Foxtons Group Plc · LSE:FOXT
Foxtons — H1 2023 Earnings Presentation
26 slides from Foxtons's earnings presentation, Jul 27, 2023
Slide 1: Interim results for the period ended 30 June 2023
DRAFT v12 PRIVATE AND CONFIDENTIAL Foxtons Group plc Interim results for the period ended 30 June 2023 27 July 2023
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”, “
Slide 3: Agenda
Agenda 1. Highlights 2. Market update 3. Financial update 4. Operational and strategic update 5. Summary and outlook 3
Slide 4: Highlights
Highlights Guy Gittins, Chief Executive Officer 4
Slide 5: H1 Highlights
H1 Highlights Operational progress driving YoY financial growth (1) (2) Financial Services Instruction market share Lettings organic revenue Sales market share refinance volumes Operational +8% / +43% +14% +33% / +15% +29% Growth in new sales agreed / Growth in Lettings / Sales £5.6m YoY growth exch
Slide 6: Market update
Market update Guy Gittins, Chief Executive Officer 6
Slide 7: London lettings market update
London lettings market update H1 23 rental prices 12% above H1 22, reflecting continued supply/demand imbalance H1 23 rental stock levels broadly flat vs. PY, but demand still strong (1) 200 £567 £600 181 Indexed property supply and tenant demand 175 £550 New tenancy average weekly rental price 180
Slide 8: Foxtons lettings performance versus the market
Foxtons lettings performance versus the market Largest and fastest growing lettings agent in London Lettings – Foxtons vs the market YoY change in new lettings instructions (1) 40% H1 23 market share: 5.8% Competition Foxtons H1 23 market share growth: +8% 30% 20% 10% 0% (10%) (20%) (30%) (40%) New
Slide 9: London sales market update
London sales market update H1 23 London exchange volumes 24% lower than H1 22. H1 23 London new sales agreed volumes Average prices 3% lower than H1 22 (1) 19% lower than H1 22 (2) H1 sales exchange volumes YoY change in H1 average sales price 14,000 2021 2022 2023 market market market 44k 12,000 42
Slide 10: Foxtons sales performance versus the market
Foxtons sales performance versus the market Instruction growth driving exchange and new sales agreed outperformance Sales – Foxtons vs the market YoY change in new sales instructions (1) 70% Competition Foxtons H1 23 market share: 7.6% 60% H1 23 market share growth: +43% 50% 40% H1 23 new sales agre
Slide 11: Financial review
Financial review Chris Hough, Chief Financial Officer 11
Slide 12: Financial highlights
Financial highlights . H1 23 H1 22 Change (£) Change (%) Revenue £70.9m £65.1m +£5.9m +9% Adj. operating profit £6.8m £6.2m +£0.7m +10% Adj. operating profit margin 9.6% 9.5% n/a +11bps Profit before tax £6.1m £4.3m +£1.8m +42% (1) Adj. EPS (basic) 1.4pps 1.1pps +0.3pps +27% (2) Net free cash flow (
Slide 13: Adjusted operating profit walk
Adjusted operating profit walk H1 22 Adj. Underlying Variable Investment in Cost Cost Inorganic H1 23 Adj. operating profit revenue pay fee earner savings inflation operating operating profit change (1) headcount and profit (2) other growth initiatives 1) Underlying revenue change excluding the incr
Slide 14: Segmental performance
Segmental performance Lettings revenue and profit growth mitigated weaker sales market and H1 investments Revenue Adj. operating profit Adj. operating profit margin H1 23 Change (£) Change (%) H1 23 Change (£) Change (%) H1 23 Change Lettings £49.8m +£10.3m +26% £14.1m +£6.8m +93% 28.4% +1,000bps Sa
Slide 15: Cash flow
Cash flow Short-term working capital outflow to support Lettings growth Operating cash to net free cash inflow conversion Opening to closing of net cash / (net debt) Opening cash £12.0m Net free cash flow (£4.3m) (1) Acquisition consideration paid (£6.3m) Dividends paid (£2.1m) Share buybacks (£1.1m
Slide 16: Operational and strategic update
Operational and strategic update Guy Gittins, Chief Executive Officer 16
Slide 17: Operational upgrades being implemented at pace and driving market outperformance
Operational upgrades being implemented at pace and driving market outperformance Areas of upgrade 2023 Focus H1 23 Progress Data reporting suite implemented Data accessibility 1. Overhaul of data architecture Culture of management to KPIs driving productivity & usage 2. Increased database mining
Slide 18: Progressing towards ambition to deliver £25m-£30m adj. operating profit
Progressing towards ambition to deliver £25m-£30m adj. operating profit Strategic ambition Progress in H1 2023 +£5.6m (14%) organic revenue Organic growth 3%-5% CAGR (1) • +21% cross-sell of property management Lettings • Increased average tenancy length +£2.7m incremental acquisition revenue Acquis
Slide 19: Strategy to focus on non-cyclical and recurring Lettings revenues
Strategy to focus on non-cyclical and recurring Lettings revenues is enhancing earnings resilience £6.8m Sales market volumes £6.2m Adj. operating profit 44k £5.4m 42k 31k 32k 30k H1 19 H1 20 H1 21 H1 22 H1 23 (£0.9m) (£2.4m) 19
Slide 20: Summary and outlook
Summary and outlook Guy Gittins, Chief Executive Officer 20
Slide 21: Outlook and summary
Outlook and summary Summary • Operational improvements are being implemented at pace and are delivering outperformance against the market. Delivered revenue and profit growth, despite challenging sales market conditions: • Lettings growth, both organic and inorganic, continues to enhance Group’s ear
Slide 22: Appendix
Appendix 22
Slide 23: Balance sheet
Balance sheet H1 23 H1 22 Goodwill and intangibles £143.5m £135.5m Property, plant & equipment £53.6m £51.9m Cash £3.0m £11.7m Investments £0.0m £3.7m Net working capital £0.4m £0.6m Deferred tax (£26.3m) (£26.1m) Provisions and net contract liabilities £0.5m (£6.2m) Borrowings (£4.8m) (£0.1m) Lease
Slide 24: Investment case
Investment case Resilient business with significant upside potential from operational improvement London is the most valuable residential property market in the UK Highly valuable markets Largest private rental sector in the UK with high levels of non-cyclical demand Resilient business model Non-cyc
Slide 25: How we deliver our growth ambitions
How we deliver our growth ambitions Focus on rebuilding areas of historic competitive advantage Leading brand • Brand positioning • Customer proposition • Brand visibility Brand High functioning sales teams • Revenue generation headcount • Tenure and productivity • Empowering fee earners Data & Peop
Slide 26: Contact
Contact: www.foxtonsgroup.co.uk investor@foxtonsgroup.co.uk +44 (0) 207 893 6261 26