Slide 1: Preliminary results presentation
Foxtons Preliminary results presentation For the year ended 31 December 2020
Slide 2: Important information
Important information This presentation includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believe”, “estimates”, “plans”, “projects”, “anticipates”, “e
Slide 3: Agenda
AGENDA 1. GROUP PERFORMANCE HIGHLIGHTS 2. FINANCIAL REVIEW 3. STRATEGIC PRIORITIES 4. DOUGLAS & GORDON ACQUISITION UPDATE 5. TRADING UPDATE AND OUTLOOK 6. APPENDIX 3
Slide 4: Overview
Overview Nic Budden, Chief Executive Officer 4
Slide 5: Group financial highlights
GROUP FINANCIAL HIGHLIGHTS • Resilient revenue performance in the context of Covid-19 GROUP REVENUE • Reflects market share gains in all segments of business £93.5M • Strong revenue underpin from lettings renewals and property management (£13.4m) vs. 2019 • Rapid reopening of branch network in June
Slide 6: Group operational highlights
GROUP OPERATIONAL HIGHLIGHTS • Closed all branches during spring lockdown and established remote teams: • Sales teams completed 300,000 virtual viewings and 1,000 essential house moves • Property Management teams completed 4,000 work orders and negotiated 3,000 rental discounts CUSTOMER AND - forego
Slide 7: Lettings market update
LETTINGS MARKET UPDATE YoY change in monthly lettings instructions (1) Average weekly rental price by year (2) 100% £500 YoY change in monthly long let instructions £459 £461 Average new long let rent achieved 80% £454 £453 £445 £450 £433 60% (£ per week) 40% £400 20% £350 0% -20% £300 -40% £250 201
Slide 8: Sales market update
SALES MARKET UPDATE YoY change in London transaction volumes (1) YoY change in new property supply and buyer demand (2) 50% 125% Monthly change Buyer registrations 40% 100% 30% Cumulative change Property instructions Monthly transaction volumes 75% 20% 10% 50% YoY change (%) 0% 25% -10% 0% -20% -30%
Slide 9: Financial review
Financial review Richard Harris, Chief Financial Officer 9
Slide 10: Income statement
INCOME STATEMENT Profit and loss statement YoY change in revenue and adj. operating profit £m FY 20 FY 19 Change 8.0 4.1 4.0 Change vs. PY (£m) Revenue 93.5 106.9 (12%) 0.0 Operating costs (77.8) (93.4) (17%) (4.0) (1.5) (1.9) (8.0) Depreciation, amortisation and (13.8) (14.2) (3%) (12.0) share-base
Slide 11: Business performance: Lettings
BUSINESS PERFORMANCE: LETTINGS Resilient performance, with renewal and property management services delivering recurring revenues during the spring lockdown FY 20 FY 19 Change YoY change in quarterly revenue (1) Revenue 20% 10% Lettings units 18,595 19,844 (6%) 0% 0% Revenue per unit £3,081 £3,313 (
Slide 12: Impact of 2020 lettings acquisitions
IMPACT OF 2020 LETTINGS ACQUISITIONS Tenancy portfolio growth • 3 acquisitions in the year, delivering 1,600 new tenancies: • London Stone Properties (Feb 20) • Pillars Estates (Oct 20) • Aston Rowe (Nov 20) • Acquisitions now fully integrated into Foxtons operating platform and are performing well
Slide 13: Business performance: Sales
BUSINESS PERFORMANCE: SALES Strong demand at the beginning of the year then impacted by property market closure. Rebound in demand following the end of spring lockdown FY 20 FY 19 Change YoY change in quarterly revenue Revenue 20% 16% 10% 0% Sales units 2,034 2,423 (16%) 0% Revenue per unit £13,854
Slide 14: Business performance: Mortgage broking
BUSINESS PERFORMANCE: MORTGAGE BROKING Strong growth in remortgage products offset lower new mortgage activity FY 20 FY 19 Change YoY change in quarterly revenue Revenue 10% 4% 5% Mortgage broking units 4,361 4,442 (2%) 0% Revenue per unit £1,853 £1,921 (4%) -5% Total mortgage broking revenue £8.1m
Slide 15: Balance sheet
BALANCE SHEET The successful equity placing in April ensures we retain a strong balance sheet with good liquidity and flexibility to support the business £m FY 20 FY 19 Goodwill & intangibles 114.1 110.3 Property, plant & equipment 55.0 64.4 Investment in associate 1.2 1.3 Net working capital 4.5 3.
Slide 16: Cash flow
CASH FLOW Adj. operating profit to net free cash inflow conversion Uses of cash flow Opening cash £15.5m Net free cash inflow £4.3m Acquisitions (net of cash acquired) (£3.8m) Net proceeds from equity raise £21.1m Share buyback programme (£0.3m) Other £0.2m Increase in cash £21.5m Adj. Add back Work
Slide 17: Capital allocation policy
CAPITAL ALLOCATION POLICY Disciplined capital allocation policy supported the business through the Covid-19 crisis and ensures fitness for the future: 1. Ensure sufficient liquidity available to manage business operational requirements 2. Fund investment in the future development of the business: FR
Slide 18: Financial summary
FINANCIAL SUMMARY Business performance has remained resilient due to the recurring nature of revenues, decisive actions to reduce costs and government support BUSINESS MODEL HAS ADAPTED WELL TO PROTECT PROFITABILITY • Business performance was resilient during the closure of the property market due t
Slide 19: Strategy, acquisition update and outlook
Strategy, acquisition update and outlook Nic Budden, Chief Executive Officer 19
Slide 20: Continued to deliver on strategic priorities despite Covid-19 challenges
CONTINUED TO DELIVER ON STRATEGIC PRIORITIES DESPITE COVID-19 CHALLENGES Organic market share growth in all segments Well progressed on lettings acquisitions Number 1 lettings agent in Build to Rent Broadened reach through a dedicated China Sales Desk and into South East England Customer Data Platfo
Slide 21: Acquisition of Douglas & Gordon
ACQUISITION OF DOUGLAS & GORDON • £16.5m revenue for the year to March 2020 £14.25M • £0.6m EBITDA (pre IFRS 16) and business has remained INVESTMENT profitable during 2020, despite Covid-19 • Acquisition funded from cash reserves • Strong lettings book with 2,900 tenancies in Prime Central London a
Slide 22: Trading update
TRADING UPDATE 2021 Trading Trading in the first two months of 2021 has been strong across all business segments. Group revenue is well ahead of 2020 and continued tight cost control has resulted in significant improvement in operating profit: • Lettings: volumes significantly above prior year as lo
Slide 23: Summary and outlook
SUMMARY AND OUTLOOK LONDON’S LEADING AGENT • Leading brands, clear proposition and exceptional dedication and service from staff continues to drive results for customers • Best in class technology underpins a multi-channel proposition and allowed the business to deliver for customers during a turbul
Slide 24: Appendices
Appendices 1. Additional financial information 2. Background to Foxtons 3. Foxtons ESG 24
Slide 25: Additional financial information: earnings/(loss) per share
1. ADDITIONAL FINANCIAL INFORMATION: EARNINGS/(LOSS) PER SHARE 2020 2019 Weighted average number of shares (1) 313.8m 274.9m Profit after tax (£3.2m) (£7.8m) Basic and diluted earnings per share (1.0p) (2.8p) Adjusted profit after tax (2) (£2.3m) (£3.1m) Adjusted basic and diluted earnings per share
Slide 26: Adj. EBITDA to adj. operating profit reconciliation
1. ADDITIONAL FINANCIAL INFORMATION: ADJ. EBITDA TO ADJ. OPERATING PROFIT RECONCILIATION • Adjusted operating profit/(loss) represents the profit/(loss) before tax for the period before finance income, finance cost, other gains/(losses) and adjusted items. This is the measure reported to the Directo
Slide 27: Background to Foxtons: mid-market sales position mirrors London
2. BACKGROUND TO FOXTONS: MID-MARKET SALES POSITION MIRRORS LONDON London and Foxtons sales distribution by price (2019) London Foxtons Volumes (%) Volumes (%) 36% 34% 33% 32% 13% 14% 6% 6% 4% 3% 3% 3% 2% 2% 3% 1% 1% 1% 1% 1% 1% 0% 27 Source: Land Registry, Foxtons
Slide 28: Background to Foxtons: unique business model in estate agency
2. BACKGROUND TO FOXTONS: UNIQUE BUSINESS MODEL IN ESTATE AGENCY 5 key competitive advantages allow us deliver on our strategy Foxtons competitive advantages: • Leading brands with the highest levels of awareness in our markets and supported by an integrated network of physical branches • Strong sal
Slide 29: Background to Foxtons: best in sector technology platform
2. BACKGROUND TO FOXTONS: UTILISING THE BEST IN SECTOR TECHNOLOGY PLATFORM Foxtons unique technology underpins every aspect of the business and provides a significant competitive advantage Leading database and CRM system Internally integrated and externally connected Delivering outcomes to drive gro
Slide 30: Responsible business
3. RESPONSIBLE BUSINESS MEMBER OF THE FTSE RUSSELL FTSE4GOOD INDEX SERIES Employee Engagement and Diversity & Inclusion • Top quartile employee engagement amongst UK companies (84%) alongside a professional and compliant culture, with 95% of staff believing Foxtons promotes ethical behavior and adhe