Slide 1: Foxtons Interim results presentation
Foxtons Interim results presentation For the six months ended 30 June 2020
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 financial highlights
GROUP FINANCIAL HIGHLIGHTS H1 20 H1 19 Change Revenue £40.4m £51.8m (22%) Adj. operating loss (1) (£2.4m) (£0.9m) (£1.5m) Net cash balance £40.5m £14.5m £26.0m • Group revenue was impacted by Covid-19 and the closure of the property market from 23rd March to 15th May, offsetting strong growth indica
Slide 5: Covid-19 priorities and actions
COVID-19 PRIORITIES AND ACTIONS 1 Protected the safety of employees and customers • Closed all branches at the beginning of lockdown • Post-lockdown completed risk assessments of branches and implemented policies and procedures in line with government guidance • Our branches reopened on 1st June and
Slide 6: Lettings update
LETTINGS UPDATE Lettings supply and demand dynamics (Weekly change vs. prior year) (1) YoY change in average London rental prices (2) Beginning of lockdown Branches reopen 15% 100% 80% 10% YoY weekly rental price change 60% 40% 5% YoY change 20% 0% 0% -20% -40% -5% -60% -10% -80% -100% -15% Applican
Slide 7: Sales update
SALES UPDATE Sales supply and demand dynamics Sales commission pipeline value (Weekly change vs. prior year) (1) (Weekly change vs. prior year) (2) 120% Branches reopen 40% Beginning of lockdown 100% 30% 80% 20% 60% 40% 10% YoY change YoY change 20% 0% 0% -20% -10% -40% -20% -60% -30% -80% -100% -40
Slide 8: Financial review
Financial review Richard Harris, Chief Financial Officer 8
Slide 9: Income statement
INCOME STATEMENT The significant impact from Covid-19 on revenues was largely offset by swift action to re-align the cost base £m H1 20 H1 19 (1) Change Revenue 40.4 51.8 (11.4) Operating costs (35.7) (45.7) 10.0 Depreciation, amortisation and (7.1) (7.0) (0.1) share based payment charge Adj. operat
Slide 10: Covid-19 impact on revenues and profitability
COVID-19 IMPACT ON REVENUES AND PROFITABILITY H1 2020 monthly revenue and profitability • Q1 saw strong demand in the sales business following the General Election in December 2019, with the value of the sales commission pipeline building to be more than 20% higher than the prior year • Staffing lev
Slide 11: Business performance: Lettings
BUSINESS PERFORMANCE: LETTINGS Resilient performance, with renewal and property management services delivering recurring revenues to partially offset limited new lettings activity during Covid-19 lockdown H1 20 H1 19 Change YoY change in commissions by period Revenue 10% 0% Lettings volumes 7,952 9,
Slide 12: Business performance: Sales
BUSINESS PERFORMANCE: SALES Strong demand at the beginning of the year then impacted by property market closedown H1 20 H1 19 Change YoY change in commissions by period Revenue 10% 0% 0% Sales volumes 858 1,194 (28%) -10% Revenue per transaction £12,906 £12,934 (0%) -20% -30% Total sales revenue £11
Slide 13: Business performance: Mortgage broking
BUSINESS PERFORMANCE: MORTGAGE BROKING Strong growth in remortgage products offset the closure of the mortgage market during Covid-19 lockdown H1 20 H1 19 Change YoY change in commissions by period Revenue 0% (1%) (2%) Mortgage broking volumes 2,066 2,099 (2%) -10% (5%) (9%) -20% Revenue per transac
Slide 14: Balance sheet
BALANCE SHEET The successful equity placing in April ensures we retain a strong balance sheet with good liquidity and flexibility to support the business £m H1 20 H1 19 (1) Goodwill & other intangibles 112.2 110.6 Property, plant & equipment 11.4 15.1 Right-of-use assets 47.9 57.9 Investment in asso
Slide 15: Cash flow
CASH FLOW Adj. operating loss to net free cash inflow conversion Uses of cash flow Operating cash inflow: £8.5m Opening cash £15.5m Net free cash inflow £5.7m Acquisitions (net of cash acquired) (£1.9m) Net proceeds from equity raise £21.1m Borrowings £5.0m Other £0.1m Increase in cash £30.0m Adj. A
Slide 16: Capital allocation policy
CAPITAL ALLOCATION POLICY Disciplined capital allocation policy to support the business through the Covid-19 crisis and ensure fitness for the future: • Ensure sufficient liquidity in the business to manage through any further business impact from Covid-19 • Fund investment in the future development
Slide 17: Financial summary
FINANCIAL SUMMARY Business performance has remained resilient due to the recurring nature of revenues and decisive actions to reduce costs BUSINESS MODEL HAS ADAPTED WELL TO PROTECT PROFITABILITY • Business performance has remained resilient due to recurring nature of certain revenues, particularly
Slide 18: Strategy and outlook
Strategy and outlook Nic Budden, Chief Executive Officer 18
Slide 19: Foxtons business model delivers for stakeholders
FOXTONS BUSINESS MODEL DELIVERS FOR STAKEHOLDERS Foxtons business model is underpinned by 5 key competitive advantages to deliver results for all stakeholders Foxtons competitive advantages: • Leading brand with the highest awareness levels in our markets, supported by a network of over 55 branches
Slide 20: Lettings acquisition strategy
LETTINGS ACQUISITION STRATEGY Foxtons competitive strength and scale in lettings provide an attractive opportunity to invest in high quality lettings portfolios at values that may be depressed by the current market disruption • No. 1 estate agency brand with network of interconnected branches throug
Slide 21: Summary and outlook
SUMMARY AND OUTLOOK LONDON’S LEADING AGENT • Strong single brand, clear proposition and exceptional dedication and service from staff continues to drive listings and results for customers • Best in class technology underpins a multi-channel proposition and allowed the business to deliver for custome
Slide 22: Appendices
Appendices 1. Additional financial information 2. Background to Foxtons 3. Foxtons ESG 22
Slide 23: Additional financial information: Earnings/(loss) per share
1. ADDITIONAL FINANCIAL INFORMATION: EARNINGS/(LOSS) PER SHARE H1 2020 H1 2019 Weighted average number of shares * 300.7m 274.9m Basic loss (£5.4m) (£2.4m) Basic loss per share (1.8p) (0.9p) Adjusted loss (£4.7m) (£2.1m) Adjusted loss per share (1.6p) (0.8p) * Weighted average number of shares exclu
Slide 24: Adj. EBITDA to adj. operating profit/(loss) reconciliation
1. ADDITIONAL FINANCIAL INFORMATION: ADJ. EBITDA TO ADJ. OPERATING PROFIT/(LOSS) RECONCILIATION • The implementation of IFRS 16 has had a material effect on the Group’s Alternative Profit Measure (APM) ‘adjusted EBITDA’. Prior to the implementation of IFRS 16, adjusted EBITDA served as a good proxy
Slide 25: Background to Foxtons: London's leading brand
2. BACKGROUND TO FOXTONS: LONDON’S LEADING BRAND Highest brand awareness in London estate agency Securing a price premium (unprompted awareness) (1) (Foxtons and top 20 competitors net proceeds achieved at average Foxtons sales price of £556k) (2) 350 £580,000 300 £556,000 Unprompted brand awareness
Slide 26: Background to Foxtons: Mirroring the high value London market
2. BACKGROUND TO FOXTONS: MIRRORING THE HIGH VALUE LONDON MARKET Distribution of residential property sales by volume London and Foxtons sales distribution by price and value (2019) (1) (2019) (2) 100% 40% 100% 100% 98% % total England & Wales residential property sales 96% Cumulative total % of res
Slide 27: Background to Foxtons: Best in sector technology platform
2. BACKGROUND TO FOXTONS: UTILISING THE BEST IN SECTOR TECHNOLOGY PLATFORM Foxtons unique technology underpins every aspect of the business and provides a significant competitive advantage Leading database and CRM system Internally integrated and externally connected Delivering outcomes to drive gro
Slide 28: Background to Foxtons: Strong culture of sales and service
2. BACKGROUND TO FOXTONS: STRONG CULTURE OF SALES AND SERVICE Employee breakdown by role type Leader Board targets drives staff engagement and sales culture: (FY19) Support staff 12% Customer acquisition 8% Sales support 7% Sales staff 73% • Over 73% of staff engaged in direct sales activities with
Slide 29: Foxtons ESG
3. FOXTONS ESG MEMBER OF THE FTSE RUSSELL FTSE4GOOD INDEX SERIES London’s Air Ambulance Making The Leap We’re proud to be heading into our fifth year of partnership with MTL is a charity aimed at raising aspirations of disadvantaged London’s Air Ambulance Charity, a relationship established in schoo