Foxtons admits ‘operational failings’ held sales back

Foxtons has given an honest assessment of failings that prevented the company from performing to its potential.

The London agency has reported full-year results of revenue up 11% to £140.3m with growth across all businesses: 17% in lettings, 8% in financial services, but only 1% in sales.

Douglas & Gordon lettings, acquired in March 2021, delivered £5.3m of operating profit in 2022, and a 35% return on capital.

Adjusted operating profit was up 56% to £13.9m and profit before tax up 115% to £11.9m.

But ‘four core operational failings have negatively impacted historical performance and prevented significant unfulfilled potential being realised’, the firm says.

Failings include:

• Poor data accessibility and utilisation impeded business decision-making and the ability to unlock revenue growth opportunities;

• Outdated estate agency processes and a diluted culture restricted organic growth;

• Insufficient headcount capacity and experience-constrained productivity;

• No clear customer proposition;

• Brand – invisible in core markets – limited the ability to compete successfully.

Improvements at pace

Guy Gittins, group CEO, who took over the reins at Foxtons in September, (main picture) says: “My operational review is complete, whilst Foxtons has strong foundations, core operational failings have throttled historical performance and prevented significant unfilled potential from being realised.

“Operational improvements are being made at pace to rebuild our competitive advantages, including embedding a more confident articulation of our brand, investing in revenue generating headcount and improving our data platform to fully harness the power of our industry leading database,” he says.

“With the support of our talented workforce, I am certain we have the collective determination to put Foxtons on top where it belongs, and with a refocused set of strategic priorities, have a medium-term growth ambition to deliver £25m to £30m of operating profit.”

Foxtons is planning to buy up smaller agencies in London in a drive to generate more lets on its books. Gittins revealed the strategy in Jamuary, when he said boosting the number of lets was a top priority.

The company announced yesterday it had acquired Atkinson McLeod, a lettings agency in East London, for £7.4m.