Foxtons shares jump as 2024 results beat expectations with strong revenue growth

Investing.com -- Foxtons Group (LON:FOXT) plc on Tuesday beat market expectations for 2024, reporting double-digit growth in both revenue and earnings, sending shares up over 5%. 

The London-based estate agency attributed this to growth in its lettings business and an improvement in its sales operations.

Foxtons reported a 11% revenue increase to £163 million in 2024, compared to £147.1 million in 2023. 

Adjusted operating profit also grew by 33% to approximately £19 million, driven by higher revenue and improved operational efficiency across all divisions.

Lettings, which contribute 65% of the group's revenue, continued to drive growth. Lettings revenue increased by 5%, supported by acquisitions and organic growth. 

The fourth quarter saw particularly strong lettings revenue growth of 11% compared to the same period in 2023. 

“Lettings remains a key area of focus for the Group, underpinning Group earnings with its non-cyclical and recurring characteristics,” the company said in a statement.

Foxtons also expanded its footprint in the lettings market by buying Haslams Estate Agents and Imagine Property Group in October 2024, adding over 2,900 tenancies to its portfolio. 

These deals, valued at £12.6 million, are expected to serve as hubs in commuter towns like Reading and Watford. 

Early performance from these additions has been in line with expectations, according to the company.

The sales division saw an impressive 30% rise in revenue, driven by a 20% increase in market share and a 10% recovery in transaction volumes across London. 

While average sales prices remained flat, reflecting broader market trends, operational improvements helped reduce sales operating losses and boosted the segment's contribution to group profitability.

Financial services also posted growth, with revenue up about 6% for the year and a stronger fourth quarter showing a 15% increase over the prior year. 

The company attributed this progress to operational improvements implemented by the new managing director who assumed the role in early 2024. These changes have increased productivity and enhanced the division's growth potential.

Foxtons reported a strong sales pipeline entering 2025, with under-offer activity at its highest level since the 2016 Brexit vote. 

This momentum is partly attributed to first-time buyer activity ahead of the anticipated Stamp Duty rate increase in April. 

Initial data from January 2025 indicates continued strong buyer demand despite interest rate uncertainty and consumer confidence.

The lettings market is expected to remain resilient this year, with high tenant demand and stable stock levels supporting rental prices and transaction volumes. 

Meanwhile, the outlook for sales will depend heavily on the pace of interest rate reductions, with quicker cuts potentially driving faster growth.