Preliminary Results for Year Ended 31 Dec. 2015

Hunters Property Plc

Kevin Hollinrake, Chairman

Harry Hill, Chief Executive Officer

Glynis Frew, Managing Director

Ed Jones, Chief Financial Officer

Tel: 01904 756 197

Smithfield Consultants Limited

Alex Simmons

Tel: 020 7360 4900

Numis Securities Limited

Stuart Skinner, Paul Gillam (Nominated Adviser)

Tom Ballard (Corporate Broking)

Tel: 020 7260 1000

Income Summary

2015

£m

2014

£m

Movement

Network Income

30.2

21.2

+42%

Turnover

12.0

9.2

+31%

EBITDA

1.57

1.08

+46%

Adjusted profit before tax

1.42

0.89

+59%

EPS

2.76p

1.78p

+55%

Adjusted EPS

4.74p

3.63p

+31%

DPS

1.50p

Balance Sheet Summary

2015

£m

2014

£m

Cash

1.2

1.1

Net Assets

5.0

1.4

Net Debt

1.1

1.7

Net Debt / EBITDA

0.7x

1.6x

2015

2014

Notes

£'000s

£'000s

Revenue

3

12,045

9,175

Administrative expenses

(10,471)

(8,100)

Operating profit before depreciation, amortisation & costs of acquisition

1,574

1,075

Depreciation

13

(162)

(103)

Amortisation

12

(368)

(146)

Costs of acquisition of subsidiaries

15

(57)

(186)

Write off of loans

-

(25)

Irrecoverable VAT

-

(23)

Share-based payment expense

25

(12)

-

Operating profit

4

975

592

Finance income

7

88

7

Finance costs

8

(183)

(116)

Profit before taxation

880

483

Taxation

9

(158)

(112)

Profit for the financial year

722

371

Other comprehensive income

-

-

Total comprehensive income for the year

722

371

Profit and total comprehensive income for the financial year attributable to:

Equity holders of the parent

726

377

Non-controlling interests

(4)

(6)

722

371

Earnings per share

Basic (pence per share)

11

2.76

1.77

Diluted (pence per share)

11

2.66

1.77

2015

2014

2013

as restated

as restated

Notes

£'000s

£'000s

£'000s

Non-current assets

Goodwill

12

3,973

3,544

2,015

Other intangible assets

12

3,439

777

78

Property, plant and equipment

13

340

420

147

Investments

14

1

75

67

Deferred tax assets

23

43

63

64

7,796

4,879

2,371

Current assets

Trade and other receivables

16

1,629

1,277

963

Cash at bank and in hand

1,211

1,146

798

2,840

2,423

1,761

Total assets

10,636

7,302

4,132

Liabilities

Current liabilities

Borrowings

17

(1,014)

(1,101)

(429)

Obligations under finance leases

19

(37)

(27)

-

Current tax liabilities

(162)

(122)

-

Trade and other payables

19

(2,492)

(2,399)

(1,770)

(3,705)

(3,649)

(2,199)

Non-current liabilities

Borrowings

17

(1,309)

(1,874)

(810)

Obligations under finance leases

20

(30)

(43)

-

Other payables

20

(68)

-

-

(1,407)

(1,917)

(810)

Provisions for liabilities

Provisions

22

(75)

(151)

-

Deferred tax liability

23

(465)

(137)

(4)

(540)

(288)

(4)

Net assets

4,984

1,448

1,119

2015

2014

2013

as restated

as restated

Notes

£'000s

£'000s

£'000s

EQUITY

Attributable to the owners of the parent:

Called up share capital

26

1,131

-

-

Share premium account

27

2,579

-

-

Merger reserve

1.2

899

1,662

1,602

Retained earnings

28

375

(222)

(497)

4,984

1,440

1,105

Non-controlling interests

-

8

14

Total equity

4,984

1,448

1,119

The financial statements were approved by the board of directors and authorised for issue on 27 April 2016 and are signed on its behalf by:

Mr E A Jones

Director

2015

Notes

£'000s

Non-current assets

Investments

14

879

Current assets

Trade and other receivables

16

2,929

Total assets

3,808

Liabilities

Current liabilities

Other payables

19

(26)

(26)

Total assets less current liabilities

3,782

Net assets

3,782

EQUITY

Called up share capital

26

1,131

Share premium account

27

2,579

Share option reserve

12

Retained earnings

28

60

Total equity

3,782

The financial statements were approved by the board of directors and authorised for issue on 27 April 2016 and are signed on its behalf by:

Mr E A Jones

Director

Company Registration No. 09448465

Share capital

Share premium account

Merger reserve

Retained earnings

Total equity attributable to owners of the parent

Non-controlling interests

Total equity

Notes

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

Balance at 1 January 2014

-

-

1,602

(384)

1,218

14

1,232

Prior year adjustment

28

-

-

-

(113)

(113)

-

(113)

As restated balance at 1 January 2014

-

-

1,602

(497)

1,105

14

1,119

Period ended 31 December 2014:

Profit and total comprehensive income for the year

-

-

-

377

377

(6)

371

Issue of subsidiary shares prior to acquisition

-

-

60

-

60

-

60

Dividends

10

-

-

-

(102)

(102)

-

(102)

Balance at 31 December 2014

-

-

1,662

(222)

1,440

8

1,448

Period ended 31 December 2015:

Profit and total comprehensive income for the year

-

-

-

726

726

(4)

722

Issue of share capital

26

1,131

2,579

104

-

3,814

3,814

Dividends

10

-

-

-

(141)

(141)

-

(141)

Credit to equity for equity settled share-based payments

25

-

-

-

12

12

-

12

Share for share exchange

-

-

(867)

-

(867)

(4)

(871)

Balance at 31 December 2015

1,131

2,579

899

375

4,984

-

4,984

Share capital

Share premium account

Share option reserve

Retained earnings

Total

Notes

£'000s

£'000s

£'000s

£'000s

£'000s

Period ended 31 December 2015:

Profit and total comprehensive income for the year

-

-

-

201

201

Issue of share capital

26

1,131

2,579

-

-

3,710

Dividends

10

-

-

-

(141)

(141)

Share based payment expense of subsidiary

14

-

-

12

-

12

Balance at 31 December 2015

1,131

2,579

12

60

3,782

2015

2014

Notes

£'000s

£'000s

Cash flows from operating activities

Operating profit

974

592

Adjustments for:

Share-based payment expense

25

12

-

Depreciation of property, plant and equipment

13

162

103

Gain on disposal of property, plant and equipment

4

(30)

-

Amortisation and impairment of intangible assets

12

368

146

(Release)/inception of provisions

22

(5)

36

Costs of acquisition

15

57

150

Changes in working capital:

(Increase)/decrease in trade and other receivables

16

(392)

231

Increase in trade and other payables

19

3

234

Cash generated from operations

1,149

1,492

Interest paid

(85)

(44)

Income taxes paid

(180)

(90)

Net cash inflow from operating activities

884

1,358

Investing activities

Purchase of intangible assets

12

(866)

(299)

Purchase of property, plant and equipment

13

(76)

(171)

Proceeds on disposal of property, plant and equipment

32

-

Business acquisitions, net of cash acquired

15

(1,390)

(1,086)

Payment of deferred considerations

(89)

Purchase of investments

(192)

-

Proceeds on disposal of investments

263

-

Interest received

5

1

Net cash used in investing activities

(2,313)

(1,555)

2015

2014

Notes

£'000s

£'000s

Financing activities

Proceeds from issue of own shares

2,700

-

Share issue costs

(558)

-

Proceeds from issue of subsidiary shares prior to acquisition

1.3

104

60

Repayment of debentures

17

(470)

-

Proceeds from borrowings

17

-

1,170

Proceeds of new bank loans

380

-

Repayment of bank loans and borrowings

17

(495)

(294)

Payment of finance leases obligations

18

(26)

(10)

Dividends paid

10

(141)

(102)

Net cash generated from financing activities

1,494

824

Net increase in cash and cash equivalents

65

627

Cash and cash equivalents at beginning of year

1,146

519

Cash and cash equivalents at end of year

1,211

1,146

Relating to:

Cash at bank and in hand

1,211

1,146

Major non-cash transactions

During the year the Group entered into a number of non-cash transactions as follows:

1. On 27 March 2015 the group enacted a share-for-share exchange to include Hunters Property Plc as the Parent, as disclosed further in note 1.2. This resulted in share capital being issued, and the company owning an investment.

2. Included within costs of issue of new shares were costs of £200,000 which were themselves settled by way of the issue of shares at a premium.

Company Statement of Cash Flows

The Company has not held any cash or cash-equivalents during the year or as at 31 December 2015. During the year it has entered into a number of equity transactions which are set out in the above but which are enacted via intercompany accounts for the Company. Accordingly, the Directors have not presented a Company Statement of Cash Flows.

1

Accounting policies

Company information

Hunters Property Plc ("the Company") is a public limited company domiciled and incorporated in England and Wales. The registered office is Apollo House, Eboracum Way, York, North Yorkshire, YO31 7RE. The consolidated financial information (or "financial statements") incorporate the financial information of the Company and entities (its subsidiaries) controlled by the Company (collectively comprising the "Group").

The principal activity of the Group is the provision of property services to consumers and businesses which include sales, lettings, franchising and related services.

1.1

Accounting convention

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the parent company. Monetary amounts in these financial statements are rounded to the nearest £'000s.

The financial statements have been prepared on the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.

As permitted by s408 Companies Act 2006, the Company has not presented its own income statement and related notes. The Company's profit for the year was £201,684.

1.2

Basis of consolidation

The Group financial information consolidates those of the Parent Company and the subsidiaries that the Parent has control of. Control is established when the Parent is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary.

Where a subsidiary is acquired/disposed of during the year, the consolidated profits or losses are recognised from/until the effective date of the acquisition/disposal.

All inter-company balances and transactions between group companies have been eliminated on consolidation.

Where necessary, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those used by the Group.

Non-controlling interests, presented as part of equity, represent the portion of a subsidiary's profit or loss and net assets that are not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interest based on their respective ownership interests.

The Group applies the acquisition method of accounting for business combinations enacted after the date of creation of the group following incorporation of Hunters Property Plc, as detailed further below. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair value of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the Group. Acquisition costs are expensed as incurred.

The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquired subsidiary's financial information prior to the acquisition. Assets acquired and liabilities assumed are measured at their acquisition-date fair values.

Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the fair value of consideration transferred, over the Group's share of the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.

The Group has applied the principles of merger accounting in consolidating the results, as control was only acquired by Hunters Property Plc via a share-for-share exchange on 27 March 2015. Merger accounting requires that the results of the Group are presented as if the Group has always been in its present form, and does not require a re-evaluation of fair values as at the point of acquisition. Accordingly, for the Group's comparative statement of financial position as at 31 December 2014, a merger reserve has been created which represents the difference between the net assets of the Group as at that date, and the retained profits recognised by the Group as at that date.

1.3

Going concern

As at the year end the group has net current liabilities, but net assets overall. The nature of the Group's trade is that there exist significant intangibles which generate strong cashflows, and are expected to continue doing so. Since the year end the Group has also secured further medium-term debt funding of £1.2million; including this the Directors have further considered 12 month cashflow forecasts from the date of approval of the financial statements, and do not foresee any cashflow issues arising.

Taking these factors into account, as at the time of approving the financial statements, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.4

Revenue

Revenue represents the amount receivable for the provision of services and the sale of goods during the year, excluding VAT and trade discounts. Revenue is recognised to the extent that it is probable that economic benefits will flow to the Group and the revenue can be measured reliably.

Revenue from residential, commercial and land sales is recognised on the basis of exchange of contract.

Financial services revenue is recognised at the later of the policy inception date or confirmation of entitlement to the commission.

Revenue from commission earned as letting agents is recognised in the month in which the income is received and when there is fulfilment of all but inconsequential or perfunctory actions.

At inception of a franchisee contract, revenue is recognised upfront which matches to the estimated cost of time and knowledge to create the franchiser-franchisee contractual arrangement. No amounts are deferred as the directors are of the opinion that virtually all inception costs are incurred at the outset, and hence although contracts run for several years this policy is considered to be the fairest presentation to comply with the matching and accruals concepts.

Revenue from franchisee management service fees are recognised monthly in arrears, calculated by reference to the terms of the contract and the value of sales attributable to each franchisee.

Deferred income arises where services are invoiced in advance of performance. The amount is released to the profit or loss in subsequent periods in reference to the stage of completion of the transaction at the reporting date.

1.5

Intangible fixed assets - goodwill

Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identifiable and separately recognised. See Note 15 for information on how goodwill is initially determined during the period. After initial recognition, goodwill is measured at cost less accumulated impairment losses. See Note 1.9 for a description of impairment testing procedures.

1.6

Intangible fixed assets other than goodwill

Intangible assets are initially measured at cost. Where intangible assets are acquired as part of a business combination, cost is determined by reference to a fair value estimation technique as disclosed further in note 15. After initial recognition, intangible assets are recognised at cost less any accumulated amortisation and any accumulated impairment losses.

The depreciable amount of an intangible asset with a finite useful life is allocated on a systematic basis over its useful life. Amortisation begins when the asset is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

The amortisation period and the amortisation method for intangible assets with a finite useful life is reviewed each financial year-end. If the expected useful life of the asset is different from previous estimates, the amortisation period is changed accordingly.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software

3 years or over the life of the license

Franchise development costs

Over the life of the franchise contract (typically 10-15 years)

Brands

10 years

Customer lists

2-12 years

1.7

Property, plant and equipment

Property, plant and equipment are recognised as an asset only if it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

An item of property, plant and equipment that qualifies for recognition as an asset is measured at its cost. Cost of an item of property, plant and equipment comprises the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

After recognition, all property, plant and equipment are carried at costs less any accumulated depreciation and any accumulated impairment losses.

Depreciation is provided at rates calculated to write down the cost of assets, less estimated residual value, over their expected useful lives on the following basis:

Leasehold land and buildings

Straight line over the life of the lease

Plant and machinery

25% Reducing balance

Fixtures, fittings and equipment

25% Reducing balance or 10%-33% straight line

Computer equipment

33% Straight line

Motor vehicles

25% Straight line

The residual value and the useful life of an asset are reviewed at least at each financial year-end and if expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying value of the asset and are recognised in profit or loss.

1.8

Non-current investments

Investments in equity instruments that have a quoted market price in an active market and other equity instruments whose fair value can be reliably measured are measured at fair value; otherwise investments in equity instruments are measured at cost.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.9

Impairment of non-current assets

For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash flows. As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of the related business combination and represent the lowest level within the Group at which management monitors goodwill.

Cash-generating units to which goodwill has been allocated are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An asset or cash-generating unit is impaired when its carrying amount exceeds its recoverable amount. The recoverable amount is measured as the higher of fair value less cost of disposal and value in use. The value in use is calculated as being net projected cash flows based on financial forecasts discounted back to present value.

The impairment loss is allocated to reduce the carrying amount of the asset, first against the carrying amount of any goodwill allocated to the cash-generating unit, and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment loss is reversed if the asset's or cash-generating unit's recoverable amount exceeds its carrying amount.

1.10

Financial instruments

Loans and receivables

Financial assets are recognised in the statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instrument.

All financial assets excluding investments are classified as loans and receivables; these comprise trade and other receivables and cash and cash equivalents. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

Financial assets are initially recognised at fair value plus directly attributable transaction costs.

After initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

If there is objective evidence that there is an impairment loss on loans and receivables, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced either directly or through use of an allowance account.

A financial asset is derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred.

Financial assets held for trading

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by IAS 39. The Company has not designated any financial assets upon initial recognition as at fair value through profit or loss.

Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Financial assets at fair value through profit and loss are carried in the balance sheet at fair value with changes in fair value recognised in finance revenue or finance expense in the income statement.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. The impairment loss is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

Classification of financial liabilities

Financial liabilities include borrowings and trade and other payables.

Financial liabilities are obligations to pay cash or other financial assets and are recognised in the statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instrument.

Financial liabilities are initially recognised at fair value adjusted for any directly attributable transaction costs.

After initial recognition, financial liabilities are measured at amortised cost using the effective interest method, with the effective interest recognised as an expense in finance costs.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the obligation specified in the contract is discharged, cancelled, or expires.

1.11

Equity instruments

Share capital represents the nominal value of shares that have been issued. Share premium represents the excess consideration received over share capital upon the sale of shares, less any incidental costs of issue.

Retained earnings include all current and prior period retained profits.

The non-controlling interest reserve is the portion of equity ownership in subsidiaries which is not attributable to the owners of the Parent Company.

The merger reserves has arisen as described in note 1.2.

1.12

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases.

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). However, for deductible temporary differences associated with investments in subsidiaries a deferred tax asset is recognised when the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

1.13

Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.

Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision in measured at present value the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

1.14

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.15

Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.16

Share-based payments

The fair value of equity-settled share based payments to employees is determined at the date of grant and is expensed on a straight-line basis over the vesting period based on the group's estimate of shares or options that will eventually vest. Full disclosure of the calculation models is given in note 25.

1.17

Leases

The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards of ownership of the leased asset. Where the Group is a lessee in this type of arrangement, the related asset is recognised at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease payments plus incidental payments, if any. A corresponding amount is recognised as a finance lease liability.

This liability is reduced by lease payments net of finance charges. The interest element of lease payments represents a constant proportion of the outstanding capital balance and is charged to profit or loss, as finance costs over the period of the lease.

Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.

1.18

Standards, amendments and interpretations in issue but not yet effective

The adoption of the following mentioned standards, amendments and interpretations in future years:

EU effective date - period beginning on or after

IFRS 14 'Regulatory Deferral Accounts'

1 January 2016*

IAS 1 (amendment) 'Presentation of Financial Statements' - Disclosure initiative

1 January 2016*

IAS 16 (amendment) 'Property, Plant and Equipment' and IAS 38 (amendment) 'Intangible Assets' - Clarification of acceptable methods of depreciation and amortisation

1 January 2016*

IAS 19 (amendment) 'Employee Benefits' - Defined benefit plans: employee contributions

1 February 2015

IAS 27 (amendment) 'Separate Financial Statements' - Equity Method in Separate Financial Statements

1 January 2016*

IFRS 10 (amendment) 'Consolidated Financial Statements' and IAS 28 (amendment) 'Investments in Associates and Joint Ventures' - Sale or contribution of assets between an investor and its associate or joint venture

1 January 2016*

IFRS 10 (amendment) 'Consolidated Financial Statements', IFRS 12 (amendment) 'Disclosure of Interests in Other Entities' and IAS 28 (amendment) 'Investments in Associates and Joint Ventures' - Investment entities: applying the consolidation exception

1 January 2016*

IFRS 11 (amendment) 'Joint Arrangements' - Accounting for acquisitions of interests in joint operations

1 January 2016*

Annual improvements to IFRS (2010 - 2012)

1 February 2015

Annual improvements to IFRS (2012 - 2014)

1 January 2016

IFRS 15 'Revenue from Contracts with Customers'

1 January 2018*

IFRS 9 'Financial Instruments'

1 January 2018*

IFRS 16 'Leases'

1 January 2019*

IAS 12 (amendment) 'Income Taxes'

1 January 2017*

IAS 7 (amendment) 'Statement of Cash Flows'

1 January 2017*

* These standards, amendments and interpretations have not yet been endorsed by the EU and the dates shown are the expected dates.

Management have not yet assessed the impact from IFRS 15 'Revenue from Contracts with Customers' and IFRS 16 'Leases' on the financial statements of the Group. All other amendments are not expected to have a material impact on the Group's financial statements.

2

Judgements and key sources of estimation uncertainty

The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Basis of consolidation

The Group was formed on 27 March 2015 when Hunters Property PLC acquired shares in its subsidiaries through a share-for-share exchange. This type of common control transaction falls outside the scope of IFRS 3 and therefore UK GAAP has been referred to for best practice guidance. The result is that the Group has adopted merger accounting as a basis for the Group consolidation.

Franchisee revenue

Franchisee sign up fees are recognised upfront at the inception of a franchisee contract, which in the directors' opinion matches to the estimated cost of time and knowledge to create the franchiser-franchisee contractual arrangement.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Provisions

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date. Each period the directors assess the risks and uncertainties surrounding the obligation and review the discount rates applied when calculating the present value. When reviewing the discount rates the directors refer to the Group weighted average cost of capital. Further details on the assumptions made for specific provisions are disclosed in note 22.

Business combinations and goodwill

The Group has made several acquisitions during the year. Judgements and estimations are made in respect of the measurement of the provisional fair values of assets and liabilities acquired and the consideration transferred. Furthermore, estimation techniques have been used to value the brand and other intangibles acquired.

The Directors test annually for impairment of the Group's intangible assets and goodwill, details of which are given in note 12.

3

Segmental reporting

IFRS 8, Operating Segments, requires operating segments to be identified on the basis of internal reports of the Group that are regularly reviewed by the Group's chief operating decision maker. The chief operating decision maker of the Group is considered to be the Board of Directors.

The Group has operating segments: Residential Sales, Lettings, and Franchising. Due to the specific nature of the Group's market, each component of revenue naturally falls within one of these segments. The operating segments are monitored by the Group's chief operating decision maker and strategic decisions are made on the basis of adjusted segment operating results. All assets, liabilities and revenues are located in, or derived in, the United Kingdom.

The Group does not have any major customers which account for 10% or more of revenues.

Segmental analysis of revenue

2015

2014

£'000s

£'000s

Residential sales

4,840

3,861

Lettings

2,460

1,993

Franchising

3,271

2,307

Other

1,474

1,014

Total revenue

12,045

9,175

Revenue analysed by geographical market

2015

2014

£'000s

£'000s

United Kingdom

12,045

9,175

Further disclosure of the segmental analysis of goodwill is made in note 12. Due to the nature of operations, the Directors, as the chief operating decision-making body, review financial information for the Group's overall business and have identified a single operating segment at cost and asset / liability levels. Accordingly, further disclosure has not been made of these elements.

4

Operating profit

2015

2014

£'000s

£'000s

Operating profit for the year is stated after charging/(crediting):

Depreciation of owned property, plant and equipment

149

103

Depreciation of property, plant and equipment held under finance leases

13

-

Gain on disposal of property, plant and equipment

(30)

-

Amortisation of intangible assets

368

146

Write back/(impairment) of loans

80

(80)

Write off of loans

-

(25)

Research and Development tax credits

(46)

-

Share-based payments

12

-

Operating lease charges (including rent)

459

507

The Group's subsidiary RealCube Limited has undertaken research and development activities during the year on which tax credits have been received. Expenses in relation to this are included within employment costs.

5

Auditor's remuneration

2015

2014

Fees payable to the company's auditor and its associates:

£'000s

£'000s

For audit services

Audit of the financial statements of the group and company

15

-

Audit of the company's subsidiaries

25

28

40

28

In addition to the audit fees, the Group's auditor, Mazars LLP, acted as reporting accountant for the IPO which was completed on 2 July 2015. The total expense incurred in respect of this was £100,987.

Audit fees disclosed for the prior year were incurred prior to the IPO, and were paid to another auditor.

6

Employees

The average monthly number of persons (including directors) employed by the group during the year was:

2015

2014

Number

Number

Sales and administration

180

120

Directors

5

5

185

125

Their aggregate remuneration comprised:

2015

2014

£'000s

£'000s

Wages and salaries

5,087

3,514

Social security costs

508

364

Pension costs

110

67

5,705

3,945

7

Finance income

2015

2014

£'000s

£'000s

Interest income

Interest on bank & similar deposits

1

-

Interest on other financial instruments

3

-

Finance income on financial assets held at amortised cost

13

7

Total interest revenue

17

7

Income from fixed asset investments

Gain on disposal of financial assets held for trading

71

-

Total income

88

7

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss

15

7

8

Finance costs

2015

2014

£'000s

£'000s

Interest on financial liabilities measured at amortised cost:

Interest on bank overdrafts and loans

71

44

Interest on finance leases

14

-

85

44

Other finance costs:

Unwinding of discount on loans and borrowings

89

66

Unwinding of discount on provisions

9

6

98

72

Total finance costs

183

116

9

Taxation

2015

2014

£'000s

£'000s

Current tax

UK corporation tax on profits for the current period

221

66

Adjustments in respect of prior periods

(1)

5

Total current tax

220

71

Deferred tax

Origination and reversal of temporary differences

(58)

41

Changes in tax rates

(4)

-

Total deferred tax

(62)

41

Total tax charge

158

112

The charge for the year can be reconciled to the profit per the Statement of Comprehensive Income as follows:

2015

2014

£'000s

£'000s

Profit before taxation

880

484

Expected tax charge based on a corporation tax rate of 20.00%

176

97

Tax effect of expenses that are not deductible in determining taxable profit

31

24

Tax effect of utilisation of tax losses not previously recognised

-

(66)

Change in unrecognised deferred tax assets

(7)

-

Effect of change in corporation tax rate

(4)

-

Permanent capital allowances in excess of depreciation

(3)

1

Share based payment charge

2

-

Under provided in prior years

(1)

5

Other adjustments

(36)

34

Acquired deferred tax reversed

-

17

Tax expense for the year

158

112

During the year the UK corporation tax rate was changed from 21% to 20%, effective from 1 April 2015.

A reduction in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and to 18% (effective from 1 April 2020) was substantively enacted in October 2015 and has therefore been considered when calculating deferred tax at the reporting date. Deferred tax balances at the reporting date are measured at 19% (2014: 20%).

10

Dividends

2015

2014

2015

2014

per share

per share

£'000s

£'000s

Amounts recognised as distributions to equity holders:

Interim paid (pence per share)

0.50

0.40

141

102

In 2014 dividends were paid from the group's parent at that date, Hunter Property Group Limited. The above is presented after allowing for a consolidation of shares which was enacted as part of the company's acquisition by Hunters Property Plc.

The proposed final dividend for the period ended 31 December 2015 is:

2015

Per share

Total

£'000s

Ordinary shares (pence per share)

1.00

283

The proposed final dividend is subject to approval by shareholders and has not been included as a liability in these financial statements.

The calculation of the basic and diluted earnings per share is based on the following data:

2015