Foxtons Predicted to Grow with Focus on Lettings

Investors are urged to monitor the share price of real estate agency Foxtons, which is expected to rise in the near future.

Master Investor, a UK investment service, recommends Foxtons as a promising investment due to its goal to double its 2023 adjusted operating profit.

“Given the strong leadership and clear goals of the group, buying shares at the current price of 52p seems like a wise investment,” said Master Investor.

Master Investor is particularly impressed by Foxtons’ management of over 28,000 rental agreements, with the company actively seeking to grow its lettings portfolio through acquisitions.

Furthermore, the company is known not just for its recurring rental income, but also for its dynamic real estate sales business.

Last year Foxtons showed impressive performance turnaround. Improvements in operations and strengthening of its platform led to market success and profit growth. Revenue increased by 5% to £147.1 million, and adjusted operating profit rose by 2% to £14.3 million, but a one-time charge related to acquisitions resulted in a 34% decrease in pre-tax profit to £7.9 million. Despite this, the company maintained its dividend at 0.9p per share.

Projections for the current year anticipate revenues around £158 million, £15 million in profits, earnings of about 3.8p per share, and a dividend of 1.2p. Looking ahead to 2025, expectations include £166 million in revenue, £18 million in profits, and a 1.45p dividend per share.

CEO Guy Gittins shared that Foxtons underwent a transformation in 2023, and has improved significantly from when he started leading the company 18 months prior. The company focused on optimizing its capabilities, increasing its workforce, and revitalizing its culture ahead of schedule. The result was a rapid growth in the lettings and sales agency sectors, reclaiming Foxtons’ status as the top agency in London. According to Gittins, the Foxtons Operating Platform has been fortified to support future growth and will provide scalability for expansion and consolidation in the industry. Gittins affirmed that their strategy for growth through the lettings market has been effective, leading to stable earnings despite challenges in the sales market. The company is on track to meet its medium-term operating profit target of £25 to £30 million through natural growth and acquisitions, as well as improving market conditions.

Master Investor has set a target price for Foxtons shares at 76p, which exceeds the current price of 54p