Foxtons has announced its new strategy as it looks to take advantage of the housing market boom.
The London-based estate agent told its investors that it intends to expand beyond the market in the capital, by targeting property sales across the south-east, in addition to other parts of the UK – starting with the main cities.
The company is also targeting growth in the Build to Rent sector, and is doing so acquiring other letting firms.
Foxtons recently completed the acquisition of Douglas & Gordon for £14.25m.
Some investors, most notably Investor Catalist Partner, feel that Foxtons’ focus on London is restricting growth, given that property sales in the capital have slowed in recent years, while in other parts of the UK they have boomed.
The investment company, controlled by property industry veterans including Robin Paterson, has a 2.3% stake in Foxtons. It has been pushing the agency to open new branches across the country, as part of changes that it believes could propel Foxtons to a £1bn valuation.
It also wants Foxtons to open a branch in Hong Kong to attract Far Eastern buyers.
Catalist recently published a dossier outlining how Foxtons could expand in cities such as Exeter, Norwich and York.
“Longer commutes are tolerated post-pandemic,” said Catalist, which previously called for change at Countrywide before its takeover this year.
Catalist suggested that Foxtons could buy a regional brand or a series of smaller agencies.
Nic Budden, chief executive officer, told investors: “Foxtons has enormous potential and we are delighted to be able to set out our growth plans. For over 40 years we have operated through the ups and downs of the sales market cycle and emerge from the unprecedented challenges of 2020 a more efficient and capable business. Our customer proposition is unique and the investments we have made in technology and data science capabilities give us competitive advantage and a solid platform for growth.
“2021 has started extremely well with strong trading and the biggest acquisition in our history. We look out on significant opportunity to grow and have a clear plan to take advantage of it. Foxtons has a history of being a highly profitable business and when I reflect on the actions we have taken together with the opportunity and improving market conditions I am confident we can deliver significant shareholder value in the coming years.”
Comments (3)
Putting aside the merits or otherwise of the proposed structural changes in policy the question raised is Nic Budden the right individual to lead the changes ?
Let’s face it these changes have not occurred after any deep introspection but dancing to the tune of the activist shareholder, Catalist . Knee jerk reaction .
Sounds as if Robin Paterson should be asked to appoint a new CEO to see it through.
Nic now known as trousering the COVID £ and a very questionable purchase of Douglas & Gordon with hard cash .There will be concerns from shareholders this will be rinsed and repeated elsewhere with borrowed debt rather than expand by issuing shares to the businesses acquired.
No real mention of one of the central planks of Catlist recommedations ,rewarding the fee earners by giving them some skin in the game encouraging to remain on side .
Taxi for Budden
Has Foxtons plateaued in London?
If Yes, they need to sharpen their message. Not spread the footprint to areas outside of their domain.
Minority shareholders aren’t always strategically correct in their thinking.
Established agents market share in towns and cities outside of London will wipe the floor with them.
£7m of Government emergency funds used to invest in Boomin and to pay Directors’ bonuses. The public and shareholders will always remember these choices.