Slide 1: Foxtons Interim results presentation
Foxtons Interim results presentation For the period ended June 2017
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 £58.5m (H1 2016: £68.8m) and adjusted EBITDA £7.1m (H1 2016: £13.1m) • Lettings revenue £32.1m (- 2%). Volumes up 1% offset by decline in rental rates. Remains a resilient, recurring revenue stream. Overall portfolio c.19,800 (2016: c.19,400) • Sa
Slide 5: Market update - Sales
MARKET UPDATE - SALES Long-run residential property sales transaction volumes YoY change in monthly sales transaction volumes(1) (monthly sales volumes as % of long term average)(1)(2) 150% London England & Wales (ex London) 80% 60% 125% 40% 100% 20% 75% 0% -20% 50% Q1 2017 % LTA -40% 25% London 61%
Slide 6: Market update - Lettings
MARKET UPDATE - LETTINGS Change in weekly London rental prices London rental stock levels (1 year change) (1)(2) (Indexed) (1) 6% 180 % change in average weekly rent 4% 160 Indexed (jan-15 = 100) 2% 140 0% 120 -2% 100 -4% 80 -6% 60 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Nov-1
Slide 7: Financial review
Financial review Mark Berry, Chief Financial Officer 7
Slide 8: A balanced business
A BALANCED BUSINESS Sales Lettings 29% Revenue decrease 2% Revenue decrease 33% Volume decrease 1% Volume increase 6% Revenue per deal increase 3% Revenue per deal decrease • Revenue: £22.2m (2016: £31.4m) • Revenues resilient at £32.1m (2016: £32.7m) • H1 17 sales volumes: 1,544, 33% lower than H1
Slide 9: Income statement
INCOME STATEMENT Income statement • £9.7m of revenue decrease resulted from subdued sales and mortgage market following external market shocks and record Q1 16. £m H1 17 H1 16 Change • Lettings revenue impacted by 5% reduction in rental prices, effectively mitigated through increased volumes resulti
Slide 10: Cash generative with no debt
CASH GENERATIVE WITH NO DEBT EBITDA to free cash flow conversion Uses of cash flow Operating cash flow: £3.2m / 45.1% conversion ratio Opening cash £9.5m £7.1m £(2.2m) Free cash flow £2.1m Dividends paid £(0.9m) £(1.7m) Other £(0.1m) £(1.1m) £2.1m Increase in cash £1.1m Cash at end of period £10.6m
Slide 11: Interim dividend and policy
INTERIM DIVIDEND AND POLICY • Fund investment in the future development of the business FREE CASH FLOW • Maintain a strong balance sheet PRIORITES • Return excess cash to shareholders • Return 35% - 40% of profit after tax as an ordinary dividend CORE DIVIDEND • 0.43pps interim dividend POLICY • Cas
Slide 12: Financial summary
FINANCIAL SUMMARY RESILIENT LETTINGS BUSINESS • Grew lettings portfolio size in period • Mitigated downward pressure on rents FOCUS ON EFFICIENCY • Strong cost control achieved in H1 2017. Ongoing review of cost base to continue to align with market conditions • Selective investments in tech and tra
Slide 13: Operational update and outlook
Operational update and outlook Nic Budden, Chief Executive Officer 13
Slide 14: Operational initiatives progress
OPERATIONAL INITIATIVES PROGRESS Objectives: Detail Results • Deepening relationships with existing Grew portfolio size to c.19,800 properties (2016: GROW OUR LESS CYCLICAL landlords to increase retention c.19,400) and actively managed properties to 32% LETTINGS BUSINESS (2016: 31%) • Continue to gr
Slide 15: Summary and outlook
SUMMARY AND OUTLOOK LONDON’S LEADING AGENT • Strong single brand and powerful culture of sales and service • Highly motivated, experienced estate agents renowned for delivering exceptional results for clients • Market-leading tech and digital offering continues to deliver a premium high-touch servic
Slide 16: Appendices
Foxtons Appendices 16
Slide 17: Strong balance sheet - net cash and no debt
STRONG BALANCE SHEET – NET CASH AND NO DEBT £m H1 17 H1 16 Goodwill & intangibles 119.8 118.9 Property, plant & equipment 26.5 27.8 Net working capital 3.3 4.5 Low working capital requirements Deferred tax (15.9) (17.5) Provisions and deferred revenue (4.7) (4.9) Positive cash position with £10m Rev
Slide 18: Segmental EBITDA and KPIs
SEGMENTAL EBITDA AND KPIs H1 17 H1 16 Sales revenue (£m) 22.2 31.4 Sales EBITDA (£m) 1.4 5.2 Sales units 1,544 2,314 Lettings revenue (£m) 32.1 32.7 Lettings EBITDA (£m) 4.9 7.1 Lettings units 9,435 9,322 Lettings tenancies (average) 19,777 19,449 Mortgage broking revenue (£m) 4.2 4.7 Mortgage broki
Slide 19: The scale and scope of our business
THE SCALE AND SCOPE OF OUR BUSINESS 2016 STATISTICS 40,000 VIEWINGS EACH MONTH 96% ASKING PRICE ACHIEVED 6 million WEBSITE VIEWS 260,000 APPLICANTS REGISTERED £2.3 billion PROPERTY SOLD £0.5 billion RENT COLLECTED 1 PROPERTY LET EVERY 23 MINUTES, 1 PROPERTY SOLD EVERY HOUR 19
Slide 20: Leading customer service and award winning business
LEADING CUSTOMER SERVICE AND AWARD WINNING BUSINESS PREMIUM CUSTOMER SERVICE AWARD WINNING BUSINESS 92% customer satisfaction 130 awards in the last 5 years Average score 4.6/5 LEADING LONDON ESTATE AGENCY POSITION Sales instructions Lettings instructions (H1 2017)(1) (H1 2017)(1) 20 1) Source: Zoop
Slide 21: 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 22: 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
Slide 23: Delivering for our customers
DELIVERING FOR OUR CUSTOMERS DEEP SECTOR AND MARKET EXPERTISE • Experienced senior staff (average 10 years experience) • Continuous mandatory training, specific training and development plans and Foxtons Academy • Local knowledge combined with regional understanding gained from integrated network •
Slide 24: Foxtons mid market sales position mirrors London
FOXTONS MID MARKET SALES POSITION MIRRORS LONDON London and Foxtons sales distribution by price (2016) London Foxtons Volumes (%) Volumes (%) 40% 35% 34% 29% 14% 12% 7% 5% 6% 4% 2% 3% 2% 2% 2% 1% 1% 1% 0% 1% 0% 1% Source: Land Registry, Foxtons research 24