reports
- Martyn King
Foxtons Group - Deals' benefits matched by tax rise
Foxtons Group’s recent acquisition of estate agents in two London commuter towns highlights the outer-London potential for low-risk, value-added expansion. Furthermore, it adds to the developing success of the company’s strategic vision and implies that medium-term targets are now coming into focus. We have updated our forecasts for the deals, but additional profit from the acquisitions is broadly matched by the increase in employer’s National Insurance costs, hence we retain our valuation of 13...
- Martyn King
Foxtons Group - Further strategic progress towards targets
The latest quarterly trading update reconfirms the developing success of the Foxtons strategic vision and implies that medium-term targets, particularly the adjusted annualised operating profit target of £25–30m, are now coming further into focus. We believe that market share is being gained in all divisions, which is likely to be boosted further as the Sales pipeline is growing comfortably ahead of the market. We have modestly raised forecasts and our valuation to 134p/share and believe that if...
- Martyn King
Foxtons Group - Valuation offers 100% upside
Foxtons Group’s H1 results clearly highlight the success of the strategy the company embarked on at the start of last year. Although there is still work to be done, significant progress has been made and it now appears likely that the medium-term target of reaching operating profit in the range of £25–30m can be achieved. Although we have maintained our existing forecasts and valuation, we believe the risks appear to be to the upside, considering that the underlying macroeconomic data appear to ...
Foxtons Group: 1 director
A director at Foxtons Group bought 50,000 shares at 64p and the significance rating of the trade was 52/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly showi...
- Robin Savage
- Martyn King
Foxtons Group - FY24 underpinned by market share gains
Foxtons Group’s Q1 revenue grew by 9%, supported by growth in all three divisions as the strategic initiatives continue to gain significant momentum, driven by investment in staff, best-in-class bespoke IT and data platforms. This implies that Foxtons’ medium-term targets are now coming into focus. Market share is being gained in all divisions, which puts Foxtons in a good position as the sales market stabilises. We maintain our valuation of 132p/share and believe that if interest rates stabilis...
- Robin Savage
Foxtons Group (FOXT LN) - Initiation
In the most difficult market conditions in more than a decade, Foxtons after adopting new strategic priorities, delivered an impressive turnaround in performance, and regained its position as London’s leading Estate Agent. Our analysis recognises the logic which underlies current consensus, see scope for upgrades and justifies valuations materially above current values.
- Martyn King
Foxtons Group - Medium-term targets come into view
The new strategic vision set out by the CEO is gaining significant momentum, driven by investment in staff and in best-in-class bespoke IT and data platforms, and implies that medium-term targets are now coming into focus. Market share is being gained in all divisions, which is likely to be boosted if the sales market stabilises in 2024. We have modestly raised forecasts and our valuation to 132p/share and believe that if interest rates stabilise or ease further, there are upside risks to our fo...
- Martyn King
Foxtons Group - Firm evidence of restructuring success
In FY23, Foxtons Group’s three divisions took market share, the direct result of management action to invest in the business. The company’s new strategy focuses growth on non-cyclical revenue streams and decouples performance from sales market cycles. This is evidenced in the FY23 trading update, which highlights a financial performance that exceeds market expectations. At this early stage of the year, we are retaining our FY24 and FY25 estimates and valuation, but it would appear that the risks...
- Martyn King
Foxtons Group - Strategic momentum and M&A adds to value
In Q323, all three of Foxtons’ divisions outperformed their respective markets, taking market share – the direct result of management action to avoid the same mistakes made during previous downcycles where costs were cut, a position from which it would subsequently struggle to recover. Foxtons’ new strategy focuses growth on non-cyclical revenue streams and decouples performance from sales market cycles. The latest value-enhancing acquisition leads to a net upgrade in estimates in FY24. We there...
- Martyn King
Foxtons Group - Strategic progress versus targets evident
Foxtons’ interim results highlighted revenue and margin expansion as well as market share gains, evidence of success in rolling out the new strategy, which focuses growth on non-cyclical revenue streams and decouples performance from sales market cycles. If the strategy succeeds, over the medium term Foxtons expects margins to expand by c 500bp and operating profit to more than double. We retain our base case valuation of 59p/share, which implies c 50% upside, and our preferred ‘bull’ case valua...
- Martyn King
Foxtons Group - Early signs of strategic success
Foxtons Group’s Q1 trading update highlighted increased revenue per transaction and market share gains, evidence of early progress in rolling out the new strategy – characterised by upgrades to data infrastructure, investment in staff and a reinvigoration of the Foxtons brand. If the strategy succeeds, over the medium term Foxtons expects margins to expand by 500bp and operating profit to more than double. We retain our base case valuation of 59p/share and our preferred ‘bull’ case valuation of ...
- Martyn King
Foxtons Group - New CEO targets recurring income streams
Foxtons’ new CEO has identified historical failings that are expected to be addressed by upgrades to data infrastructure, investment in staff and a reinvigoration of the Foxtons brand. If successful, over the medium term Foxtons expects margins to expand 500bp and hopes that operating profit will more than double. Importantly, it aims to increase the proportion of recurring income from c 65% currently, thereby reducing cyclical income and increasing the quality of income. We have raised our FY23...
- Martyn King
Foxtons Group - Growth-oriented review poised to be announced
FY22 was a robust year for Foxtons with revenue up 11%, but the short-term outlook is less certain for recessionary reasons. However, the outlook remains encouraging with the new CEO on the cusp of announcing a growth-oriented operational review. 65% of revenue is now generated from the resilient Lettings and Financial Services divisions, a proportion that is likely to increase over time. Our ‘base’ case valuation gives a value of 53p/share, but ignores the potential of M&A expansion in particul...
- Martyn King
Foxtons Group - Strong markets and strategic initiatives shine
The tight London lettings market has resulted in a significant increase in rental rates to values that exceed pre-pandemic levels, which has further benefited Foxtons as it has concentrated M&A activity in this area. It has also witnessed positive trends from strategic initiatives to focus on higher-value properties in both the Lettings and Sales divisions, as well as investment in Financial Services. We have raised our FY22 estimates, but have retained FY23 and FY24 forecasts, given the economi...
- Martyn King
Foxtons Group - M&A contribution and potential overlooked
H1 revenue grew 3% against tough comparators and operating profit increased by 13% y-o-y, reflecting good underlying markets and M&A in lettings. The announcement also highlighted the strong contribution from M&A, where we expect Douglas & Gordon (D&G) alone to contribute c 45% of FY22 profit, an aspect we believe is overlooked by the market. We retain our underlying assumptions and our 128p per share valuation.
- Martyn King
Foxtons Group - Strong performance and market share gains
Q1 revenue growth of 8% reflects good underlying growth and M&A in lettings, as well as robust sales and mortgage markets. In sales, Foxtons has taken market share despite the y-o-y decline in revenue and Q2 has started well, with an 8% increase in the under-offer pipeline. Furthermore, additional income streams are developing well and Foxtons has identified c £8m of M&A investment so far this year, highlighting strategic progress. We retain our underlying assumptions and our 128p per share valu...
- Martyn King
Foxtons Group - FY21 profit growth highlights strategic progress
Foxtons preliminary results highlighted that FY21 was a good year. 2022 has also started well, with rents continuing to increase and the sales market remaining at buoyant levels, according to management. Furthermore, additional income streams are developing well and amounted to £9m in the period, while the company has identified c £8m of M&A investment so far this year, highlighting strategic progress. We retain our underlying assumptions and our 128p per share valuation.
- Martyn King
Foxtons Group - Robust Q4 and strength into 2022
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.
- Martyn King
Foxtons Group - Robust Q4 and strength into 2022
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.
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