Is Foxtons out of the woods? Results show perkier performance

Foxtons has put its years of disappointing results behind it with looming full-year results for 2022 that promise revenue and adjusted operating profit expected to be ahead of market expectations.

The company has pinned its more promising performance on recent senior management changes including a new CEO and the addition of former boss Peter Rollings to the board, a busy acquisition campaign and strong performances from both its financial services, sales and lettings businesses.

Group revenue ahead of market expectations at around £140m (up 11% year-on-year) while adjusted operating profit is also up.

In February last year, Foxtons integrated the Douglas & Gordon Lettings portfolio and disposed of the loss-making sales business and then in May bought two more lettings portfolios, adding some 2,500 tenancies to its book.

Foxtons says it will continue to “target further acquisition opportunities as part of its strategy to deliver attractive total returns on invested capital and improve the resilience of its revenues”.

DNA reboot

But Foxtons is not quite out of the woods yet – the agency says it is about to complete an ‘operational review’ of its activities to create more growth and ‘rebuild’ Foxtons’ ‘DNA’ including a recruitment drive, details of which will be presented to investors on 7^th March.

But the firm is expecting a bumpy 2023 as the sales market subdues as higher interest rates and economic uncertainty kick in, although lettings are expected to fair better.

“Much has been achieved in a short period and it is great to see some of the team’s hard work reflected in the 2022 results,” says Gittins.

“The economic outlook for the year ahead remains uncertain, but we have a growing portfolio of non-cyclical revenues, and a refreshed operational strategy to rebuild Foxtons’ estate agency DNA and return the business to its position as London’s go to estate agency.”

Bellwether

“Foxtons is a good bellwether of the London housing market, with a focus on lettings and lower to mid-market London property sales, it has its finger on London’s housing market pulse,” says Anthony Codling, market commentator and CEO of Twindig.

“We expect the market to trim their Foxtons forecasts for 2023, but this reflects market challenges rather than company under-performance. In the meantime, Foxtons will be investing for growth and we believe it will exit 2023 on a firmer footing than it entered it.”