Foxtons Group — Market share gains in Sales continues apace

Foxtons Group (LSE: FOXT)

Last close As at 29/01/2025

GBP0.67

1.00 (1.52%)

Market capitalisation

GBP200m

More on this equity

Research: Real Estate

Foxtons Group — Market share gains in Sales continues apace

Foxtons Group’s FY24 trading update confirmed revenue and adjusted operating profit growth of c 11% and c 33%, respectively, reflecting the developing success of the company’s strategic vision. This suggests that the medium-term targets, particularly the adjusted annualised operating profit target of £25–30m, are increasingly coming into focus. We believe market share is being gained across all divisions, likely to be further boosted by the under-offer pipeline in Sales, which is the strongest since 2016. We have modestly raised our FY24e forecasts but maintained estimates further out at this stage, given the increase in Stamp Duty from April. Our valuation remains 134p per share, though risks appear to be skewed to the upside if market momentum continues, which could be further supported by a potential easing of interest rates.

Andy Murphy

Written by

Andy Murphy

Director, Financials & Industrials

Real estate

FY24 trading update

28 January 2025

Price 66.00p
Market cap £201m

Net debt at 31 December 2024

£12.8m

Shares in issue

303.9m
Code FOXT
Primary exchange LSE
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs (1.5) 11.9 20.3
52-week high/low 71.2p 50.6p

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 are split into three separate revenue streams: sales, lettings and mortgage broking.

Next events

FY24 prelims


5 March

Q1 results

23 April

Analyst

Andy Murphy
+44 (0)20 3077 5700

Foxtons Group is a research client of Edison Investment Research Limited

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).

Year end Revenue (£m) PBT (£m) EPS (p) DPS (p) P/E (x) Yield (%)
12/23 147.1 15.2 2.88 0.90 22.9 1.4
12/24e 163.0 20.7 3.99 1.40 16.5 2.1
12/25e 178.4 23.6 4.48 1.57 14.7 2.4
12/26e 185.5 28.5 5.77 2.02 11.4 3.1

FY24 results exceed market expectations

Foxtons’ FY24 trading update confirmed that total revenue increased by 11% to £163m, with adjusted operating profit for the 12 months rising by c 33% to £19m. Both figures were ahead of market expectations and Edison’s forecasts of £160.2m and £17.9m, respectively. Despite investing £13.0m in acquisitions, including Haslams Estate Agents and Imagine Property Group in October, Foxtons ended the year with net debt of £12.8m (FY23: £6.8m), which was modestly better than anticipated.

Lettings provides platform, Sales drove growth

Lettings revenue, which accounts for c 65% of Foxtons’ revenue, increased by c 5% for the year and was up 11% in Q4. Q4 growth was partly driven by like-for-like growth of c 5%, with the remainder generated by acquired businesses, which are performing as expected and are steadily being integrated into the group. Sales performed strongly in a recovering London market, increasing market share by c 20% (source: TwentyCi). Sales revenue increased by c 30%, despite broadly flat average sales prices, which contributed to a significant reduction in sector losses. Financial Services revenue grew by 6% in the year with growth accelerating to 15% in Q4, reflecting operational upgrades and an improving underlying market.

Valuation: Unchanged despite strong end to FY24

We have increased our FY24 expectations given the outperformance in the period but have retained our FY25 and FY26 figures, as the market is being temporarily boosted by the government’s decision to increase Stamp Duty. FY25 has started well, with the under-offer pipeline at its highest level in nearly 10 years, suggesting forecast risks are skewed to the upside. We also maintain our 134p per share valuation.

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