revenue growth was assumed to 
decline linearly to a long-term growth rate of 2.25%.
The after tax cash flows determined through this process was then discounted at 13.5% to determine a value for each brand name. This discount rate 
approximated the company’s WACC as the risk profile of the brand names was seen as commensurate with that of the overall company.
The Directors believe that no reasonably possible change in assumptions will cause the value in use of the brands names CJ Hole, Parkers and Ellis & Co 
to fall below their carrying values and hence impair their intangible values.
The Whitegates brand was valued in a similar manner and deemed to have an immaterial value when the acquisition was made principally due to its lack 
of profitability over preceding years. It is therefore not recognised separately.
Goodwill and indefinite life intangible assets have been allocated for impairment testing purposes to the following cash-generating units.
The carrying values are as follows:
Goodwill Brands
2014
£
2013
£
2014
£
2013
£
Xperience Franchising Limited 912,716 – 571,000 –
Whitegates Estate Agency Limited 400,501 – – –
Martin & Co (UK) Ltd 75,000 75,000 – –
1,388,217 75,000 571,000 –
Company
No goodwill or customer lists exist in the parent company. 42
Annual Report and Accounts 2014
42 42 42
18. Property, plant and equipment 
Group
Leased 
Assets
£
Motor
Vehicles
£
Office 
Equipment
£
Fixtures & 
Fittings
£
Total
£
Cost
Brought forward 1 January 2013 65,241 20,367 21,802 119,652 227,062
Additions 4,152 – 27,881 7,636 39,669
Disposals (12,630) – – – (12,630)
Transferred to assets held for sale (19,729) (20,367) (17,499) (8,685) (66,280)
Carried forward 31 December 2013 37,034 – 32,184 118,603 187,821
Acquisitions – – 4,961 – 4,961
Additions – – 15,724 270 15,994
Carried forward 31 December 2014 37,034 – 52,869 118,873 208,776
Depreciation
Brought forward 1 January 2013 7,813 6,335 8,738 80,401 103,287
Charge for year 4,347 1,283 4,162 6,098 15,890
Eliminated on disposals (2,526) – – – (2,526)
Transferred to assets held for sale (2,575) (7,618) (1,431) (1,692) (13,316)
Carried forward 31 December 2013 7,059 – 11,469 84,807 103,335
Charge for year 3,703 – 4,479 5,101 13,283
Carried forward 31 December 2014 10,762 – 15,948 89,908 116,618
Net book value
At 31 December 2014 26,272 – 36,921 28,965 92,158
At 31 December 2013 29,975 – 20,715 33,796 84,486
Company
The parent company has no property, plant and equipment.
19. Investments
Company
Shares in group 
undertakings
£
Cost
At 7 October 2013 –
Additions 17,990,000
At 31 December 2013 17,990,000
Additions 6,110,284
At 31 December 2014 24,100,284
Net book value
At 31 December 2014 24,100,284
At 31 December 2013 17,990,000
MartinCo PLC was incorporated on 7 October 2013. On the 10 December 2013 a share for share exchange acquisition took place with Martin & 
Co (UK) Limited; 17,990,000 ordinary shares in MartinCo PLC were exchanged for 100% of the issued share capital in Martin & Co (UK) Limited.
On 31 October 2014 the Company acquired the entire issued share capital of Xperience Franchising Limited and Whitegates Estate Agency Limited for 
a consideration of £6,110,284.
Martin & Co (UK) Limited is exempt from the requirements of the Companies Act 2006 relating to the audit of accounts under section 479A of the 
Companies Act 2006.
At the year-end MartinCo PLC has guaranteed all liabilities of Martin & Co (UK) Limited. The value of the contingent liability resulting from this 
guarantee is unknown at the year-end.
The carrying value of the investment has been considered for impairment per the accounting policy in note 4.
Notes to the consolidated financial statements
for the year ended 31 December 2014 continued 43
Annual Report and Accounts 2014
43 43 43
The Company’s investments at the balance sheet date in the share capital of companies include the following:
Subsidiaries
Share class % ownership
Country of 
incorporation
Martin & Co (UK) Limited Ordinary 100 England
Xperience Franchising Limited Ordinary 100 England
Whitegates Estate Agency Limited Ordinary 100 England
Nature of business of each of the above subsidiaries: Franchisor of residential letting, sales, and property management services.
20. Trade and other receivables
Group Company
2014
£
2013
£
2014
£
2013
£
Trade receivables 55,536 65,165 – –
Loans to franchisees 190,333 45,000 – –
Other receivables 167,263 433,667 24,926 25,267
Amounts due from group undertakings — – 239,483 –
Prepayments and accrued income 552,187 321,737 5,829 –
Tax receivable — – 74,258 –
965,319 865,569 344,496 25,267
Trade receivables are stated net of bad debt provisions of £nil (2013: £nil).
Ageing of trade receivables
The following is an analysis of trade receivables that are past due but not impaired. These relate to a number of customers for whom there is no recent 
history of defaults. The ageing analysis of these trade receivables is as follows:
2014
£
2013
£
Group
Not more than 3 months 54,620 48,598
More than 3 months but not more than 6 months – 15,193
More than 6 months but not more than 1 year 916 1,233
More than 1 year – 141
55,536 65,165
No allowance has been made against the overdue receivables based on historic default experience. The Directors consider that the carrying value of 
trade and other receivables represents their fair value.
The Group does not hold any collateral as security for its trade and other receivables. 44
Annual Report and Accounts 2014
44 44 44
21. Called up share capital
2014 2013
Number £ Number £
Group
Authorised, allotted issued and fully paid ordinary shares of 1p each 22,000,000 220,000 22,000,000 220,000
Company
Authorised, allotted issued and fully paid ordinary shares of 1p each 22,000,000 220,000 22,000,000 220,000
Group
number
Company
number
As at 1 January 2013 17,990,000 –
Initial allotment 10,000 10,000
Issued in share for share exchange – 17,990,000
Issued on admission to Alternative Investment Market 4,000,000 4,000,000
As at 31 December 2013 22,000,000 22,000,000
As at 31 December 2014 22,000,000 22,000,000
MartinCo PLC was incorporated on 7 October 2013 and 10,000 ordinary shares of 1p each were issued. On 10 December 2013 a share for share  
exchange took place whereby a further 17,990,000 shares of 1p each were exchanged for 100% of the issued share capital of Martin & Co (UK) Limited. 
On 17 December a further 4,000,000 shares were placed at £1 each.
22. Share premium
On 17 December 2013 the Company entered into a Placing Agreement whereby 4m new ordinary shares were placed with institutional investors at 
£1 per share. The share premium arising from the difference between the value of the shares placed and their nominal value was £3,960,000. The costs 
of this placing were £170,000 which includes the costs of obtaining HMRC approval that the placing was eligible for relief under the Enterprise 
Investment Scheme and for investment by Venture Capital Trusts.
23. Other reserves
Merger
Reserve
£
Share-based
Payment
Reserve
£
Total
£
Group
1 January 2013 (179,800) – (179,800)
31 December 2013 (179,800) 40,874 (138,926)
Deferred tax on share options – 77,520 77,520
31 December 2014 (179,800) 118,394 (61,406)
Company
31 December 2013 17,810,100 40,874 17,850,974
Deferred tax on share options – 77,520 77,520
31 December 2014 17,810,100 118,394 17,928,494
Merger reserve
The acquisition of Martin & Co (UK) Limited by MartinCo PLC did not meet the definition of a business combination and therefore, falls outside of the 
scope of IFRS 3. This transaction was in 2013 and accounted for in accordance with the principles of merger accounting as set out in Financial Reporting 
Standard 6 – Acquisitions and Mergers.
The consideration paid to the shareholders of the Subsidiary was £17,990,000 (the value of the investment). As these shares had a nominal value of 
£179,900, the merger reserve in the Company is £17,810,100.
On consolidation the investment value of £17,990,000 is eliminated so that the nominal value of the shares remains of £(179,900) and, as there is a 
difference between the Company value of the investment and the nominal value of the shares purchased in the Subsidiary of £100, this is also 
eliminated, to generate a merger reserve in the Group of £(179,800).
Share-based payment reserve
The share-based payments reserve comprises charges made to the income statement in respect of share-based payments and related deferred tax 
impacts under the Group’s equity compensation scheme.
Notes to the consolidated financial statements
for the year ended 31 December 2014 continued 45
Annual Report and Accounts 2014
45 45 45
24. Borrowings
Group Company
2014
£
2013
£
2014
£
2013
£
Repayable within 1 year:
Bank loan (term loan) 500,000 – 500,000 –
Repayable in more than 1 year:
Bank loan (term loan) 2,000,000 – 2,000,000 –
Bank loans due after more than 1 year are repayable as follows:
Between 1 and 2 years 500,000 – 500,000 –
Between 2 and 5 years 1,500,000 – 1,500,000 –
The term loan of £2.5m is secured with a fixed and floating charge over the Group’s assets and a cross guarantee across all companies in the Group. The 
loan commenced on 30 October 2014 and is repayable over 5 years in equal instalments. Interest is charged quarterly on the outstanding amount and 
the rate is fixed during the term at 4.08%. At 31 December 2014 the unutilised amount of the facility was £2.5m.
25. Trade and other payables
Group Company
2014
£
2013
£
2014
£
2013
£
Trade payables 178,673 170,717 29,809 31,612
Other taxes and social security 340,534 178,218 – –
Other payables 23,571 – – –
Accruals and deferred income 503,752 304,335 72,874 20,781
Amounts owed to group undertakings – – – 243,026
1,046,530 653,270 102,683 295,419
The Directors consider that the carrying value of trade and other payables approximates their fair value.
26. Leasing agreements
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which 
fall due as follows:
Non-cancellable operating leases
2014
£
2013
£
Group
Within 1 year 44,820 25,001
Between 1 and 5 years 17,000 33,194
61,820 58,195
The lease arrangements above consist of those relating to land and buildings and office equipment.
Company
No leases exist in the parent company. 46
Annual Report and Accounts 2014
46 46 46
27. Deferred tax asset/(liability)
Group Company
2014
£
2013
£
2014
£
2013
£
Balance at beginning of year 34,654 (10,760) 40,874 –
Movement during the year
 Statement of changes in equity 77,520 40,874 77,520 40,874
 Acquisitions (903,310) – – –
 Statement of comprehensive income – 4,540 – –
Balance at end of year (791,136) 34,654 118,394 40,874
Deferred taxation has been provided as follows:
Group Company
2014
£
2013
£
2014
£
2013
£
Accelerated capital allowances (6,220) (6,220) – –
Share-based payments 118,394 40,874 118,394 40,874
Acquired business combinations (903,310) – – –
(791,136) 34,654 118,394 40,874
28. Financial instruments
Financial instruments – Risk Management
The Group is exposed through its operations to the following financial risks:
• Credit risk 
• Liquidity risk 
• Interest rate risk 
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Group’s 
objectives, policies and processes for managing those risks and the methods used to measure them.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and processes for managing those 
risks or the methods used to measure them from previous periods unless otherwise stated in this note.
Principal financial instruments
The principal financial instruments used by the Group and Company, from which financial instrument risk arises, are as follows:
• Receivables 
• Loans to franchisees 
• Cash at bank 
• Trade and other payables 
Financial assets
Financial assets measured at amortised cost:
Group Company
2014
£
2013
£
2014
£
2013
£
Loans and receivables:
Trade receivables 55,536 65,165 – –
Loans to franchisees 190,333 45,000 – –
Other receivables 167,263 433,667 30,755 25,767
Cash and cash equivalents 3,367,259 4,817,520 — –
Amounts owed by Group undertakings — – 239,483 –
3,780,391 5,361,352 270,238 25,267
Notes to the consolidated financial statements
for the year ended 31 December 2014 continued 47
Annual Report and Accounts 2014
47 47 47
Financial liabilities
Financial liabilities measured at amortised cost:
Group Company
2014
£
2013
£
2014
£
2013
£
Other financial liabilities:
Bank loan 2,750,465 – 2,750,465 –
Trade payables 178,673 170,717 29,809 31,612
Other payables 23,571 – – –
Accruals 503,752 304,335 72,874 20,781
Amounts owed to Group undertakings – – – 243,026
3,456,461 475,052 2,853,148 295,419
Maturity analysis of financial liabilities:
Group Company
2014
£
2013
£
2014
£
2013
£
In less than one year:
Bank loan 590,563 – 590,563 –
Trade payables 178,673 170,717 29,809 31,612
Other payables 23,571 – – –
Accruals 503,752 304,355 72,874 20,781
Amount owed to Group undertakings – – – 243,026
1,296,559 475,052 693,246 295,419
In more than one year:
Bank loan 2,159,902 – 2,159,902 –
2,159,902 – 2,159,902 –
All of the financial assets and liabilities above are recorded in the statement of financial position at amortised cost. The above amounts reflect the 
contractual undiscounted cash flows, including future interest charges, which may differ from carrying values of the liabilities at the reporting date.
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst retaining ultimate 
responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives 
and policies to the finance function. The Board receives monthly reports from the finance function through which it reviews the effectiveness of the 
processes put in place and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness  
and flexibility. Further details regarding these policies are set out below:
Capital management policy
Management considers capital to be the carrying amount of equity. The Group manages its capital to ensure its operations are adequately provided for, 
while maximising the return to shareholders through the effective management of its resources. The principal financial risks faced by the Group are 
liquidity risk and interest rate risk. The Directors review and agree policies for managing each of these risks. These policies remain unchanged from 
previous years.
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern and so provide returns for shareholders.  
The Group meets its objectives by aiming to achieve growth which will generate regular and increasing returns to the shareholders.
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 the amount of dividends paid to shareholders.
Credit risk
Credit risk is the risk of financial loss to the Group if a franchisee or a counterparty to a financial instrument fails to meet its contractual obligations.  
It is Group policy to assess the credit risk of new franchisees before entering contracts.
The highest risk exposure is in relation to loans to franchises and their ability to service their debt. The Directors have established a credit policy under 
which each new franchisee is analysed individually for creditworthiness before a franchise is offered. The Group’s review includes external ratings, when 
available, and in some cases bank references. The Group does not consider that it has significant concentration of credit risk. 48
Annual Report and Accounts 2014
48 48 48
28. Financial instruments continued
Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and principal repayments on its debt instruments. It is the 
risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future development, the Group monitors forecast 
cash inflows and outflows on a monthly basis.
Interest rate risk
The Group’s exposure to changes in interest rate risk relates primarily to interest earning financial assets and interest bearing financial liabilities. Interest 
rate risk is managed by the Group on an on-going basis with the primary objective of limiting the effect of an adverse movement in interest rates. Hence 
the fixed rate of interest on the bank term loan. The Directors monitor movements in interest rates and have not prepared sensitivity analysis in relation 
to interest rates as they do not believe that any reasonable variance would have a material impact on the Group.
Fair values of financial instruments
The fair value of financial assets and liabilities is considered the same as the carrying values.
29. Acquisitions
On 31 October 2014, the Group acquired 100% of the share capital of Xperience Franchising Ltd (“XFL”) and Whitegates Estate Agency Ltd (“WEAL”) 
both franchisors of lettings and estate agents for cash of £6.1m. The transaction met the definitions of a business combination and is accounted for using 
the acquisition method under IFRS 3.The assets and liabilities below are shown at their fair values at acquisition.
XFL
£
WEAL
£ 
Total
£ 
Intangible assets
 Brand names 571,000 – 571,000
 Master franchise agreements 3,422,579 652,506 4,075,085
 Customer lists 176,202 49,002 225,204
Tangible assets 4,335 626 4,961
Trade and other receivables 86,443 51,588 138,031
Cash 995,088 49,294 1,044,382
Trade and other payables (261,006) (97,280) (358,286)
Deferred tax 788,384 114,926 903,310
Net assets acquired 4,206,257 590,810 4,797,067
Goodwill 912,716 400,501 1,313,217
Consideration 5,118,973 991,311 6,110,284
Satisfied by:
Cash to vendors 5,118,973 991,311 6,110,284
The goodwill above represents the value attributable to the new businesses and the assembled and trained workforce. Deferred tax at 20% has been 
provided on the value of intangible assets defined as brand names and master franchise agreements. Acquisition costs of £158,741 were incurred and 
charged to exceptional items in the Consolidated Statement of Comprehensive Income.
Post acquisition results
XFL
£m
WEAL
£m 
Total
£m 
Revenue 0.20 0.10 0.30
Profit before tax since acquisition included in the Consolidated statement of comprehensive income 0.10 0.05 0.15
If the acquisitions had completed on the first day of the financial year, Group revenues would have been £7m and Group profit before tax would have 
been £2.4m (this excludes the restructuring costs incurred pre-acquisition by WEAL).
The Group acquired two franchisors of lettings and estate agents operating under 4 brands throughout England and Wales. The acquisitions were made 
to extend national coverage, increase the Group’s market share and develop its sales expertise.
Notes to the consolidated financial statements
for the year ended 31 December 2014 continued 49
Annual Report and Accounts 2014
49 49 49
30. Discontinued operations and held for sale assets and liabilities
Subsequent to the Board’s decision to discontinue the activity of owning and managing its own offices, the offices in Birmingham Kings Heath and 
Bournemouth were sold on 30 August 2013, in Coventry on 1 October 2013, in Portsmouth on 19 December 2013 and in Worthing on 30 December 2014. 
These are classified as discontinued activities.
In June 2014, the Group acquired its first portfolio of 374 managed lettings properties in Saltaire for £0.3m. This has been managed for the Group by 
Martin & Co Saltaire under a management services agreement and achieved its budgeted returns. However, portfolios that meet the Group’s criteria 
have been difficult to find either because of the sales price or issues with the quality of the portfolio. On 21 November 2014 T G Fisheries Ltd, the 
franchisee operating Martin & Co Saltaire, notified the Group of its intention to purchase the portfolio of properties it was managing on behalf of the 
Group in accordance with the services agreement signed between the parties. At the year-end this asset is classified as held for resale but not as a 
discontinued operation because the Group intends to continue to pursue and acquire portfolios of managed properties which meet its criteria. The sale 
was completed on 30 January 2015.
2014
£
2013
£
Non-current assets held for sale and discontinued operations
Operating cash flows (17,953) (22,613)
Investing cash flows 364,743 66,326
Financing cash flows — –
Increase in cash and cash equivalents 346,790 43,713
Assets of disposal group classified as held for sale
Intangible assets 254,846 181,347
Property, plant and equipment – 23,120
Other current assets – 10,662
254,846 215,129
Liabilities of disposal group classified as held for sale
Trade and other payables – 48,108
Analysis of the results of discontinued operations is as follows:
Revenue 204,249 816,718
Expenses (180,749) (651,481)
Profit before tax of discontinued operations 23,500 165,237
Made up of:
Trading operations 19,493 28,416
Sale of operations 4,007 136,821
23,500 165,237
Tax (4,935) (38,417)
Profit/(Loss) for the year from discontinued operations 18,565 126,820
As a result of the sale of the owned offices, the Group generated net cash inflows from investing activities of £365k (2013: £58k). The total consideration 
was £210k (2013: £697k). However, the Group agreed to defer consideration on Worthing as it had for three of the office disposals in 2013 so that £252k 
of deferred consideration existed at 31 December 2014 (2013: £408k)
31. Share-based payments
Enterprise Management Incentive (EMI) Share Option Scheme 
During the period ended 31 December 2013 the Company implemented an Enterprise Management Incentive scheme as part of the remuneration for 
senior management. The options were granted over a discretionary period and have varying vesting conditions.
The Company granted 1,566,000 options over ordinary shares to directors and executives of the Group. Following an independent expert valuation of 
scheme, the share based payments charge was deemed by the company to be immaterial in the current and prior year to the financial statements and 
therefore no charge has been recognised in the year.
The vesting conditions include performance conditions including a profit before tax target in the year ended 31 December 2016.
The maximum term of the options granted is ten years from the grant date. Upon vesting, each option allows the holder to purchase one ordinary share 
at a exercise price of £0.1764. The number of options granted under the scheme total 1,566,000.
The estimated fair value of each share option granted in the EMI plan is 0.97 pence. This was calculated by applying the Black-Scholes option pricing 
model which takes into account factors specific to share incentive plans, such as the vesting period. 50
Annual Report and Accounts 2014
50 50 50
31. Share-based payments continued
The following principal assumptions were used in the valuation:
Expected term 6.5 years
Volatility 50%
Option life August 2023
Risk free interest rate 2.08%
Exercise price £0.1764
Share price at date of grant £0.1764
Expected volatility is a measure of the amount by which a share price is expected to fluctuate during a period. Movement in the number of share options 
were as follows:
2014
£
2013
£
Number of share options
Outstanding at the beginning of the year 1,566,000 —
Granted – 1,566,000
Outstanding at the end of the year 1,566,000 1,566,000
Exercisable at the end of the year – —
The weighted average remaining contractual life of options is 8.7 years (2013: 9.7 years).
32. Related party disclosures 
Transactions with Directors
Dividends
During the period dividends were paid to the Directors and their spouses as follows:
2014
£
2013
£
Interim and Final dividend (ordinary shares of £0.01 each) 142,999 252,500
Loans
During 2013 loans were made by the Group to a director, R. Martin. On 18 December 2013, as part of the flotation process, R. Martin fully repaid the 
total loan of £729,004. At 31 December 2013 and subsequently no loans have existed between the Group and its Directors.
Director emoluments
Included within the remuneration of key management and personnel detailed in note 9, the following amounts were paid to the Directors:
2014
£
2013
£
Wages and salaries 412,433 301,312
Social security costs 34,617 29,511
447,050 330,823
Transactions with Other Related Parties
Transactions with The Landlord Hub Limited
The Landlord Hub Limited is a related party by virtue of common shareholders as Mr R W Martin owns 35%, Mrs K M Martin owns 35%, Mr I Wilson 
owns 10%, Mrs H Shackell owns 10% and the daughters of Mr and Mrs R W Martin own 5% each.
The Group has supplied recruitment services during the year of £18,540 (2013: £5,520) and other services of £801 (2013: £19,637). It has also earned 
commission on references supplied by The Landlord Hub Ltd to its franchise network of £23,767 (2013: nil). At the 31 December 2014, The Landlord Hub 
Ltd owed the Group £26,282 (2013: £5,948).
33. Subsequent events
On 21 November 2014 T G Fisheries Ltd, the franchisee operating Martin & Co Saltaire, notified the Group of its intention to purchase the portfolio of 
properties it was managing on behalf of the Group in accordance with the Services Agreement signed between the parties. This transaction completed 
on 30 January 2015 resulting in the portfolio being disposed of for £255,998 and generating a resulting profit over its net book value of £1,152.
Notes to the consolidated financial statements
for the year ended 31 December 2014 continued 51
Annual Report and Accounts 2014
51 51 51
Shareholder Information
Financial calendar
Announcement of Preliminary results – 31 March 2015
Annual General Meeting – 7 May 2015
Half-year results – 30 September 2015 
Interim dividend – 30 September 2015
Registered office address:
MartinCo PLC
2 St Stephen’s Court 
St Stephen’s Road 
Bournemouth
BH2 6LA
Company No. 08721920
01202 614 614 
www.martinco.com
Auditors
Baker Tilly UK Audit LLP
25 Farringdon Street
London
EC4A 4AB
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS13 8AE 52
Annual Report and Accounts 2014
52
Notes  MartinCo PLC Annual Report and Accounts 2014
www.martinco.com
MartinCo PLC
2 St. Stephen’s Court
St. Stephen’s Road
Bournemouth
Dorset
BH2 6LA
Tel: 01202 614 614