Slide 1: Full Year Results Presentation
FOXTONS GROUP PLC FULL YEAR RESULTS PRESENTATION For the period ended 31 December 2023 05 March 2024
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 01 2023 highlights 02 Market update 03 Operational and strategic update 04 Financial review 05 Foxtons Operating Platform 06 Trading and outlook 07 Appendix 05 March 2024 Foxtons Group PLC Full Year 2023 Results Presentation 3
Slide 4: 2023 Highlights
01 2023 HIGHLIGHTS Guy Gittins, Chief Executive Officer Foxtons Group PLC Full Year 2023 Results Presentation 4
Slide 5: Introduction: Business reset complete, platform strengthened to deliver growth
Introduction Business reset complete. Foxtons Operating Platform strengthened to deliver growth. 1 Revenue growth (+5%) and adjusted operating profit growth (+2%) in significantly weaker sales market. 2 Operational upgrades delivered ahead of schedule to strengthen the Foxtons Operating Platform. 3
Slide 6: Market Update
02 MARKET UPDATE Guy Gittins, Chief Executive Officer Foxtons Group PLC Full Year 2023 Results Presentation 6
Slide 7: London lettings market update
London lettings market update Lettings market dynamics normalising. London supply and demand dynamics normalised through 2023. Rental price levels underpinned by limited new supply in the market 200 191 £575 £600 £532 180 £550 165 166 £461 £500 • London lettings market in 2023 was characterised by a
Slide 8: London sales market update
London sales market update Sales market value 24% lower in 2023 vs. 2022. 2023 exchange volumes weaker, in line with 2008 (GFC) and 2020 (Covid-19) levels • London sales market London decreased c.24% in value in 2023: 140,000 • 22% decrease in volumes. (1) Annual volume • 2.4% decrease in prices. (2
Slide 9: Operational and Strategic Update
03 OPERATIONAL AND STRATEGIC UPDATE Guy Gittins, Chief Executive Officer Foxtons Group PLC Full Year 2023 Results Presentation 9
Slide 10: Operational update
Operational update Operational upgrades delivered ahead of schedule. Strengthened the Foxtons Operating Platform to drive market outperformance. Competitive advantages 2023 priorities Progress in 2023 Delivering new technology products to Delivered new end-to-end digital Lettings platform. Technol
Slide 11: Progress against strategic priorities
Progress against strategic priorities Significant progress in 2023. On track to deliver medium term profit target. Strategic priorities Progress in 2023 7% organic revenue growth. Organic growth 3%-5% • Increased average tenancy lengths to drive landlord retention. Lettings CAGR (1) • 9% increase in
Slide 12: Progress against strategic priorities: transforming the Group's financial profile
Progress against strategic priorities Transforming the Group’s financial profile to deliver growth through sales market cycles. Adjusted operating profit progression Resilient business Delivering growth through sales market cycles Strong foundations £30.0m Strengthened operating platform delivering
Slide 13: Financial Review
04 FINANCIAL REVIEW Chris Hough, Chief Financial Officer Foxtons Group PLC Full Year 2023 Results Presentation 13
Slide 14: Financial review: Highlights
Financial review Highlights. 2023 2022 Change (£) Change (%) Revenue £147.1m £140.3m £6.8m +5% (1) Adj. EBITDA £17.5m £16.5m £1.0m +6% Ad. EBITDA margin 11.9% 11.8% n/a +10bps Delivered revenue and adjusted operating Adj. operating profit £14.3m £13.9m £0.4m +2% growth despite a significantly weaker
Slide 15: Financial review: Adjusted operating profit walk
Financial review Adjusted operating profit walk. • Fee earner investment includes: • 11% increase in headcount. • New competitive fee earner remuneration packages introduced to drive the attraction and retention of the best talent and align behaviour and incentives with the Group’s strategic priorit
Slide 16: Segmental performance: Lettings
Segmental performance Lettings delivered a year of growth from operational upgrades and acquisitions. 2023 2022 Change (%) • Revenue growth included: +£6.3m of organic growth (+7%), +£3.9m inorganic contribution, +£4.1m interest on client monies. Financials • Organic revenue growth driven by higher
Slide 17: Segmental performance: Lettings acquisitions delivering high returns
Segmental performance Lettings acquisitions delivering high levels of returns. Name Purchase Enterprise Value Pre-acquisition Post-acquisition Acquisition multiple Return on (1) year EBITDA avg. annual EBITDA (EBITDA post investment synergies) 3 x portfolios 2020 £4.8m £0.6m £1.2m 3.9x 20% Douglas &
Slide 18: Segmental performance: Sales
Segmental performance Sales outperformed in historically low volume market through market share gains. 2023 2022 Change (%) • Revenue decreased by 14% reflecting weak market backdrop, partially mitigated by market share growth: Financials • Sales market value over 24% lower than 2022 (22% lower Reve
Slide 19: Segmental performance: Financial Services
Segmental performance Financial Services outperformed in a turbulent mortgage market 2023 2022 Change (%) • Revenue decreased by 14% reflecting weak sales market and mortgage Financials market turbulence. Partly mitigated by non-cyclical refinance volumes and market share growth: Revenue £8.8m £10.2
Slide 20: Cash flow
Cash flow Short-term working capital outflow to increase competitiveness in Lettings. Operating cash to net free cash inflow/(outflow) conversion Opening to closing of net cash / (net debt) Opening net cash £12.0m Net free cash flow (£0.1m) (1) Acquisition consideration paid (£13.9m) Dividends paid
Slide 21: Capital allocation policy
Capital allocation policy Updated dividend policy to reflect Group’s refreshed strategy and financial profile. 1. Balance sheet strength Operational requirements and manage through cyclical sales markets. 2. Organic growth Investments to enhance operating platform advantage. Progressive dividend pol
Slide 22: Foxtons Operating Platform
05 FOXTONS OPERATING PLATFORM Guy Gittins, Chief Executive Officer Foxtons Group PLC Full Year 2023 Results Presentation 22
Slide 23: Foxtons Operating Platform
Foxtons Operating Platform Driving growth by leveraging the capabilities of the Foxtons Operating Platform. Foxtons Operating Platform PEOPLE, CULTURE & TRAINING is the most comprehensive Unique high performance culture TECH PLATFORM (BOS) and advanced platform in which promotes delivering customer
Slide 24: Trading and Outlook
06 TRADING AND OUTLOOK Guy Gittins, Chief Executive Officer Foxtons Group PLC Full Year 2023 Results Presentation 24
Slide 25: Trading and outlook
Trading and outlook Well positioned to deliver growth in 2024. January and February 2024 trading in line with expectations: • Lettings market supply and demand dynamics have normalised, with increased levels of available rental stock and fewer tenants registering for each available rental property c
Slide 26: Contact
Contact: www.foxtonsgroup.co.uk investor@foxtonsgroup.co.uk +44 (0) 207 893 6261 Foxtons Group PLC Full Year 2023 Results Presentation 26
Slide 27: Appendix
APPENDIX Appendix number Section 1-2 Financial appendices 3 Investment case 4-5 Operational appendices Foxtons Group PLC Full Year 2023 Results Presentation 27
Slide 28: Appendix 1: Balance sheet
Financial appendices Appendix 1: Balance sheet. 2023 2022 Goodwill and intangibles £155.6m £135.4m Property, plant & equipment £52.4m £53.3m Cash £5.0m £12.0m Net contract assets / (liabilities) £6.8m (£2.7m) Net working capital (£4.0m) £0.1m Deferred tax (£26.2m) (£25.7m) Provisions (£4.6m) (£3.3m)
Slide 29: Appendix 2: Adj. operating profit to Adj. EBITDA reconciliation
Financial appendices Appendix 2: Adj. operating profit to Adj. EBITDA reconciliation. £m 2019 2020 2021 2022 2023 Adj. operating profit (0.7) 1.9 8.9 13.9 14.3 Adj. operating profit margin (0.6%) 2.0% 7.1% 9.9% 9.7% (1) Add back: Depreciation of PPE 3.2 2.6 2.3 2.1 2.4 Add back: Amortisation 0.6 0.9
Slide 30: Appendix 3: Investment case
Investment case Appendix 3: Investment case. Most valuable residential property markets in the UK (13% of population, 24% of value). (1) Highly valuable markets (2) Largest lettings market in the UK (40% of total). Strong long-term growth fundamentals. Business fundamentals Resilient business model
Slide 31: Appendix 4: Technology platform (BOS) overview
Operational appendices Appendix 4: Technology platform (BOS) overview. End-to-end Lettings and Sales transaction Consumer “My Foxtons” portal and apps management Customer identification, marketing and re- CRM system with single customer view targeting BOS Lead prospecting platform Workforce remunera
Slide 32: Appendix 5: Foxtons data platform
Operational appendices Appendix 5: Foxtons data platform • Industry-leading platform, combining best in class data infrastructure, rich historical databases, real-time data, and advanced data science, analytics and insights. • Largest database in London with over 1.6bn data points built over 20 year