Slide 1: Foxtons Interim results presentation
Foxtons Interim results presentation For the six months ended 30 June 2016
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: Highlights
Highlights Nic Budden, Chief Executive Officer
Slide 4: Group performance
Group performance • EU referendum caused significant uncertainty in the London property market H1 Group Revenue (£m) • H1 2016 subdued sales performance overall, masked by brief surge in transactions in March due to stamp duty change followed by sharp contraction in Q2 • Lettings demand dampened fro
Slide 5: Market overview
Market overview Nic Budden, Chief Executive Officer
Slide 6: London and South East markets offer disproportionate value
London and South East markets offer disproportionate value 2015 Addressable market size of South East England residential Breakdown of England and Wales residential property markets (sales and lettings commissions) property sales markets (by value) 100% SE Ring 14% £1.6bn 90% Rest of E&W 26% 80% OLC
Slide 7: Sales market update: monthly transactions
Sales market update Monthly London residential property sales transactions and YoY change (%) 18,000 100% Monthly transactions (LHS) 16,000 90% YoY change % (RHS) 80% 14,000 70% 12,000 60% 10,000 Monthly transactions 50% YoY change % 8,000 40% 6,000 30% 4,000 20% 2,000 10% 0% 0 -10% Jun-13 Jun-14 Ju
Slide 8: Lettings market update
Lettings market update Average initial tenancy length and Number of privately rented homes in London(1) renewal tenancies as % of total tenancies(2)(3) 1,100,000 19.0 45% Initial tenancy length (number of months) 1,000,000 18.5 40% Renewals % of total tenancies 18.0 35% 900,000 30% Number of househo
Slide 9: Strategy
Strategy Nic Budden, Chief Executive Officer
Slide 10: Strategy
Strategy ∙ London property market continues to offer disproportionate value and growth Focus on market ∙ 45% of all property transactions by value in England and Wales occurred in London in 2015 with attractive ∙ Natural imbalance between supply and demand leading to resilient prices fundament
Slide 11: Resilient business model able to withstand market downturn
Resilient business model able to withstand market downturn Group Adj. EBITDA profile displays resilience through the cycle (1) Indexed London and Foxtons residential property sales transaction volumes (2) £49.6m £46.2m £46.0m 250 0 1 225 +111% 1 £37.7m £38.3m 0 200 £31.8m 26 Indexed (2008 = 100) 23
Slide 12: Planned branch network growth
Planned branch network growth 100 branches Key Existing office Planned office 12
Slide 13: Expansion economics
Expansion economics Foxtons branch Adj. EBITDA mix by area New branch economics (34 branches opened 2010-2015) 100% £4.0m branches 10 33 branches 14% 90% £3.5m 27% Zone 3+ 80% £3.0m £2.5m 9 branches 70% 39% EBITDA enhancing £2.0m 60% 19 branches after 7 months £1.5m 50% 42% Zone 2 £1.0m Average time
Slide 14: Financial results
Financial results Gerard Nieslony, Chief Financial Officer
Slide 15: Key performance indicators
Key performance indicators Revenue by segment - % of total (2) KPIs H1 2016 H1 2015 % 5.1% 6.8% 47.4% 45.4% Sales revenue (£m) 31.3 33.7 (7.0%) Units(3) 2,314 2,578 (10.2%) Revenue per deal (£) 13,522 13,057 3.6% 47.2% 47.4% Lettings revenue (£m) 32.6 33.5 (2.7%) Units 9,127 10,310 (11.5%) 2015 2016
Slide 16: Profit and loss
Profit and loss Profit & loss (£m) H1 2016 H1 2015 % Segmental EBITDA analysis (1) Revenue £10.0m £9.8m Sales 31.3 33.7 (7.0%) Lettings 32.6 33.5 (2.7%) £7.0m Mortgage broking 4.7 3.6 27.9% H1 2015 £5.0m Other 0.2 0.3 H1 2016 Total revenue 68.8 71.1 (3.1%) Administrative expenses (55.7) (50.6) (10.1
Slide 17: Adj. EBITDA analysis
Adj. EBITDA analysis (£m) Primarily revenue driven together with rent/rates increases Revenue increase from new branches opened since Jan-15 (excludes £1.0m of 0% deals in those branches) Cost increase of new branches primarily salaries; £1.3m (including commissions on 0% deals), Rates, rents etc.;
Slide 18: Cash flow
Cash flow Cash flow (£m) H1 2016 H1 2015 Adjusted operating cash Adjusted EBITDA 13.1 20.5 Minimal working capital requirements Movement in working capital 1.3 (0.4) Net capital spend (3.5) (3.2) Capex primarily relates to opening of 5 new branches in each period Adjusted operating cash 10.9 16.9 Op
Slide 19: Dividends and share buy-back
Dividends and share buy-back • High cash generation enabled the company to return £28.3m to shareholders in H1 2016; £17.1m total dividends and £11.2m of share buy-back • The share buy-back scheme commenced in December 2015 and ended February 2016 with the company buying 7.1m shares (2.5% of shares
Slide 20: Summary and outlook
Summary and outlook • Unsurprisingly, the run up to the EU referendum and the introduction of the stamp duty surcharge for buy to let and second homes significantly impacted markets in H1. • Too early to accurately predict how the London property sales market will respond to the UKs decision to leav