Foxtons has delivered its best first half results since 2016 by capitalising on improved trading conditions, particularly in sales, contributing to rapid growth in profitability.

The acquisition of Douglas & Gordon (D&G), the largest in the Group’s history, was a significant strategic development. At the recent Capital Markets Day held in June, the management team set out the Group’s potential and clear plans for growth.

With growing organic market share, Foxtons believes that it is well placed in both sales and lettings and its first half performance demonstrates how efficiently the business can deliver profits, cash and returns to shareholders.

Foxtons has also announced this morning that it is re-instating the dividend and are announcing a £3m share buyback programme today.

Nic Budden, Foxtons CEO, said: “I am delighted to be reporting a strong first half performance which has seen growth across all our business areas and allows us to re-instate the dividend and further our share buyback programme.”

Financial summary and highlights

Growth across all business areas saw group revenue of £66.9m, up 66% against 2020 and 29% up against 2019. 

–       Lettings: £33.1m (2020: £25.7m, 2019: £32.4m); 2% up against 2019 including £1.4m tenant fee impact

–       Sales: £28.6m (2020: £11.1m, 2019: £15.4m); 86% up against 2019

–       Mortgage broking: £5.2m (2020: £3.6m, 2019: £4.0m); 31% up against 2019

Group adjusted operating profit was £5.2m, a major improvement on the £2.4m loss recored in 2020 and £0.9m loss in 2019. Inherent operating leverage drove strong growth in profitability combined with D&G’s contribution since acquisition on 1 March.

The trading data also shows net cash of £24.4m at 30 June 2021 (31 December 2020: £37.0m) after a £2.7m share buyback programme and £10m net cash consideration for D&G in March 2021.

Interim dividend of 0.18p declared and £3m share buyback programme being announced today to return excess capital to shareholders following the strong trading performance during the period.

Foxtons has also confirmed no use of government support in the period with £1.5m of branch business rates voluntarily paid in July relating to the first 6 months of 2021.

Operational highlights and strategic developments

·    Growth in market share, further strengthened by the acquisition of D&G, enabled the Group to capitalise on high levels of market activity to deliver a strong first half performance.

·    Acquisition of D&G for £14.25m (cash and debt free basis), including a portfolio of 2,900 tenancies, contributed £7.2m of revenue and £1.0m of operating profit in the period supported by a strong sales market. Integration proceeding in line with plan.

·    £3m investment in Boomin, the next generation property site, demonstrating Foxtons’ commitment to remaining at the forefront of technological transformation in the property sector.

·    Implementation of sophisticated customer data platform enabling us to engage with customers far more effectively through the delivery of highly customised marketing content.

·    At our recent Capital Markets Day we set out our growth strategy with a focus on how technology and data science is supporting our strategy focussed on market leadership, revenue diversification and profit growth.

·    Progression of our revenue diversification strategy with a newly appointed Business Development Director to drive UK expansion; strong revenue growth and momentum across both the China Desk and Build to Rent.

·    Launched new social mobility partnership with charity Career Ready to help young people fulfil their potential.

Budden commented: “I am delighted to be reporting a strong first half performance which has seen growth across all our business areas and allows us to re-instate the dividend and further our share buyback programme.”

“The combination of political stability and easing restrictions has seen positive momentum return in the market and we are delighted that thousands of customers chose Foxtons to sell or let their property. This enabled us to grow revenues and market share in both sales and lettings, further strengthened by the acquisition of D&G, demonstrating the attractiveness of our customer proposition.

“Over the past few years our focus on both efficiency and investment in brand, people and technology has put us in a strong position to capitalise on improving market conditions. We have the most sophisticated, technology-enabled proposition in the market and a highly efficient business allowing us, as these results demonstrate, to maximise profitability, cash flow and returns to shareholders as revenues increase.

“We were pleased to make two significant transactions over the period. D&G is a renowned London agent and gives us a high quality lettings book and our investment in the exciting new market entrant Boomin ensures we remain closely associated with next generation property businesses. 

“The management team and I were delighted last month, to present our strategy focussed on market leadership, revenue diversification and profit growth at the recent Capital Markets Day. Foxtons has huge potential and today’s results demonstrate we are building a highly profitable business.

“I would also like to pay tribute to our outgoing chairman Ian Barlow who has recently announced his retirement from the Board. His expert advice and stewardship over eight years on the Foxtons board has been invaluable and on behalf of the Board and the Company we wish him all the very best for the future.”

Foxtons’ Chairman to stand down by end of the year