Slide 1: Interim results presentation
Foxtons Interim results presentation For the period ended 30 June 2018
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: Overview
Overview Nic Budden, Chief Executive Officer 3
Slide 4: Group overview
GROUP OVERVIEW FINANCIAL PERFORMANCE • Group revenue £53.0m and adjusted EBITDA £0.1m • Lettings revenue £31.7m (- 1%). Broadly flat volumes with slightly lower average revenue per deal. Remains a resilient, recurring revenue stream. • Sales revenue £17.2m (- 23%). Decline driven by record low housi
Slide 5: Market update - Lettings
MARKET UPDATE - LETTINGS Average London rental prices (1)(2) London rental stock levels (Indexed) (3) 470 140 465 130 460 Indexed (jan-17 = 100) Average weekly rent 455 120 450 110 445 100 440 435 90 430 80 425 420 70 415 60 Jul-16 Jul-17 Nov-17 Apr-16 May-16 Jun-16 Apr-17 Apr-18 Nov-16 May-17 Jun-1
Slide 6: Market update - Sales
MARKET UPDATE - SALES Residential property sales transaction volumes(1) Affordability key driver of low volumes (House price / earnings ratio)(2) London England & Wales (ex. London) 130,000 (LHS) (RHS) 900,000 15.0 England & Wales annual transaction volumes 800,000 14.0 120,000 London annual transac
Slide 7: Financial review
Financial review Mark Berry, Chief Financial Officer 7
Slide 8: A balanced business through the cycle
A BALANCED BUSINESS THROUGH THE CYCLE Sales Lettings 23% Revenue decrease 1% Revenue decrease 23% Volume decrease - Volumes flat flat Revenue per unit 1% Revenue per deal decrease • Revenue: £17.2m (H1 17: £22.2m) • Revenue resilient at £31.7m (H1 17: £32.1m) • Contribution margin 51% pre- allocatio
Slide 9: Income statement
INCOME STATEMENT Income statement £m H1 18 H1 17 Change • £5.0m of the £5.5m revenue decrease was from the sales business • Lettings revenue and mortgage broking revenue was resilient. Lettings volumes in line with prior year overall with an improvement in Q2 Revenue 53.0 58.5 (9%) • £1.5m net cost
Slide 10: Summarised cash flow
SUMMARISED CASH FLOW EBITDA to free cash flow conversion Cash flow bridge Opening cash £18.6m Free cash outflow £(6.0m) Dividends paid £(0.7m) Other £(0.1m) Change in cash £(6.8m) Cash at end of period £11.8m EBITDA Working Cash cost of Capex & Tax paid Free cash capital FY17 adj. investments outflo
Slide 11: Free cash flow priorities
FREE CASH FLOW PRIORITIES • Fund investment in the future development of the business FREE CASH FLOW • Maintain a strong balance sheet PRIORITIES • Return excess cash to shareholders CORE DIVIDEND • Return 35% - 40% of profit after tax as an ordinary dividend POLICY • No interim dividend; in line wi
Slide 12: Financial summary
FINANCIAL SUMMARY BALANCED BUSINESS BUILT TO WITHSTAND THE CYCLE • Lettings revenue resilient after slow start to Q1. Q2 exit rate in line with PY as we enter Q3 peak period • Sales volumes subdued throughout the period FOCUS ON EFFICIENCY & SELECTIVE LONG TERM INVESTMENTS • Selective investments in
Slide 13: Operational update and outlook
Operational update and outlook Nic Budden, Chief Executive Officer 13
Slide 14: Investing for future growth
INVESTING FOR FUTURE GROWTH KEY PRIORITIES 1. Investing in • Enhanced account management for largest landlords, and launched Foxtons Prime for HNW buyers and sellers customer • 9.2/10 TrustPilot review score and outperform rivals by achieving average 9% sales price premium vs. competitors service an
Slide 15: Summary and outlook
SUMMARY AND OUTLOOK LONDON’S LEADING AGENT • Strong single brand, clear proposition and exceptional service continues to drive listings • Highly motivated, experienced estate agents renowned for delivering exceptional results for clients • Market-leading tech and digital offering continues to delive
Slide 16: Appendices
Appendices 16
Slide 17: Strong balance sheet – net cash and no debt
STRONG BALANCE SHEET – NET CASH AND NO DEBT £m H1 18 H1 17 Goodwill & intangibles 120.4 119.8 Property, plant & equipment 22.1 26.5 Investment in associate 1.0 - Net working capital 4.6 3.3 Low working capital requirements Deferred tax (16.1) (15.9) Provisions and deferred revenue (6.0) (4.7) Positi
Slide 18: Segmental EBITDA and KPIs
SEGMENTAL EBITDA AND KPIs H1 18 H1 17 Sales revenue (£m) 17.2 22.2 Sales EBITDA (£m) (3.6) 1.4 Sales units 1,188 1,544 Lettings revenue (£m) 31.7 32.1 Lettings EBITDA (£m) 3.0 4.9 Lettings units 9,430 9,435 Mortgage broking revenue (£m) 4.1 4.2 Mortgage broking EBITDA (£m) 0.7 0.8 Mortgage broking u
Slide 19: Earnings per share and effective tax rate
EARNINGS PER SHARE AND EFFECTIVE TAX RATE H1 2018 H1 2017 Basic earnings £(2.9m) £3.3m Weighted average number of shares * 274.9m 274.8m Basic earnings per share (1.1p) 1.2p Effective tax rate ** -17.1% 11.4% * Number of shares used for EPS calculation purposes excludes shares held in Treasury ** Ef
Slide 20: Foxtons market leading outcomes drive #1 listings position
FOXTONS MARKET LEADING OUTCOMES DRIVE #1 LISTINGS POSITION Foxtons and competitor sales price achieved for average Sales instructions Foxtons house sale (1) (H1 2018)(2) +9.4% £580,000 £570,000 £560,000 £550,000 £540,000 £530,000 £520,000 Lettings instructions (H1 2018)(2) £510,000 £500,000 Foxtons
Slide 21: Foxtons mid market sales position mirrors London
FOXTONS MID MARKET SALES POSITION MIRRORS LONDON London and Foxtons sales distribution by price (2017) London Foxtons Volumes (%) Volumes (%) 36% 34% 32% 31% 16% 13% 6% 6% 4% 3% 3% 3% 2% 2% 2% 1% 1% 1% 1% 1% 1% 1% 21 1) Source: Land Registry, Foxtons research
Slide 22: The scale and scope of our business
THE SCALE AND SCOPE OF OUR BUSINESS 2017 STATISTICS 33,600 VIEWINGS EACH MONTH PRICE ACHIEVED +9.4% VS. COMPETITORS 4.8 million WEBSITE VIEWS 250,000 APPLICANTS REGISTERED £1.7 billion PROPERTY SOLD £0.5 billion RENT COLLECTED 1 PROPERTY LET EVERY 16 MINUTES, 1 PROPERTY SOLD EVERY HOUR 22
Slide 23: We operate a unique centralised estate agency model
WE OPERATE A UNIQUE CENTRALISED ESTATE AGENCY MODEL SINGLE BRAND BRANCH NETWORK FOCUSED SOLELY ON SALES & CUSTOMER SERVICE New business & lead generation team Lettings management team Web, Portal & IT development teams OUR SCALEABLE CENTRE IS A KEY Support services DIFFERENTIATOR Marketing Protograp
Slide 24: Best in the sector technology platform
BEST IN THE SECTOR TECHNOLOGY PLATFORM Foxtons unique technology underpins every aspect of the business and provides a significant competitive advantage Leading database Internally integrated and Delivering outcomes and CRM system externally connected to drive growth Single digital platform Operatio