Last close As at 05/08/2026
GBP0.37
▲ −1.70 (−4.39%)
Market capitalisation
GBP110m
Research: Real Estate
Foxtons traded well in all divisions in Q4 and generated revenue for the year of c £133m. The company benefited not only from the implementation of its strategy, but also from a robust sales market, which saw a 22% increase in the number of properties under offer in Q4 compared to the long-run average. The letting market also improved, with rental rates recovering sharply and now c 3% ahead of pre-pandemic levels. Foxtons entered 2022 with a sales pipeline similar in size year-on-year.
Foxtons Group |
Robust Q4 and strength into 2022 |
FY21 trading update |
Real estate |
28 January 2022 |
Share price performance
Business description
Next events
Analyst
Foxtons GroupFoxtons Group is a research client of Edison Investment Research Limited |
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Foxtons traded well in all divisions in Q4 and generated revenue for the year of c £133m. The company benefited not only from the implementation of its strategy, but also from a robust sales market, which saw a 22% increase in the number of properties under offer in Q4 compared to the long-run average. The letting market also improved, with rental rates recovering sharply and now c 3% ahead of pre-pandemic levels. Foxtons entered 2022 with a sales pipeline similar in size year-on-year.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/19 |
106.9 |
(1.9) |
(0.3) |
0.0 |
N/A |
N/A |
12/20 |
93.6 |
1.6 |
(0.1) |
0.0 |
N/A |
N/A |
12/21e |
131.8 |
7.5 |
(0.0) |
0.5 |
N/A |
1.3 |
12/22e |
132.1 |
12.0 |
3.2 |
0.8 |
12.5 |
2.0 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Better than expected Q4, £16.8m D&G contribution
Trading in Q4 was better than expected across all divisions and resulted in FY21 revenue of c £133m and adjusted reported operating profit hitting c £7m, ahead of consensus and in line with the top end of the expected range. Revenue included a £16.8m contribution from Douglas & Gordon (D&G) in the 10 months from March 2021, modestly ahead of our expectations.
Good start to 2022 and disposal of D&G sales
Foxtons entered this year with a pipeline similar in size to the same time last year and benefited from some sales that were slow to complete at the end of 2021 falling into the early weeks of 2022. At this early stage we are maintaining our profit forecasts for 2022, where we anticipate revenue of £132.1m and adjusted reported operating profit of £10.9m versus the c £7m that Foxtons expects to report for FY21. In mid-January, Foxtons announced the simultaneous disposal of the D&G sales business, including the high street premises, and the integration of the D&G lettings book into the Foxtons network. The D&G lettings business alone is expected to contribute c £4m to operating profit in FY22, around twice the contribution of the whole business in 2021.
Valuation: Profit forecasts and valuation retained
Our base case shows FY22e reported diluted EPS of 2.2p that, when we apply the average 2014–15 P/E of 17.5x, gives a valuation in line with the current share price. Based on FY23 estimates, our basic EPS of 2.7p implies a valuation of 45.5p, c 14% ahead of the current price. However, we believe future growth is not fully reflected in the share price or in our estimates as we do not include M&A activity. Our unchanged bull case highlights potential upside in forecasts, where Foxtons is particularly geared to further acquisitions of lettings books, growth from Build to Rent, regional expansion and underlying market growth. Our bull case scenario suggests a potential FY22e EPS of 7.3p, which implies a valuation of 128p/share when the 17.5x P/E is applied.
Exhibit 1: Financial summary
£m |
2018 |
2019 |
2020 |
2021e |
2022e |
2023e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||||
Revenue |
|
|
111.5 |
106.9 |
93.6 |
131.8 |
132.1 |
136.7 |
Normalised operating profit |
|
|
(0.3) |
0.6 |
3.8 |
9.5 |
13.9 |
15.9 |
Amortisation of acquired intangibles |
(0.2) |
(0.6) |
(0.8) |
(1.2) |
(1.0) |
(1.0) |
||
Exceptionals |
(15.7) |
(5.7) |
(1.1) |
(0.8) |
0.0 |
0.0 |
||
Share-based payments |
(1.3) |
(0.7) |
(1.0) |
(1.8) |
(2.0) |
(1.9) |
||
Reported operating profit |
(17.6) |
(6.3) |
0.8 |
5.7 |
10.9 |
13.0 |
||
Net Interest |
0.0 |
(2.4) |
(2.2) |
(1.9) |
(1.9) |
(1.9) |
||
Exceptionals |
0.3 |
(0.1) |
(0.0) |
(0.1) |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
0.0 |
(1.9) |
1.6 |
7.5 |
12.0 |
14.0 |
Profit Before Tax (reported) |
|
|
(17.2) |
(8.8) |
(1.4) |
3.7 |
9.0 |
11.1 |
Reported tax |
0.0 |
1.0 |
(1.8) |
(7.7) |
(1.7) |
(2.6) |
||
Net income (normalised) |
0.0 |
(0.9) |
(0.2) |
(0.1) |
10.3 |
11.4 |
||
Net income (reported) |
(17.2) |
(7.8) |
(3.2) |
(4.0) |
7.3 |
8.5 |
||
Basic average number of shares outstanding (m) |
275 |
275 |
314 |
325 |
320 |
320 |
||
EPS - basic normalised (p) |
|
|
0.01 |
(0.32) |
(0.08) |
(0.04) |
3.22 |
3.57 |
EPS - diluted normalised (p) |
|
|
0.01 |
(0.32) |
(0.08) |
(0.04) |
3.17 |
3.52 |
EPS - basic reported (p) |
|
|
(6.25) |
(2.83) |
(1.02) |
(1.22) |
2.28 |
2.67 |
Dividend (p) |
0.00 |
0.00 |
0.00 |
0.54 |
0.79 |
0.92 |
||
Revenue growth (%) |
(5.2) |
(4.1) |
(12.5) |
40.9 |
5.9 |
3.4 |
||
Normalised Operating Margin |
(0.3) |
0.5 |
4.1 |
7.2 |
10.0 |
11.0 |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
130.9 |
178.7 |
173.4 |
172.6 |
163.1 |
154.5 |
Intangible Assets |
101.5 |
101.0 |
103.5 |
103.9 |
105.0 |
106.1 |
||
Goodwill |
9.3 |
9.3 |
11.4 |
11.4 |
11.4 |
11.4 |
||
Tangible Assets |
17.2 |
13.0 |
10.5 |
22.4 |
19.8 |
17.2 |
||
Right of use assets |
0.0 |
51.4 |
44.4 |
35.4 |
27.4 |
20.4 |
||
Contract assets |
0.3 |
0.6 |
0.4 |
0.4 |
0.4 |
0.4 |
||
Investments & other |
2.6 |
3.3 |
3.1 |
(0.9) |
(0.9) |
(1.0) |
||
Current Assets |
|
|
32.4 |
30.2 |
52.6 |
38.4 |
45.6 |
51.1 |
Contract assets |
0.5 |
1.0 |
1.7 |
1.7 |
1.7 |
1.7 |
||
Debtors |
13.7 |
13.4 |
13.9 |
19.0 |
20.1 |
20.8 |
||
Cash & cash equivalents |
17.9 |
15.5 |
37.0 |
18.6 |
26.4 |
33.8 |
||
Other |
0.2 |
0.3 |
0.1 |
(0.6) |
(2.3) |
(5.0) |
||
Current Liabilities |
|
|
(22.0) |
(27.9) |
(29.2) |
(33.4) |
(34.2) |
(34.8) |
Creditors |
(13.7) |
(10.5) |
(10.3) |
(14.5) |
(15.4) |
(15.9) |
||
Lease liabilities |
0.0 |
(9.7) |
(10.8) |
(10.8) |
(10.8) |
(10.8) |
||
Contract liabilities |
(2.5) |
(6.3) |
(7.7) |
(7.7) |
(7.7) |
(7.7) |
||
Other |
(5.7) |
(1.4) |
(0.4) |
(0.4) |
(0.4) |
(0.4) |
||
Long Term Liabilities |
|
|
(17.9) |
(65.2) |
(62.4) |
(49.7) |
(38.1) |
(25.5) |
Lease liabilities |
0.0 |
(46.2) |
(40.7) |
(28.8) |
(18.8) |
(8.9) |
||
Contract liabilities |
(1.1) |
(1.3) |
(1.1) |
(1.1) |
(1.1) |
(1.1) |
||
Other long-term liabilities |
(16.8) |
(17.8) |
(20.6) |
(19.9) |
(18.2) |
(15.6) |
||
Net Assets |
|
|
123.3 |
115.8 |
134.5 |
128.1 |
136.6 |
145.5 |
Shareholders' equity |
|
|
123.3 |
115.8 |
134.5 |
128.1 |
136.6 |
145.5 |
CASH FLOW |
||||||||
Op Cash Flow before WC and tax |
(13.2) |
(2.6) |
4.3 |
9.9 |
14.9 |
17.0 |
||
Depreciation - Right of use assets |
0.0 |
9.8 |
9.4 |
9.0 |
8.0 |
7.0 |
||
Impairment of goodwill |
9.8 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Branch asset impairment |
2.7 |
4.3 |
1.7 |
0.7 |
0.0 |
0.0 |
||
Gain on disposal of PPE etc |
0.1 |
(0.4) |
(0.5) |
(0.5) |
(0.5) |
(0.5) |
||
Working capital |
1.3 |
(2.6) |
(0.6) |
(0.9) |
(0.3) |
(0.2) |
||
Exceptional & other |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Decrease in provisions |
1.2 |
0.8 |
(0.8) |
(1.0) |
(1.0) |
(1.0) |
||
Share based payment charges |
1.3 |
0.7 |
1.0 |
1.8 |
2.0 |
1.9 |
||
Cash settlement of share incentive plan |
0.0 |
(0.4) |
0.0 |
0.5 |
0.5 |
0.5 |
||
Tax |
(1.5) |
0.2 |
0.2 |
(0.7) |
(1.7) |
(2.6) |
||
Net operating cash flow |
|
|
1.8 |
9.8 |
14.7 |
18.7 |
22.0 |
22.2 |
Capex |
0.2 |
(0.3) |
(0.4) |
(0.4) |
(0.4) |
(0.4) |
||
Acquisitions/disposals |
(2.0) |
(0.2) |
(3.9) |
(17.6) |
(0.1) |
(0.1) |
||
Net interest |
0.0 |
0.0 |
0.0 |
0.1 |
0.1 |
0.2 |
||
Dividends |
(0.7) |
0.0 |
0.0 |
0.0 |
(1.8) |
(2.5) |
||
Repayment of lease liabilities |
0.0 |
(12.0) |
(10.0) |
(14.0) |
(12.0) |
(12.0) |
||
Purchase of own shares |
0.0 |
(0.1) |
(0.3) |
(5.7) |
(0.3) |
(0.3) |
||
Net proceeds from issue of ord. Shares |
0.0 |
0.0 |
21.1 |
0.0 |
0.0 |
0.0 |
||
Other |
0.0 |
0.3 |
0.3 |
0.3 |
0.3 |
0.3 |
||
Net Cash Flow |
(0.7) |
(2.4) |
21.5 |
(18.4) |
7.9 |
7.3 |
||
Opening net debt/(cash) |
|
|
(18.6) |
(17.9) |
(15.5) |
(37.0) |
(18.6) |
(26.4) |
Closing net debt/(cash) (ex lease liabilities) |
|
(17.9) |
(15.5) |
(37.0) |
(18.6) |
(26.4) |
(33.8) |
|
Source: Company accounts, Edison Investment Research
|
|
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