Foxtons’ total earnings and revenues surpassed forecasts last year, despite a fall in housing purchases as rental demand continued to climb.
London’s biggest estate agency’s turnover grew by around 5 per cent to £147million in 2023, while adjusted operating profits flatlined at about £4million, which it credited to ‘decoupling earnings from sales market cycles’.
Annual revenue from lettings jumped by 16 per cent to over £100million for the first time on the back of organic growth and the purchase of 2,800 properties belonging to Atkinson McLeod and Ludlow Thompson.
Strong forecast: Foxtons believes turnover grew by around 5 per cent to £147million in 2023, while adjusted operating profits flatlined at about £4million
Demand for rental homes, particularly in London and other major cities, was strong last year, leading to a shortage of properties available and a jump in rents.
This helped Foxtons and peers make up for slowing trade from home buyers.
Average rents in the capital were up by 6.9 per cent in the 12 months ending November, according to the Office for National Statistics.
The boom in lettings revenue offset a slide in trade at Foxtons’ sales and financial services divisions, with the former experiencing a 14 per cent decline.
However, Foxtons said the sales segment achieved ‘significant’ market share growth and outperformed the broader market, which underwent a 22 per cent drop in volumes.
Guy Gittins, chief executive of Foxtons, said: ‘Our strategy to prioritise non-cyclical and recurring revenues has driven revenue and profit growth, despite a weaker sales market, and in contrast to prior years.
‘This, combined with the operational progress and significant market share gains made to date, gives me confidence that our strategy is working, and we enter 2024 focused on delivering our strategic priorities and medium-term profit ambitions.’
Foxtons expects the lettings business to remain strong this year, supported by rents staying at ‘historically elevated’ levels and a boost in market supply.
The London-listed group also said its sales arm started 2024 with ‘an under-offer pipeline significantly ahead’ of the prior year.
It noted that buyer demand has picked up amid falling mortgage rates in recent weeks, with some deals on the market offering below 4 per cent.
Foxtons Group shares were 0.6 per cent lower at 52.3p on Thursday morning but have rebounded by approximately 39 per cent over the past 12 months.
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