05.03.2025
This morning’s 2024 Final Results from Foxtons Group (LON:FOXT) were impressive.
The group is the largest lettings agent in London as well as being the largest lettings brand in the UK.
It also recorded the highest number of sales agreed in London in 2024.
The 2024 Results
The company reported that revenues in the year to end-December 2024 were up 11% at £163.9m (£147.1m) while pre-tax profits were a thumping 121% better at £17.5m (£7.9m), helping to lift earnings 47% to 5.0p (3.4p) and to increase its dividend by 30% to 1.17p (0.9p) per share.
Revenues were up across the three different segments of the business – lettings were up 5%, sales were 31% better, while the financial services revenues were 6% higher.
The group’s year-end net debt figure was £12.7m (£6.8m), reflecting the group’s improved cash generation, balanced off against £12.7m of acquisition spend, and payment of £2.8m of dividends.
Current Year Outlook
The group reports that the Lettings market dynamics are expected to remain consistent with 2024, with rental levels broadly flat.
Healthy stock levels support its focus on driving new business and organic growth, whilst the October 2024 and February 2025 acquisitions provide further incremental revenues and organic growth opportunities.
On the Sales side, the group’s under-offer pipeline entering 2025 was at its highest level since the Brexit vote in 2016, delivering strong year-to-date revenue growth as the under-offer pipeline converts to exchanges, with volumes boosted by first-time buyers taking advantage of stamp duty relief ahead of the 31st March 2025 deadline.
Management Comment
CEO Guy Gittins stated that:
"2024 was another strong year for Foxtons with revenue up 11% and adjusted operating profit up 38%.
Across 2024 we retained our position as London's largest lettings agent and the UK's largest lettings estate agency brand, and increased our share of the London sales market by 20%.
In Sales, significant market share gains drove revenue growth of 31% and meant we agreed the highest number of transactions in London last year, while our Lettings and Financial Services businesses continued to provide the steady, recurring revenues which underpin Group profitability.
In October 2024, we acquired Haslams Estate Agents and Imagine Property Group, both businesses with strong lettings portfolios, taking us into the exciting new growth markets of Reading and Watford.
Last week, as part of our Watford growth plan, we acquired Marshall Vizard, a high-quality lettings business that further strengthens Foxtons' Watford presence and market share.
After a good start to 2025, we are well positioned to deliver another year of growth and are on-track to deliver against the medium-term growth targets I set out in March 2023.
I look forward to setting out details of the next stage of our growth plan to investors at a capital markets event in Q2 2025."
Further Comment On The Rumours
Guy Gittins commented upon the recent rumours of ‘laddish culture’ within the group’s various offices, that were highlighted by Bloomberg last week and discussed across the national media last week.
He stated that:
“Estate agency is a people-first business, and maintaining an engaging, respectful and inclusive culture is of the utmost importance to us.
We are focused on creating an environment which attracts, motivates and retains a diverse team of talent, that can together deliver excellent customer outcomes.
Although significant progress has been made over the last two years, including the introduction of mandatory annual respect and inclusion training, strengthened ED&I policies, and enhanced whistleblowing and speak up processes, there remains more to do.
This is particularly important to me and we remain steadfast in our commitment to an inclusive, professional and respectful culture and we will continue to seek further improvement and progress.
Changes made to date are supporting our transformation, including: a 25% increase in female managers over the last two years; improving employee engagement; and a 12% increase in employee retention rates since 2022 as new career development and diversity programmes take effect.”
Gittins continued by stating that:
“Our latest employee engagement survey, indicated that 87% of employees believe Foxtons values diversity and builds diverse teams, and 81% of employees recommend Foxtons as a great place to work, 8% higher than equivalent businesses in the UK.
These initiatives are particularly important to me and while progress has been made, we recognise there is more we can and should do.
We remain steadfast in our commitment to an inclusive, professional and respectful culture and we will continue to seek further improvements and progress.”
Analyst View
Greg Poulton, analyst at Singer Capital Markets, rates the group’s shares as a Buy, with a Target Price of 92p.
He forecasts another year of strong growth in the group’s pre-tax profits, looking for an 11% advance this year, then on to 23% growth next year and 19% in 2027.
His estimates for the current year are for revenues of £178.6m (£163.9m), with adjusted pre-tax profits of £20.8m (£19.0m), earnings of 5.0p (4.9p) and paying a 1.37p (1.17p) dividend per share.
For 2026 he sees £189.8m revenues, £25.5m profits, 6.1p earnings and a 1.57p dividend.
Looking into 2027 Poulton estimates £200.4m revenues, £30.3m profits, 7.3p per share of earnings and a 1.77p dividend.
In My View
Considering the Singer Capital Markets estimates it is reasonable for
the broker’s analyst to set a 92p Target Price, which gives the £185m-capitalised group’s shares an easy aim over the next year or so.
The shares, which closed last night at 61p, are sure to move up on the back of these results and ahead of the Q1 Trading Update at the end of next month.
Comments