Slide 1: Foxtons Group plc Interim results presentation
Foxtons Group plc Interim results presentation For the six months ended 30 June 2021
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 Highlights and strategic update Nic Budden, Chief Executive Officer Market overview Nic Budden Financial review Richard Harris, Chief Financial Officer Summary and outlook Nic Budden 3
Slide 4: Highlights and strategic update
Highlights and strategic update Nic Budden 4
Slide 5: Group highlights
Group highlights REVENUE • Growth in all business areas driven by market share growth, M&A and new services and sales channels £66.9m • Strong growth in sales and mortgage broking revenues +£15.1m vs. H1 19 • Resilient lettings performance with volume growth offsetting lower rents ADJ. OPERATING PRO
Slide 6: Strategy: Lead, Diversify, Grow
Strategy: Lead, Diversify, Grow Market Diversify Profit leadership revenues growth 6
Slide 7: Market leadership
Market Diversify Profit Market leadership leadership revenues growth Strategic lever H1 21 progress Data science and (1) Sales technology to drive Organic market share growth share growth Leverage proposition 15% growth in Lettings (2) to deliver growth tenancy portfolio 1. Implemented Customer The
Slide 8: Diversify revenues
Market Diversify Profit Diversify revenues leadership revenues growth Strategic lever H1 21 progress New China Desk delivered Sales New sales channels c.£1m revenue Growth in new More than doubled revenue Lettings (1) Build to Rent Sector in Foxtons Build to Rent Expansion into 1. Berkshire trial pe
Slide 9: Profit growth
Market Diversify Profit Profit growth leadership revenues growth Strategic lever H1 21 progress Sales Productivity growth Deals per agent +45% (vs. 2019) Profit contribution from Lettings Douglas & Gordon acquisition lettings acquisitions (1) 69% mortgage broking cross-sell Group Cross-sell of servi
Slide 10: Market overview
Market overview Nic Budden 10
Slide 11: Sales market update
Sales market update Sales supply and demand dynamics (indexed) (1) Average London sales prices (2) 200 Buyer registrations £550,000 180 Indexed (Jan-19 = 100) Property instructions £525,000 Average sales price 160 140 £500,000 120 100 £475,000 80 60 £450,000 40 £425,000 20 0 £400,000 Mar-19 Jul-19 N
Slide 12: Lettings market update
Lettings market update Rental supply and demand dynamics (indexed) (1) Average London rental prices (p.w.) (2) 250 Tenant registrations £500 £480 Indexed (Jan-19 = 100) Property instructions Average weekly rent 200 £460 £440 150 £420 £400 100 £380 £360 50 £340 £320 0 £300 Mar-19 Jul-19 Nov-19 Mar-20
Slide 13: Financial review
Financial review Richard Harris 13
Slide 14: Income statement
Income statement H1 21 vs. £m H1 21 H1 20 H1 19 H1 19 • Increased operating costs driven by impact of Douglas Revenue 66.9 40.4 51.8 29% & Gordon and higher commissions Operating costs (53.7) (35.7) (45.7) (18%) • Despite being eligible for relief we paid our £1.5m branch business rates bill for the
Slide 15: Business performance: lettings
Business performance: lettings Resilient performance as higher volumes offset lower rental prices H1 21 H1 20 H1 19 H1 21 vs. H1 19 Volume 10,026 7,952 9,265 8% Revenue per transaction £3,300 £3,229 £3,499 (6%) Lettings revenue £33.1m £25.7m £32.4m 2% Less: direct costs (£10.6m) (£7.3m) (£8.9m) Lett
Slide 16: Business performance: sales
Business performance: sales Strong growth through market recovery, market share gains and higher staff productivity H1 21 H1 20 H1 19 H1 21 vs. H1 19 Volume 2,071 858 1,194 73% Revenue per transaction £13,833 £12,906 £12,934 7% Sales revenue £28.6m £11.1m £15.4m 86% Less: direct costs (£11.7m) (£6.2
Slide 17: Business performance: mortgage broking
Business performance: mortgage broking Growth from increased Foxtons cross-selling and more favourable market conditions H1 21 H1 20 H1 19 H1 21 vs. H1 19 Volume 2,795 2,066 2,099 33% Revenue per transaction £1,859 £1,744 £1,889 (2%) Mortgage broking revenue £5.2m £3.6m £4.0m 31% Less: direct costs
Slide 18: Cash flow
Cash flow Adj. operating profit to net free cash inflow conversion Uses of cash flow 0.7 Opening cash £37.0m 8.2 Net free cash inflow £3.0m Acquisition of Douglas & Gordon (£10.0m) (net of cash acquired) 5.2 Investment in Boomin (£3.0m) (9.1) (0.6) 3.0 Share buybacks (£2.7m) (1.1) (0.3) Other £0.1m
Slide 19: Capital allocation framework
Capital allocation framework 1. Ensure sufficient liquidity available to manage business operational requirements Fund investment in the future development of the business: Free cash 2. Continued investment in people and technology flow Acquisition of high quality lettings businesses priorities 3. M
Slide 20: Financial summary
Financial summary Good growth in revenues in all business segments Operating leverage drove good growth in profitability Douglas & Gordon contributed £7.2m revenue and £1.0m operating profit since acquisition in March. Integration progressing in line with plan Strong cash generation supports continu
Slide 21: Summary and outlook
Summary and outlook Nic Budden 21
Slide 22: Summary and outlook
Summary and outlook Summary • Business rebounded well from Covid-19 to deliver strong performance across all business segments • High levels of operating leverage delivered profits growth • Good progress made against Lead, Diversify, Grow strategic objectives • Successful acquisition of Douglas & Go
Slide 23: Appendix
Appendix 1. Additional financial information 2. Background to Foxtons
Slide 24: 1. Additional financial information: balance sheet
1. Additional financial information: balance sheet Strong balance sheet provides operational flexibility £m Jun-21 Dec-20 Key movements: Goodwill and intangibles 125.8 115.0 • Increase in goodwill and intangibles, property, plant & equipment and lease liabilities reflects acquisition of Property, pl
Slide 25: 1. Additional financial information: earnings/(loss) per share
1. Additional financial information: earnings/(loss) per share H1 21 H1 20 Loss for the purposes of basic and diluted eps (£3.9m) (£5.4m) Adjust for: Adjusted items (including associated taxation) £0.9m £0.7m Deferred tax remeasurement (due to UK corporate tax rate change) £6.3m £1.7m Adjusted earni
Slide 26: 2. Background to Foxtons: unique operating model
2. Background to Foxtons: unique operating model Competitive advantages Key outcomes Premium customer service Brand and reach and customer results Technology and Customer loyalty and advocacy data science Sales and Business results service intensity 26
Slide 27: 2. Background to Foxtons: strong foundation for growth
2. Background to Foxtons: strong foundation for growth (1) (2) (3) Leading brand Strong value proposition Sector leading service #1 8% 4% Brand awareness in London property Rental yield premium Sales price premium Customer loyalty Technology platform Data science 86% 77% Single 1.6bn Landlords All c
Slide 28: 2. Background to Foxtons: Single tech stack underpins operations
Aggregators 2. Background to Foxtons: Property information Single tech stack underpins Website optimisation operations Payment processing Telephone Cross-sell Branches Cyber security Web Chat Social Media BOS Paid search and SEO Compliance Email Performance CDP and management Data science My Foxtons
Slide 29: 2. Background to Foxtons: market leadership through our people
2. Background to Foxtons: market leadership through our people Culture & Sales intensity Professionalism engagement 29