REG - Foxtons Group PLC - Q1 Trading Update

FoxtonsAnnouncement

20/04/2023 07:00

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RNS Number : 8251W  Foxtons Group PLC  20 April 2023

FOXTONS GROUP PLC

Q1 Trading Update

 

Strong growth in Lettings drives revenues as operational turnaround progresses

 

20 April 2023 - Foxtons Group plc (LSE: FOXT) has started the new financial
year well and in line with management's expectations. Revenue in the first
quarter was up 10% to £32.9m (Q1 2022: £30.0m) with Lettings revenue up 27%,
reflecting continued progress against the Group's strategy to grow its
resilient Lettings business both organically and through acquisition.

 

Group revenue: 3 months ended 31 March

 

                     Q1 2023  Q1 2022 ((1))  £m change   % change
 Lettings            £22.8m   £17.9m         £4.9m       27%
 Sales               £8.1m    £9.6m          (£1.6m)     (16%)
 Financial Services  £2.0m    £2.4m          (£0.4m)     (18%)
 Total               £32.9m   £30.0m         £2.9m       10%

( )

(1) 2022 revenues are presented on a continuing basis and exclude revenue from
the D&G Sales business which was disposed of on

11 February 2022.

Lettings

Lettings revenue was up 27% in the first quarter to £22.8m (Q1 2022:
£17.9m), with organic revenue growth of 20% and £1.3m contribution from the
acquisitions completed in May 2022 and March 2023. Lettings revenue grew to
69% of Group revenue, up from 60% last year.

 

Organic revenue growth was underpinned by operational improvements and an
increase in average revenue per transaction. Growth in average revenue per
transaction includes a focus on securing longer non-cancellable tenancy terms
(resulting in a greater proportion of revenue being recognised at the start of
the tenancy), increased cross sell of our higher value property management
service, and higher average rental prices.

 

Sales

In line with management's expectations, Sales revenue declined 16% to £8.1m
(Q1 2022: £9.6m), driven by a reduction in exchange volumes in the quarter.
This was a consequence of the lower under-offer sales pipeline at the start of
the year, resulting from reduced buyer activity following the September
mini-budget.

 

However, we are much encouraged by the early impact of the operational
improvements we have made. During the quarter, we saw an increase in
instruction market share and we completed the highest number of quarterly
viewings in the last 5 years. Combined with growing levels of buyer demand,
this has supported good growth in the value of the under-offer pipeline over
the course of the first quarter.

 

Financial Services

Financial Services revenue was similarly down 18% in the quarter to £2.0m (Q1
2022: £2.4m).  Against a backdrop of lower sales market activity, investment
in adviser capacity supported marginally higher volumes, particularly from
refinance customers.

 

Commenting on Q1, Guy Gittins, Chief Executive Officer said:

"We delivered good year-on-year growth in the first quarter, reflecting strong
growth in our resilient Lettings business as operational improvements and high
levels of tenant demand drove strong organic revenue growth, supplemented by
incremental revenues from acquisitions. As expected, Sales and Financial
Services revenues were lower year-on-year, reflecting the lower under-offer
pipeline at the start of 2023 and volatility in the mortgage market. Over the
course of the quarter, operational improvements and increasing levels of buyer
demand, meant we have made good progress in rebuilding the under-offer sales
pipeline.

 

"We are focused on delivering the operational upgrades I set out in March at
pace. Key areas of progress in the quarter include rebuilding fee generating
headcount and embedding estate agency culture changes; including prioritising
lead generation in competitive markets, focusing on core estate agency KPIs
and improving cross-sell across the Group.

 

"I am encouraged by the early results achieved to date. We have grown our
market share of Sales instructions and completed the highest number of
viewings in the last 5 years, delivered growth in the cross-sell of Lettings
property management services, and in Financial Services delivered growth in
both the volume of mortgages underwritten and the cross-sell of protection
products.

 

"I remain confident in our refocused strategic priorities and the
determination of the business to deliver market share growth and shareholder
value by making Foxtons London's go-to estate agent."

 

 

 

For further information, please contact:

 

 Foxtons Group plc                      investor@foxtonsgroup.co.uk (mailto:investor@foxtonsgroup.co.uk)

 Chris Hough, Chief Financial Officer   +44 20 7893 6261

 Muhammad Patel, Investor Relations

 TB Cardew                              Foxtons@tbcardew.com (mailto:Foxtons@tbcardew.com)

 Tom Allison / Will Baldwin-Charles /   +44 7789 998 020 / 44 7834 524 833/
 Olivia Rosser
+ 44 7552 864 250

 

 

About

Foxtons is London's most iconic estate agency. Founded in 1981, The Group
operates from a network of interconnected branches, offering a range of
residential property related services across three business segments:
Lettings, Sales and Financial Services.

 

The Group seeks to deliver significant shareholder value through its strategic
priorities:

·   Lettings organic growth

·   Lettings acquisitive growth

·   Sales market share growth

·   Financial Services revenue growth

 

 

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