Its unaudited trading update showed that its lettings revenue rose 16 per cent and delivered more than £100m in revenue for the first time, offsetting the performance of its other divisions.
Its lettings business accounts for 70 per cent of the group’s revenue.
In 2023, Foxtons Group’s overall revenue came to £147m, which was up from £140.3m the year before, following an agency buying spree including the Ludlow Thompson brand.
It posted an adjusted operating profit of £14m, which it said was higher than market expectations of £11.8m and broadly flat on the previous year’s £13.9m.
Alexander Hall performance
The update did not provide details on the performance of its financial services business, Alexander Hall, but it said this and its sales division saw reductions in revenue due to the weaker sales market.
Looking ahead, Foxtons Group said its sales division’s under-offer pipeline was stronger than last year and its financial services arm is expected to see a return of buyer demand due to lower mortgage rates.
It said: “Any sustained reduction in interest rates is expected to spur significant further growth in buyer demand.”
Foxtons added: “Through 2024, the group will continue its focus on delivering operational enhancements to drive further growth and continue to decouple earnings from sales market cycles.
“By doing so, the group is well positioned for its medium-term growth ambition to deliver £25m to £30m of adjusted operating profit.”
A transformational year
Guy Gittins, chief executive of Foxtons, said: “2023 has been a transformational year for Foxtons, following the implementation of a refreshed strategy and operational turnaround plan.
“We have delivered a year of market share growth and have ended the year with revenue and adjusted operating profit ahead of market expectations; our operational upgrades and investment in fee earners, training, data and brand, coupled with a return to driving innovation in the industry, are now consistently delivering material benefits to our competitiveness and market positioning, helping us to end 2023 as the UK’s fastest growing large lettings and sales agency brand.
“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 Group is expected to to report full-year results for 2023 on 5 March.
