Foxtons Group PLC (FXTGY) (Q2 2024) Earnings Call Highlights: Strong Revenue Growth Amidst ...

GuruFocus News
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In This Article:

  • Revenue: GBP78.5 million, up 11% year-on-year.

  • Adjusted Operating Profit: GBP8.5 million, a 24% increase from the prior year.

  • Adjusted Operating Profit Margin: 10.8%, an increase of 120 basis points.

  • Adjusted EBITDA: GBP10.5 million, up 25%.

  • Statutory Profit Before Tax: GBP7.5 million, a 24% increase year-on-year.

  • Net Free Cash Outflow: GBP0.9 million, reflecting expected seasonality.

  • Interim Dividend: 0.22p per share, a 10% increase from last year.

  • Lettings Revenue: GBP52.4 million, with 1% like-for-like growth and GBP2.2 million from acquisitions.

  • Sales Revenue: 28% increase, driven by 30% growth in market share of exchanges.

  • Financial Services Revenue Growth: 7%, despite challenging market conditions.

  • Net Debt: GBP11.3 million at the end of the half-year.

  • RCF Facility: Increased to GBP30 million, with extended term to June 2027.

Release Date: July 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Foxtons Group PLC (FXTGY) delivered revenue and profit growth despite a flat London sales market, driven by operational improvements.

  • The company achieved a substantial 30% increase in sales exchange market share and double-digit growth in lettings new business volumes.

  • Productivity improved with a 6% increase in revenue per fee earner and a 15% increase in revenue per branch.

  • Noncyclical and recurring activities generated nearly 70% of revenue, enhancing business robustness.

  • Foxtons Group PLC (FXTGY) completed the integration of Ludlow Thompson ahead of schedule, reflecting strong operational capabilities.

Negative Points

  • The London sales market remains flat and at historically low levels, 15% below the 10-year average.

  • The company faces ongoing cost pressures, including wage inflation and other cost inflation items.

  • There is an expected temporary reduction in the volume of existing tenancies re-transacting due to longer tenancy terms.

  • Despite revenue growth, the adjusted operating loss in sales narrowed but still remains a loss.

  • The mortgage market remains challenging with elevated interest rates impacting financial services growth.

Q & A Highlights

Q: Can you comment on market share in lettings and sales, and how are you faring in these areas? A: Guy Gittins, CEO, explained that Foxtons has grown its market share at the fastest rate among UK estate agencies for both sales and lettings. The lettings market share is around 6%, and sales market share has increased significantly to 5.1% from 3.1% before his tenure. The company continues to focus on increasing market share through its data-driven platform and strong company culture.

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