Foxtons Group — FY21 profit growth highlights strategic progress

Foxtons Group (LSE: FOXT)

Currency in GBP

Last close As at 02/02/2023

GBP0.38

2.00 (5.55%)

Market capitalisation

GBP110m

Research: Real Estate

Foxtons Group — FY21 profit growth highlights strategic progress

Foxtons preliminary results highlighted that FY21 was a good year. 2022 has also started well, with rents continuing to increase and the sales market remaining at buoyant levels, according to management. Furthermore, additional income streams are developing well and amounted to £9m in the period, while the company has identified c £8m of M&A investment so far this year, highlighting strategic progress. We retain our underlying assumptions and our 128p per share valuation.

Andy Murphy

Written by

Andy Murphy

Director, Financials & Industrials

Real Estate

Foxtons

FY21 profit growth highlights strategic progress

Preliminary FY21 results

Real estate

10 March 2022

Price

32.4p

Market cap

£107m

Net cash* (£m) at 31 December 2021 *Including £3.7m of cash held for sale and excluding lease liabilities.

23.1

Shares in issue

330.1m

Free float

100%

Code

FOXT

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(11.6)

(20.8)

(45.1)

Rel (local)

(3.3)

(14.5)

(45.8)

52-week high/low

68.00p

31.35p

Business description

Foxtons Group is London’s leading and most widely recognised estate agency. It operates from a network of 57 interconnected branches offering a range of residential-related services, which break down into three separate revenue streams: sales, lettings and mortgage broking.

Next events

Q1 trading update

21 April 2022

AGM

15 June 2022

Interims

28 July 2022

Analyst

Andy Murphy

+44 (0)20 3077 5700

Foxtons is a research client of Edison Investment Research Limited

Foxtons preliminary results highlighted that FY21 was a good year. 2022 has also started well, with rents continuing to increase and the sales market remaining at buoyant levels, according to management. Furthermore, additional income streams are developing well and amounted to £9m in the period, while the company has identified c £8m of M&A investment so far this year, highlighting strategic progress. We retain our underlying assumptions and our 128p per share valuation.

Year end

Revenue (£m)

PBT*
(£m)

EPS**
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/20

93.6

1.6

(0.2)

0.0

N/A

N/A

12/21

126.5

10.0

1.9

0.5

17.2

1.3%

12/22e

132.3

12.4

2.1

0.7

15.2

2.3%

12/23e

137.1

14.6

2.5

0.9

12.9

2.7%

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 change, ie company definition.

Revenue up by a third, but profit up fivefold

Foxtons’ FY21 revenue increased by 35% to £126.5m, partly driven by recovering markets and partly by acquisition. Normalised operating profit tripled, from £3.8m to £12.1m due to good trading, operational gearing and the initial contribution from D&G lettings, offset by the voluntary repayment of £1.5m in business rates. Reported, adjusted and continuing EPS came in at 1.9p versus a small loss last year and a full year dividend of 0.45p was declared. Foxtons ended the year with net cash of £19.4m (ex £3.7m held for sale), slightly better than expectations despite returning £5.7m of surplus capital to shareholders. It has since announced a £3m share buyback that could see it buy back c 3% of the issued share capital.

Evidence of strategic progress abounds

Foxtons has had notable strategic success since the start of FY21. In particular, the purchase of D&G in March went well according to management, adding c 2,900 tenancies to the portfolio and growing it by 13.3%. Furthermore, the recent disposal of the D&G sales operation removes a loss-making entity from the group and reduces the risks associated with owning the high street network. In addition, other growth streams added £9m in revenue from three sources: private office (£3.3m), Build to Rent (£2.7m, up 68%) and Asia-Pacific sales (£2.7m). Finally, Foxtons has identified M&A investment of c £8m for the current year for the purchase of lettings books, which fits neatly with its strategy and our optimistic view of the valuation.

Valuation: 128p/share valuation retained

We believe that Foxtons’ growth strategy is bearing fruit, but the success is not reflected in the current rating, especially after the sell-off since the summer. We believe that our bull case better highlights the potential upside in forecasts, where Foxtons is particularly geared to further acquisitions of lettings books as well as growth from Build to Rent, regional expansion and its underlying markets. Our bull case scenario suggests a potential 2022 EPS of 7.4p, which implies a valuation of 128p/share when the average 2014/15 P/E of 17.5x is applied.

FY21 group and divisional performance very strong

FY21 revenue increased by 35% to £126.5m, partly driven by recovering markets and partly by M&A. Stripping out the £10m revenue relating to the acquired D&G lettings activity, revenue grew 24% y-o-y and was 9.9% ahead of 2019. Underlying trading was strong across all three divisions. In lettings, volumes rose 19% to 22,091, benefiting from market growth and M&A. In sales, volumes increased 53% to 3,122 and in mortgage broking, volumes increase 14% to 4,991 mortgages.

Exhibit 1: Full year results summary

FY19

FY20

FY21

FY21 vs FY19

FY21 vs FY20

Revenue

Lettings

65.7

57.3

74.3

13.1%

29.8%

Sales

32.6

28.2

42.7

30.8%

51.4%

Mortgage Broking

8.5

8.1

9.5

10.9%

17.1%

Total revenue

106.9

93.6

126.5

18.3%

35.2%

Adjusted operating profit

Lettings

4.2

6.3

8.9

111.3%

40.6%

Sales

(6.3)

(5.8)

(1.5)

(76.0%)

(74.3%)

Mortgage Broking

1.4

1.4

1.5

12.7%

8.5%

Total adjusted operating profit, pre exceptionals

(0.7)

1.9

8.9

-

369.6%

PBT (pre-exceptionals)

(3.2)

(0.3)

6.9

-

-

EPS - continuing, diluted and adjusted (company definition)*

(1.1)

(0.2)

1.9

-

-

DPS

0.0

0.0

0.5

-

-

Net cash

15.5

37.0

23.1

49.1%

(37.6%)

Source: Foxtons and Edison Investment Research. Note: *Exceptions (including tax and deferred tax remeasurement added back).

Operating profit rose nearly fivefold, from £1.9m to £8.9m, due to good trading, operational gearing and the contribution from D&G lettings, which was incremental, offset by the voluntary repayment of £1.5m in business rates. Adjusted EPS came in at 1.9p versus a small loss last year and a full year dividend of 0.45p/share was declared.

Foxtons ended the year with net cash of £19.4m (£23.1m including £3.7m of cash relating to the D&G sales operation which has subsequently been sold), slightly better than expectations despite investing £11.4m in acquisitions, returning £5.7m of surplus capital to shareholders via share buybacks and spending £0.6m on dividends. On 8 March, Foxtons announced another £3m share buyback programme, which could see it buy back c 3% of the issued share capital at the current price.

In 2021, Foxtons made material strategic progress with the integration of the D&G lettings business and disposal of the D&G sales business in the early weeks of 2022. It also carried out a strategic review of its mortgage broking business, Alexander Hall, and concluded that it is not only in the interests of the group to keep it, but also that it plans to increase the financial adviser base to fully realise the financial services cross-selling opportunities that it brings.

Lettings activity picked up; rates also moving up

The volume of lettings increased by 18.8% to 22,091, benefiting from a recovering market that added c 8% to full-year volumes, and c 2,100 lettings from the D&G acquisition which was included for 10 months of the year. Total revenue rose 29.8% y-o-y to £74.3m, the higher growth rate reflecting the superior (due to geographical bias) rental rates achieved in the acquired business. Overall, revenue per letting rose 9.2% to £3,365. Underlying rental rates in the market rose c 3%. We believe rates in FY22 are likely to rise further given the rate growth currently being witnessed as markets reopen post COVID. There will also be an additional two months’ contribution from D&G in FY22, which will add to total revenue and the average revenue per let.

Exhibit 2: Foxtons lettings activity, last six half years

Source: Foxtons Group

Sales revenue highest since 2016

Sales activity, especially in H1 when market participants took advantage of the stamp duty holiday, was very strong with FY21 volumes up 53.5% to 3,122 units. H1 volumes increased by more than 100% due to the market distortion but, even in H2, sales volumes rose 6.4% y-o-y. Revenue per unit was down 1.3% to £13,668, mainly due to mix as Foxtons handled a higher proportion of flats versus higher-value houses. Overall, sales revenue rose 51.4% to £42.7m, the highest figure reported since 2016. These figures exclude D&G sales, as the activity was held for sale at year end and subsequently sold.

Given the strength of the underlying markets and the board’s growth ambitions, Foxtons plans to add c 30 sales negotiators to the business this year. This amounts to c 0.5 employees per branch.

Exhibit 3: Sales activity, last six half years

Source: Foxtons Group

Mortgage activity to be retained and expanded

Mortgage broking activity was also buoyant in the year, benefiting in the first half from the strength of the sales market in particular. Overall, FY21 revenue increased 10.9% to £9.5m and volume rose 12.4% to 4,991 transactions. Revenue per transaction was up 2.3% to £1,895 as there was a higher proportion of purchases versus remortgages.

Foxtons’ strategic review concluded that not only were there synergies to be retained, particularly with the sales operation, but that the company would invest in headcount to better capture more of the lead generation that comes from sales activities. Recruitment is ongoing with additional costs of c £0.4m expected to reach break-even in 2022 and accretive in future years.

Exhibit 4: Mortgage broking activity

Source: Foxtons Group

Underlying forecasts unchanged; valuation remains 128p/share

Our underlying assumptions remain unchanged and our revenue forecasts are therefore similar to our previous figures. However, the table below shows a modest uptick in normalised operating profit and normalised PBT as the assumed charge for amortisation has increased by £0.6m and is added back to arrive at Edison’s ‘normalised’ result. The lower increase in EPS reflects the change mentioned above, but is offset by the increased number of shares in issue.

Exhibit 5: Summary of estimate changes

FY21

FY22e

FY23e

£m

Old

New

Change (%)

Old

New

Change (%)

Revenue

126.5

132.1

132.3

0.1%

136.7

137.1

0.3%

Y-o-y growth (%)

-

4.4%

4.6%

-

3.5%

3.6%

-

Total operating profit (normalised)

12.1

13.9

14.5

4.6%

15.9

16.7

4.9%

Y-o-y growth (%)

-

15.2%

20.5%

-

14.4%

14.6%

-

PBT (normalised)

10.0

12.0

12.4

3.4%

14.0

14.6

3.9%

Y-o-y growth (%)

-

19.5%

23.6%

-

16.8%

17.3%

-

EPS (basic normalised) (p)

(0.5)

3.2

3.3

1.1%

3.6

3.6

1.5%

Y-o-y growth (%)

-

N/A

N/A

-

11.1%

11.6%

-

Source: Foxtons Group data, Edison Investment Research

We retain our bull case valuation of 128p/share, but note that the quality of earnings has increased materially as loss-making operations have been sold and predictable lettings revenue has increased. Our bull case assumes M&A spend of c £10m on lettings books and Foxtons highlights in the statement that it has already identified M&A spend of c £8m. Given the current early stage of 2022, we believe our £10m M&A spend is realistic and could be surpassed, implying upside to the valuation scenario. We apply a 17.5x multiple, which was the average achieved in 2014/15 when the markets were similarly buoyant.

Exhibit 6: Bear, base and bull case revenue and profit scenarios

2022e

Bear

Base

Bull

2019 revenue base (£m)

106.9

106.9

106.9

Organic revenue growth

(8.9)

13.0

39.4

M&A revenue growth

11.2

12.4

19.2

2022 revenue

109.1

132.3

165.5

Operating profit

(4.1)

10.9

32.5

Interest

(2.1)

(2.1)

(2.1)

PBT

(6.3)

8.8

30.4

Tax (@ 19%)

-

(1.7)

(5.8)

Profit after tax

(8.6)

7.1

24.6

Average shares in issue (diluted)

334.8

334.8

334.8

EPS (p) continuing, diluted and adjusted. Company definition*

(2.6)

2.1

7.3

Current price (p)

32.4

 

Implied 2022E P/E (x)

N/A

15.2

4.4

Potential value per share

Target P/E (x)

17.5

17.5

Implied value per share (p)

37.3

127.7

Source: Edison Investment Research. Note: *Exceptions (including tax and deferred tax remeasurement added back).


Exhibit 7: Financial summary

£m

2019

2020

2021

2022e

2023e

2024e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

106.9

93.6

126.5

132.3

137.1

142.0

EBITDA

 

 

13.5

15.7

25.1

26.5

27.7

28.5

Normalised operating profit

 

 

0.6

3.8

12.1

14.5

16.7

18.5

Amortisation of acquired intangibles

(0.6)

(0.8)

(1.7)

(1.6)

(1.6)

(1.6)

Exceptionals

(5.7)

(1.1)

(1.4)

0.0

0.0

0.0

Share-based payments

(0.7)

(1.0)

(1.5)

(2.0)

(2.0)

(2.0)

Reported operating profit

(6.3)

0.8

7.6

10.9

13.1

14.9

Net Interest

(2.4)

(2.2)

(2.0)

(2.1)

(2.1)

(2.1)

Exceptionals

(0.1)

(0.0)

(0.0)

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(1.9)

1.6

10.0

12.4

14.6

16.4

Profit Before Tax (reported)

 

 

(8.8)

(1.4)

5.6

8.8

11.0

12.8

Reported tax

1.0

(1.8)

(6.9)

(1.7)

(2.6)

(3.2)

Profit After Tax (norm)

(0.9)

(0.2)

3.1

10.7

12.0

13.2

Profit After Tax (reported)

(7.8)

(3.2)

(1.3)

7.1

8.4

9.6

Discontinued operations

0.0

0.0

(4.8)

0.0

0.0

0.0

Net income (normalised)

(0.9)

(0.2)

(1.7)

10.7

12.0

13.2

Net income (reported)

(7.8)

(3.2)

(6.2)

7.1

8.4

9.6

Basic average number of shares outstanding (m)

275

314

324

330

330

330

EPS - basic normalised (p)

 

 

(0.32)

(0.08)

(0.52)

3.25

3.63

4.00

EPS - diluted normalised (p)

 

 

(0.32)

(0.08)

(0.52)

3.20

3.58

3.94

EPS - basic reported (p)

 

 

(2.83)

(1.02)

(1.90)

2.16

2.54

2.91

EPS – continuing, diluted and adjusted*

(1.06)

(0.16)

1.88

2.13

2.50

2.87

Dividend (p)

0.00

0.00

0.45

0.75

0.88

1.00

Revenue growth (%)

(4.1)

(12.5)

35.2

4.6

3.6

0.0

EBITDA Margin (%)

12.6

16.8

19.9

20.1

20.2

20.1

Normalised Operating Margin

0.5

4.1

9.5

11.0

12.2

13.0

BALANCE SHEET

Fixed Assets

 

 

178.7

173.4

184.4

181.0

171.5

162.9

Intangible Assets

101.0

103.5

107.3

109.4

110.5

111.6

Goodwill

9.3

11.4

17.7

17.7

17.7

17.7

Tangible Assets

13.0

10.5

9.7

12.5

12.9

13.3

Right of use assets

51.4

44.4

43.8

31.8

20.8

10.8

Contract assets

0.6

0.4

0.9

0.9

0.9

0.9

Investments & other

3.3

3.1

5.1

8.8

8.7

8.7

Current Assets

 

 

30.2

52.6

39.3

39.6

45.5

50.0

Contract assets

1.0

1.7

3.7

3.7

3.7

3.7

Debtors

13.4

13.9

16.0

17.2

17.8

18.5

Cash & cash equivalents

15.5

37.0

19.4

20.1

28.0

35.0

Other

0.3

0.1

0.3

(1.4)

(3.9)

(7.1)

Current Liabilities

 

 

(27.9)

(29.2)

(31.9)

(31.9)

(33.1)

(33.7)

Creditors

(10.5)

(10.3)

(14.5)

(14.6)

(15.8)

(16.3)

Lease liabilities

(9.7)

(10.8)

(8.8)

(8.8)

(8.8)

(8.8)

Contract liabilities

(6.3)

(7.7)

(8.2)

(8.2)

(8.2)

(8.2)

Other

(1.4)

(0.4)

(0.3)

(0.3)

(0.3)

(0.3)

Long Term Liabilities

 

 

(65.2)

(62.4)

(68.4)

(56.0)

(42.6)

(28.7)

Lease liabilities

(46.2)

(40.7)

(39.3)

(28.5)

(17.7)

(7.0)

Contract liabilities

(1.3)

(1.1)

(1.1)

(1.1)

(1.1)

(1.1)

Other long-term liabilities

(17.8)

(20.6)

(28.0)

(26.3)

(23.7)

(20.5)

Net Assets

 

 

115.8

134.5

123.5

132.8

141.3

150.6

Shareholders' equity

 

 

115.8

134.5

123.5

132.8

141.3

150.6

CASH FLOW

Op Cash Flow before WC and tax

(2.6)

4.3

4.2

12.5

14.7

16.5

Depreciation - Right of use assets

9.8

9.4

13.0

12.0

11.0

10.0

Impairment of goodwill

0.0

0.0

3.2

0.0

0.0

0.0

Branch asset impairment

4.3

1.7

1.1

0.0

0.0

0.0

Gain on disposal of PPE etc

(0.4)

(0.5)

(1.4)

(0.5)

(0.5)

(0.5)

Working capital

(2.6)

(0.6)

1.7

(1.1)

0.6

(0.1)

Decrease in provisions

0.8

(0.8)

0.2

(1.0)

(1.0)

(1.0)

Share based payment charges

0.7

1.0

1.5

2.0

2.0

2.0

Cash settlement of share incentive plan

(0.4)

0.0

0.0

(0.5)

(0.5)

(0.5)

Tax

0.2

0.2

(0.2)

(1.7)

(2.6)

(3.2)

Net operating cash flow

 

 

9.8

14.7

23.5

21.8

23.7

23.2

Capex

(0.3)

(0.4)

(1.7)

(6.0)

(0.4)

(0.4)

Acquisitions/disposals

(0.2)

(3.9)

(14.5)

(0.6)

(0.1)

(0.1)

Net interest

0.0

0.0

(0.0)

0.1

0.1

0.1

Dividends

0.0

0.0

(0.6)

(1.5)

(2.5)

(2.9)

Repayment of lease liabilities

(12.0)

(10.0)

(15.2)

(13.0)

(13.0)

(13.0)

Purchase of own shares

(0.1)

(0.3)

(5.7)

(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

Other

0.3

0.3

0.3

0.3

0.3

0.3

Net Cash Flow

(2.4)

21.5

(13.9)

0.8

7.9

7.0

Opening net debt/(cash)

 

 

(17.9)

(15.5)

(37.0)

(23.1)

(23.8)

(31.7)

Closing net debt/(cash) (excluding lease liabilities)

 

(15.5)

(37.0)

(23.1)

(23.8)

(31.7)

(38.7)

Closing net debt/(cash) (including lease liabilities)

40.4

14.6

28.7

17.2

(1.4)

(19.2)

Source: Company data, Edison Investment Research. Note: *Company definition.

General disclaimer and copyright

This report has been commissioned by Foxtons Group and prepared and issued by Edison, in consideration of a fee payable by Foxtons Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Foxtons Group and prepared and issued by Edison, in consideration of a fee payable by Foxtons Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on Foxtons Group

View All

Latest from the Real Estate sector

View All Real Estate content

Research: Healthcare

Sareum Holdings — Approaching the clinic

Sareum’s H122 results (to end-December 2021) provided an update on the company’s progress with its therapeutic pipeline. With final toxicology and safety studies for lead asset SDC-1801 completed in Q4 of CY21 (final report expected by end-Q122), the company is on track to file an exploratory clinical trial application (CTA) in mid-2022 and start clinical studies in H222. The cash balance of £5.6m at the end of H1 should be sufficient to take SDC-1801 through Phase Ia clinical trials and accelerate SDC-1802’s preclinical progress, with the company continuing to assess options to further clinical development. Sareum completed the 50:1 share consolidation it announced at the December 2021 AGM, with the new shares starting trading on 1 March.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free