Foxtons’ spending spree to gain market share within London’s lettings sector continues with the acquisition of Gordon & Co and Stones Residential for £10.55 million.
The two agencies, which are South and North London agencies respectively, generate over 80% of their revenue from lettings services with a combined book of 2,500 properties.
These acquisitions are part of Foxtons’ growth strategy, which used to be cold-start branch driven but is now focussed on buying rivals and setting up ‘virtual branches’ outside the M25.
Adding Gordon & Co and Stones Residential takes Foxtons’ total properties under management to over 27,500 and its statement this morning points to a business that is increasingly dominated (70% of turnover) by lettings and financial services.
Lettings are simply more profitable than sales in London where there is huge competition for instructions – its acquisition of Douglas & Gordon is already expected to deliver operating profit of more than £4 million this year.
Four-branch Gordon & Co is being bought for £8.35 million from a group of private shareholders with £1.5 deferred for 12 months subject to performance targets, based on an annual turnover of £4 million and profits of £100,000. Outside its branches, the company offers clients coverage across London via a ‘hybrid’ model and also has an office in Hong Kong.
A single branch of two-branch Stones Residential is being acquired for £2.2m with £200,000 deferred for 12 months, also subject to the performance targets based on a turnover of £1.3m. Its Stanmore branch is being bought, while the firm’s Belsize Park office remains.
Nic Budden (pictured), Chief Executive Officer of Foxtons, says: “Acquiring Gordon & Co and Stones Residential is a great opportunity for Foxtons to expand our coverage and reinforces our position as London’s largest lettings agent.
“Since 2019, we have acquired six lettings portfolios and grown our tenancies by 40%, which demonstrates good progress against our strategy to generate attractive returns for our shareholders.”