Last close As at 05/08/2026
GBP0.37
▲ −1.70 (−4.39%)
Market capitalisation
GBP110m
Research: Real Estate
In FY23, Foxtons Group’s three divisions took market share, the direct result of management action to invest in the business. The company’s new strategy focuses growth on non-cyclical revenue streams and decouples performance from sales market cycles. This is evidenced in the FY23 trading update, which highlights a financial performance that exceeds market expectations. At this early stage of the year, we are retaining our FY24 and FY25 estimates and valuation, but it would appear that the risks to our estimates are to the upside.
Foxtons Group |
Firm evidence of restructuring success |
FY23 trading update |
Real estate |
26 January 2024 |
Share price performance
Business description
Next events
Analyst
Foxtons Group is a research client of Edison Investment Research Limited |
||||||||||||||||||||||||||||||||||||||||||||
In FY23, Foxtons Group’s three divisions took market share, the direct result of management action to invest in the business. The company’s new strategy focuses growth on non-cyclical revenue streams and decouples performance from sales market cycles. This is evidenced in the FY23 trading update, which highlights a financial performance that exceeds market expectations. At this early stage of the year, we are retaining our FY24 and FY25 estimates and valuation, but it would appear that the risks to our estimates are to the upside.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
126.5 |
10.0 |
2.0 |
0.5 |
26.8 |
0.8 |
12/22 |
140.3 |
13.7 |
3.0 |
0.9 |
17.7 |
1.7 |
12/23e |
147.1 |
15.6 |
3.0 |
0.9 |
17.9 |
1.7 |
12/24e |
157.6 |
19.0 |
3.5 |
1.2 |
15.1 |
2.3 |
Note: *PBT is normalised, excluding amortisation of acquired intangibles, exceptional items, discontinued business and share-based payments. EPS is similar but after charging for share-based payments and excluding deferred tax re-measurement attributable to the corporate tax charge (ie diluted company definition).
Evidence of market outperformance obvious
FY23 revenue and adjusted operating profit are expected to be c £147m and c £14m respectively, both of which exceed market consensus and our now raised FY23 estimates. Lettings grew revenue by 16% to c £101m and now represents c 70% of group revenue. Sales revenue was down 14% y-o-y to c £37m, compared to a market that saw volumes down 22% and average sales prices down c 2.4%, thus representing a strong improvement in market share, from c 3.3% to c 4.0%. Financial Services revenue declined c 12% to c £9m, hit by lower sales volumes and mix trends. Foxtons ended the year with net debt of c £7m after investing £13.9m in M&A, £11m in working capital and a total of £3.8m in dividends and the share buyback.
Strategic action having a materially positive impact
Management action to invest in the business and leverage Foxtons’ platform is clearly making a material difference to performance. Investing in the right quality of staff, and in higher numbers, has reduced the attrition rate, as well as raising morale and productivity. Real-time data across a wide range of metrics are being utilised more effectively, both to drive leads and monitor staff and branch performance, which is leading to a more competitive internal environment that encourages cross-selling and up-selling between offerings and divisions.
Valuation: Preferred ‘bull’ case retained at 127p
Trading in the run up to Christmas was strong, boosted by more competitive mortgage offers, and this momentum, along with across-the-board market share gains, has continued into the new year. Foxtons entered 2024 with an under-offer pipeline that was ‘significantly ahead’ of 2023, which bodes well. We retain our ‘base’ case valuation of 62p and our preferred ‘bull’ case valuation, which attempts to reflect market share gains across all three divisions in line with the revised strategy, of 127p, although we accept that forecast risks appear to be to the upside.
Exhibit 1: Financial summary
£'m |
2019 |
2020 |
2021 |
2022 |
2023e |
2024e |
2025e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||||
Revenue |
|
|
106.9 |
93.6 |
126.5 |
140.3 |
147.1 |
157.6 |
163.9 |
EBITDA |
|
|
13.5 |
15.7 |
25.1 |
27.8 |
28.9 |
31.7 |
34.4 |
Normalised operating profit |
|
|
0.6 |
3.8 |
12.1 |
15.6 |
17.9 |
21.7 |
24.4 |
Amortisation of acquired intangibles |
(0.6) |
(0.8) |
(1.7) |
(1.6) |
(1.8) |
(2.4) |
(2.4) |
||
Share-based payments |
(0.7) |
(1.0) |
(1.5) |
(0.2) |
(2.0) |
(2.0) |
(2.0) |
||
Total adjusted operating profit |
(0.7) |
1.9 |
8.9 |
13.9 |
14.1 |
17.4 |
20.0 |
||
Exceptionals |
(5.7) |
(1.1) |
(1.4) |
(0.1) |
(4.4) |
0.0 |
0.0 |
||
Reported operating profit |
(6.3) |
0.8 |
7.6 |
13.8 |
9.7 |
17.4 |
20.0 |
||
Net Interest |
(2.4) |
(2.2) |
(2.0) |
(1.9) |
(2.2) |
(2.7) |
(2.5) |
||
Exceptionals |
(0.1) |
(0.0) |
(0.0) |
(0.0) |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
(1.9) |
1.6 |
10.0 |
13.7 |
15.6 |
19.0 |
21.9 |
Profit Before Tax (reported) |
|
|
(8.8) |
(1.4) |
5.6 |
11.9 |
7.4 |
14.6 |
17.5 |
Reported tax |
1.0 |
(1.8) |
(6.9) |
(2.4) |
(1.7) |
(3.7) |
(4.4) |
||
Discontinued operations |
0.0 |
0.0 |
(4.8) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
(0.9) |
(0.2) |
(1.7) |
11.4 |
13.9 |
15.3 |
17.5 |
||
Net income (reported) |
(7.8) |
(3.2) |
(6.2) |
9.6 |
5.7 |
11.0 |
13.1 |
||
Basic average number of shares outstanding (m) |
275 |
314 |
324 |
308 |
308 |
308 |
308 |
||
EPS - basic normalised (p) |
|
|
(0.32) |
(0.08) |
(0.52) |
3.69 |
4.51 |
4.98 |
5.69 |
EPS - basic reported (p) |
|
|
(2.83) |
(1.02) |
(1.90) |
3.11 |
1.84 |
3.57 |
4.27 |
EPS - Continuing, diluted and adjusted, company definition (p) |
|
|
(1.06) |
(0.16) |
1.98 |
3.00 |
2.97 |
3.52 |
4.21 |
Dividend (p) |
0.00 |
0.00 |
0.45 |
0.90 |
0.90 |
1.23 |
1.47 |
||
Revenue growth (%) |
(-4.1) |
(-12.5) |
35.2 |
10.9 |
4.9 |
7.1 |
4.0 |
||
EBITDA Margin (%) |
12.6 |
16.8 |
19.9 |
19.8 |
19.6 |
20.1 |
21.0 |
||
Normalised Operating Margin (%) |
0.5 |
4.1 |
9.5 |
11.1 |
12.1 |
13.8 |
14.9 |
||
BALANCE SHEET |
|||||||||
Fixed Assets |
|
|
178.7 |
173.4 |
184.4 |
191.7 |
196.1 |
189.7 |
181.9 |
Intangible Assets |
101.0 |
103.5 |
107.3 |
109.3 |
110.4 |
111.5 |
112.6 |
||
Goodwill |
9.3 |
11.4 |
17.7 |
26.1 |
26.1 |
26.1 |
26.1 |
||
Tangible Assets |
13.0 |
10.5 |
9.7 |
10.7 |
25.0 |
27.6 |
28.7 |
||
Right of use assets |
51.4 |
44.4 |
43.8 |
42.6 |
31.6 |
21.6 |
11.6 |
||
Contract assets |
0.6 |
0.4 |
0.9 |
1.7 |
1.7 |
1.7 |
1.7 |
||
Investments & other |
3.3 |
3.1 |
5.1 |
1.4 |
1.3 |
1.3 |
1.2 |
||
Current Assets |
|
|
30.2 |
52.6 |
39.3 |
34.5 |
24.7 |
34.5 |
46.2 |
Contract assets |
1.0 |
1.7 |
3.7 |
5.7 |
5.7 |
5.7 |
5.7 |
||
Debtors |
13.4 |
13.9 |
16.0 |
16.0 |
25.0 |
31.5 |
32.8 |
||
Cash & cash equivalents |
15.5 |
37.0 |
19.4 |
12.0 |
(6.7) |
(3.5) |
7.0 |
||
Other |
0.3 |
0.1 |
0.3 |
0.7 |
0.7 |
0.7 |
0.7 |
||
Current Liabilities |
|
|
(27.9) |
(29.2) |
(31.9) |
(38.7) |
(38.1) |
(39.2) |
(39.9) |
Creditors |
(10.5) |
(10.3) |
(14.5) |
(16.7) |
(16.2) |
(17.3) |
(18.0) |
||
Lease liabilities |
(9.7) |
(10.8) |
(8.8) |
(10.7) |
(10.7) |
(10.7) |
(10.7) |
||
Contract liabilities |
(6.3) |
(7.7) |
(8.2) |
(9.7) |
(9.7) |
(9.7) |
(9.7) |
||
Other |
(1.4) |
(0.4) |
(0.3) |
(1.5) |
(1.5) |
(1.4) |
(1.4) |
||
Long Term Liabilities |
|
|
(65.2) |
(62.4) |
(68.4) |
(64.9) |
(55.1) |
(45.8) |
(36.3) |
Lease liabilities |
(46.2) |
(40.7) |
(39.3) |
(35.8) |
(26.0) |
(16.7) |
(7.2) |
||
Contract liabilities |
(1.3) |
(1.1) |
(1.1) |
(0.3) |
(0.3) |
(0.3) |
(0.3) |
||
Other long term liabilities |
(17.8) |
(20.6) |
(28.0) |
(28.8) |
(28.8) |
(28.8) |
(28.8) |
||
Shareholders' equity |
|
|
115.8 |
134.5 |
123.5 |
122.7 |
127.6 |
139.1 |
151.8 |
CASH FLOW |
|||||||||
Op Cash Flow before WC and tax |
(2.6) |
4.3 |
6.6 |
15.0 |
11.5 |
19.7 |
22.4 |
||
Depreciation - Right of use assets |
9.8 |
9.4 |
10.6 |
12.2 |
11.0 |
10.0 |
10.0 |
||
Impairment of goodwill |
0.0 |
0.0 |
3.2 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Branch asset impairment |
4.3 |
1.7 |
1.1 |
(0.3) |
0.0 |
0.0 |
0.0 |
||
Gain on disposal of PPE etc |
(0.4) |
(0.5) |
(1.4) |
(0.3) |
(0.5) |
(0.5) |
(0.5) |
||
Working capital |
(2.6) |
(0.6) |
1.7 |
(1.2) |
(9.5) |
(5.4) |
(0.6) |
||
Decrease in provisions |
0.8 |
(0.8) |
0.2 |
1.1 |
(1.0) |
(1.0) |
(1.0) |
||
Share based payment charges |
0.7 |
1.0 |
1.5 |
0.2 |
2.0 |
2.0 |
2.0 |
||
Cash settlement of share incentive plan |
(0.4) |
0.0 |
0.0 |
(0.0) |
(0.5) |
(0.5) |
(0.5) |
||
Tax |
0.2 |
0.2 |
(0.2) |
(2.7) |
(1.7) |
(3.7) |
(4.4) |
||
Net operating cash flow |
|
|
9.8 |
14.7 |
23.5 |
23.9 |
11.2 |
20.7 |
27.4 |
Capex |
(0.3) |
(0.4) |
(1.7) |
(2.9) |
(0.4) |
(0.4) |
(0.4) |
||
Acquisitions/disposals |
(0.2) |
(3.9) |
(14.5) |
(9.6) |
(14.0) |
(2.3) |
(0.8) |
||
Net interest |
0.0 |
0.0 |
(0.0) |
0.1 |
(0.0) |
(0.0) |
(0.0) |
||
Dividends |
0.0 |
0.0 |
(0.6) |
(1.5) |
(2.8) |
(2.8) |
(3.8) |
||
Repayment of lease liabilities |
(12.0) |
(10.0) |
(15.2) |
(12.7) |
(12.0) |
(12.0) |
(12.0) |
||
Purchase of own shares |
(0.1) |
(0.3) |
(5.7) |
(4.9) |
(1.1) |
(0.3) |
(0.3) |
||
Net proceeds from issue of ord. Shares |
0.0 |
21.1 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
0.3 |
0.3 |
0.3 |
(3.4) |
0.3 |
0.3 |
0.3 |
||
Net Cash Flow |
(2.4) |
21.5 |
(13.9) |
(11.1) |
(18.7) |
3.3 |
10.4 |
||
Opening net debt/(cash) |
|
|
(17.9) |
(15.5) |
(37.0) |
(23.1) |
(12.0) |
6.7 |
3.5 |
Closing net debt/(cash) (ex lease liabilities |
|
(15.5) |
(37.0) |
(23.1) |
(12.0) |
6.7 |
3.5 |
(7.0) |
|
Source: company accounts, Edison Investment Research
|
|
Research: Consumer
Britvic delivered an encouraging start to FY24 with robust Q124 results that showed good revenue progression, reflecting the strength of its brand portfolio. Group revenue growth of 8.1% was driven by positive trends in both price and volumes and was broad-based across Britvic’s geographies, continuing the positive momentum from FY23. Particularly strong growth in Brazil reflects the success of the Extra Power acquisition. Britvic reported robust trading over the important Christmas period, with revenue growth of 12.1% and volumes up 6.4% in December. The company continues to invest in its brands, including a refresh of Pepsi, and consequently is confident in achieving FY24 market expectations.