Business
Acquisition of Atkinson McLeod Limited
Acquisition of Atkinson McLeod Limited.
About this update from Foxtons Group Plc
[{"type":"text","content":"\n \n \n \n Foxtons Group plc\n \n \n \n \n Acquisition of Atkinson McLeod Limited\n \n \n \n \n 6 March 2023\n \n \n \n \n \n \n \n \n Delivering on acquisition strategy and reinforcing position as London's largest lettings agent\n \n \n \n \n \n Foxtons Group plc (\"the Group\" or \"Foxtons\") today announces the acquisition of Atkinson McLeod Limited (\"Atkinson McLeod\") for a consideration of £7.4m, adjusted for current assets less total liabilities at completion, which will be funded through the Group's existing cash resources.\n \n \n Atkinson McLeod is a high-quality estate agent, operating in Central East London across four branches, with a strong lettings business that generates c.90% of its revenues across c.1,100 tenancies.\n \n \n \n \n \n \n Strategic rationale\n \n \n \n The acquisition of Atkinson McLeod represents further progress against our strategy of acquiring lettings businesses that deliver an attractive return on invested capital, enhance earnings and improve the resilience of the Group's earnings, whilst also reinforcing Foxtons as London's largest lettings brand.\n \n \n Since 2019, the Group has significantly increased the size of its lettings portfolio through acquisition, driving good levels of growth in lettings revenue and profitability. For the year ended 31 December 2022, non-cyclical and recurring revenues, primarily delivered by lettings, represented c.65% of Group revenue, significantly enhancing the earnings resilience of the Group.\n \n \n \n \n \n \n Acquisition terms and financial impact\n \n \n \n The acquisition constitutes a class 2 transaction pursuant to the UK Listing Rules. For the purposes of the LR 10.4.1 R (Notification of class 2 transactions), Atkinson McLeod's unaudited revenue and operating profit for the 12 months ended 31 March 2022 were 3.1m and 0.9m respectively. Gross assets as at 31 March 2022 were 2.5m.\n \n \n The Directors believe the acquisition of Atkinson McLeod will be earnings accretive in 2023, and through the delivery of synergies, post-completion profitability will be enhanced from historical levels.\n \n \n Total consideration for the acquisition is 7.4m, adjusted for current assets less total liabilities at completion, of which £0.7m is deferred for a period of 12 month...