Foxtons posts third consecutive quarter of revenue growth

24th Oct 2024 10:12

(Sharecast News) - Foxtons Group reported its third consecutive quarter of revenue growth on Thursday, with third-quarter revenue up 8% to £47.4m, compared to £43.9m in the same period of 2023.

The London-listed estate agent said year-to-date revenue through 30 September was up 10% to £125.9m, compared to £114.8m a year earlier.

Its growth was primarily driven by the sales division, which saw a 36% increase in revenue to £13.5m, marking the highest third quarter sales revenue since 2015.

Sales revenue growth was supported by a 34% increase in transaction volumes, significantly outpacing the wider market, which grew around 13%.

Foxtons said its market share also increased, with year-to-date market share gains reaching 25%.

At the end of September, the company's under-offer pipeline was 23% higher than the prior year, positioning it well for continued revenue growth in the fourth quarter.

Lettings revenue meanwhile remained stable at £31.6m, matching the strong performance of the third quarter of 2023, which had benefited from record renewal activity.

Although renewal volumes were lower in 2024, that was offset by double-digit growth in new business volumes.

Year-to-date, lettings revenue increased 3% to £84m, including £3.1m in acquisition revenues, with Ludlow Thompson - acquired in 2023 - contributing £1m of incremental revenue in the quarter.

Financial services revenue remained flat in the quarter at £2.3m, with year-to-date revenue up 3% to £6.8m.

Increased lower-value product transfer mortgages impacted average commission levels, but higher adviser productivity largely offset that effect.

Looking ahead, Foxtons said it was confident in delivering its full-year expectations, adding that it was on track to achieve its medium-term target of £25m to £30m in adjusted operating profit.

The company said it was also actively supporting initiatives in the Renters' Rights Bill, and saw potential opportunities as the legislation progressed through parliament.

"We have delivered our third consecutive quarter of growth, with third-quarter revenues up 8% to £47.4m, and year-to-date revenue up 10% to £125.9m, as the momentum we have built across the business has been maintained, and we continue to cement our position as London's largest lettings and sales agency brand," said chief executive officer Guy Gittins.

"Continued market share growth, enabled by a focus on improving training, negotiator tenure, culture and our data and technology capabilities, and supported by early signs of market recovery, drove third quarter sales revenue up 36%.

"This growth was supported by a resilient performance in lettings, which continues to provide a valuable stream of recurring and non-cyclical revenues."

Gittins said the company entered the final quarter with optimism, noting that its sales agreed pipeline was 23% higher than the same time last year, as sales volumes in its markets continued to recover, with the firm well-placed to continue to unlock value within the business.

"Our balance sheet and cash flow remain strong which will continue to support our growth and value creation initiatives, including both organic investments and synergistic lettings acquisitions.

"We are on-track to deliver increased profitability in 2024, in line with consensus, and we continue to make progress towards our medium-term target of £25m to £30m adjusted operating profit."

At 0947 BST, shares in Foxtons Group were up 2.68% at 61.2p.

Reporting by Josh White for Sharecast.com.