Foxtons Reports Strong Revenue Growth in Q1, Boosted by Increased Sales

Main Points:

The company’s revenue for the first quarter rose by 9% to £35.7 million, compared to £32.9 million in the same quarter of the previous year, with improvements seen across all sectors of the business. Performance is aligning with the expectations set by management.

Lettings brought in 5% more revenue, reaching £24.0 million, aided by recent portfolio acquisitions. Despite this, like-for-like revenues remained relatively unchanged.

Sales revenue saw a more significant increase of 17%, amounting to £9.5 million, driven by a considerable growth in Foxtons’ share of market transactions.

During this quarter, the volume of Foxtons’ agreed sales surged by 31% compared to the same period last year.

Their financial services sector also performed better, with an increase of 16% in revenue, achieving £2.3 million.

The company’s overall strong quarterly performance, with a 9% increase in revenue to £35.7 million, is consistent with business segment growth, meeting management’s expectations.

Detailed Revenue Breakdown for the First Three Months Ending March 31:

Lettings:

The lettings department’s revenue rose by 5% to £24.0 million in this quarter, thanks primarily to acquisitions made in 2023. Despite these acquisitions, revenues remained stable when compared year-over-year. The market for rentals has normalized, resulting in steady rental prices.

Sales:

Sales revenue climbed significantly by 17%, reaching £9.5 million due to a surge in Foxtons’ transaction market share. This progress is the result of the company’s operational improvements, with increased market share seen for four of the past five quarters.

Foxtons saw a 31% increase in sales volume and ended March 2024 with an under-offer pipeline 34% higher in value than the previous year and 12% higher than in 2022—this is the highest since the 2016 Brexit vote. This strong pipeline is anticipated to bolster revenue growth into the second quarter, with a favorable sales market outlook supported by stable mortgage rates and good stock levels.

Financial Services:

The financial services division’s revenue was up 16% reaching £2.3 million, boosted by an uplift in mortgage volumes. These gains are due to enhancements in advisor productivity and cross-selling initiatives within the company.

CEO Guy Gittins commented on the positive start to the year, emphasizing the momentum the business has gained. With Foxtons regaining top status in London’s real estate scene, the company is focused on translating property listings into successful transactions and serving its clients effectively.

He pointed out that a 17% increase in sales revenue reflects market improvements and the effective operational refinements implemented last year. The company is positively looking ahead to the rest of the year, armed with the highest valued sales pipeline since Brexit in 2016 for the upcoming second quarter.

Gittins also highlighted the significant progress made over the past two years in rebuilding the business base and enhancing the Foxtons Operating Platform. With these improvements in place, the company is well-positioned to continue driving growth and achieving medium-term profit targets.