Last close As at 05/08/2026
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Market capitalisation
GBP110m
Research: Real Estate
The latest quarterly trading update reconfirms the developing success of the Foxtons strategic vision and implies that medium-term targets, particularly the adjusted annualised operating profit target of £25–30m, are now coming further into focus. We believe that market share is being gained in all divisions, which is likely to be boosted further as the Sales pipeline is growing comfortably ahead of the market. We have modestly raised forecasts and our valuation to 134p/share and believe that if interest rates ease further, there is upside potential to our forecasts.
Foxtons Group |
Further strategic progress towards targets |
Q3 trading update |
Real estate |
25 October 2024 |
Share price performance
Business description
Next events
Analyst
Foxtons Group is a research client of Edison Investment Research Limited |
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The latest quarterly trading update reconfirms the developing success of the Foxtons strategic vision and implies that medium-term targets, particularly the adjusted annualised operating profit target of £25–30m, are now coming further into focus. We believe that market share is being gained in all divisions, which is likely to be boosted further as the Sales pipeline is growing comfortably ahead of the market. We have modestly raised forecasts and our valuation to 134p/share and believe that if interest rates ease further, there is upside potential to our forecasts.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/22 |
140.3 |
13.7 |
3.0 |
0.9 |
20.4 |
1.5 |
12/23 |
147.1 |
15.2 |
2.9 |
0.9 |
21.2 |
1.5 |
12/24e |
159.7 |
19.6 |
3.7 |
1.3 |
16.3 |
2.1 |
12/25e |
168.9 |
22.9 |
4.5 |
1.6 |
13.5 |
2.6 |
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).
Profit target forecast to be achieved in FY26e
At the start of 2023, Foxtons’ CEO set out a strategic vision to return the company to its former position as London’s go-to estate agent. This included growing the non-cyclical and recurring revenues, which currently stand at circa two-thirds of group revenue, to target operating profit of between £25m and £30m and to achieve an operating margin of over 15%. Significant progress has been made, with unprecedented investment in staff training and retention, and also the development of proprietary IT and data systems that strive to put Foxtons ahead of its competition. Market share is growing and in Sales in particular, share is already ahead of target.
Sales division drives strong Q3 revenue performance
Foxtons’ Q324 trading update was robust, with Q3 revenue increasing 8.0% to £47.4m, benefiting from continued market outperformance and market share gains, which have become a regular feature of Foxtons’ performance over the last 18 months. Year-to-date (to 30 September) revenue increased 9.7% to £125.9m, with growth in all divisions, although the most marked outperformance was in Sales as internal initiatives have begun to feed through and the market has picked up a little. Group revenue in the first nine months of 2024 (9M24) is up more than 50% on the 9M19 pre-COVID comparative period, implying a step-change in trading performance.
Valuation: Raised modestly to 134p/share
The outlook is finally improving after a prolonged period of uncertainty, and as a result of this and very good Sales activity throughout this year, we have modestly raised our FY24 and FY25 adjusted operating profit estimates. We have also raised our valuation, from 132p/share to 134p/share, in line with the profit upgrade. Earlier this year, Foxtons revised its dividend policy, which points to progression potential, with payments at least in line with FY23.
Q324 trading confirms improving markets
Without doubt, the underlying driver of Foxtons’ revenue growth in the year-to-date and Q3 periods has been the Sales division, which has benefited from a range of reinvigorating internal initiatives, and as a result has taken market share comfortably above the 4.5% target. Elsewhere, Lettings, the less volatile and more predictable revenue driver, has performed robustly in markets that are beginning to witness a greater supply of properties entering the market, thus providing added opportunity. With the end-September sales pipeline up 23%, the outlook for the remainder of the year and into 2025 appears encouraging.
Year-to-date and Q3 revenue growth driven by Sales
Foxtons’ Q324 trading update was robust, with Q3 revenue increasing 8.0% to £47.4m. We believe this is a continuation of the market outperformance and market share gains that have become a regular feature of Foxtons’ performance over the last 18 months. Year-to-date revenue increased 9.7% to £125.9m, with growth in all divisions, although the most marked outperformance was in Sales, as internal initiatives have begun to feed through and the market has picked up a little. Looking at the table below, year-to-date (9M24) group revenue is up more than 50% on the 9M19 pre-COVID comparative period.
In the core Lettings business, Q3 revenue was flat year-on-year at £31.6m, with the comparative period benefiting from a record level of renewal revenues due to high numbers of tenancies coming up for renewal in the period. This year, Foxtons has seen double-digit growth in new business, driven by operational improvements, and in Q324 this helped to offset the lower expected renewal volumes. Last year, Foxtons acquired Ludlow Thompson in November, which added c £1m of revenue in the quarter.
On a year-to-date basis, Lettings revenue increased 3% to £84.0m, (9M23: £81.3m), which included c £3.1m from the acquisition. The underlying Lettings market has been consistent with the H124 period, with rental prices flat year-on-year and strong tenant demand facing improved levels of available stock, which in turn is focusing the group on new business volumes.
Exhibit 1: 9M24 and Q324 revenue growth rates by division and group
£m |
9M19 |
9M20 |
9M21 |
9M22 |
9M23 |
9M24 |
9M24 vs 9M19 |
9M24 vs 9M20 |
9M24 vs 9M21 |
9M24 vs 9M22 |
9M24 vs 9M23 |
Revenue |
|
|
|
||||||||
Lettings |
53.7 |
45.2 |
57.7 |
68.6 |
81.3 |
84.0 |
56.3% |
85.8% |
45.5% |
22.3% |
3.3% |
Sales |
23.8 |
18.0 |
33.5 |
32.7 |
26.9 |
35.1 |
47.5% |
95.3% |
4.8% |
7.3% |
30.4% |
Financial Services |
6.0 |
5.8 |
7.2 |
7.6 |
6.6 |
6.8 |
13.2% |
18.0% |
-4.9% |
-9.3% |
3.3% |
Total revenue |
83.5 |
69.0 |
98.4 |
108.9 |
114.8 |
125.9 |
50.7% |
82.6% |
28.0% |
15.6% |
9.7% |
|
|||||||||||
£ |
Q319 |
Q320 |
Q321 |
Q322 |
Q323 |
Q324 |
Q324 vs Q319 |
Q324 vs Q320 |
Q324 vs Q321 |
Q324 vs Q322 |
Q324 vs Q323 |
Revenue |
|
|
|||||||||
Lettings |
21.3 |
19.5 |
24.8 |
29.2 |
31.6 |
31.6 |
48.5% |
62.1% |
27.6% |
8.2% |
0.0% |
Sales |
8.4 |
6.9 |
8.3 |
11.9 |
9.9 |
13.5 |
61.5% |
95.7% |
63.4% |
13.4% |
36.4% |
Financial Services |
2.1 |
2.2 |
2.0 |
2.8 |
2.4 |
2.3 |
10.4% |
4.5% |
14.8% |
-16.4% |
-4.2% |
Total revenue |
31.7 |
28.6 |
35.0 |
43.8 |
43.9 |
47.4 |
49.4% |
65.7% |
35.3% |
8.3% |
8.0% |
Source: Foxtons Group, Edison Investment Research
In Sales, Q3 revenue increased 36% y-o-y to £13.5m, which is the highest figure in nearly 10 years, as Foxtons continues to take market share and as the market showed some early signs of recovery. Q3 volumes were up 34% compared to a market that increased c 13%, implying continued market share gain. In the year-to-date (9M24), revenue was up 30% to £35.1m, reflecting market share growth of 25% to leave Foxtons on a 9M24 market share of 5.0%, versus 4.0% last year. Foxtons is now regularly ahead of its 4.5% market share target, suggesting that the target may be reviewed in due course.
The outlook for sales in Q4 is encouraging given the under-offer pipeline at the end of September was up 23% against the prior year.
In Financial Services, Q3 revenue was down marginally at £2.3m (Q323: £2.4m), while being up 3% at £6.8m for 9M24. In Q3, Foxtons experienced higher levels of lower-value transfer mortgages, which had a negative impact on commission levels. There was, however, an almost equal and opposite impact of increased adviser productivity as operational upgrades took effect. Refinance activity remains a key feature and the division is expected to benefit from the uplift in new purchase volumes mentioned above.
Continued strategic development
Exhibit 2 below highlights the divisional revenue trends. Clearly, Lettings has grown steadily in each of the last four years in contrast to Sales and Financial Services, as the underlying markets have been quite volatile, driven by outside influences. Revenue in both Sales and Financial Services has grown in the year to date compared with 9M23, and despite the evident volatility, the revenues of both divisions are comfortably higher than they were in 9M19, which, in our opinion reflects the active investment in fee earners, staff training, data suites and the Foxtons brand, especially in the more recent periods.
|
Exhibit 2: 9M revenue by division, last six years |
|
|
Source: Foxtons Group, Edison Investment Research |
Exhibit 3 below shows the growth rates of the three divisions in Q324 versus the same period in 2019 and in 9M24 versus 9M19. While Lettings has shown consistently strong growth in both periods, at least partly driven by M&A, it is interesting to note that revenue grew faster in Sales in Q3 versus the nine-month period, suggesting some acceleration in performance as a result of the management initiatives mentioned above.
Exhibit 3: Divisional growth rates – Q324 and 9M24 versus Q319 and 9M19
Revenue growth |
Q324 vs Q319 |
9M24 vs 9M19 |
Lettings |
48.5% |
56.2% |
Sales |
61.5% |
47.9% |
Financial Services |
10.4% |
13.2% |
Total revenue |
49.4% |
50.7% |
Source: Foxtons Group, Edison Investment Research
Modest profit upgrade driven by Sales outperformance
Given the strong performance in Sales in particular, and the positive outlook for the Sales pipeline, we have modestly increased our FY24 and FY25 revenue and adjusted operating profit estimates. Although the company pointed to its expectations of achieving FY consensus, given the market backdrop, we believe that the balance of risks is to the upside although we understand that the forthcoming UK government budget may have some impact on market sentiment.
Exhibit 4: Revised forecasts
£m |
FY23 |
FY24e (old) |
FY24e (new) |
Change (%) |
FY25e (old) |
FY25e (new) |
Change (%) |
Revenue |
147.1 |
157.6 |
159.7 |
1.3% |
166.6 |
168.9 |
1.6% |
Y-o-y growth (%) |
4.9% |
- |
8.5% |
- |
5.7% |
- |
|
Adjusted operating profit |
14.3 |
17.6 |
17.9 |
1.6% |
20.4 |
20.8 |
1.8% |
Y-o-y growth (%) |
1.1% |
- |
25.4% |
- |
16.1% |
- |
|
Reported PBT |
7.9 |
15.0 |
15.3 |
1.7% |
18.2 |
18.5 |
1.8% |
Y-o-y growth (%) |
-37.9% |
- |
93.3% |
- |
21.4% |
- |
|
EPS (company definition) (p) |
2.9 |
3.7 |
3.7 |
0.9% |
4.4 |
4.5 |
3.0% |
Y-o-y growth (%) |
-0.9% |
- |
29.5% |
- |
21.4% |
- |
|
DPS (p) |
0.9 |
1.3 |
1.3 |
0.5% |
1.6 |
1.6 |
2.3% |
Y-o-y growth (%) |
0.0% |
- |
45.1% |
- |
21.4% |
- |
|
Net cash/(debt) (pre-IFRS 16, ie ex-lease liabilities) |
(6.8) |
(5.1) |
(5.0) |
1.5% |
7.2 |
7.5 |
4.3% |
Y-o-y growth (%) |
-155.9% |
- |
-26.1% |
- |
-249.6% |
- |
Source: Foxtons Group, Edison Investment Research
Exhibit 5: Financial summary
£m |
2019 |
2020 |
2021 |
2022 |
2023 |
2024e |
2025e |
2026e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||||||
Revenue |
|
|
106.9 |
93.6 |
126.5 |
140.3 |
147.1 |
159.7 |
168.9 |
175.6 |
EBITDA |
|
|
13.5 |
15.7 |
25.1 |
27.8 |
30.0 |
35.2 |
38.1 |
43.1 |
Normalised operating profit |
|
|
0.6 |
3.8 |
12.1 |
15.6 |
17.1 |
22.2 |
25.1 |
30.1 |
Amortisation of acquired intangibles |
(0.6) |
(0.8) |
(1.7) |
(1.6) |
(1.8) |
(2.4) |
(2.4) |
(2.4) |
||
Share-based payments |
(0.7) |
(1.0) |
(1.5) |
(0.2) |
(1.0) |
(2.0) |
(2.0) |
(2.0) |
||
Total adjusted operating profit |
(0.7) |
1.9 |
8.9 |
13.9 |
14.3 |
17.9 |
20.8 |
25.8 |
||
Exceptionals |
(5.7) |
(1.1) |
(1.4) |
(0.1) |
(4.5) |
0.0 |
0.0 |
0.0 |
||
Reported operating profit |
(6.3) |
0.8 |
7.6 |
13.8 |
9.8 |
17.9 |
20.8 |
25.8 |
||
Net Interest and exceptionals |
(2.5) |
(2.2) |
(2.0) |
(1.9) |
(1.9) |
(2.6) |
(2.2) |
(1.9) |
||
Profit Before Tax (norm) |
|
|
(1.9) |
1.6 |
10.0 |
13.7 |
15.2 |
19.6 |
22.9 |
28.2 |
Profit Before Tax (reported) |
|
|
(8.8) |
(1.4) |
5.6 |
11.9 |
7.9 |
15.3 |
18.5 |
23.9 |
Reported tax |
1.0 |
(1.8) |
(6.9) |
(2.4) |
(2.4) |
(3.8) |
(4.6) |
(6.0) |
||
Discontinued operations |
0.0 |
0.0 |
(4.8) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
(0.9) |
(0.2) |
(1.7) |
11.4 |
12.8 |
15.8 |
18.2 |
22.2 |
||
Net income (reported) |
(7.8) |
(3.2) |
(6.2) |
9.6 |
5.5 |
11.4 |
13.9 |
17.9 |
||
Basic average number of shares outstanding (m) |
275 |
314 |
324 |
308 |
302 |
302 |
302 |
302 |
||
EPS - basic normalised (p) |
|
|
(0.32) |
(0.08) |
(0.52) |
3.69 |
4.23 |
5.23 |
6.04 |
7.36 |
EPS - basic reported (p) |
|
|
(2.83) |
(1.02) |
(1.90) |
3.11 |
1.82 |
3.79 |
4.60 |
5.92 |
EPS - continuing, diluted, and adjusted. company def. (p) |
|
|
(1.06) |
(0.16) |
1.98 |
3.00 |
2.88 |
3.73 |
4.53 |
5.83 |
Dividend (p) |
0.00 |
0.00 |
0.45 |
0.90 |
0.90 |
1.31 |
1.59 |
2.04 |
||
Revenue growth (%) |
(-4.1) |
(-12.5) |
35.2 |
10.9 |
4.9 |
8.5 |
5.7 |
4.0 |
||
Normalised Operating Margin (%) |
0.5 |
4.1 |
9.5 |
11.1 |
11.6 |
13.9 |
14.9 |
17.2 |
||
BALANCE SHEET |
||||||||||
Fixed Assets |
|
|
178.7 |
173.4 |
184.4 |
191.7 |
214.2 |
206.4 |
197.1 |
188.0 |
Intangible Assets |
101.0 |
103.5 |
107.3 |
109.3 |
114.9 |
116.0 |
117.1 |
118.2 |
||
Goodwill |
9.3 |
11.4 |
17.7 |
26.1 |
40.7 |
40.7 |
40.7 |
40.7 |
||
Tangible Assets |
13.0 |
10.5 |
9.7 |
10.7 |
9.5 |
13.6 |
16.3 |
19.1 |
||
Right of use assets |
51.4 |
44.4 |
43.8 |
42.6 |
42.5 |
29.5 |
16.5 |
3.5 |
||
Contract assets |
0.6 |
0.4 |
0.9 |
1.7 |
4.7 |
4.7 |
4.7 |
4.7 |
||
Investments & other |
3.3 |
3.1 |
5.1 |
1.4 |
1.9 |
1.9 |
1.8 |
1.8 |
||
Current Assets |
|
|
30.2 |
52.6 |
39.3 |
34.5 |
37.1 |
42.2 |
56.0 |
73.5 |
Contract assets |
1.0 |
1.7 |
3.7 |
5.7 |
14.3 |
14.3 |
14.3 |
14.3 |
||
Debtors |
13.4 |
13.9 |
16.0 |
16.0 |
17.4 |
20.8 |
22.0 |
22.8 |
||
Cash & cash equivalents |
15.5 |
37.0 |
19.4 |
12.0 |
5.0 |
6.8 |
19.3 |
35.9 |
||
Other |
0.3 |
0.1 |
0.3 |
0.7 |
0.5 |
0.5 |
0.5 |
0.5 |
||
Current Liabilities |
|
|
(27.9) |
(29.2) |
(31.9) |
(38.7) |
(57.1) |
(51.6) |
(52.2) |
(52.7) |
Creditors, tax and social security |
(10.5) |
(10.3) |
(14.5) |
(16.7) |
(21.4) |
(16.1) |
(17.0) |
(17.7) |
||
Lease liabilities |
(9.7) |
(10.8) |
(8.8) |
(10.7) |
(10.7) |
(10.7) |
(10.7) |
(10.7) |
||
Short term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
(11.7) |
(11.7) |
(11.7) |
(11.7) |
||
Contract liabilities |
(6.3) |
(7.7) |
(8.2) |
(9.7) |
(11.8) |
(11.8) |
(11.8) |
(11.8) |
||
Other |
(1.4) |
(0.4) |
(0.3) |
(1.5) |
(1.6) |
(1.4) |
(1.1) |
(0.9) |
||
Long Term Liabilities |
|
|
(65.2) |
(62.4) |
(68.4) |
(64.9) |
(68.6) |
(59.4) |
(49.8) |
(40.3) |
Lease liabilities |
(46.2) |
(40.7) |
(39.3) |
(35.8) |
(36.9) |
(27.7) |
(18.1) |
(8.6) |
||
Contract liabilities |
(1.3) |
(1.1) |
(1.1) |
(0.3) |
(0.4) |
(0.4) |
(0.4) |
(0.4) |
||
Other long term liabilities |
(17.8) |
(20.6) |
(28.0) |
(28.8) |
(31.3) |
(31.3) |
(31.3) |
(31.3) |
||
Shareholders' equity |
|
|
115.8 |
134.5 |
123.5 |
122.7 |
125.6 |
137.7 |
151.0 |
168.4 |
CASH FLOW |
||||||||||
Op Cash Flow before WC and tax |
(2.6) |
4.3 |
6.6 |
15.0 |
11.6 |
20.2 |
23.1 |
28.1 |
||
Depreciation - Right of use assets |
9.8 |
9.4 |
10.6 |
12.2 |
12.9 |
13.0 |
13.0 |
13.0 |
||
Impairment of goodwill |
0.0 |
0.0 |
3.2 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Branch asset impairment |
4.3 |
1.7 |
1.1 |
(0.3) |
3.4 |
0.0 |
0.0 |
0.0 |
||
Gain on disposal of PPE etc |
(0.4) |
(0.5) |
(1.4) |
(0.3) |
0.2 |
(0.5) |
(0.5) |
0.5 |
||
Working capital |
(2.6) |
(0.6) |
1.7 |
(1.2) |
(10.8) |
(8.7) |
(0.3) |
(0.2) |
||
Decrease in provisions |
0.8 |
(0.8) |
0.2 |
1.1 |
(0.5) |
(1.0) |
(1.0) |
(1.0) |
||
Share based payment charges |
0.7 |
1.0 |
1.5 |
0.2 |
1.0 |
2.0 |
2.0 |
2.0 |
||
Cash settlement of share incentive plan |
(0.4) |
0.0 |
0.0 |
(0.0) |
0.0 |
(0.5) |
(0.5) |
(0.5) |
||
Tax |
0.2 |
0.2 |
(0.2) |
(2.7) |
(2.2) |
(3.8) |
(4.6) |
(6.0) |
||
Net operating cash flow |
|
|
9.8 |
14.7 |
23.5 |
23.9 |
15.7 |
20.8 |
31.2 |
36.0 |
Capex |
(0.3) |
(0.4) |
(1.7) |
(2.9) |
(2.1) |
(1.9) |
(2.0) |
(2.1) |
||
Acquisitions/disposals |
(0.2) |
(3.9) |
(14.5) |
(9.6) |
(15.5) |
(2.3) |
(0.8) |
(0.8) |
||
Net interest |
0.0 |
0.0 |
(0.0) |
0.1 |
0.1 |
(0.1) |
0.0 |
0.3 |
||
Dividends |
0.0 |
0.0 |
(0.6) |
(1.5) |
(2.7) |
(2.7) |
(3.9) |
(4.8) |
||
Repayment of lease liabilities |
(12.0) |
(10.0) |
(15.2) |
(12.7) |
(12.5) |
(12.0) |
(12.0) |
(12.0) |
||
Purchase of own shares |
(0.1) |
(0.3) |
(5.7) |
(4.9) |
(1.1) |
(0.3) |
(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 |
0.0 |
||
Other |
0.3 |
0.3 |
0.3 |
(3.4) |
0.2 |
0.3 |
0.3 |
0.3 |
||
Net Cash Flow |
(2.4) |
21.5 |
(13.9) |
(11.1) |
(17.9) |
1.8 |
12.5 |
16.7 |
||
Opening net debt/(cash) |
|
|
(17.9) |
(15.5) |
(37.0) |
(23.1) |
(12.0) |
6.8 |
5.0 |
(7.5) |
Closing net debt/(cash) (ex lease liabilities |
|
(15.5) |
(37.0) |
(23.1) |
(12.0) |
6.8 |
5.0 |
(7.5) |
(24.2) |
|
Source: Foxtons Group, Edison Investment Research
|
|
Research: TMT
Softcat’s FY24 results supports management’s assertion that the group has found a unique formula. Management re-emphasised the role of its corporate culture in creating a differentiated offering for the highly fragmented UK IT services market. Softcat’s resulting growth in market share also translated into strong cash generation and dividend flow. The results suggest that management can meet or slightly exceed guidance even under challenging economic conditions.