Foxtons shares rose over 6% on Tuesday after the estate agency said that revenue and adjusted operating profit for the year to the end of December 2024 were set to be ahead of market expectations after “another year of significant earnings growth”.
The estate agency, which saw its share price end the day on 70p, provided a market update that showed revenue up 11% on the year to around £163m, while adjusted operating profit rose 33% to about £19m – both ahead of market expectations.
The outperformance reflects strong operational delivery, in particular significant share gains in the sales market, with sales revenue surging 30%, driven by a c.20% increase in market share and a c.10% recovery in London transaction volumes.
Lettings revenue, which accounts for around 65% of group income, rose 5%, and Foxtons.
Revenue in the financial services segment grew 6%, with fourth-quarter revenues up around 15% versus the same period a year earlier, “reflecting operational upgrades driving adviser productivity and improving sales market volumes”.
The Group continued its acquisition strategy in the year, adding over 2,900 tenancies to its Lettings portfolio following the acquisitions of Haslams Estate Agents and Imagine Property Group in October 2024, for a total initial consideration of £12.6m. To date, both acquisitions have performed in line with expectations.
The Group’s net debt at year end was £12.8m and includes £13.0m of acquisition related spend in the year.
Looking ahead, lettings is expected to remain resilient in 2025, with high levels of tenant demand and good stock levels underpinning rental prices and transaction volumes.
Sales entered 2025 with an under-offer pipeline significantly above the prior year, and at its highest opening position since 2016, which is expected to underpin year-on-year revenue growth in Q1 2025. The growth in the under-offer pipeline is partly driven by first time buyer activity ahead of increased Stamp Duty rates from April 2025, which may result in some buyer activity being accelerated into Q1 2025 ahead of the deadline.
Early data indicates new buyer activity in 2025 remains above prior year levels, despite recent uncertainty on the interest rate outlook and consumer confidence. If a more positive market backdrop is sustained through the year, with continued operational progress, our Sales business is well positioned to return to profitability. The speed and extent of future interest rate reductions will likely determine the level of buyer demand in the market, with faster interest rate cuts providing an opportunity for accelerated growth.
The progress made in 2024 is an important step towards our medium-term targets and provides further evidence that the changes implemented over the past two years are working. Through 2025 the Group will continue to deliver enhancements to the industry-leading Foxtons Operating Platform enabling the maximisation of market opportunities.
Guy Gittins, CEO, said: “I’m delighted that we have delivered a second consecutive year of revenue and profit growth since I returned to the business in September 2022, as our turn-around strategy continues to deliver results, and we ended the year with earnings ahead of market expectations.
“Our renewed focus on training, culture and retention, supported by our best-in-class data and technology, has driven double digit market share gains in Sales, and revenue growth in Lettings. In addition, we have made two acquisitions in commuter towns as we expand into exciting new growth markets.
“We enter 2025 with optimism. We expect the lettings business to remain resilient and, in sales, we start the year with the highest opening under-offer pipeline since the Brexit vote in 2016. This dynamic, coupled with our results driven-culture and industry-leading Foxtons operating platform, leaves us well placed to continue to deliver against our strategic priorities in 2025.”
Foxtons intends to report its 2024 full year results on 5 March 2025.
Read the orginal article: https://propertyindustryeye.com/foxtons-share-price-soars-as-fy-profit-revenue-ahead-of-expectations/
