Foxtons Group (FOXT LN) - 1Q24 IMS shows real momentum

Foxtons Group plc first quarter revenue rose 9% to £35.7m (1Q23: £32.9m) with growth delivered across all business segments. Trading is in line with management's expectations.

Foxtons Group - FY24 underpinned by market share gains

Foxtons Group’s Q1 revenue grew by 9%, supported by growth in all three divisions as the strategic initiatives continue to gain significant momentum, driven by investment in staff, best-in-class bespoke IT and data platforms. This implies that Foxtons’ medium-term targets are now coming into focus. Market share is being gained in all divisions, which puts Foxtons in a good position as the sales market stabilises. We maintain our valuation of 132p/share and believe that if interest rates stabilis

Strong start to FY24 as momentum continues into Q1

After a year of outperformance in FY23, strong momentum has continued, with a solid Q1 trading performance (revenue +9%). Expectations are reiterated at this early stage in the year and the Group has continued to deliver progress against its strategic objectives. Lettings (70% of Group) grew revenue by 5% in Q1 and continues to underpin earnings resilience. Foxtons continues to win share in Sales and Financial Services, which saw growth of 17% and 16% respectively. This is expected to continue,

Foxtons Group (FOXT LN) - Initiation: London’s number one

In the most difficult market conditions in more than a decade, Foxtons after adopting new strategic priorities, delivered an impressive turnaround in performance, and regained its position as London’s leading Estate Agent. Our analysis recognises the logic which underlies current consensus, see scope for upgrades and justifies valuations materially above current values.

Foxtons Group - Medium-term targets come into view

The new strategic vision set out by the CEO is gaining significant momentum, driven by investment in staff and in best-in-class bespoke IT and data platforms, and implies that medium-term targets are now coming into focus. Market share is being gained in all divisions, which is likely to be boosted if the sales market stabilises in 2024. We have modestly raised forecasts and our valuation to 132p/share and believe that if interest rates stabilise or ease further, there are upside risks to our fo

London’s leading estate agent is back

Foxtons has reclaimed its position as London’s leading estate agency after a year of outperformance where it was the UK’s fastest growing large lettings and sales agency brand in FY23. Adj. EBIT increased by 2% to £14.3m, as Lettings (70% of Group) continued to underpin earnings resilience and the Group continued to win share in Sales and Financial Services despite a significant decline in Sales market activity. Foxtons entered FY24 in a strong position and management confirms it is on track to

Foxtons Group - Firm evidence of restructuring success

In FY23, Foxtons Group’s three divisions took market share, the direct result of management action to invest in the business. The company’s new strategy focuses growth on non-cyclical revenue streams and decouples performance from sales market cycles. This is evidenced in the FY23 trading update, which highlights a financial performance that exceeds market expectations. At this early stage of the year, we are retaining our FY24 and FY25 estimates and valuation, but it would appear that the risks

Outperforming the market; FY23 profit 20% ahead

FY23 was a year of outperformance for Foxtons, with the operating profit outturn c.20% ahead of our forecast and broadly flat against the prior year despite a significantly weaker sales market. This is testament to the strategy of growing Lettings (now 70% of Group revenue) to underpin earnings resilience whilst winning share in Sales and Financial Services. Foxtons enters FY24 in a strong position, with continued expected resilience in Lettings and an under-offer pipeline significantly ahead of

Foxtons Group - Strategic momentum and M&A adds to value

In Q323, all three of Foxtons’ divisions outperformed their respective markets, taking market share – the direct result of management action to avoid the same mistakes made during previous downcycles where costs were cut, a position from which it would subsequently struggle to recover. Foxtons’ new strategy focuses growth on non-cyclical revenue streams and decouples performance from sales market cycles. The latest value-enhancing acquisition leads to a net upgrade in estimates in FY24. We there

Further Lettings acquisition strengthens forecasts

We update our forecasts for the Ludlow Thompson acquisition which was announced on Tuesday. Our adj. PBT forecasts increase by 0.6%/1.0% in FY23/FY24, with the acquisition providing stronger underpinning to our growth assumptions. Our net debt forecasts increase by the consideration. We continue to believe the strategy to focus on growing non-cyclical and recurring revenue streams is attractive. M&A continues to accelerate this, with two acquisitions executed in the year to date. 70% of revenue

Acquisition further strengthens Lettings offering

Foxtons has announced its second acquisition of 2023, acquiring Ludlow Thompson for a total consideration of £10.0m, further enhancing its Lettings offering. In 2022, Ludlow Thompson generated revenues of £7.3m, of which 70% were focused on Lettings. The consideration therefore represents a multiple of 1.4x revenue or 2.0x Lettings revenue, in line with recent acquisition multiples. Whilst Ludlow Thompson generated PBT of only £0.1m in 2022, returns are expected to be more attractive post integr

Good update; FY guidance reiterated

A very pleasing 3Q update with Foxtons achieving its third consecutive quarter of market outperformance providing strong evidence that the management-led turnaround is working. The group’s strategy of growing its non-cyclical & recurring revenues is clearly paying off with Lettings revenues up 8% in the quarter fully offsetting weaker trends in Sales and Financial Services. Overall, 3Q group revenues are flat and +5% YTD. Lettings represented 72% of group revenues in 3Q up from 70% at the half

Foxtons Group - Strategic progress versus targets evident

Foxtons’ interim results highlighted revenue and margin expansion as well as market share gains, evidence of success in rolling out the new strategy, which focuses growth on non-cyclical revenue streams and decouples performance from sales market cycles. If the strategy succeeds, over the medium term Foxtons expects margins to expand by c 500bp and operating profit to more than double. We retain our base case valuation of 59p/share, which implies c 50% upside, and our preferred ‘bull’ case valua

Strong H1 outturn with turnaround on track

Foxtons’ interims highlight that the operational turnaround is on track, with adjusted EBIT growth of 10% in H1 despite the challenging macro backdrop. This performance stands in stark contrast to previous economic cycles and highlights the resilience of the Group, underpinned by its Lettings business, which now represents 70% of sales. Management initiatives in Sales are also having a strong impact, with significant market share gains delivered (3.8% in H1’23 vs. 3.3% in H1’22). Trading since t

Foxtons Group - Early signs of strategic success

Foxtons Group’s Q1 trading update highlighted increased revenue per transaction and market share gains, evidence of early progress in rolling out the new strategy – characterised by upgrades to data infrastructure, investment in staff and a reinvigoration of the Foxtons brand. If the strategy succeeds, over the medium term Foxtons expects margins to expand by 500bp and operating profit to more than double. We retain our base case valuation of 59p/share and our preferred ‘bull’ case valuation of

Morning Note – 22 April 2024

Benefits of scale set to materialise

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

S&U - PBT ahead, encouraging volume trends

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

Foresight Solar Fund - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

International Public Partnerships - Consistently and responsibly delivering

International Public Partnerships’ (INPP’s) FY23 results show that it continues to deliver consistent and predictable returns for investors, while delivering environmental and social benefits for the individuals and communities that are served by its assets. Despite this strong performance and a substantial need for private infrastructure funding, the macroeconomic environment has weighed on INPP’s share price, in common with the wider sector. Regardless, attractive returns are available from th

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26

LIBERUM: Speedy Hire: Weakness in FY 24 but recovery in FY 25

Hybridan Small Cap Feast - 22 April 2024

22nd April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Witan

Business as usual for WTAN’s executive team, while the board reviews investment management arrangements…

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

H&T Group (HAT): Core franchise build, short-term retail noise

In our 15 March 2023 initiation, 'Pawnbroking royalty, with strong, profitable growth', and subsequent notes, we have highlighted the strong market for pawnbroking and why H&T, as the market leader, is uniquely placed to take advantage of these opportunities. These results reconfirmed both, with the pledge book up 28% and net pawnbroking revenue up 36%. Like many in the retail space, H&T faced the challenge of customers focusing on lower-value, lower-margin items in the key run-up to Christmas 2

Zeus Top Picks for 2024 - 2023 review and outlook for 2024

On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div