Foxtons to spend ‘millions more’ buying up competitors in London
The troubled estate agency says its business did better during Covid housing market than expected, and has cash to burn.
Foxtons is to buy up more competitors in order to drive growth within the troubled estate agency after three recent acquisitions have proved successful.
The company has seen declining revenues and profits since early 2018, culminating in its first ever yearly loss during 2019.
But its latest trading statement reveals that the sales recovery in London following the first lockdown means it now has funds spare to buy up smaller competitors, as well as £3 million available to buy back its own publicly-listed shares.
This follows a £22 million cash raise from investors during the worst months of the first Covid lockdown to help it survive the downturn.
Buying spree
Foxtons says it has fared better than expected and will now spend some of the spare investor cash on buying up competitors.
This will be on top of the £4.6 million it has already spent buying Stone Properties in March plus last month the lettings book of another rival, Aston Rowe. A third unspecified lettings book has also been bought.
“The results we have seen from these initial acquisitions are encouraging and have reinforced our belief that they present an attractive method of growing the business, improving profitability and delivering strong financial returns,” the company says.
“We have a good pipeline of additional, similar opportunities, and expect to make further investments in the next 12 months, striking a balance between executing at pace and ensuring the integration of the acquired businesses goes smoothly.”
Industry commentator Anthony Codling (pictured) of Twindig says: “The announcement of the share buyback programme is either inspired or foolhardy, and we hope it’s the former rather than the latter.”
