Foxtons has put in ‘a strong performance’ in both sales and lettings sectors so far this year, with revenue up 10% to £86.1m and adjusted operating profit up 31% to £12.3m, says CEO Guy Gittins.

The estate agency’s interim report reveals that sales revenue was up 25%, and its market share has grown by 5%, which was slightly ahead of its target of 4.5%. This, it says, was the result of elevated market transaction volumes in the first quarter ahead of the Stamp Duty rise and the £2.2m of incremental sales that were delivered by the successful integration of its commuter market acquisitions.

Positive impact of acquisitions

And in lettings, revenue was up 4%. This was supported by recent acquisitions of Imagine Properties and Marshall Vizard, the resilience of its core portfolio and growth in value-added property management services.

Financial Services revenue, though, was flat, as higher new purchase mortgage volumes were offset by the phasing of refinance activity, which is weighted towards H2.

Cutting costs

At the same time, the estate agency group has been reducing its costs by negotiating an early exit from the Chiswick Park HQ lease and rightsizing HQ space. It has, though, also been investing in technology, including its website and AI-driven sentiment analysis systems.

Looking ahead, Foxtons expects sales growth to be more subdued than anticipated as a result of borrowing costs not reducing as fast as had been forecast and weaker consumer confidence.

Lettings, in contrast, is expected to be more in line with expectations, with higher property management revenues, further strategic acquisitions and the usual summer uplift in activity continuing to drive momentum.

Our strategy is clear and scalable, supported by a market-leading Operating Platform and a commitment to consistently deliver results for our customers.”

Gittins says: “It’s been a strong start to the year, with revenue up 10% and adjusted operating profit growing 31%. The Lettings business has continued to perform well, providing steady, recurring revenues which underpin our growth, while the Sales business benefited from a rebuilt market share position and increased market activity ahead of the stamp duty deadline.

“Last month, we hosted a Capital Markets Event to present the next phase of our growth plan. At the event, we introduced new financial targets, including an ambition to more than double profitability, by delivering £50m of adjusted operating profit in the medium term. Our strategy is clear and scalable, supported by a market-leading Operating Platform and a commitment to consistently deliver results for our customers.

More challenging second half.”

“We expect a more challenging second half for the sales market compared to the first, and while we welcome the Government’s new mortgage guarantee scheme as a constructive step, the property market also requires a comprehensive review of stamp duty to help stimulate growth and improve access to home ownership across all price points.

“Despite the wider macroeconomic uncertainty, the Group’s strong financial profile is underpinned by stable and recurring earnings from Lettings and gives us continued confidence in delivering our growth strategy.”

You can read the full report here.