A growing  
national footprint
Annual Report & Accounts 2015
MartinCo PLC Annual Report and Accounts 2015 MartinCo PLC is the holding company for three master 
franchises operating five established lettings and 
estate agency brands, with 240 franchisees and 
287 offices in the UK.
The vision  
To achieve an increasing UK 
market share of lettings and 
estate agency transactions,  
using a proven franchise model 
and multiple, and sometimes 
competing, established  
property brands.
Welcome to MartinCo PLC
Overview
 
Highlights of the year 01
Who we are and what we do  02
Chairman’s statement  04
Strategic report
 
Market opportunities 06
Business model 08
Strategy in action 09
Strategic framework 10
Chief Executive’s statement  12
Financial review 13
Principal risks 14
Corporate social responsibility 16
Governance
 
Board of directors 18
Directors’ report 20
Directors’ remuneration report 22
Corporate governance statement 24
Independent auditor’s report 26
Financial statements
 
Consolidated statement  
of comprehensive income 27
Consolidated statement  
of financial position 28
Company statement  
of financial position 29
Consolidated statement  
of changes in equity 30
Company statement  
of changes in equity 31
Consolidated statement  
of cash flows 32
Notes to the consolidated  
statement of cash flows 33
Company statement  
of cash flows 34
Notes to the Company  
statement of cash flows 35
Notes to the consolidated  
financial statements 36
Shareholder information 56
Discover more 
martinco.com/investor-relations Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 1
Revenue 
(£m)
EBITDA*
(£m)
Proﬁt before tax
(£m)
Net assets
(£m)
3.6
4.3
4.1
5.2
7.1
1.4
1.5
1.7
2.1
3.2
1.3
1.4
0.9
1.9
2.7
0.3 0.7
5.0
6.3
7.6
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
2011 2012 2013 2014 2015
2011
2012 2013 2014 2015
Successful integration of the four “Xperience” brands 
into the existing franchisor infrastructure
Number of tenanted managed properties across the Group 
increased from 42,000 to 45,000 at year end
Total of 12 new franchisees recruited, 13 new offices opened 
32 offices with annual revenues in excess of £500k compared 
to 23 offices in 2014
Group remains weighted toward the lettings market, with 76% 
of Management Service Fees revenue derived from this activity
Strong cash position of £4.3m at year end with £5m 
(£3.0m undrawn) debt facility in place
Board recommends a final dividend for 2015 of 4.1p per share 
(2014: 2.7p per share)
Operational highlights
Financial highlights
Revenue
Management Service Fees 
EBITDA*
Profit before tax
2014: 
£5.2m
2014: 
£4.1m
2014: 
£2.1m
2014: 
£1.9m
£7.1m +38%  
£6.2m +53%  
£3.2m +50%  
£2.7m +42%  
* before exceptional costs MartinCo PLC Annual Report and Accounts 2015 2
The “Xperience” brands acquired in October 2014 are proving to have 
strong local reputations and be well recognised by customers. All our 
brands are capable of further expansion.
Recognised property brands 
harnessed to the motive power  
of local owner/managers.
Who we are and what we do
Our core business at a glance
01
Focusing on lettings and 
property management
02
Providing a range of 
estate agency services
03
Leveraging established 
property brands
04
Locating offices on the 
high street
The private rented sector has 
overtaken social housing to 
become the second largest tenure 
in the UK. We service private 
landlords by finding tenants and 
managing their properties.
All our brands offer traditional  
“no sale, no fee” estate agency, 
and the Martin & Co brand offers 
clients an alternative, an on-line 
advertising service only for a 
reduced but pre-paid fee. 
Martin & Co is a nationally 
recognised lettings brand.  
Our four other property brands 
each enjoy strong customer 
recognition within their regions 
and enjoy even longer heritage.
Customers want to search for 
property on-line but the credibility 
of a local agency, staff with 
knowledge of the area, and 
proximity for accompanied 
viewings and management  
visits to tenanted properties 
remains compelling. Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 3
 
55%
13
of the private rented housing stock  
within our occupied franchise territories
offices opened in 2015, of which 7 in 
virgin territory for our brands
Martin & Co
Offices opened in 2015: 6
Offices: 171
Location: National 
Established: 1986
Martin & Co
Offices opened in 2015: 1
Offices: 24
Location: London
Established: 1986
Whitegates
Offices opened in 2015: 1
Offices: 34 
Location:  North England,  
The Midlands
Established: 1978
Cj Hole
Offices opened in 2015: 4
Offices: 22 
Location: South West England
Established: 1867
Ellis & Co
Offices opened in 2015: 1
Offices: 22 
Location: London
Established: 1850
Parkers
Offices opened in 2015: 0
Offices: 14
Location: M4 corridor
Established: 1948
Brand coverage across the UK MartinCo PLC Annual Report and Accounts 2015 4
As we approach the  
30th anniversary of the 
founding of Martin & Co 
it gives me great 
satisfaction to look back 
over events that have 
structured our thinking 
and that have enabled us 
to develop our network 
and thus deliver yet 
another year of 
consistent and  
reliable growth.
When the economy emerged from the 
recession of the early 1990s it became 
evident to me that the traditional agency 
business model was outmoded and there was 
therefore a need for us to develop stability 
and consistency in our business. It had to 
have a solid lettings portfolio as its bedrock 
so it could deliver reliable and repeat income 
streams. In addition it needed to lose its 
cumbersome cost base which had become its 
Achilles heel during the routine cyclical 
slumps in the residential sales market. Hence 
the birth of our franchise model which 
delivers reliable “triple ring fenced” repeat 
income streams without the capital exposure 
of the traditional model for our sector.
Many factors which influenced the growth of 
the “buy-to-let” market (as it became known) 
remain, but these have an even greater 
impact today. A rapidly increasing population, 
growing pressure on the housing stock with 
the volume of new builds failing to meet 
Government annual targets, social mobility 
and employment instability, increased single 
occupancy households and inability to raise 
mortgage finance to name but a few.
Today the private residential lettings sector is 
maturing and we have built a managed 
portfolio of over 45,000 units which provides 
our bedrock and secures our position as a 
leading national player. We envisage further 
growth in lettings as the appetite for 
institutional investment develops. This will 
allow residential property to become a more 
reliable asset class as more sophisticated 
clients seek expertise and uniform service 
delivery on a national scale.
With the task of building our lettings business 
well advanced, we are delighted now to be 
able to provide more focus on residential 
sales. The wealth of sales expertise that came 
with our acquisition of the Xperience brands 
and the many exceptional agency businesses 
that came with that acquisition, have started 
to yield returns as we integrate them into the 
Group. Furthermore, we are seeing positive 
results from introducing our lettings 
expertise into the Xperience brands.  
This will help to provide equilibrium in the 
split between sales and lettings across our 
Group and to counter the cyclical nature of 
the sales sector.
In addition to our national Martin & Co brand, 
the Group now includes the recently-acquired, 
long-established regional brands of CJ Hole, 
Whitegates, Ellis & Co and Parkers, each with 
a long and proud history of serving the 
community within their respective territories. 
We aim to use our franchising know-how to 
reinvigorate these brands, to regain their 
former position and to capitalise on the latent 
value embedded within their long-standing 
multi-generational presence.
Despite an apparent threat from new 
technology, we firmly believe the success-
only charging structure from a locally based 
agent will survive the threat from online 
agencies. This is because delivery of both a 
sales and lettings service have powerful local 
elements which cannot adequately be 
replicated online across the whole market.
Regardless of minor regulatory or fiscal 
adjustments, the demand for property within 
the UK regardless of tenure has never been 
greater. I have great confidence in the future 
for the MartinCo Plc Group.
My thanks go to the executive, their teams 
and my fellow Board members for their 
outstanding efforts over the last year.
I am delighted to announce that the Board 
has recommended a final dividend of 4.1p per 
ordinary share for 2015.
The Strategic Report is contained 
on pages 6 to 17. It was approved 
by the Board on 4 April 2016.
Richard Martin
Chairman
MartinCo PLC
Strong strategy and 
consistent application 
of franchising principles.
Chairman’s statement Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 5 MartinCo PLC Annual Report and Accounts 2015 5
Tenanted managed 
properties 
45,000 
+6%
All properties let 
31,573  
+17%
Properties sold 
7,689  
+249%
In detail
Adding value  
through data mining
Control of numbers is important to any 
business owner and we collect raw data 
from our entire network every month so 
that we can assess trends and measure 
progress against our own KPIs. Over time, 
we have developed a range of 
performance norms which means we can 
respond quickly to adverse variances and 
help franchisees to identify where 
intervention is necessary. Intervention 
could be a visit from one of our highly 
qualified support staff, or attendance at a 
training course. We are able to issue a 
regular ‘Health Check’ to our network 
identifying adverse indicators, and how 
much additional income could be gained 
by corrective action.
For example, with a portfolio of over 
45,000 properties under management, we 
understand how portfolios behave, how 
many tenancies are renewed, vacated and 
relet to new tenants, or lost due to 
landlords selling or moving back in. We 
call this portfolio attrition, and 
understanding adverse variances is key to 
maximising income from this valuable 
opportunity.
Properties listed  
for sale
14,059  
+147% MartinCo PLC Annual Report and Accounts 2015 6
Macro-economic drivers 
of private rented sector 
remain in place.
Market opportunities
The powerful success story of the resurgent private  
rented sector, rising from 9% of total UK housing stock  
in the early 1990s to an estimated 20% today, driven by 
private landlords.
The key driving macro-economic factors
Stored equity 
There is an estimated £2,000bn of  
equity stored in the UK housing stock 
unencumbered by mortgages, with 
another £2,000bn of equity in mortgaged 
stock, of which £1,000bn is owner-
occupied and £1,000bn is privately 
rented*.  
There is potential for older owners of 
unmortgaged property to downsize and 
release equity to acquire a buy-to-let 
investment for income.
*Savills Residential Property Focus 2016 Issue 1
Pension reform 
Pension reform has enabled the over-55s 
to access retirement funds, which can be 
used as a deposit on a buy-to-let property. 
This group will be responsible for 3 million 
future property deals, with nearly 40% of 
homeowners planning at least one more 
property purchase*.
*Prudential
Buy-to-let 
mortgage availability
Over 1,000 buy-to-let mortgage products 
are currently available, with record low 
interest rates available on fixed term loans 
for up to 5 years. Many mortgages are 
available with terms of up to 35 years and 
with upper age limits of 70 years old.
Net migration 
at a record high
Net migration to the UK in 2014/15 was 
338,000 – a new high. The foreign-born 
UK population has lower home ownership 
rates (43%) and is almost 3 times as likely 
to be in the private rented sector (39%)*.
*Office for National Statistics
First-time buyers 
at the limit
House prices for first-time buyers hit a 
record high in August, with the typical 
first-time buyer paying 3.8% more than in 
2014. The average first-time buyer now 
earns £50,000 per annum (UK average 
earnings £25,000) and pays a deposit of 
£33,000 on a property worth £190,000).
A high performing 
asset class
Independent research we commissioned 
showed the total returns from buy-to-let 
as an asset class ranged from 6.4% to 
13.2% per annum, depending on region, 
over the 10 years to 2014, exceeding 
returns from stocks and shares, which 
averaged 0.5% per annum. Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 7
The key driving opportunities
Enlarged private rented 
sector
The private rented sector has grown  
from a low of 9% to almost 20% of UK 
stock, overtaking the social housing sector, 
with 5.4 million privately rented homes  
in 2014 expected to reach 7.2 million  
by 2025*.
*PwC UK Economic Outlook July 2015
Increased regulation 
Government is increasing regulation on 
landlords. Deposits must be registered, 
new health and safety rules for rented 
homes, and checks on a tenant’s “right to 
rent” in the UK and licensing in Wales. 
These changes favour agents.
On-line advertising 
Tenants search for properties on-line,  
and the three largest property portals 
Rightmove plc, Zoopla and On the Market 
do not allow private advertisers. As one of 
the largest property groups we enjoy 
preferential terms.
Fragmented market 
There are estimated to be 16,000 estate 
agents and 20,000 letting agents in the 
UK. Of these only 7 organisations have 
more than 100 offices. There are an 
estimated 20 property franchise systems. 
Consolidation opportunities exist.
Multiple brands 
Each of our five brands has an established 
track record – the youngest, Martin & Co, 
itself has been trading for 30 years. 
We believe that each brand is capable of 
further expansion and that our growing 
cities could support 2 and in places  
3 brands.
Rise of franchising 
There are now three AIM-listed property 
franchisors with almost 700 offices 
between them. The combination of 
corporate infrastructure to support highly 
incentivised individual owner/managers 
trading under a recognised brand name 
has proven to be a powerful one. MartinCo PLC Annual Report and Accounts 2015 8
The proposition
All new franchisees receive intensive  
initial training and mentoring, followed  
by an assisted launch.
We arrange funding, find premises and 
experienced staff, and manage “roll-out” of  
every new office using a detailed and time-
proven plan.
There is ongoing support through a regional 
training programme, and office visits from  
our “business development” team.
All offices have unlimited access to our business 
systems helpdesk and to specialist “market 
intelligence” tools.
Marketing collateral is developed centrally and 
made available through a digital hub for 
franchisees to purchase at bulk-discount rates.
We build and optimise our five brand websites 
in-house. We support franchisees with regular 
social media content and monthly newsletters to 
our landlord database (c. 43,000 contacts).
We source specialist operational software at  
a group discount, and work with our providers  
to ensure all franchisees and staff are  
competent users.
We have an internal audit team and conduct 
regular checks on the finances of our franchisees.
In return, our franchisees pay a Management 
Services Fee (“MSF”) including a licence element 
for use of the brand. MSF is 9% plus VAT of all 
income for Martin & Co offices, and currently 
7.5% plus VAT for the other brands, but this will 
converge to 9% when franchises renew.
In addition, franchisees contribute to a marketing 
promotions fund and the total contributed in 
2015 was £694k. The franchisees themselves 
decide on the use of this fund, and this has 
included sponsorship of international rugby and 
cricket.
Five-year renewable franchise licence
No exit without a sale to a new franchisee
Renewal subject to performance criteria
Central control over brand and standards
Stable network with high levels of 
franchisee retention
Key strengths
Franchisee
selection
Business
planning
Structured
training/
mentoring
programme
Launch
and support
IT helpdesk,
marketing, staff
recruitment
Digital 
marketing
National  
supplier
agreements
Acquisition
programme
Franchise
Network
Business model
The franchise model – 
continuous recruitment 
and tactical acquisitions. Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 9
Two brands, one market
Peter Grieve was a successful senior executive 
in the hospitality trade. However, he and his 
wife Rani wanted a better life that meant  
less commuting.
In 2008 they decided to open a new office of 
Martin & Co in Worcester with Rani working in 
the business immediately and winning many 
new landlords. By 2010 Peter was also working 
full-time in the business and the couple decided 
to open their second office. They acquired an 
existing Martin & Co business in Gloucester  
and revitalised it, moving to more  
prestigious premises.
In 2013 we found them a managed portfolio  
for sale and assisted Peter and Rani 
operationally with the purchase. Emboldened 
by the experience Peter and Rani then bought 
another “bolt on” portfolio.
After we acquired the CJ Hole master franchise, 
Peter and Rani approached us and asked to buy 
a franchise for Worcester. Our Chief Executive 
was at first a little puzzled, but they explained 
that they had an opportunity to take a lease on 
premises in a prime spot opposite the Worcester 
Foregate Street Station. In Peter’s opinion the 
CJ Hole brand already had market cachet as a 
mid-to-upper market estate agency and this 
would complement the couple’s existing Martin 
& Co business with its lettings focus. In October 
2015 Peter and Rani opened the new CJ Hole 
office in Worcester just 50 yards from their 
Martin & Co shopfront.
In detail
The life of a franchisee
2008 Opened Martin & Co 
Worcester (cold start)
2010 Acquired Martin & Co 
Gloucester (resale)
2013 Acquired portfolio of 212 
managed properties
2014 Acquired portfolio of 40 
managed properties
 Turnover £822k 
Gros   profit £690k
2015 Opened C J Hole in Worcester
 September: A record month 
with turnover of £101k 
(+10.5% YTD)
s
Strategy in action
Martin & Co and CJ Hole 
in Worcester. MartinCo PLC Annual Report and Accounts 2015 10
A clear strategic plan 
focused on growing all  
five of our property brands.
Strategic framework
MartinCo PLC intends to further develop its network,  
opening new Martin & Co offices nationally, and adding 
offices to its other four brands within their regional footprint.
Franchisee recruitment 
Income diversification
Marketing & PR
The Group continues to actively recruit new 
franchisees both to open new offices and to 
take over existing businesses when the 
franchisee wants to exit.
• Creation of a dedicated franchise sales team in a new 
“showroom” showcasing the brands, the marketing collaterals, 
shop fit and furniture.
• Adoption of “The Property Franchise Group” as the trading style 
for our multi-brand franchise.
• Cold start offices launched with new franchisees in Kingston, 
Plymouth, Hull, Wokingham, Gloucester and Greenford. Cold start 
offices opened by existing franchisees in Downend, Cirencester, 
Worcester, Chester, Longbridge, Ashford and Huyton.
• Number of house sale transactions completed across the Group 
increased from 2,201 to 7,689.
• Offices offering an estate agency service increased from  
243 to 256.
• Financial services strategy agreed with business partner Legal  
& General and will roll-out during 2016.
• Review of all marketing collateral across the five brands to  
create a full suite of campaign and point-of-sale materials.
• New look for Ellis & Co brand in London with delighted 
franchisees volunteering to refresh their shop fascias,  
boards and stationery.
• “Ask Martin” national campaign based on independent  
research we commissioned on the returns achieved from  
buy-to-let investment.
• Appearance by our CEO on Radio 4’s “Today” programme,  
and sponsorship of international cricket and rugby to  
promote the Martin & Co brand.
We aim to increase our earnings from property 
sales and financial services by leveraging the 
estate agency credentials of the four brands 
we have acquired. However, the Group’s core 
focus will continue to be its lettings business.
The acquired brands are strong within regional 
catchments, and it is our intention to 
invigorate those brands and expand the 
territories over which they trade. Martin & Co 
is a pioneering brand, which has grown 
through cold-starting in green field locations 
on a fully national basis and this will continue.
Progress during 2015 Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 11
• Ability to find, recruit and retain skilled 
franchisees
• Withdrawal of funding support by retail banks
• Market conditions for house sales 
• Financial services strategy is new and untested
• Competition for lettings business has 
intensified because of increased agency 
activity versus reduced numbers of lettings 
transactions (as a function of lengthening 
average tenancy terms)
• Reputational risks to our brands
• Failure to exploit online technology as quickly 
as our competitors
Principal risks KPIs
Franchise enquiries 
(Q4 2015 vs Q4 2014)
(% of total MSF 2014 vs 2015)
(Dec 2015 -Dec 2014)
(2015 vs 2014)
(% of total MSF 2014 vs 2015)
(Twitter: Dec 2015 - Dec 2014)
Estate agency MSF
Visits to our websites
Offices opened
Financial services MSF
Followers on social media
+174%
10% ➧ 23%
+135%
+116% 
13 
0.22% ➧ 0.91%
+25%
see page 14 for 
more information
National Network Conference 2016 MartinCo PLC Annual Report and Accounts 2015 12
30 years in the  
private rented  
sector.
Chief Executive’s statement
As a group, most of our 
income is derived from 
letting and managing 
properties in the private 
rented sector.
The sector has been resurgent over the last 
30 years, income from tenanted properties is 
predictable, seasonal fluctuations in letting 
transactions are modest and well 
understood by the management, and 
lettings, unlike house sales, has not suffered 
from economic cycles.
The private rented sector has been very 
effective in providing housing solutions for 
those unable to buy a home, and as such the 
sector has doubled in the last 20 years, 
organically and with no government support. 
Individuals have invested in the buy-to-let 
sector out of their own pocket, made more 
attractive by allowing the interest on a 
buy-to-let loan to be offset as an expense 
against income.
In fact independent research, which we 
commissioned and published in 2015 to 
coincide with the pension reforms launch on 
1 April 2015, highlighted that a wholly cash 
funded investment in a buy-to-let property 
over the last decade would have 
outperformed the same cash sum invested 
in stocks and shares by at least 13 times 
(max. 26 times).
According to recent research** the equity in 
mortgaged buy-to-let properties now 
exceeds the equity in mortgaged owner 
occupied properties. Debt is falling in the 
buy-to-let sector and more properties are 
owned mortgage-free. We believed that 
pressure on the UK housing stock will mean 
that buy-to-let investment remains an 
attractive proposition for older people who 
have equity to draw against or pension pots 
to invest.
During 2015 we let more properties than 
ever before and we ended the year 
managing over 45,000 tenanted homes, 
which means collecting and accounting for 
£34m in rents every month.
We are delighted with the four property 
brands we acquired in October 2014. The 
brands of Parkers, CJ Hole, Whitegates and 
Ellis & Co all have great heritage and 
pedigree and already enjoy strong 
reputations with the public for both estate 
agency and lettings.
The first part of 2015 was substantially 
taken up with the integration of Xperience 
into our Group. Xperience operated out of 
two headquarter buildings, one in Leeds and 
one in Theale. We never occupied the Leeds 
building and closed and disposed of the 
lease at Theale. Head office headcount has 
risen slightly by the end of 2015 to 39 staff, 
but this is in the context of managing a 
network of 287 offices; at the time of the 
IPO in December 2013 our network was 190 
offices and a headcount of 31.
I am delighted to report that all the costs of 
the re-organisation and assimilation of 
Xperience into our Group have been incurred 
and we enter 2016 with a lowered cost base. 
The vast majority of our franchisees have 
been franchisees for 5 years or more.  
This means that their initial bank loans  
will have been paid down and these 
businesses should be very well placed to 
raise new funds to acquire competitors. We 
intend to put more energy into this activity 
during 2016.
We will be rolling out a financial services 
strategy to all our offices during 2016.  
The proposition will be a “whole of market” 
selection of mortgages and fee-free advice. 
Life Assurance and General Insurance 
products will be tied to Legal & General. 
The benefits of this strategy will be 
increased income from financial services 
(currently just 1% of MSF) and greater 
understanding of our customers.
Enquiries from potential franchisees have 
been on a steep rise during the final quarter 
of 2015. We achieved our highest number of 
new recruits in three years and opened 13 
new offices. We remain very positive about 
prospects for the private rental sector and 
with a strong balance sheet, five great 
property brands and experienced 
management in place we achieved our best 
year yet in 2015 and aim to surpass this by  
a substantial margin in 2016.
Ian Wilson
Chief Executive Officer
** Savills Research Feb 2016 Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 13
Financial review
Acquisitions strategy 
generates significant 
increase in profits.
Our multi-franchise 
strategy has delivered 
improvements in 
operating margin, 
EBITDA and PBT.
In what turned out to be a flat housing 
market in 2015 with 1.2m transactions* 
(2014: 1.2m transactions) our focus has been 
on the integration of the acquired brands, 
realising economies of scale and developing 
our offerings across five brands.
Revenue
Group revenue for the financial year to 31 
December 2015 was £7.1m (2014: £5.2m), an 
increase of £1.9m (38%) over the prior year. 
The incorporation of a full year’s revenue 
from the Xperience acquisition in October 
2014 contributed £1.7m of this increase.
Management Service Fees represented 87% 
of Group revenue with the remainder being 
franchise sales and ancillary services to 
support MSF generation.
Management Service Fees from the Martin & 
Co offices increased by £0.4m (11%) in the 
year. However, franchise sales activities, 
whilst on a par with 2014, delivered lower 
revenues in 2015 of £0.1m and we sold our 
Saltaire portfolio in January 2015 which had 
delivered £0.1m of revenue in 2014.
Operating profit
Operating profit before exceptional items 
increased from £2.0m to £2.9m (42%) and  
the margin increased from 39% to 41%.
Administration expenses, including the  
first full year of the Xperience acquisition, 
increased by £1.1m (£0.2m of the increase 
was attributable to amortisation). Cost 
savings of £0.4m were realised.
EBITDA
EBITDA before exceptional costs for 2015 
was £3.2m (2014: £2.1m) an increase of 
£1.1m (50%) over the prior year.
Exceptional items
The exceptional costs for 2015 are  
£0.2m (2014: £0.2m) and all relate to 
redundancy payments following the  
Group’s re-organisation (2014: Xperience  
acquisition costs).
Profit before tax
The profit before tax was £2.7m for 2015, an 
increase of £0.8m (42%) over the prior year.
Taxation
The effective rate of corporation tax for the 
year was 20.25% (2014: 21.5%). The total tax 
charge for 2015 is £539k (2014: £416k).
Earnings per share
Earnings per share for the year was 9.8p 
(2014: 6.9p), an increase of 42%. The profit 
attributable to owners increased to £2.2m 
(2014: £1.5m).
Dividends
The Board is proposing a final dividend of 
4.1p per share for 2015 which, together with 
the interim dividend of 1.8p per share paid to 
shareholders on 30 September 2015, equates 
to a total dividend for the financial year of 
5.9p (2014: 4.0p) an increase of 47.5%.
Cash flow
The Group is highly cash gererative.
The net cash inflow from operating activities 
in 2015 was £2.4m (2014: £1.5m) before 
exceptional costs of £0.2m (2014: £0.2m) as 
the newly expanded Group continues to 
generate strong operating cash inflows.
The net cash inflow from investing activities 
was £0.3m (2014: outflow £5.0m) due 
principally to the disposal of the Saltaire 
portfolio (2014: Xperience acquisition).
Loan repayments totaling £0.5m plus 
interest payments of £0.1m were made on 
the Santander UK plc loan during 2015. 
Dividend payments were £1m in 2015.
Liquidity
The Group had cash balances of £4.3m at 
31 December 2015 (2014: £3.4m).
Financial position
The Group is strongly cash generative which, 
together with the undrawn facility from 
Santander UK plc of £3.0m, puts it in a strong 
position to fulfil its strategic plan.
David Raggett
Chief Financial Officer
* HMRC UK Property Transaction Statistics  
23 February 2016
2015 2014
 
Continuing
£m
Discontinued
£m
Total
£m
Continuing
£m
Discontinued
£m
Total
£m
Revenue 7.1 – 7.1 5.2 0.2 5.4
Admin expenses 3.9 – 3.9 2.8 0.2 3.0
Operating profit* 2.9 – 2.9 2.0 – 2.0
Operating profit 2.7 – 2.7 1.9 – 1.9
Profit before tax* 2.9 – 2.9 2.1 – 2.1
Profit before tax 2.7 – 2.7 1.9 – 1.9
EBITDA*  3.2 – 3.2 2.1 – 2.1
* before exceptional costs MartinCo PLC Annual Report and Accounts 2015 14
Effective management with  
regular reviews, evaluations 
and prioritising of risks.
Principal risks
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.
Risk area
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.
Market conditions
The residential property market is influenced by economic and political 
factors on a regular basis. This can cause short-term changes in the 
behaviour of our clients and long term changes in the way our  
sector develops.
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.
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.
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 20,000 lettings agents in the UK, with 
varying levels of service and standards. Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 15
Potential impact Mitigation
• Five Business Development Managers to support and develop 
franchisee’s growth.
• Experienced and long-serving management team with a track record 
of growth.
• Comprehensive training made available to franchisees.
• Reduced growth in Management Service Fees.
•  Reduced market share and representation.
• 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.
• 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.
• Focus of senior management team on finding and  
completing acquisitions.
• There is estimated to be between 14,500 and 27,000 letting agents in 
the UK (the higher figure including professional landlords managing 
their own portfolio) all with potential portfolios to buy, so there 
should be sufficient supply.
• Contracted with a specialist provider to assist in acquiring portfolios.
• Supportive UK banks.
• 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.
• Experienced franchise recruitment department.
• Strong demand for resales.
• A strong offering and one of the lowest rates of Management Service 
Fees amongst our competitors.
• Supportive UK banks.
• 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.
• 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 Business Development Managers to monitor 
and enforce brand compliance.
• All franchisees are required to be members of trade bodies and the 
Property Ombudsman Service.
• 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. MartinCo PLC Annual Report and Accounts 2015 16
The Board is committed  
to the development 
of the business in 
a socially responsible way.
Corporate social responsibility
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 39 employees at  
31 December 2015 including 8 who are  
field based around the UK, and an executive 
team of 6 (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. Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 17
The table below demonstrates the departments and duties conducted by staff at head office:
Franchising
• 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.
Franchise support
• 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.
IT
• Build and maintain the websites.
• Franchisee operating software development.
• Customer database management.
• Application and systems integration.
• Franchisee reporting of business 
information.
• Billing systems.
Brand standards
• Audit and compliance.
• Protect the brands’ 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.
Finance
• Manage the day-to-day 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.
• Franchise audits.
Helpdesk support
• Support the use of Jupix across the Martin & 
Co network.
• Support the use of Brief Your Market ‘‘BYM'’ 
throughout the brands.
• 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 other systems  
and thereby improved management of  
their businesses.
Training
• 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
• Recruitment and talent acquisition for the 
offices in the network and head office.
• Supporting and advising the franchise 
owners through the recruitment life cycle.
• Ensure the highest calibre individuals are 
recruited.
Marketing
• 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. MartinCo PLC Annual Report and Accounts 2015 18
02
04
03
05
01
Board of directors Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 19
01 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.
02 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.
03 David Raggett 
Chief Financial Officer
Since qualifying with PwC as a Chartered 
Accountant David 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 joined 
the Group in February 2013.
04 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.
05 Phil Crooks
Non-Executive Director
Phil Crooks is a Chartered Accountant and 
currently a partner in the Forensic and 
Investigations Services at Grant Thornton UK 
LLP with more than 30 years’ experience in 
accounting, auditing and investigations. He 
was previously UK Head of Audit for 6 years 
and a member of the International Assurance 
Advisory Board at Grant Thornton. Previously 
he spent 15 years at Price Waterhouse. Phil 
has extensive audit and advisory experience, 
addressing financial reporting and accounting 
issues and has worked with a wide range of 
listed and private international companies. 
Phil was appointed as a Non-Executive 
Director of MartinCo PLC’s Board and Chair of 
its Audit and Risk Committee in May 2015. MartinCo PLC Annual Report and Accounts 2015 20
Directors’ report
The Directors present their Annual Report and audited financial statements for the financial year ended 31 December 2015. Information that 
would normally be presented in the Director’s report has been presented in the Company’s Strategic report in accordance with S414C(11) of 
the Companies Act 2006.
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 £2.9m in the financial year as compared to  
£2.1m for the prior year. The results are shown in the Consolidated Statement of Comprehensive Income on page 27. A full review of the 
Group’s business is included in the Strategic Report on pages 6 to 17.
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 redundancy costs following acquisitions in 2014 and amounted to £0.2m (2014: £0.2m  
acquisition costs). The profit before tax for the year was £2.7m (2014: £1.9m).
Future developments
The future developments of the Group are included in the Strategic Report on pages 6 to 17.
Dividends
The Group paid a final dividend for the financial year ended 31 December 2014 of 2.7p per share on 8 May 2014 and an interim dividend for 
the financial year ended 31 December 2015 of 1.8p per share on 30 September 2015.
The Board recommends a final dividend for the financial year ended 31 December 2015 of 4.1p per share to be paid on 12 May 2016 to all 
shareholders on the register at the close of business on 22 April 2016 subject to shareholders approval on 10 May 2016 (2014: 2.7p). 
Directors
The Directors shown below have held office throughout the year unless otherwise stated:
R W Martin
I Wilson
D A Raggett
P M Latham
P J Crooks – appointed 12 May 2015
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. The Group has 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 £3m remains unutilised and available to the Group at 
31 December 2015 for development and expansion of operations.
For these reasons, the Directors continue to adopt the going concern basis in preparing the financial statements. Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 21
Auditor
RSM UK Audit LLP (formerly 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 RSM 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.
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:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRSs adopted by the EU;
• 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
4 April 2016 MartinCo PLC Annual Report and Accounts 2015 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 
Phil Crooks.
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 
£325k (2014: £300k).
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 £182k (2014: £112k).
Pension
There were no contributions made to Directors’ pensions in the year (2014: £nil).
Share options
No options over shares of the Company were granted to Directors in 2015 (2014: 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
Phil Crooks 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. Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 23
Taxable benefits
The Directors are not entitled to taxable benefits such as a company car, car allowance or private medical insurance.
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 2015
£’000
Total 2014
£’000
Executive Directors:
Richard Martin 40 — 40 40
Ian Wilson 120 134 254 204
David Raggett 100 48 148 128
260 182 442 372
Non-Executive Directors:
Paul Latham 40 — 40 40
Phil Crooks 25 — 25 —
65 — 65 40
Total remuneration 325 182 507 412
Appointment
Phil Crooks was appointed to the Board as Non-Executive Director in May 2015. His fees are paid to Grant Thornton LLP. No Director 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.
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
4 April 2016 MartinCo PLC Annual Report and Accounts 2015 24
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 meets 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 & risk and remuneration committees. During the year a second Non-Executive Director was appointed as it 
strives towards congruence with the Corporate Governance Guidelines.
The Board
The Board comprises the Chairman, 2 independent Non-Executive Directors and 2 Executive Directors who are the Chief Executive Officer 
and the Chief Financial Officer of the Company.
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 Executive Directors.
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 advisers to keep up to date with 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 has two Non-Executive Directors, Paul Latham and Phil Crooks, who provide an important contribution to its strategic 
development.
Board Committees
The Board has delegated specific responsibilities to the Audit & Risk 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 Phil Crooks. 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 to 23. Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 25
Audit & Risk Committee
Phil Crooks took over the Chair of the Audit & Risk Committee upon his appointment as a Non-Executive Director in May 2015. Paul Latham 
continued as a member. It met 4 times in 2015 and will continue to meet at least twice a year. 
The Audit & Risk Committee has the primary responsibility for ensuring that the financial performance of the Group is properly measured, 
reported on and monitored. In the financial year ended 31 December 2015 it 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;
• the appropriateness of the Group’s accounting policies;
• the potential impact on the Group’s financial statements of certain events and risks;
• 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;
• internal assurance reporting; 
• non-audit services;
• the dividend policy;
• the processes for identifying the risks to the business and managing those risks; and
• its terms of reference.
The Audit & Risk Committee makes recommendations to the Board on the appointment, re-appointment and removal of the external auditor. 
In making the recommendation on the annual re-appointment of the external auditor, it monitors the relationship to assess independence, 
objectivity and cost effectiveness 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 at 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 & Risk Committee’s Chairman meets the external auditors to discuss matters relating to the 
Committee’s remit and any issues arising from the audit. 
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 Board 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. MartinCo PLC Annual Report and Accounts 2015 26
Independent auditor’s report to the members of 
MartinCo PLC 
We have audited the Group and Parent Company financial statements (“the financial statements”) on pages 27 to 55. The financial reporting 
framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (‘‘IFRSs'’) 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 Directors’ Responsibilities Statement 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 2015 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 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 matter 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;
• 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 RSM UK Audit LLP (formerly Baker Tilly UK Audit LLP), Statutory Auditor 
Chartered Accountants
25 Farringdon Street
London, EC4A 4AB
4 April 2016 Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 27
Consolidated statement of comprehensive income
for the year ended 31 December 2015
Notes
2015
£
2014
£
Continuing operations
Revenue 7 7,130,967 5,176,174
Cost of sales (356,844) (354,145)
Gross profit 6,774,123 4,822,029
Administrative expenses 8 (3,880,629) (2,789,131)
Operating profit before exceptional items 2,893,494 2,032,898
Exceptional items 10 (166,069) (158,741)
Operating profit 11 2,727,425 1,874,157
Finance income 12 50,914 51,140
Finance costs 12 (85,572) (22,295)
Profit before income tax expense 2,692,767 1,903,002
Income tax expense 13 (538,667) (411,541)
Profit and total comprehensive income for the year from continuing operations 2,154,100 1,491,461
Discontinued operations
Profit and total comprehensive income for the year from discontinued operations 29 – 18,565
Profit and total comprehensive income for the year attributable to owners 2,154,100 1,510,026
Earnings per share – Continuing 14 9.8p 6.9p
Earnings per share – Discontinued 14 0.0p 0.0p
Total Earnings per share 14 9.8p 6.9p
Diluted Earnings per share – Continuing 14 9.4p 6.6p
Diluted Earnings per share – Discontinued 14 0.0p 0.0p
Total Diluted Earnings per share 14 9.4p 6.6p MartinCo PLC Annual Report and Accounts 2015 28
Consolidated statement of financial position
31 December 2015
Notes
2015
£
2014
£
Assets
Non-current assets
Intangible assets 17 6,014,336 6,270,173
Property, plant and equipment 18 140,241 92,158
6,154,577 6,362,331
Current assets
Trade and other receivables 20 912,183 965,319
Cash and cash equivalents 4,346,054 3,367,259
5,258,237 4,332,578
Assets of a disposal group classified as held for sale 29 – 254,846
5,258,237 4,587,424
Total assets 11,412,814 10,949,755
Equity
Shareholders’ equity
Called up share capital 21 220,000 220,000
Share premium 22 3,790,000 3,790,000
Other reserves 23 134,560 (61,406)
Retained earnings 3,492,253 2,328,153
Total equity attributable to the owners liabilities
Non-current liabilities
Borrowings 24
7,636,813
1,500,000
6,276,747
2,000,000
Deferred tax 27 558,001 791,136
Current liabilities 2,058,001 2,791,136
Borrowings 24 500,000 500,000
Trade and other payables 25 916,924 1,046,530
Tax payable 301,076 335,342
1,718,000 1,881,872
Total liabilities 3,776,001 4,673,008
Total equity and liabilities 11,412,814 10,949,755
The financial statements were approved and authorised for issue by the Board of Directors on 4 April 2016 and were signed on its behalf by:
David Raggett
Chief Financial Officer Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 29
Company statement of financial position
31 December 2015
(Company No: 08721920)
Notes
2015
£
2014
£
Assets
Non-current assets
Investments 19 24,100,284 24,100,284
Deferred tax asset 27 314,360 118,394
24,414,644 24,218,678
Current assets
Trade and other receivables 20 201,040 344,496
Cash and cash equivalents 195,577 13,469
396,617 357,965
Total assets 24,811,261 24,576,643
Equity
Shareholders’ equity
Called up share capital 21 220,000 220,000
Share premium 22 3,790,000 3,790,000
Other reserves 23 18,124,460 17,928,494
Retained earnings 1,111 35,466
Total equity 22,135,571 21,973,960
Liabilities
Non-current liabilities
Borrowings 24 1,500,000 2,000,000
Current liabilities
Borrowings 24 500,000 500,000
Trade and other payables 25 675,690 102,683
1,175,690 602,683
Total liabilities 2,675,690 2,602,683
Total equity and liabilities 24,811,261 24,576,643
The financial statements were approved and authorised for issue by the Board of Directors on 4 April 2016 and were signed on its behalf by:
David Raggett
Chief Financial Officer MartinCo PLC Annual Report and Accounts 2015 30
Consolidated statement of changes in equity
for the year ended 31 December 2015
Called up share
capital
£
Retained
earnings
£
Share 
 premium
£
Other 
 reserves
£
Total 
 equity
£
Balance at 1 January 2014 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
Profit and total comprehensive income – 2,154,100 – – 2,154,100
Dividends – (990,000) – – (990,000)
Deferred tax on share-based payments – – – 195,966 195,966
Total transactions with owners – (990,000) – 195,966 (794,034)
Balance at 31 December 2015 220,000 3,492,253 3,790,000 134,560 7,636,813 Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 31
Company statement of changes in equity
for the year ended 31 December 2015
Called up share
capital
£
Retained  
earnings
£
Share  
premium
£
Other  
reserves
£
Total  
equity
£
Balance as at 1 January 2014 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
Profit and total comprehensive income – 955,645 – – 955,645
Dividends – (990,000) – – (990,000)
Deferred tax on share-based payments – – – 195,966 195,966
Total transactions with owners – (990,000) – 195,966 (794,034)
Balance as at 31 December 2015 220,000 1,111 3,790,000 18,124,460 22,135,571 MartinCo PLC Annual Report and Accounts 2015 32
Consolidated statement of cash flows
for the year ended 31 December 2015
Notes
2015
£
2014
£
Cash flows from operating activities
Cash generated from operations 1 2,871,051 1,937,611
Interest paid (94,064) (203)
Tax paid (616,402) (609,292)
Net cash from operating activities 2,160,585 1,328,116
Cash flows from investing activities
Purchase of subsidiary undertakings net of cash acquired 2 – (5,065,902)
Purchase of intangible assets – (326,317)
Purchase of tangible assets (67,199) (17,520)
Proceeds from sale of intangible assets 324,495 341,576
Proceeds from sale of tangible assets – 24,646
Interest received 50,914 51,140
Net cash generated from/(used in) investing activities 308,210 (4,992,377)
Cash flows from financing activities
Repayment of bank loan
Drawdown of bank loan
(500,000)
–
–
2,500,000
Equity dividends paid (990,000) (286,000)
Net cash (used in)/generated from financing activities (1,490,000) 2,214,000
Increase/(Decrease) in cash and cash equivalents 978,795 (1,450,261)
Cash and cash equivalents at beginning of year 3,367,259 4,817,520
Cash and cash equivalents at end of year 4,346,054 3,367,259 Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 33
Notes to the consolidated statement of cash flows
for the year ended 31 December 2015
1. Reconciliation of profit before income tax to cash generated from operations
2015
£
2014
£
Cash flows from operating activities
Profit before income tax 2,692,767 1,926,502
Depreciation and amortisation charges 259,607 74,087
Loss/(Profit) on disposal of intangible assets 14,194 (4,007)
Finance costs 85,572 22,295
Finance income (50,914) (51,140)
Operating cash flow before changes in working capital 3,001,226 1,967,737
Increase in trade and other receivables (15,363) (107,279)
(Decrease)/Increase in trade and other payables (114,812) 77,153
Cash generated from operations 2,871,051 1,937,611
2015
£
2014
£
Continuing operations
Profit before tax 2,692,767 1,903,002
Adjustments for:
 Depreciation of property, plant and equipment 19,116 13,283
 Loss on disposal of intangible assets 14,194 –
 Amortisation 240,491 60,804
 Finance costs 85,572 22,295
 Finance income (50,914) (51,140)
Changes in working capital
 Increase in trade and other receivables (15,363) (117,941)
 (Decrease)/Increase in trade and other payables (114,812) 125,261
Cash inflow from continuing operations 2,871,051 1,955,564
Discontinued operations
Profit before tax – 23,500
Adjustments for:
 Profit on disposal of intangible assets – (4,007)
Changes in working capital:
 Decrease in trade and other receivables – 10,662
 Decrease in trade and other payables – (48,108)
Cash outflow from discontinued operations – (17,953)
Cash generated from operations 2,871,051 1,937,611
2. Purchase of Subsidiary undertakings net of cash acquired
In the prior 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 MartinCo PLC Annual Report and Accounts 2015 34
Company statement of cash flows
for the year ended 31 December 2015
Notes
2015
£
2014
£
Cash flows from operating activities
Cash generated from operations 1 381,040 (901,396)
Interest paid (94,064) (203)
Net cash from operating activities 286,976 (901,599)
Cash flows from investing activities
Investment in subsidiary companies – (6,110,284)
Interest received 5,132 11,676
Equity dividends received 1,380,000 1,450,000
Net cash generated from/(used in) investing activities 1,385,132 (4,648,608)
Cash flows from financing activities
Repayment of bank loan (500,000) –
Drawdown of bank loan – 2,500,000
Equity dividend paid (990,000) (286,000)
Net cash (used in)/generated from financing activities (1,490,000) 2,214,000
Increase/(Decrease) in cash and cash equivalents 182,108 (3,336,207)
Cash and cash equivalents at beginning of year 13,469 3,349,676
Cash and cash equivalents at end of year 195,577 13,469 Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 35
Notes to the Company statement of cash flows
for the year ended 31 December 2015
1. Reconciliation of loss before income tax to cash generated from operations
2015
£
2014
£
Cash flows from operating activities
Profit/(Loss) before income tax 849,556 997,783
Finance costs 85,572 22,295
Finance income (5,132) (11,676)
Equity dividend received (1,380,000) (1,450,000)
Operating cash flow before changes in working capital (450,004) (441,598)
Decrease/(Increase) in trade and other receivables 249,545 (244,970)
Increase/(Decrease) in trade and other payables 581,499 (214,828)
Cash generated from/(used in) operations 381,040 (901,396) MartinCo PLC Annual Report and Accounts 2015 36
Notes to the consolidated financial statements
for the year ended 31 December 2015
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 and listed on AIM. 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) Limited 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
The following relevant new standards, amendments to standards and interpretations have been issued, but are not effective for the financial 
year beginning on 1 January 2015, as adopted by the European Union, and have not been early adopted:
Standard Key requirements Effective date as adopted by the EU
Amendments to IAS 16 and IAS 38 Clarifies acceptable methods of depreciation and amortisation. 1 January 2016
Amendments to IAS 1 Disclosure amendments 1 January 2016
Amendments to IFRS 5 Non-current assets held for sale and discontinued operations 1 January 2016
Amendments to IFRS 7 Disclosure amendments 1 January 2016
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the 
financial statements of the Group when the relevant standards and interpretations come into effect. The principal accounting policies 
applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years 
presented, unless otherwise stated.
The following standards have been issued by the IASB but have not yet been adopted by the EU:
Standard Key requirements Effective date as adopted by the EU
IFRS 9 Financial Instruments 1 January 2018
IFRS 15 Revenue from contracts with customers 1 January 2018
IFRS 16 Leases 1 January 2018
While the above standards have not been adopted by the EU the company is currently assessing their impact. Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 37
3. Basis of consolidation
The Group financial statements include those of the parent company and its subsidiaries, drawn up to 31 December 2015. 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.
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.
4. Significant accounting policies
Revenue recognition
Revenue represents income, net of VAT, from the sale of franchise agreements, resale fees, 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. Resale fees are recognised in the month that a contract for the resale of a franchise is signed. Management service 
fees are recognised on a monthly basis, with other fees recognised when the training and support is provided to the franchisee.
Operating profit
Profit from operations is stated before finance income, finance costs and tax expense.
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 re-measured 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 re-
measurement 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. MartinCo PLC Annual Report and Accounts 2015 38
4. Significant accounting policies continued
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 re-measured 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.
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.
Notes to the consolidated financial statements
for the year ended 31 December 2015 continued Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 39
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
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 be 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.
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 of the 
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. MartinCo PLC Annual Report and Accounts 2015 40
4. Significant accounting policies continued
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 intangibles
The Group is required to test, where indicators of impairment exist, whether intangibles assets have 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.
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 prior year were £4.6m as detailed further in note 17.
Notes to the consolidated financial statements
for the year ended 31 December 2015 continued Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 41
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. At 
31 December 2015 the balance of assets held for sale was £nil (2014: £254,846).
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:
2015
£
2014
£
Management Service Fee 6,190,911 4,048,575
Franchise sales 316,847 423,779
Other 623,209 703,820
7,130,967 5,176,174
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.
Other revenue relates to training and ongoing support to franchisees.
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:
2015
£
2014
£
Continuing operations:
Employee costs (see note 9) 2,353,365 1,852,466
Property costs 179,845 67,773
General administrative costs 1,106,928 808,088
Amortisation 240,491 60,804
3,880,629 2,789,131
9. Employees and Directors
Average numbers of employees (including Directors), employed during the year:
2015 2014
Continuing operations:
Administration 30 29
Management 9 7
39 36 MartinCo PLC Annual Report and Accounts 2015 42
9. Employees and Directors continued
Employee costs (including Directors) during the year amounted to:
2015
£
2014
£
Continuing operations:
Wages and salaries 2,107,274 1,676,377
Social security costs 246,091 176,089
2,353,365 1,852,466
Exceptional costs arising through redundancy 166,069 –
Key management personnel are defined as Directors and executives of the Group. Details of the remuneration of the key management 
personnel are shown below:
2015
£
2014
£
Wages and salaries 1,014,249 694,911
Social security costs 126,817 69,937
1,141,066 764,848
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 redundancy costs relating to the acquisition of Xperience Franchising Limited and Whitegates Estate Agency 
Limited. In the prior year, exceptional items represented the acquisition costs for Xperience Franchising Limited and Whitegates Estate 
Agency Limited.
11. Operating profit
2015
£
2014
£
The operating profit from continuing operations is stated after charging:
Depreciation 19,166 13,283
Amortisation 240,491 60,804
Loss on disposal of intangible assets 14,194 –
Auditor’s remuneration (see below) 49,250 123,863
Staff costs (note 9) 2,519,434 1,852,466
Operating lease expenditure 65,634 47,311
Audit services
– Audit of the Company and consolidated accounts 21,000 18,500
– Audit the Subsidiaries pursuant to legislation 24,000 45,000
– Audit related assurance services 4,250 –
Tax services
– advisory compliance services – 2,500
– advisory services – 10,363
Other non-audit services – advisory services – 47,500
49,250 123,863
Comprising:
Audit services 49,250 63,500
Non-audit services – 60,363
49,250 123,863
Notes to the consolidated financial statements
for the year ended 31 December 2015 continued Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 43
12. Finance income and costs
2015
£
2014
£
Finance income:
Bank interest 33,742 38,781
Other similar income 17,172 12,359
50,914 51,140
2015
£
2014
£
Finance costs: 
Bank interest 85,572 22,295
85,572 22,295
13. Taxation
2015
£
2014
£
Current tax 575,836 411,541
Deferred tax credit (37,169) –
Total tax charge in statement of comprehensive income 538,667 411,541
The tax assessed for the period is lower than the standard rate of corporation tax in the UK. The difference is explained below:
2015
£
2014
£
Profit on ordinary activities before tax 2,692,767 1,903,002
Profit on ordinary activities multiplied by the effective standard rate of corporation tax in the UK of 20.25% 
(2014: 21.5%) 545,285 409,145
Effects of:
Expenses not deductible for tax purposes 18,201 19,325
Depreciation in excess of capital allowances (26,693) (18,803)
Losses carried forward 1,874 1,874
Total tax charge in respect of continuing activities 538,667 411,541
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.
2015
£
2014
£
Earnings per ordinary share
Profit from continuing operations 2,154,100 1,491,461
Profit from discontinued operations – 18,565
2,154,100 1,510,026
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.
2015
Number
2014
Number
Weighted average number of shares
Number used in basic earnings per share 22,000,000 22,000,000
Dilutive effect of share options on ordinary shares 848,442 832,818
Number used in diluted earnings per share 22,848,442 22,832,818 MartinCo PLC Annual Report and Accounts 2015 44
15. Profit 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 £955,645 (2014: £1,072,042).
16. Dividends
2015
£
2014
£
Interim and Final dividend (ordinary shares of £0.01 each) 990,000 286,000
Dividend per share 4.5p 1.3p
The dividend per share is calculated using the number of shares in issue at the year end.
17. Intangible assets
Master Franchise
Agreement
£
Brands
£
Customer Lists
£
Goodwill
£
Total
£
Cost
Brought forward 1 January 2014 – – – 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
Disposals – – (19,267) – (19,267)
Carried forward 31 December 2015 4,075,085 571,000 261,254 1,388,217 6,295,556
Amortisation
Brought forward 1 January 2014 – – – – –
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
Charge for year 163,003 – 77,488 – 240,491
Eliminated on disposals – – (3,921) – (3,921)
Carried forward 31 December 2015 190,170 – 91,050 – 281,220
Net book value
At 31 December 2015 3,884,915 571,000 170,204 1,388,217 6,014,336
At 31 December 2014 4,047,918 571,000 263,038 1,388,217 6,270,173
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 carrying value of the goodwill 
arising on the acquisitions of Xperience Franchising Limited (“XFL”) and Whitegates Estate Agency Limited (“WEAL”) is based on revenue and 
operating margin projections through to 31 December 2017. Thereafter projected revenue growth was assumed to decline linearly to a 
long-term growth rate of 2.25%. 
Notes to the consolidated financial statements
for the year ended 31 December 2015 continued Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 45
The cash flows 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 16.8% for XFL and 17.8% 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 master franchise agreements are being amortised over 25 years. The period of amortisation remaining at 31 December 2015 was 
23 years 10 months. 
The brand names under which XFL trades of C J Hole, Parkers and Ellis & Co have been in existence for between 68 years and 161 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 forecast growth in current revenues using market data through to 31 December 2017. 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
2015
£
2014
£
2015
£
2014
£
Xperience Franchising Limited 912,716 912,716 571,000 571,000
Whitegates Estate Agency Limited 400,501 400,501 – –
Martin & Co (UK) Ltd 75,000 75,000 – –
1,388,217 1,388,217 571,000 571,000
Company
No goodwill or customer lists exist in the parent company. MartinCo PLC Annual Report and Accounts 2015 46
18. Property, plant and equipment
Group
Leased
assets
£
Office
equipment
£
Fixtures &
fittings
£
Total
£
Cost
Brought forward 1 January 2014 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
Additions – 35,798 31,401 67,199
Carried forward 31 December 2015 37,034 88,667 150,274 275,975
Depreciation
Brought forward 1 January 2014 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
Charge for year 3,704 8,897 6,515 19,116
Carried forward 31 December 2015 14,466 24,845 96,423 135,734
Net book value
At 31 December 2015 22,568 63,822 53,851 140,241
At 31 December 2014 26,272 36,921 28,965 92,158
19. Investments
Company
Shares in Group
undertakings 
£
Cost
At 1 January 2014 17,990,000
Additions 6,110,284
At 31 December 2014 24,100,284
At 31 December 2015 24,100,284
Net book value
At 31 December 2015 24,100,284
At 31 December 2014 24,100,284
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, Xperience Franchising Limited and Whitegates Estate Agency Limited are exempt from the requirements of the 
Companies Act 2006 relating to the audit of accounts under section 479A of the Companies Act 2006.
Notes to the consolidated financial statements
for the year ended 31 December 2015 continued Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 47
At the year-end MartinCo PLC has guaranteed all liabilities of Martin & Co (UK) Limited, Xperience Franchising Limited and Whitegates Estate 
Agency 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 and it has been determined that the value of the discounted future 
cash inflows exceeds the carrying value. Thus, there is no impairment charge.
The Company’s investments at the balance sheet date in the share capital of companies include the following:
Subsidiaries
Share class % ownership and voting rights Country of incorporation
Martin & Co (UK) Limited Ordinary 100 England
Xperience Franchising Limited Ordinary 100 England
Whitegates Estate Agency Limited Ordinary 100 England
20. Trade and other receivables
Group Company
2015
£
2014
£
2015
£
2014
£
Trade receivables 91,856 55,536 – –
Loans to franchisees 174,848 190,333 – –
Other receivables 52,945 167,263 5,001 24,926
Amounts due from group undertakings – – – 239,483
Prepayments and accrued income 592,534 552,187 15,691 5,829
Tax receivable – – 180,348 74,258
912,183 965,319 201,040 344,496
Trade receivables are stated net of bad debt provisions of £37,678 (2014: £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:
2015
£
2014
£
Group
Not more than 3 months 77,606 54,620
More than 3 months but not more than 6 months 13,666 –
More than 6 months but not more than 1 year 584 916
91,856 55,356
An 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. A loan to a franchisee for £147,000 is secured by way of 
a fixed and floating charge over their assets. MartinCo PLC Annual Report and Accounts 2015 48
21. Called up share capital
2015 2014
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
There has been no movement in shares during the year or preceding year.
22. Share premium
There have been no movements in share premium during the current and preceding year.
23. Other reserves
Merger reserve
£
Share-based
payment reserve
£
Total
£
Group
1 January 2014 (179,800) 40,874 (138,926)
Deferred tax on share options – 77,520 77,520
1 January 2015 (179,800) 118,394 (61,406)
Deferred tax on share options – 195,966 195,966
31 December 2015 (179,800) 314,360 134,560
Company
1 January 2014 17,810,100 40,874 17,850,974
Deferred tax on share options – 77,520 77,520
1 January 2015 17,810,100 118,394 17,928,494
Deferred tax on share options – 195,966 195,966
31 December 2015 17,810,100 314,360 18,124,460
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 remaining is £(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 2015 continued Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 49
24. Borrowings
Group Company
2015
£
2014
£
2015
£
2014
£
Repayable within 1 year:
Bank loan (term loan) 500,000 500,000 500,000 500,000
Repayable in more than 1 year:
Bank loan (term loan) 1,500,000 2,000,000 1,500,000 2,000,000
Bank loans due after more than 1 year are repayable as follows:
Between 1 and 2 years 500,000 500,000 500,000 500,000
Between 2 and 5 years 1,000,000 1,500,000 1,000,000 1,500,000
The term loan of £2m (2014: £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 2015 the unutilised amount of the 
facility was £3m (2014: £2.5m).
25. Trade and other payables
Group Company
2015
£
2014
£
2015
£
2014
£
Trade payables 84,364 178,673 24,739 29,809
Other taxes and social security 391,889 340,534 9,343 –
Other payables 42,288 23,571 19,702 –
Accruals and deferred income 398,383 503,752 138,728 72,874
Amounts owed to group undertakings – – 483,178 –
916,924 1,046,530 675,690 102,683
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
2015
£
2014
£
Group
Within 1 year 54,400 44,820
Between 1 and 5 years 190,200 17,000
244,600 61,820
The lease arrangements above consist of those relating to land and buildings and office equipment.
Company
No leases exist in the parent company. MartinCo PLC Annual Report and Accounts 2015 50
27. Deferred tax asset/(liability)
Group Company
2015
£
2014
£
2015
£
2014
£
Balance at beginning of year (791,136) 34,654 118,394 40,874
Movement during the year
 Statement of changes in equity 195,966 77,520 195,966 77,520
 Statement of comprehensive income 37,169 – – –
 Acquisitions – (903,310) – –
Balance at end of year (558,001) (791,136) 314,360 118,394
Deferred taxation has been provided as follows:
Group Company
2015
£
2014
£
2015
£
2014
£
Accelerated capital allowances (6,220) (6,220) – –
Share-based payments 314,360 118,394 314,360 118,394
Acquired business combinations (866,141) (903,310) – –
(558,001) (791,136) 314,360 118,394
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
• Borrowings
Notes to the consolidated financial statements
for the year ended 31 December 2015 continued Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 51
Financial assets
Financial assets measured at amortised cost:
Group Company
2015
£
2014
£
2015
£
2014
£
Loans and receivables: 
Trade receivables 91,856 55,536 5,001 –
Loans to franchisees 174,848 190,333 – –
Other receivables 52,945 167,263 30,755
Cash and cash equivalents 4,364,054 3,367,259 195,577 –
Amounts owed by group undertakings – – – 239,483
Accrued income 543,526 513,383 – –
5,227,229 4,293,774 200,578 270,238
Financial liabilities
Financial liabilities measured at amortised cost:
Group Company
2015
£
2014
£
2015
£
2014
£
Other financial liabilities:
Bank loan 2,000,000 2,500,000 2,000,000 2,500,000
Trade payables 84,364 178,673 24,739 29,809
Other payables 42,288 23,571 19,702 –
Accruals 355,983 493,752 111,228 72,874
Amounts owed to group undertakings – – 483,178 –
2,482,635 3,195,996 2,638,847 2,602,683
Maturity analysis of financial liabilities:
Group Company
2015
£
2014
£
2015
£
2014
£
In less than one year:
Bank loan 570,938 590,563 570,938 590,563
Trade payables 84,364 178,673 24,739 29,809
Other payables 42,288 23,571 19,702 –
Accruals 355,983 493,752 111,228 72,874
Amount owed to group undertakings – – 483,178 –
1,053,573 1,286,559 1,209,785 693,246
In more than one year:
Bank loan 1,588,964 2,159,902 1,588,964 2,159,902
1,588,964 2,159,902 1,588,964 2,159,902
All of the financial assets and liabilities above are recorded in the statement of financial position at amortised cost. The above maturity 
analysis amounts reflect the contractual undiscounted cash flows, including future interest charges, which may differ from carrying values of 
the liabilities at the reporting date. MartinCo PLC Annual Report and Accounts 2015 52
28. Financial instruments continued
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 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.
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.
Notes to the consolidated financial statements
for the year ended 31 December 2015 continued Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 53
29. 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 office in Worthing was sold on 
30 December 2014. This is classified as discontinued activities.
In June 2014, the Group acquired its first portfolio of 374 managed lettings properties in Saltaire for £0.3m. On 21 November 2014 Martin & 
Co Saltaire, the franchisee managing the portfolio on the Group’s behalf, notified the Group of its intention to exercise its right to purchase 
the portfolio. At the end of 2014 this asset was 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.
2015
£
2014
£
Non-current assets held for sale and discontinued operations
Operating cash flows – (17,953)
Investing cash flows – 364,743
Financing cash flows – –
Increase in cash and cash equivalents – 346,790
Assets of disposal group classified as held for sale
Intangible assets – 254,846
Property, plant and equipment – –
Other current assets – –
– 254,846
Liabilities of disposal group classified as held for sale
Trade and other payables – –
Analysis of the results of discontinued operations is as follows:
Revenue – 204,249
Expenses – (180,749)
Profit before tax of discontinued operations – 23,500
Made up of:
Trading operations – 19,493
Sale of operations – 4,007
– 23,500
Tax – (4,935)
Profit for the year from discontinued operations – 18,565
As a result of the sale of the owned offices, the Group generated net cash inflows from investing activities of £nil (2014: £365k). The total 
consideration was £nil (2014: £210k). However, the Group agreed to defer consideration on Worthing as it had for three of the office disposals 
in 2013 so that £188k of deferred consideration existed at 31 December 2015 (2014: £252k). MartinCo PLC Annual Report and Accounts 2015 54
30. 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. 
During the period ended 31 December 2013 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. The options were granted 
over a discretionary period and have varying vesting conditions.
The vesting conditions of 742,000 options include performance conditions including a profit before tax target in the year ending 
31 December 2016. The remaining options vest in the year ending 31 December 2016.
The maximum term of the options granted is ten years from the grant date. Upon vesting, each of the 1,566,000 options allows the holder to 
purchase one ordinary share at an exercise price of £0.1764. 
The estimated fair value of the 1,566,000 share option granted in the EMI plan in prior years 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.
During the year ended 31 December 2015 the Company granted 220,000 options to an executive of the Group. The estimated fair value of the 
220,000 share options granted in the EMI plan in the year is £63,616. 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. No charge has been included in the year as, in 
the opinion of the directors, these options are not expected to vest because vesting conditions are unlikely to be met.
The following principal assumptions were used in the valuation:
Expected term 4 years
Volatility 50%
Option life  January 2025
Risk free interest rate 2.08%
Exercise price £0.985
Share price at date of grant £0.985
Dividend yield 5%
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 was as follows:
2015 
£
2014 
£
Weighted average 
exercise price
Weighted average 
exercise price
Number of share options
Outstanding at the beginning of the year 1,566,000 £0.1764 1,566,000 £0.1764
Forfeited (64,800) £0.1764 – –
Granted 220,000 £0.985 – –
Outstanding at the end of the year 1,721,200 £0.2798 1,566,000 £0.1764
Exercisable at the end of the year – – – –
The weighted average remaining contractual life of options is 7.9 years (2014: 8.7 years).
Notes to the consolidated financial statements
for the year ended 31 December 2015 continued Strategic report Governance Financial statements Overview
MartinCo PLC Annual Report and Accounts 2015 55
31. Related party disclosures
Transactions with Directors
Dividends
During the year dividends were paid to the Directors and their spouses as follows:
2015
£
2014
£
Interim and Final dividend (ordinary shares of £0.01 each) 526,273 152,034
Director emoluments
Included within the remuneration of key management and personnel detailed in note 9, the following amounts were paid to the Directors:
2015
£
2014
£
Wages and salaries 507,335 412,433
Social security costs 62,060 34,617
569,395 447,050
Transactions with Other Related Parties
Transactions with The Landlord Hub Limited
The Landlord Hub Limited was a related party by virtue of common shareholders as Mr R W Martin owned 35%, Mrs K M Martin owned 35%, 
Mr I Wilson owned 10%, Mrs H Shackell owned 10% and the daughters of Mr and Mrs R W Martin owned 5% each. During the year ended  
31 December 2015 R W Martin and his family sold their shareholdings in The Landlord Hub Limited to an unconnected third party. Mr I 
Wilson retained his shareholding.
The Group has supplied recruitment services during the year of £2,100 (2014: £18,540) and other services of £nil (2014: £801). It has also 
earned commission on references supplied by The Landlord Hub Limited to its franchise network of £53,770 (2014: £23,767). At the  
31 December 2015, The Landlord Hub Ltd owed the Group £2,510 (2014: £26,282). MartinCo PLC Annual Report and Accounts 2015 56
Shareholder information
Financial calendar
Announcement of Preliminary results – 5 April 2015
Annual General Meeting – 10 May 2016
Half year results – 30 September 2016
Interim dividend – 30 September 2016
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
RSM UK Audit LLP 
25 Farringdon Street
London
EC4A 4AB
Registrar
Computershare Investor Services PLC 
The Pavilions
Bridgwater Road 
Bristol
BS13 8AE  MartinCo PLC Annual Report and Accounts 2015
www.martinco.com
MartinCo PLC
2 St. Stephen’s Court
St. Stephen’s Road
Bournemouth
Dorset
BH2 6LA
Tel: 01202 614 614