Foxtons Group slightly over-achieved expectations for FY25 despite external factors affecting demand. Our valuation moves from 120p to 115p as a result of these external pressures. Foxtons completed two acquisitions in January further underpinning the drive to expand in faster growing commuter markets. That said, there remains significant financial headroom to facilitate further M&A, which appears likely given the forthcoming Renters’ Rights Act.

Foxtons Group is expected to achieve its FY25 profit expectation despite external factors affecting demand. However, these factors, plus an internal decision to maintain headcount to capture growth when its arises, leads us to reduce our FY26 and FY27 estimates, in effect pushing out growth by 12 months. Our valuation moves from 126p to 120p as a result. That said, financial headroom has been increased to facilitate further M&A, which appears increasingly likely given the forthcoming Renters’ Rights Act.

Foxtons Group’s Q325 revenue growth was clearly affected by the loss of consumer confidence in the sales market. We, and the company, believe this will probably continue until the end of the year, given the unhelpful headlines relating to potential tax increases in the Autumn Budget and the slower-than-hoped-for decline in interest rates. We have reduced our profit estimates and valuation as a result. However, we believe Foxtons’ strategic direction remains positive, and the internal initiatives previously outlined will bear fruit. Furthermore, the revised medium-term financial targets announced in June are ambitious but achievable, underpinned by structural growth, headquarter-related cost savings, Foxtons’ technology stack and its proprietary data vault.