Investors looking for promising opportunities in UK property-related shares might want to consider Foxtons Group plc. The renowned estate agency, known for its robust management and strategic business operations, is anticipated to experience significant growth in the near future. Master Investor, a respected UK investment platform, advocates for Foxtons as a sound investment due to its ambitious goal to double the adjusted operating profit achieved in 2023.
The current share price stands attractively at 52p, which Master Investor views as a valuable investment opportunity. This confidence is bolstered by Foxtons managing a substantial portfolio of over 28,000 tenancies. Mark Watson-Mitchell of Master Investor expresses high regard for the company’s strategic direction, particularly its approach to expanding its Lettings division through acquisitions.
Business Performance and Financial Highlights
In the past year, Foxtons has shown commendable performance improvements. The company reported a 5% increase in revenues, reaching £147.1 million up from £140.3 million in the previous year. Adjusted operating profits also saw a modest rise to £14.3 million, up from £13.9 million. Despite facing a £4.5 million one-off charge due to acquisition integrations, the pre-tax profits were adjusted to £7.9 million, down from £11.9 million, impacting earnings per share slightly, which decreased from 3.1p to 3.0p.
Looking ahead, forecasts for the coming years are optimistic. Revenue for the current year is expected to hit around £158 million, with profits projected at approximately £15 million. Earnings per share are anticipated to be around 3.8p, and the dividend is expected to increase to 1.2p per share. The trajectory continues positively into 2025, with revenue estimates at £166 million and profits likely reaching £18 million.
Leadership and Future Outlook
CEO Guy Gittins has expressed satisfaction with the transformation and achievements under his leadership. Since taking over, Gittins has revitalised Foxtons by enhancing core business capabilities and nurturing a dynamic corporate culture. This has not only restored Foxtons’ competitive edge but also reinstated its status as London’s leading estate agency.
The company’s strategic focus on Lettings is designed to ensure steady earnings despite fluctuating sales markets. The Foxtons Operating Platform, a distinctive and scalable asset, is set to support the company’s growth and expansion plans, aligning with their medium-term financial targets.