REG - Foxtons Group PLC - Acquisition of Atkinson McLeod Limited

FoxtonsAnnouncement

06/03/2023 07:00

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RNS Number : 9230R  Foxtons Group PLC  06 March 2023

Foxtons Group plc

Acquisition of Atkinson McLeod Limited

6 March 2023

 

Delivering on acquisition strategy and reinforcing position
as London's largest lettings agent

 

Foxtons Group plc ("the Group" or "Foxtons") today announces the acquisition
of Atkinson McLeod Limited ("Atkinson McLeod") for a consideration of £7.4m,
adjusted for current assets less total liabilities at completion, which will
be funded through the Group's existing cash resources.

Atkinson McLeod is a high-quality estate agent, operating in Central East
London across four branches, with a strong lettings business that generates
c.90% of its revenues across c.1,100 tenancies.

 

Strategic rationale

The acquisition of Atkinson McLeod represents further progress against our
strategy of acquiring lettings businesses that deliver an attractive return on
invested capital, enhance earnings and improve the resilience of the Group's
earnings, whilst also reinforcing Foxtons as London's largest lettings brand.

Since 2019, the Group has significantly increased the size of its lettings
portfolio through acquisition, driving good levels of growth in lettings
revenue and profitability. For the year ended 31 December 2022, non-cyclical
and recurring revenues, primarily delivered by lettings, represented c.65% of
Group revenue, significantly enhancing the earnings resilience of the Group.

 

Acquisition terms and financial impact

The acquisition constitutes a class 2 transaction pursuant to the UK Listing
Rules. For the purposes of the LR 10.4.1 R (Notification of class 2
transactions), Atkinson McLeod's unaudited revenue and operating profit for
the 12 months ended 31 March 2022 were £3.1m and £0.9m respectively.
Gross assets as at 31 March 2022 were £2.5m.

The Directors believe the acquisition of Atkinson McLeod will be earnings
accretive in 2023, and through the delivery of synergies, post-completion
profitability will be enhanced from historical levels.

Total consideration for the acquisition is £7.4m, adjusted for current
assets less total liabilities at completion, of which £0.7m is deferred for a
period of 12 months.

The business is being bought from certain private individual shareholders.

 

Full year results 2022

The Group will present its full year results for the year ended 31 December
2022 on 7 March 2023.

 

Guy Gittins, Foxtons CEO, commented:

"The acquisition of Atkinson McLeod will grow our lettings portfolio, further
build on our successful acquisition track record and reinforce our position as
London's largest letting agent. The acquisition will add c.1,100 tenancies and
annualised revenues of around £3 million, demonstrating further progress with
our acquisition strategy. Since 2019, we have acquired 7 lettings portfolios,
growing our own portfolio by 38%, which now stands at more than 27,500
tenancies. We greatly look forward to welcoming the Atkinson McLeod team to
the Foxtons Group."

Giles Atkinson, Atkinson McLeod Co-founder, commented:

"With its strong service ethos and high-performance culture, Foxtons is a
natural fit for our business, our colleagues and customers alike. After a
straightforward and smooth sales process, it is exciting to be joining such a
well-respected and admired group that is focused on delivering best in class
service for customers."

-ENDS-

 

For further information, please contact:

 

 Foxtons Group plc
 Chris Hough, Chief Financial Officer  investor@foxtonsgroup.co.uk (mailto:investor@foxtonsgroup.co.uk)

 Muhammad Patel, Investor Relations    +44 20 7893 6261

 TB Cardew                             Foxtons@tbcardew.com
 Tom Allison/Ed Orlebar                +44 7789 998 020/ +44 7738 724 630

 

TB Cardew

 

Foxtons@tbcardew.com

Tom Allison/Ed Orlebar

+44 7789 998 020/ +44 7738 724 630

 

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