FULL YEAR RESULTS FOR YEAR ENDED 31 DECEMBER 2024

Foxtons Group plc

FULL YEAR RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024

5 March 2025

47% earnings growth1 driven by significant Sales market share gains2 and strong returns from Lettings acquisitions. Next phase of the growth plan now firmly in focus.

Foxtons Group plc (LSE:FOXT) ("the Group" or "Foxtons") has delivered another year of growth. Strengthened operational capabilities, combined with strong returns from Lettings acquisitions, have underpinned 47% earnings growth. The Group is on track to deliver against its medium-term targets set in March 2023 and the next phase of the growth plan is now coming into focus. Key elements of this growth plan will be communicated at a capital markets event in Q2 2025.

Financial highlights:

· Group revenue up 11% to £163.9m, with growth delivered in each business:

- Lettings revenue up 5%, boosted by earnings accretive acquisitions.

- Sales revenue up 31%, driven by double-digit market share gains2.

- Financial Services revenue up 6%, due to operational upgrades and stronger new transaction volumes.

· Adjusted operating profit up 38% to £21.6m, showing significant progress towards medium-term target of £28m-£33m (excluding amortisation of acquired intangibles, and consequentially restated from £25m-£30m)8.

· Stronger revenue to profit conversion drove improved adjusted operating profit margin of 13.2% (+260 bps).

· Profit before tax up 121% to £17.5m.

· Significant improvement in net free cash flow (2024: £9.8m; 2023: (£0.1m)) reflecting a return to strong cash generation and more normalised working capital movements.

· Year-end net debt of £12.7m (2023: £6.8m net debt), reflecting improved cash generation, £12.7m of acquisition spend, and £2.8m of dividends.

· Total dividend up 30% to 1.17p per share in-line with the Group's progressive dividend policy.

Strategic highlights

· Continued delivery against strategic priorities:

- 3.3% Lettings organic revenue CAGR since 2022, within the Group's target range of 3%-5%9.

- 26% average return on Lettings acquisitions, ahead of the Group's target of 20%10, with synergistic acquisitions continuing to be a key driver of profit growth.

- 4.9% Sales exchange market share (2023: 4.1%), ahead of the Group's target of at least 4.5% (20% growth versus 2023)2.

- 67% of revenue generated from non-cyclical and recurring activities, underpinning Group earnings11.

Operational highlights:

· Largest lettings agent in London and largest lettings brand in the UK12 and highest number of sales agreed in London in 202413.

· Organic Lettings portfolio grew 4%, driven by a 12% increase in new business volumes and stronger landlord retention, supported by the Group's data and technology capabilities and improving customer service levels.

· Two commuter town acquisitions (Reading and Watford) completed in October 2024 for an initial consideration of £12.6m. The acquisitions are earnings enhancing and unlock new organic and inorganic growth opportunities. The rapid integration of the new Watford hub has enabled the further acquisition of Marshall Vizard, completed on 28 February 202514. This bolt-on acquisition is expected to generate strong synergies and reinforce Foxtons' leadership position in the Watford lettings market.

· Sales revenue growth of 31% driven by market outperformance, with a 20% increase in market share in 20242. Foxtons' growth was highest in London's volume markets (up to £1m price range). These markets are more resilient and more active than higher value ones, and in 2024 comprised 86% of total London volumes.

· Further upgrades to the industry-leading Foxtons Operating Platform delivered in 2024, as part of the Group's continuous improvement ethos. Highlights include a new employee value proposition, technology upgrades, an AI-driven lead-scoring platform, a new real-time customer satisfaction feedback system and brand enhancement initiatives.

· We are determined to continue enhancing our culture, and build on the work to date and this will remain a key area of focus throughout 2025:

- In 2024 we delivered a 6% improvement in employee engagement vs 202315; 13% improvement in Lettings and Sales employee retention rates vs 202216; and made progress with career development and diversity programmes resulting in a 25% increase in the number of female managers vs 202216.

- 87% of employees believe Foxtons values diversity and builds diverse teams15 and 81% of employees recommend Foxtons as a great place to work (8% higher than the average score for companies in the UK with 1,000-5,000 employees)15.

· Financial Services has undergone a significant rebuild in 2024 under a new Managing Director appointed in January 2024. Key initiatives introduced include process upgrades, enhanced cross-selling from the estate agency business, and a new data suite to support a KPI-driven performance culture.

Trading and outlook

· Trading year to date is in-line with our expectations.

· Lettings market dynamics are expected to remain consistent with 2024, with rental levels broadly flat. Healthy stock levels support the Group's focus on driving new business and organic growth, whilst the October 2024 and February 2025 acquisitions provide further incremental revenues and organic growth opportunities.

· In Sales, our under-offer pipeline entering 2025 was at its highest level since the Brexit vote in 2016, delivering strong year-to-date revenue growth as the under-offer pipeline converts to exchanges, with volumes boosted by first time buyers taking advantage of stamp duty relief ahead of 31 March 2025 deadline.

· New under-offer activity, which is not influenced by stamp duty relief, has shown good growth as buyers respond positively to recent interest rate reductions. The under-offer pipeline at the end of February 2025 stood 21% higher than the prior year. The speed and extent of future interest rate reductions will likely determine the number of buyers entering the market, with faster interest rate cuts providing an opportunity for accelerated growth.

· Group remains on track to deliver against the medium-term target of £28m-£33m adjusted operating profit8 set in March 2023, despite £2m of additional national insurance costs per annum.

· With the operational turnaround complete, the next phase of the growth plan is now underway. We will communicate the key elements of this plan at a capital markets event in Q2 2025. Further details will be provided in due course.

Guy Gittins, Chief Executive Officer, said:

"2024 was another strong year for Foxtons with revenue up 11% and adjusted operating profit up 38%. Across 2024 we retained our position as London's largest lettings agent and the UK's largest lettings estate agency brand, and increased our share of the London sales market by 20%.

"In Sales, significant market share gains drove revenue growth of 31% and meant we agreed the highest number of transactions in London last year, while our Lettings and Financial Services businesses continued to provide the steady, recurring revenues which underpin Group profitability.

"In October 2024, we acquired Haslams Estate Agents and Imagine Property Group, both businesses with strong lettings portfolios, taking us into the exciting new growth markets of Reading and Watford. Last week, as part of our Watford growth plan, we acquired Marshall Vizard, a high-quality lettings business that further strengthens Foxtons' Watford presence and market share.

"Estate agency is a people-first business, and maintaining an engaging, respectful and inclusive culture is of the utmost importance to us. We are focused on creating an environment which attracts, motivates and retains a diverse team of talent, that can together deliver excellent customer outcomes. Although significant progress has been made over the last two years, including the introduction of mandatory annual respect and inclusion training, strengthened ED&I policies, and enhanced whistleblowing and speak up processes, there remains more to do. This is particularly important to me and we remain steadfast in our commitment to an inclusive, professional and respectful culture and we will continue to seek further improvement and progress.

"Changes made to date are supporting our transformation, including: a 25% increase in female managers over the last two years; improving employee engagement; and a 12% increase in employee retention rates since 2022 as new career development and diversity programmes take effect. Our latest employee engagement survey, indicated that 87% of employees believe Foxtons values diversity and builds diverse teams, and 81% of employees recommend Foxtons as a great place to work, 8% higher than equivalent businesses in the UK. These initiatives are particularly important to me and while progress has been made, we recognise there is more we can and should do. We remain steadfast in our commitment to an inclusive, professional and respectful culture and we will continue to seek further improvements and progress.

"After a good start to 2025, we are well positioned to deliver another year of growth and are on-track to deliver against the medium-term growth targets I set out in March 2023. I look forward to setting out details of the next stage of our growth plan to investors at a capital markets event in Q2 2025."

For further information, please contact:

An analyst presentation will be held at 9.00am today by webinar. For joining instructions, please contact [email protected]. A recording of the presentation will be available at www.foxtonsgroup.co.uk.

1 On an adjusted earnings per share basis.

2 Sales market share calculated as Foxtons' share of exchange volumes in 2024 vs 2023 in Foxtons' core addressable markets. Source: TwentyCi.

3 Adjusted EBITDA is an alternative performance measure and is consistent with the definition of adjusted EBITDA used to calculate the Group's revolving credit facility covenants. The metric is defined as profit before tax before finance income, non-IFRS 16 finance costs, other gains, depreciation of property, plant and equipment (but after IFRS 16 depreciation), amortisation, share-based payment charges and adjusted items.

4 Adjusted operating profit is an alternative performance measure. Adjusted operating profit represents profit before tax before amortisation of acquired intangibles, finance income, finance cost, other gains/(losses) and adjusted items. This definition has been revised for the 2024 financial results and now excludes the amortisation of acquired intangibles. Comparatives have been restated to the new definition to ensure a fair comparison across financial years.

5 Profit before tax includes £0.3m of adjusted item credits (2023: £4.5m of adjusted item charges) and £2.1m of amortisation of acquired intangibles (2023: £1.4m). On an adjusted basis, adjusted profit before tax is up 40% to £19.2m (2023: £13.8m).

6 Adjusted earnings per share is an alternative performance measure. This definition has been revised for the 2024 financial results and now excludes the amortisation of acquired intangibles. Comparatives have been restated to the new definition to ensure a fair comparison across financial years.

7 Net free cash flow is net cash from operating activities less repayment of IFRS 16 lease liabilities and net cash generated/used in investing activities, excluding the acquisition of subsidiaries (net of any cash acquired) and purchase of investments.

8 The Group's adjusted operating profit target range has been restated by £3m to reflect the revised adjusted operating profit definition which now excludes the amortisation of acquired intangibles.

9 Defined as organic revenue growth excluding interest earned on client monies and the revenue contribution from lettings acquisitions completed since 1 January 2022.

10 "Return" refers to return on invested capital and is defined as EBITDA less cash taxes / enterprise value, for acquisitions operated by Foxtons for over 12 months. The acquisitions of Haslams and Imagine, completed in October 2024, are excluded from this calculation.

11 Revenue derived from Lettings and Financial Services refinance activity.

12 Market share of estate agent lettings instructions by brand in 2024. Source: TwentyCi

13 Sales agreed in London in 2024 by estate agent brand. Source: TwentyCi.

14 Acquisition completed for £2.3m on a cash free and debt free basis, of which £0.5m deferred for 12 months subject to performance conditions.

15 Result from the Group's annual employee engagement survey independently administered by a third party, CultureAmp. 77% (2023: 68%) of the workforce responded to the 2024 survey.

16 2022 comparator presented, being the last year before the introduction of the operational turnaround plan which includes improving staff retention and improving the gender balance in managerial positions.

PERFORMANCE AT A GLANCE

1 These measures are APMs used by the Group and are defined, and purpose explained within Notes 2 and 16.

2 Adjusted operating profit and adjusted operating profit margin definitions have been revised for the 2024 financial results and now excludes the amortisation of acquired intangibles. Comparatives have been restated to the new definition to ensure a fair comparison across financial years. Refer to Note 2 of the financial statements for a reconciliation to statutory measures and purpose.

3 These segmental metrics are defined within Note 16.

Chairman's Statement

2024 has been a year of continued progress for Foxtons, with our efforts focused on delivering improved financial performance and making progress against our strategic priorities following the steps taken in 2023 to strengthen the foundations of the business. Over the last two years we have made substantial strides in enhancing our technology, data capabilities, culture and brand positioning, all of which have contributed to strong revenue and earnings growth.

The business continues to benefit from a resilient revenue base, with approximately two thirds of the Group's revenues coming from recurring and non-cyclical sources, primarily from Lettings. This shift has been supported by a series of lettings focused acquisitions which have been a key driver of earnings growth, created a more stable earnings profile and significantly reduced our exposure to the volatility of the sales market.

At the same time, we have remained focused on rebuilding market share in Sales, with operating losses reducing significantly in 2024. Continued progress towards sustained profitability in Sales remains a priority as we move into 2025, with market share growth remaining the key area of focus.

In October 2024 we completed two acquisitions in the commuter towns of Reading and Watford, reinforcing our growth trajectory and demonstrating that Foxtons is firmly on the front foot. In February 2025, we acquired a second Watford lettings business, Marshall Vizard, which will be earnings accretive in 2025 and builds upon our market leading position in Watford.

Market and financials

The lettings market remained resilient in 2024, with supply and demand dynamics stabilising after a period of imbalance in prior years. Volumes in the sales market also saw signs of improvement, as lower interest rates underpinned improving buyer demand in our core markets. This supported improved London exchange volumes in 2024 versus 2023, albeit below the 10-year historical average.

Revenue increased 11% to £163.9 million, reflecting growth across all areas of the business. Adjusted operating profit, excluding amortisation of acquired intangibles, increased 38% to £21.6 million, with profit growth outpacing revenue, demonstrating the operating leverage within the Foxtons model.

The Group returned to cash generation in 2024, with £9.8 million of net free cash flow (2023: (£0.1 million)) reflecting underlying cash generation and normalised working capital movements. After £12.7 million of acquisition spend and £2.8 million of dividends, net debt at 31 December 2024 stood at £12.7 million (2023: £6.8 million net debt).

To support the Group's continued organic and acquisitive growth strategies, the Board increased and extended the revolving credit facility in May 2024. The facility was expanded from £20 million to £30 million and extended by one year to June 2027, with an option for a further one-year extension. The facility also includes a £10 million accordion option, which can be drawn upon with bank approval.

The revolving credit facility supported the acquisitions of Haslams and Imagine in 2024 and with an increased facility and a return to cash generation, we are in a strong position to continue to progress our acquisition strategy, as demonstrated last week through the acquisition of Marshall Vizard.

Cost base

Like many people-based businesses, the Government's planned April 2025 increase in employer's national insurance contributions will increase our cost base. The impact is estimated at £2 million per annum, which we expect to mitigate with the incremental profit that will be generated by the two October 2024 acquisitions, by continuing to improve fee earner productivity and by proactively managing costs.

We continue to engage with the landlord of our Chiswick Park headquarters to explore options to surrender a portion of our office space with a view to generating meaningful cost savings ahead of the September 2027 lease end date. This ability to downsize our headquarters is now possible through better utilising our branch network and building out a lower-cost property management hub outside of London.

Culture

As a sales-focused business, we are firmly focused on building a high-performance culture which inspires all of our people to deliver the very best results for our customers and each other. The Board is acutely focused on building this culture within an environment which is inclusive, professional and respectful.

The Board takes this very seriously and monitors culture through a variety of mechanisms, including reviewing employee engagement surveys, visiting branches, non-executive directors attending each Employee Engagement Committee meeting, and monitoring a range of culture performance indicators.

Guy has been instrumental in bringing cultural change to Foxtons, and with a clear tone from the top, he has made changes to create a more respectful and inclusive environment which attracts, retains and motivates the Foxtons team. 2024 saw a number of culture enhancing initiatives rolled out, including mandatory annual respect and inclusion training, enhancing the Group's speak up processes and relaunching the Group's employee value proposition. Although significant steps have been taken to enhance our culture, we are determined to continue improving, build on the work to date, and this will remain a key area of focus throughout 2025.

Rental market reform

The proposed Renters' Rights Bill, set to take effect in 2025, is progressing through Parliament. While we support many initiatives, we have raised concerns about recent changes, specifically the ban on upfront rental payments which could harm lower-income tenants, the international student market, and drive talent away from London and the UK. We will continue to engage with the Government and provide a constructive point of view. We believe Foxtons is well-positioned to seize opportunities as landlords seek professional lettings agents to navigate the changing regulations.

Dividends

With a strong earnings profile and clear growth ambitions, the Board is maintaining its progressive dividend policy, balancing capital returns to investors with reinvestment in the business.

For 2025, the Board is proposing a final dividend of 0.95p per share, bringing total dividends declared for 2024 to 1.17p, representing a 30% increase on the prior year.

Outlook

Sales market conditions are continuing to improve, particularly in the volume segment where Foxtons holds a leading share, creating a supportive backdrop for the next phase of growth. The Group remains on track to deliver against the medium-term target of £28 million to £33 million adjusted operating profit, despite £2 million of additional national insurance costs per annum, reflecting the strength of our core operations and diversified revenue streams. Recent acquisitions in key commuter towns have further expanded our footprint, enhancing our growth potential. We remain confident in our ability to deliver long-term value for shareholders, employees, and customers alike.

Chief Executive's Review

2024 has been a year of significant progress for Foxtons, reinforcing our position as London's leading estate agency and the UK's largest lettings brand. Despite an evolving macroeconomic environment, we delivered strong financial and operational results, with revenue growth of 11% and adjusted operating profit growth of 38%. This performance reflects the execution of our transformation strategy and the resilience of our business model.

We've continued to invest in the capabilities of our industry-leading Foxtons Operating Platform, driving improvements in efficiency, customer service, and employee productivity. Investments in key areas such as culture, technology, data and brand have enhanced our ability to serve customers while increasing market share across our business segments.

We have made further strategic progress in 2024, particularly in Lettings, where we have delivered organic portfolio growth and delivered strong returns through our acquisition strategy which provide a platform for future organic growth and synergistic value creation. In Sales, enhancements to lead generation, customer service, and staff productivity drove double-digit market share growth and we entered 2025 with an under-offer pipeline at its highest level since 2016.

Additionally, in 2024 we completed two acquisitions, expanding our reach into the high-growth markets of Watford and Reading. These acquisitions align with our strategic objective of adding high-quality, earnings-accretive lettings businesses to our portfolio while unlocking new growth opportunities. Last week, we acquired Marshall Vizard, a lettings business in Watford, which will be integrated into the newly created, Foxtons branded hub as we extend our market leading position.

At the start of 2023, I outlined a vision to re-establish Foxtons as London's go-to agent and, to ensure we held ourselves fully accountable to this vision, I also set a number of medium-term growth targets. Over the past two years, we have successfully rebuilt the Group's competitive advantages, and in 2024, we saw real momentum in each of our businesses. With a strong operational foundation in place, we are well positioned to capitalise on further opportunities in 2025 enabling us to deliver on our growth targets.

2024 market conditions

The London lettings market remained resilient in 2024, supported by sustained tenant demand and an increase in available rental stock. As a result, the supply and demand imbalance that had driven sharp rental price increases in prior years reduced towards historical norms. Rental prices in the market were broadly flat over the year, while higher stock levels enabled Foxtons to deliver organic portfolio growth, which will drive future revenue expansion. Looking ahead, we expect this more stable market environment to persist into 2025, with rental price growth likely to track inflation over the medium term.

The sales market experienced some recovery from the depressed levels of 2023, as improved macroeconomic stability and declining interest rates supported growth in buyer demand over the year. Annual transaction volumes in London increased by 9%, reflecting this increased demand, with a notable divergence between the first and second halves of the year. In H1, sales volumes were broadly in line with 2023, while H2 saw a 16% increase in transaction activity, with the volume market (up to £1 million price range), which is where Foxtons primarily operates, being the most active and resilient part of the market. Given the typical three-to-four-month timescale for property transactions to complete, some of this increased demand will flow into early 2025, and is reflected in our under-offer pipeline entering the year, which was at its highest level since the Brexit vote in 2016.

Despite the change in government in 2024, market conditions remained stable over the year. Unlike previous election years, the General Election in June had minimal impact on the sales market, and the Chancellor's Autumn Budget introduced no material policy changes affecting the property market, although the Government did confirm the first-time buyer stamp duty relief will end at the end of March 2025.

On the regulatory front, the Government is advancing the Renters' Rights Bill, largely continuing the legislative framework proposed by the prior administration. While we support several elements of the Bill, we recognise that ongoing regulatory changes may introduce short-term uncertainty for landlords. Our focus remains on ensuring our customers-both landlords and tenants-are well-informed and positioned to navigate any potential market impacts. As the industry becomes increasingly complex, landlords are likely to place greater reliance on large, professional lettings agents, reinforcing Foxtons' competitive advantage.

Financial results

Foxtons delivered strong financial performance in 2024 driven by continued operational improvements and growth in each business. Revenue for the year was up 11% to £163.9 million, adjusted operating profit up 38% to £21.6 million and profit before tax up 121% to £17.5 million.

Lettings

Lettings revenue increased by 5% or £4.8 million to £106.0 million, with acquisitions contributing £4.3 million of incremental revenue alongside £1.0 million of additional interest on client monies. Organic revenue was broadly flat as strong new business growth and increased property management revenues, were offset by an expected temporary reduction in the volume of existing tenancies re-transacting following longer tenancy terms signed in 2022 and 2023. Lettings adjusted operating profit margin remained strong at 26% (2023: 27%).

Operational improvements, including improved brand visibility, enhanced data capabilities, and proactive customer acquisition strategies, supported strong landlord retention and incremental growth in revenue per landlord. We recognise customer service is key to delivering long term growth, to this end we embedded a real-time customer satisfaction feedback system, enabling us to gather valuable and actionable insights across various customer segments and refine our processes to better align with customer expectations.

Sales

Sales revenue increased by 31% to £48.6 million, supported by a 20% increase in market share and a modest 10% recovery in transaction volumes.

Significant operational upgrades, including enhancements to instruction generation, fee earner productivity, and cross-selling of ancillary services, underpinned our market outperformance. The adjusted operating loss in Sales reduced by 58% to £4.1 million. This improvement reflects the growing productivity of the fee earner investments made in 2023, delivering tangible results throughout the year. With the right number of fee earners now in the business and significantly better fee earner retention rates, supported by improving market conditions, the Sales business now has a clear path to profitability.

Financial Services

Financial Services revenue grew by 6% to £9.3 million, benefiting from both operational improvements supporting market share growth and improved mortgage market conditions. Adjusted operating profit increased 74% to £1.1 million.

Under a new Managing Director, who joined in January 2024, a full operational review of the business has been completed. Key initiatives included process upgrades, enhanced cross-selling from the estate agency business, and the implementation of a new data suite to support a KPI-driven performance culture. These efforts drove an 11% increase in revenue per adviser and an 8% rise in deals per adviser.

Operational progress

In 2024, we continued to make substantial strides in enhancing our performance, with a focus on lead generation, customer service, culture and team productivity. The continued evolution of the Foxtons Operating Platform continues to be key to our success and provides competitive advantage.

Culture and people

Estate agency is a people-first business, and maintaining an engaging, respectful and inclusive culture is of great importance. Creating an environment which attracts, motivates and retains outstanding talent and delivers excellent customer outcomes is critical to our success. Although significant progress has been made over the last two years, including delivering mandatory annual respect and inclusion training, improving ED&I policies, enhancing whistleblowing and speak up processes, there is always more we can and should do. Whilst significant progress has been made, we remain steadfast in our commitment to fostering an inclusive, professional and respectful working environment and we will continue to further improve and progress our culture.

A key milestone for us this year was the launch of our new employee value proposition, 'Make it with us'. This initiative reflects two years of work to build a culture which fully aligns to our strategic priorities. The proposition includes an overhaul of our training programmes, a more robust recruitment process, the introduction of clear career development pathways, and a refreshed approach to rewards and recognition. Whilst significant progress has been made, we remain steadfast in our commitment to fostering an inclusive, professional, respectful and high-performance culture where hard work and dedication are recognised and rewarded.

Technology and data

Our bespoke real-time productivity reporting system has been instrumental in driving greater transparency, highlighting best practices, and aligning individual performance with broader business goals. In 2024 we achieved an 8% increase in revenue per fee earner, a direct result of both our people strategy and improved technology and data systems.

Technological advancements were another key driver of our operational success in 2024. We introduced an AI-driven lead-scoring platform across our branch network, complementing the system we launched in our customer prospecting centre in 2023. This has significantly boosted our lead generation efforts and driven higher instruction levels. We also enhanced our marketing capabilities with a new data and reporting suite that provides in-depth insights into campaign performance, improving customer targeting and maximising returns on marketing spend.

Brand

Foxtons continues to be one of the most recognised brands in London, and 2024 saw the revitalisation of our customer-facing marketing strategy. We launched a series of thematic campaigns, such as 'Ready, Set, Foxtons', designed to boost engagement and reinforce our unique market position. These campaigns drive organic growth and enhanced customer brand perception levels.

Acquisitions

Finally, we expanded our footprint into the commuter towns of Reading and Watford, through the acquisition of two high-quality, lettings focused businesses in October 2024. Both businesses are the leading independent agent in their markets and will act as hubs to deliver long term growth through organic growth and further synergistic bolt-on acquisitions. We have already started to increase our Watford presence through the February 2025 acquisition of Marshall Vizard making Foxtons the clear market leader. With demand for lettings on the rise in both Reading and Watford, this expansion aligns with our goal of increasing our portfolio of recurring lettings revenues and further decoupling Group earnings from sales market volatility.

Continued delivery against our strategic priorities and targets

In March 2023, I presented four strategic priorities which underpin the delivery of our medium-term adjusted operating profit target. Over the last two years we set out to rebuild the Foxtons Operating Platform to drive change across a range of areas including culture, training, technology, data and brand. 

From 2024 onwards, in order to align with market practice, our adjusted operating profit target has been redefined to exclude the non-cash amortisation of acquired intangibles, resulting in the target range being restated by £3 million: £28 million to £33 million. Our 2024 adjusted operating profit of £21.6 million (2023: £15.7 million) reflects a materially improved contribution from Sales compared to 2023 and strong profit accretion from Lettings acquisitions.

Over the course of 2024, we have made good progress against the four strategic priorities, as set out below:

1. Lettings organic growth: 3.3% organic revenue CAGR since 2022 reflecting good growth across 2023 and broadly flat revenues in 2024 as growth in new business volumes and higher margin property management revenues offset an expected temporary reduction in the volume of existing tenancies re-transacting in 2024, following longer tenancy terms signed across 2022 and 2023.

Medium-term target set in March 2023: 3% - 5% revenue CAGR.

2. Lettings acquisitions: Prior year bolt-on acquisitions continue to perform well, delivering over 26% average annual returns since acquisition. In 2024, the Group entered new commuter belt markets through the acquisition of two businesses which will act as strategic hubs in Reading and Watford. These hubs create new organic and non-organic growth opportunities, with the latter through subsequent bolt-on acquisitions. A return on capital higher than the Group's weighted average cost of capital is targeted for the initial strategic hub investment, and a higher return on capital is targeted for subsequent bolt-on acquisitions that integrate into a strategic hub.

Medium-term target set in March 2023: 20%+ return on capital for bolt-on acquisitions.

3. Sales market share growth: Exceeded the target of 4.5%, growing sales exchange market share by 20% to 4.9% (2023: 4.1%). Continuing to build on this share level, combined with market volumes recovering to more normalised levels, will support the Sales business' return to profitability

Medium-term target set in March 2023: 4.5%+ exchange market share.

4. Financial Services revenue growth: 6% revenue growth in 2024 as operational upgrades drove revenue growth through adviser productivity gains. The business' foundations have been rebuilt and it is now well positioned to deliver further growth.

Medium-term target set in March 2023: 7% - 10% revenue CAGR.

2025 trading and outlook

Lettings is expected to remain resilient with the business continuing to display strong non-cyclical and recurring characteristics. Tenant demand remains high, underpinning rental prices, while stock levels have steadily improved over the past 18 months. Through our leading market position, and by leveraging the Foxtons Operating Platform, we are well positioned to continue capitalising on the increased supply of rental properties, providing the opportunity to continue to grow market share organically. The Renters' Rights Bill may cause some market turbulence as landlords and tenants adapt to any changes in legislation, but over the medium term, the Bill is expected to increase the importance of selecting high-quality, professional agents, creating growth opportunities for Foxtons.

In Sales, we entered 2025 with a notably stronger under-offer pipeline compared to the previous year, our best start since 2016, underpinning a good level of year-on-year revenue growth in Q1. The increase in the pipeline towards the end of 2024 was supported by first-time buyer activity ahead of increased stamp duty rates from April, which is driving higher exchange volumes in Q1, particularly in the lower value property segment.

Early 2025 has shown continued strength in buyer demand, boosted by the recent interest rate reduction. New offers have outpaced last year's levels and the under-offer pipeline at the end of February stood 21% higher than the prior year. This signals more potential growth, provided macroeconomic conditions and consumer confidence hold steady.

We are on track to deliver against the medium-term target of £28 million to £33 million adjusted operating profit set in March 2023. With the full potential of the Foxtons Operating Platform at our disposal, we are in growth mode, and I look forward to setting out details of the next stage of our growth plan to investors at a capital markets event in Q2 2025.

Financial review

1APMs are defined, purpose explained and reconciled to statutory measures within Notes 2 and 16 of the financial statements.

2Adjusted operating profit and adjusted operating profit margin definitions have been revised for the 2024 financial results and now exclude the amortisation of acquired intangibles. Comparatives have been restated to the new definition to ensure a fair comparison across financial years.

Note: Throughout the financial review, values in tables/narrative may have been rounded and totals may therefore not be the sum of presented values in all instances.

Financial overview

As presented in the table above, key financial performance measures include:

· Revenue increased by 11% to £163.9 million (2023: £147.1 million), with Lettings revenue up 5%, Sales revenue up 31% and Financial Services revenue up 6%.

· Adjusted EBITDA increased by 36% to £23.8 million (2023: £17.5 million) and adjusted operating profit increased by 38% to £21.6 million (2023: £15.7 million).

· Profit before tax increased to £17.5 million (2023: £7.9 million) and profit after tax increased to £14.0 million (2023: £5.5 million).

· Basic adjusted earnings per share was 5.0p (2023: 3.4p) and basic earnings per share was 4.6p (2023: 1.8p).

· Net free cash flow was £9.8 million (2023: £0.1 million outflow) and net debt at 31 December 2024 was £12.7 million (2023: £6.8 million net debt) reflecting the uses of cash explained on page 17.

· An interim dividend of 0.22p per share was paid in September 2024. The Board has proposed a final dividend of 0.95p per share, resulting in a total dividend for the year of 1.17p per share (2023: 0.90p per share).

In May 2024, the Board increased and extended the Group's revolving credit facility (RCF). The size of the committed facility increased from £20 million to £30 million and the facility was extended by a year to June 2027, with an option to extend for a further year. The facility also includes a £10 million accordion option which can be requested at any time subject to bank approval. The RCF supports the Group's inorganic and organic growth strategy.

Revenue

1'Volumes' and 'Revenue per transaction' are defined in Note 16 of the financial statements.

The Group consists of three operating segments: Lettings, Sales and Financial Services. Lettings represents 65% (2023: 69%), Sales 30% (2023: 25%) and Financial Services 5% (2023: 6%) of total revenue. Non-cyclical and recurring revenue streams, generated by Lettings and refinance activity within Financial Services, represents 67% (2023: 72%) of Group revenue.

Lettings revenue

Lettings revenue increased by 5% to £106.0 million (2023: £101.2 million), including £4.3 million of incremental acquisition revenues (2 additional months of trading from Atkinson McLeod, acquired 3 March 2023; 10 additional months of trading from Ludlow Thompson, acquired 6 November 2023; and 2 additional months of trading from Haslams and Imagine, both acquired 28 October 2024). Transaction volumes were flat and average revenue per transaction increased by 5%, reflecting improved property management cross-sell and a change in mix towards higher fee new business volumes.

Double-digit growth in new business volumes offset an expected temporary reduction in the volume of existing tenancies renewing/re-letting in 2024, following longer tenancy terms signed across 2022 and 2023. Average tenancy lengths have increased by c.15% since 2022 as part of the Group's strategy to improve client retention and grow its portfolio of recurring revenues.

As expected, rental prices for new deals completed in the year were flat as year-on-year rental growth moderated as supply and demand dynamics continue to normalise, but with rental prices remaining at elevated levels.

Lettings revenue includes £6.6 million (2023: £5.6 million) of interest earned on client monies which supports the operating costs of managing client money, such as staff costs, bank and card fees, and compliance costs.

Sales revenue

Sales revenue increased by 31% to £48.6 million (2023: £37.2 million), with the increase driven by an 30% increase in Sales exchange volumes compared to 2023. Foxtons' Sales volumes outperformed the market which saw a 9% increase in volumes (source: TwentyCi) with Foxtons' market share of exchanges increasing by 20% to 4.9% (2023: 4.1%).

Average revenue per transaction was 1% higher than 2023 reflecting a 1% increase in the average price of properties sold (2024: £592,000; 2023: £586,000), whilst commission rates remained flat at 2.25% (2023: 2.25%). The 1% increase in the average price of properties sold compared to 1% reduction in London property values (source: Land Registry).

Financial Services revenue

Financial Services revenue increased by 6% to £9.3 million (2023: £8.8 million), reflecting a 2% increase in volumes and a 5% increase in average revenue per transaction. Higher average revenue per transaction was driven by growth in new purchase activity, which commands a higher average fee than product transfers within the refinance business. In 2024, £3.7 million (40% of revenue) was generated from non-cyclical refinance activity and £5.6 million (60% of revenue) from purchase activity which is more cyclical in nature.

Contribution and contribution margin

Contribution, defined as revenue less direct salary costs of front office staff and bad debt charges, increased to £104.9 million (2023: £93.2 million). Contribution margin for the year was 64.0% (2023: 63.4%) reflecting the following segmental margin changes:

· Lettings contribution margin fell slightly to 73.7% (2023: 74.5%) reflecting a temporary reduction in higher margin re-transaction volumes.

· Sales contribution margin increased to 46.8% (2023: 38.9%) due to growth in transaction volumes and the inherent operating leverage in the business. The margin improvement is reflective of increased productivity of Sales fee earners, with average revenue per fee earner increasing by 23% year-on-year.

· Financial Services margin increased to 43.0% (2023: 38.8%) due to a higher margin revenue mix.

Total average fee earner headcount across Lettings, Sales and Financial Services is up 4% to 859 (2023: 829), reflecting selective headcount investment and acquired headcount from acquisitions. Fee earner retention continues to be important in driving average fee earner productivity, with Lettings and Sales fee earner retention rates improving by 13% since 2022 (period prior to the Group's operational turnaround).

Adjusted operating profit and adjusted operating profit margin

Adjusted operating profit for the year was £21.6 million (2023: £15.7 million) and adjusted operating margin was 13.2% (2023: 10.6%). Refer to Note 2 of the financial statements for a reconciliation of adjusted operating profit to the closest equivalent IFRS measure and Note 16 for a reconciliation of the revised definition of the adjusted operating profit metrics to the previous definition.

Consistent with prior periods, for the purposes of segmental reporting, shared costs relating to the estate agency businesses are allocated between Lettings and Sales with reference to relevant cost drivers, such as front office headcount in the respective businesses. Corporate costs are not allocated to the operating segments and are presented separately.

Lettings adjusted operating profit remained flat at £27.2 million. Sales adjusted operating loss decreased materially by £5.8 million to £4.1 million, and Financial Services operating profit increased by £0.5 million to £1.1 million.

Within adjusted operating profit the following depreciation, amortisation and share-based payment IFRS 2 charges were incurred:

ADJUSTED EBITDA and adjusted EBITDA MARGIN

Adjusted EBITDA increased by 36% to £23.8 million (2023: £17.5 million) and Adjusted EBITDA margin increased to 14.5% (2023: 11.9%). Adjusted EBITDA, which excludes non-cash depreciation, amortisation and share-based payment charges, is defined on a basis consistent with that of the Group's revolving credit facility covenants. Since the metric includes IFRS 16 lease depreciation and IFRS 16 lease finance cost the measure fully reflects the Group's lease cost base. Refer to Note 16 of the financial statements for a reconciliation of adjusted EBITDA to the closest equivalent IFRS measure.

Adjusted items

A net adjusted items credit of £0.3 million (2023: £4.5 million net charge) was incurred in the year. Adjusted items, due to their size and incidence require separate disclosure in the financial statements to reflect management's view of the underlying performance of the Group and allow comparability of performance from one period to another. The table below provides detail of the adjusted items in the year, refer to Note 3 of the financial statements for further details.

Net cash outflow from adjusted items during the year totalled £1.2 million (2023: £0.6 million).

Profit before taX AND ADJUSTED PROFIT BEFORE TAX

Profit before tax increased by 121% to £17.5 million (2023: £7.9 million) due to increased underlying profitability and adjusted items being favourable by £4.8 million compared to the prior year as previously noted. Net finance costs and other losses/gains of £2.3 million (2023: £1.9 million), of which £2.1 million relates to IFRS 16 lease finance costs (2023: £2.0 million), were incurred in the year. Adjusted profit before tax, which excludes adjusted items, is £19.2 million (2023: £13.8 million).

profit after tax

The Group has a low-risk approach to its tax affairs and all business activities are within the UK and are UK tax registered and fully tax compliant. The Group does not have any complex tax structures in place and does not engage in any aggressive tax planning or tax avoidance schemes. The Group is transparent, open and honest in its dealings with tax authorities.

Profit after tax of £14.0 million (2023: £5.5 million) is after charging current tax of £3.5 million (2023: £2.8 million). No deferred tax credits have been recognised in the period (2023: £0.4 million).

The effective tax rate for the year was 19.9% (2023: 30.5%), which compares to the statutory corporation tax rate of 25.0% (2023: 23.5%). The 2024 effective tax rate is lower than the statutory corporation tax rate primarily due to an adjustment in respect of previous periods.

Net deferred tax liabilities totalled £26.8 million (2023: £26.2 million), which comprise £29.5 million (2023: £28.2 million) of deferred tax liabilities relating to the Group's intangible assets, offset by deferred tax assets of £2.7 million (2023: £2.0 million). The deferred tax assets relate to fixed asset timing differences, share based payments and tax losses brought forward which are expected to be recovered through future taxable profits.

The Group received £nil in tax refunds during the year (2023: £0.3 million).

ADJUSTED operating cost base

The Group defines its adjusted operating cost base as the difference between revenue and adjusted operating profit, excluding depreciation of property, plant and equipment and amortisation of intangible assets. The reconciliation of the adjusted operating cost base measure is presented below:

The table below analyses the adjusted operating cost base into five categories. The adjusted operating cost base increased by £11.0 million to £139.6 million (2023: £128.6 million), with £4.5 million attributable to incremental acquisition related operating costs.

1 Direct salary costs of branch fee earners and bad debt charges. 2 Branch related operating costs shared between Lettings and Sales.3 Centralised fee earners, lead generation staff and Lettings property management staff.4 Central overhead costs supporting branch operations.5 Corporate costs not attributed directly to the operating activities of the operating segments.

Key movements in the adjusted operating cost base in 2024 versus 2023 are as follows:

· Direct costs increased by £5.2 million primarily due to an increase in variable commissions paid to fee earners reflecting year-on-year revenue growth and a 4% increase in fee earner headcount, following selective headcount investment and acquired headcount from acquisitions.

· Centralised revenue generating operating costs increased by £2.0 million primarily due to acquired headcount relating to Lettings acquisitions and investment in centralised fee earner and lead generation teams.

· Central overhead costs increased by £3.0 million reflecting specific investments in centralised teams responsible for the delivery of revenue generating projects, acquisition related overheads that will be subject to further rationalisation, general inflationary pressures and £0.5 million of incremental share-based payment charges.

Earnings per share

Cash flow from operating activities and net free cash flow

1 Excludes £12.7 million (2023: £13.9 million) of cash outflows relating to the acquisition of subsidiaries (net of any cash acquired), and £0.1 million (2023: £nil) proceeds related to the sale of shares.

Operating cash flow before movements in working capital increased by £6.6 million to £35.3 million (2023: £28.7 million). Net cash from operating activities increased by £9.1 million to £24.7 million (2023: £15.7 million) due to increased operating cashflows, more normalised working capital movements as the impact of shorter landlord billing terms eases (as highlighted in the prior year), offset by a £3.4 million increase in income taxes paid. Net free cash flow was a £9.8 million inflow (2023: £0.1 million outflow).

Net debt

Net debt at 31 December 2024 was £12.7 million (2023: £6.8 million). Net debt reflects operating cash inflows of £24.7 million, £12.7 million of acquisition related spend, £4.9 million of working capital outflows, £2.7 million of capital expenditure, and £2.8 million of dividends paid.

Revolving credit facility

In May 2024, the Board increased and extended the Group's RCF. The size of the RCF was increased from £20 million to £30 million and the facility was extended by a year to June 2027, with an option to extend for a further year. The facility also includes a £10 million accordion option which can be requested at any time subject to bank approval. The RCF supports the Group's Lettings portfolio acquisition strategy and working capital management. Drawdowns on the facility accrue interest at SONIA +1.65%.

The RCF is subject to a leverage covenant (net debt to adjusted EBITDA not to exceed 1.75x) and an interest cover covenant (adjusted EBITDA to interest not to be less than 4x) as defined in the facility agreement. Both covenants are calculated using pre-IFRS 16 accounting principles. At 31 December 2024 the leverage ratio was 0.5x and the interest cover ratio was 29x.

Under an IAS 1 amendment, effective 1 January 2024, which clarified the requirements relating to the classification of liabilities subject to covenants, the RCF balance is presented as non-current and the prior year comparative has been restated on the same basis.

Acquisitions

Haslams

On 28 October 2024, the Group acquired the entire issued capital of Haslams Estate Agents (Thames Valley) Limited. Gross purchase consideration was £9.7 million, with £7.4 million paid up to 31 December 2024 and £2.2 million deferred for a period of 12 months post completion. Acquired net assets were fair valued and include £2.8 million of customer contracts and relationships and £7.0 million of acquired goodwill. The acquisition contributed £1.1 million of revenue and £0.3 million of adjusted operating profit in 2024, with cost synergies to be delivered in 2025.

Imagine

On 28 October 2024, the Group acquired the entire issued capital of Imagine Group Property Limited. Gross purchase consideration was £6.3 million, with £5.1 million paid up to 31 December 2024 and £1.1 million deferred for a period of 12 months post completion. Acquired net assets were fair valued and include £1.1 million of customer contracts and relationships and £5.2 million of acquired goodwill. The acquisition contributed £0.6 million of revenue and £0.1 million of adjusted operating profit in 2024, with cost synergies to be delivered in 2025.

Refer to Note 9 of the financial statements for further details of the 2024 acquisitions.

Other balance sheet positions

Significant balance sheet movements in the period:

· Goodwill of £52.3 million (2023: £40.7 million) and other intangible assets of £118.0 million (2023: £114.9 million), with the increase in goodwill and other intangible assets driven by the acquisitions in the year which contributed £12.1 million of goodwill and £3.9 million of customer contracts and relationships.

· Other intangible assets of £118.0 million (2023: £114.9 million) include £2.8 million (2023: £1.5 million) of assets under construction which primarily relates to the development of the Group's customer website due to launch in Q1 2025.

· Total contract assets of £24.2 million (2023: £19.0 million) and total contract liabilities of £10.5 million (2023: £12.2 million), with the increase in contract assets including acquired contract assets of £1.2 million.

· Lease liabilities of £42.8 million (2023: £47.6 million) and right-of-use assets of £38.6 million (2023: £42.5 million) with movements in the balances explained in Note 8 of the financial statements.

· Borrowings of £18.0 million (2023: £11.8 million) to finance the Group's acquisition strategy.

Dividend policy and capital allocation

The Group's capital allocation framework has been refined in the year to fully reflect the Group's ongoing strategic priorities and capital structure. The framework, which aims to support long-term growth and deliver sustainable shareholder returns, prioritises:

· Organic growth, by investing in strategically important areas such as people, technology, data and brand.

· Accretive acquisition opportunities, by acquiring high-quality lettings portfolios which contribute non-cyclical and recurring revenues and deliver strong returns on investment and synergy potential.

· A progressive dividend, which provides a reliable and growing income stream to investors, whilst maintaining strong dividend cover.

We also continuously assess other shareholder return opportunities, such as share buybacks, considering factors such as earnings per share accretion, borrowing capacity and leverage.

The Group seeks to utilise its balance sheet and revolving credit facility to best effect, and to maintain a leverage ratio (net debt to adjusted EBITDA) of less than 1.25x.

An interim dividend of 0.22p per share was paid in September 2024. The Board has proposed a final dividend of 0.95p per share, resulting in a total dividend for the year of 1.17p per share (2023: 0.90p per share). The proposed dividend will be paid on 16 May 2025 to shareholders on the register at 11 April 2025, subject to shareholder approval at the AGM due to be held on 7 May 2025. The shares will be quoted ex-dividend on 10 April 2025.

Share buy back

No shares were bought back in the year (2023: £1.1 million). The Board will continue to keep share buybacks under review in the context of other potential uses of capital.

Related partY transactions

Related party transactions are disclosed in Note 14 of the financial statements.

Treasury ManAgement

The Group seeks to ensure it has sufficient funds for day-to-day operations and to enable strategic priorities to be pursued. Financial risk is managed by ensuring the Group has access to sufficient borrowing facilities to support working capital demands and growth strategies, with cash balances held with major UK based banks. The Group has no foreign currency risk and consequently has not entered into any financial instruments to protect against currency risk.

Pensions

The Group does not have any defined benefit schemes in place but is subject to the provisions of auto-enrolment which require the Group to make certain defined contribution payments for our employees.

POST BALANCE SHEET EVENTS

On 28 February 2025, the Group acquired the entire issued share capital of Marshall Vizard LLP (and its holding companies), a Watford lettings agent, for a consideration of £2.3 million on a debt free and cash free basis. The consideration was fully satisfied in cash, with £0.5 million deferred for 12 months subject to performance conditions. Unaudited revenue and operating profit for the 12 months ended 31 March 2024 was £0.9 million and £0.5 million respectively. The synergistic acquisition adds a further c.600 tenancies and demonstrates further progress against the Group's acquisition strategy.

Risk management

The Group has identified its principal risks and uncertainties and they are regularly reviewed by the Board and Senior Management. Refer to pages 20 and 21 for details of the Group's risk management framework and principal risks and uncertainties.

Going concern, prospects and viability

The financial statements of the Group have been prepared on a going concern basis as the Directors have satisfied themselves that, at the time of approving the financial statements, the Group has adequate resources to continue in operation for a period of at least 12 months from the date of approval of the financial statements. Furthermore, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over a five-year viability period.

Refer to Note 1 of the financial statements for details of the Group's going concern assessment and the going concern statement.

Chris Hough

Chief Financial Officer

4 March 2025

PRINCIPAL RISKS

Risk management

The Board is responsible for establishing and maintaining the Group's system of risk management and internal control, with the aim of protecting its employees and customers and safeguarding the interests of the Group and its shareholders in the constantly changing environment in which it operates. The Board regularly reviews the principal risks facing the Group, together with the relevant mitigating controls, and undertakes a robust risk assessment. In reviewing the principal risks, the Board considers emerging risks, including climate-related risks, and changes to existing risks. In addition, the Board has set guidelines for risk appetite as part of the risk management process against which risks are monitored.

The identification of risks is undertaken by specific executive risk committees that analyse the risk universe by risk type across four key risk types: strategic risks, financial risks, operational risks and compliance risks. A common risk register is used across the Group to monitor gross and residual risk, with the results assessed by the Audit Committee and Board. The Audit Committee monitors the effectiveness of the risk management system through management updates, output from the various executive risk committees and reports from internal audit.

The principal risks do not comprise all of the risks that the Group may face and are not listed in any order of priority. Additional risks and uncertainties not presently known to management, or deemed to be less material at the date of this report, may also have an adverse effect on the Group.

Forward looking statements

This preliminary announcement contains certain forward-looking statements with respect to the financial condition and results of operations of Foxtons Group plc. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. The forward-looking statements are based on the Directors' current views and information known to them at 4 March 2025. The Directors do not make any undertakings to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Nothing in this statement should be construed as a profit forecast.

Responsibility statement

The following statement will be contained in the 2024 Annual Report and Accounts.

Each of the Directors confirms that to the best of their knowledge:

· The consolidated financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit of the Group;

· The Parent Company financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities and financial position of the Company;

· The Strategic Report and the Directors' Report include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and

· The Directors consider that the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group's and the Company's position, performance, business model and strategy.

This responsibility statement was approved by the Board of Directors and was signed on its behalf by:

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2024

1 In 2024 the Group's adjusted profit/earnings measures have been redefined to exclude the amortisation of acquired intangibles. 2023 comparatives have been restated as applicable under the revised definition to ensure a fair comparison. Refer to Note 16 for definitions of each of the adjusted measures, the rationale for the change in definitions and reconciliations presenting the restatement of the prior year comparatives as applicable.

2  Adjusted EBITDA and Adjusted profit before tax are reconciled to the nearest statutory measure in Note 16.

3  Adjusted operating profit is reconciled to the nearest statutory measure in Note 2.

4  Adjusted basic earnings per share is reconciled to statutory earnings per share in Note 6.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2024

1  Current and non-current borrowings as at 31 December 2023 have been restated to adopt Amendments to IAS 1 effective 1 January 2024. See Notes 1 and 10 for further details.

The financial statements of Foxtons Group plc, registered number 07108742, were approved by the Board of Directors on 4 March 2025.

Signed on behalf of the Board of Directors

Chris Hough

Chief Financial Officer

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2024

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December 2024

NOTES TO THE FINANCIAL STATEMENTS

1. Accounting policies, judgements and estimates

1.1 General information

Foxtons Group plc ('the Company') is a company incorporated in the United Kingdom under the Companies Act 2006. The address of the Company's registered office is Building One, Chiswick Park, 566 Chiswick High Road, London W4 5BE. The principal activity of the Company and its subsidiaries (collectively, 'the Group') is the provision of services to the residential property market in the UK.

These financial statements are presented in pounds sterling which is the currency of the primary economic environment in which the Group operates.

1.2 Basis of preparation

The consolidated preliminary results of the Company for the year ended 31 December 2024 comprise the Company and its subsidiaries.

The consolidated preliminary results of the Group for the year ended 31 December 2024 were approved by the Directors on 4 March 2025. These consolidated preliminary results have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. They do not include all the information required for full annual financial statements to comply with UK-adopted International Accounting Standards, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2024.

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Financial Review. The Financial Review also includes a summary of the Group's financial position and its cash flows.

The financial information for the year ended 31 December 2024 does not constitute statutory accounts as defined in sections 435 (1) and (2) of the Companies Act 2006. The auditor has reported on these accounts; their report was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis of matter and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Statutory accounts for the year ended 31 December 2023 have been delivered to the Registrar of Companies and those for 2024 will be delivered following the Company's 2025 Annual General Meeting.

1.3 Going concern

Going concern assessment

The financial statements of the Group have been prepared on a going concern basis as the Directors have satisfied themselves that, at the time of approving the financial statements, the Group will have adequate resources to continue in operation for a period of at least 12 months from the date of approval of the consolidated financial statements. The assessment has taken into consideration the Group's financial position, liquidity requirements, recent trading performance and the outcome of reverse stress testing over an 18-month forecast period to August 2026.

At 31 December 2024, the Group was in a net current liability position of £5.2 million (2023: £8.4 million) and a net debt position of £12.7 million (2023: £6.8 million net debt), which includes the £18.0 million drawdown on the Group's £30.0 million revolving credit facility ('RCF') used to fund the Group's acquisition strategy and working capital requirements. The facility is available for use until June 2027 and has an option to extend for a further year to June 2028. The facility also includes a £10 million accordion option which can be requested at any time subject to bank approval. For RCF terms refer to Note 10.

Reverse stress scenario

In assessing the Group's ability to continue as a going concern, the Directors have stress tested the Group's cash flow forecasts using a reverse stress scenario which incorporates a severe deterioration in market conditions. Reverse stress testing seeks to determine the point at which the Group could be considered to fail without taking further mitigating actions or raising additional funds. For the purposes of the reverse stress test, the point of failure has been defined as the point at which the Group breaches its RCF covenants.

The reverse stress scenario has taken into consideration the revenue characteristics of the Group, specifically the transactional nature of Sales revenue, which contrasts to the recurring and non-cyclical nature of Lettings revenue. The scenario assumes a severe macro-economic downturn from April 2025 to August 2026 which heavily impacts Sales and Financial Services revenues since these streams are most sensitive to the macro-economic environment. Additionally, Lettings revenues have been assumed to be impacted despite their resilient nature.

Under the reverse stress scenario Sales revenue would be 15% lower than 2024 and Lettings revenue 4% lower than 2024, despite the Group having completed two acquisitions in October 2024 which are revenue accretive. The key assumptions are:

· A 24% reduction in sales market transactions and a 10% reduction in Lettings units compared to 2024. For context, a 24% reduction in sales market transactions would see transaction volumes fall c.7% compared to those levels seen in 2009 following the Global Financial Crisis.

· An 18% reduction in sales market share and a 10% reduction in Lettings average revenue per transaction from current levels, further reducing revenues.

· Mitigating action is taken to reduce discretionary spending and right size fee earner headcount to reflect market conditions. The modelled actions include: reducing direct costs to reflect market conditions; reducing discretionary spend such as marketing; and pausing management bonuses.

In the unlikely event of the reverse stress scenario, the Group forecasts it would breach the RCF's leverage covenant (refer to Note 10 for details of the covenants) in March 2026. Under such a scenario, further mitigating actions that could be taken, but not included in the reverse stress scenario, include further reducing discretionary spend, further rationalising headcount, pausing capital expenditure, seeking agreement to defer lease payments or raising additional funds.

1.4 Critical accounting judgements and key sources of estimation uncertainty

The critical accounting judgements and key sources of estimation uncertainty within these consolidated preliminary results are the same as those within the 2024 Annual Report and Accounts: 'Useful economic life of the brand intangible asset', 'impairment of intangibles with an indefinite life' and 'contract asset expected credit loss provision'.

1.5 Alternative performance measures (APMs)

In reporting financial information the Group presents APMs which are not defined or specified under the requirements of IFRS. The Group believes that the presentation of APMs provides stakeholders with additional and helpful information on the performance of the business, but does not consider them to be a substitute for or superior to IFRS measures. APMs are also used to enhance the comparability of information between reporting periods, by adjusting for factors which affect IFRS measures, to aid users in understanding the Group's performance. The Group's APMs are defined, explained and reconciled to the nearest statutory measure within Notes 2 and 16.

Changes in APM definitions

During the financial year, the Board reviewed certain APM definitions and decided to exclude the amortisation of intangibles acquired in business combinations from profit measures. The amortisation charge is excluded since the incremental amortisation charge arising from acquired intangible assets is not considered when assessing the underlying trading performance of the Group/segments. The change also aligns the metric with generally accepted market practice.

As a result of this change, the following APMs have been redefined to exclude the amortisation of intangibles acquired in business combinations:

• Adjusted operating profit

• Adjusted operating profit margin

• Adjusted profit before tax

• Adjusted earnings per share

2023 comparatives have been restated as applicable under the revised definition to ensure a fair comparison. Refer to Note 16 for further details of the restatement of the 2023 comparatives.

Adjusted items

Adjusted operating profit, adjusted operating profit margin, adjusted EBITDA, adjusted EBITDA margin, adjusted profit before tax and adjusted earnings per share exclude adjusted items.

Adjusted items include costs or revenues which due to their size and incidence require separate disclosure in the financial statements to reflect management's view of the underlying performance of the Group and allow comparability of performance from one period to another. Items include restructuring and impairment charges, significant acquisition costs and any other significant exceptional items. Refer to Note 3 for further information around the adjusted items recognised in the year.

2. Business and geographical segments

Products and services from which reportable segments derive their revenues

Management has determined the operating segments based on the monthly management pack reviewed by the Directors, which is used to assess both the performance of the business and to allocate resources within the entity. Management has identified that the Board is the Chief Operating Decision Maker ('CODM') in accordance with the requirements of IFRS 8 'Operating Segments'.

The operating and reportable segments of the Group are (i) Lettings; (ii) Sales; and (iii) Financial Services.

(i) Lettings generates commission from the letting and management of residential properties and income from interest earned on tenants' deposits.

(ii) Sales generates commission on sales of residential property.

(iii) Financial Services generates commission from the arrangement of mortgages and related products under contracts with financial service providers and receives administration fees from clients.

All revenue for the Group is generated from within the UK and there is no intra-group revenue.

Segment assets and liabilities, including depreciation, amortisation and additions to non-current assets, are not reported to the Directors on a segmental basis and are therefore not disclosed. Goodwill and intangible assets have been allocated to reportable segments as described in Note 7.

The segmental disclosures include two APMs as defined below. Further details of the APMs is provided in Note 16.

Contribution and contribution margin

Contribution is defined as revenue less direct operating costs (being salary costs of front office staff and costs of bad debt). Contribution margin is defined as contribution divided by revenue. These measures indicate the profitability and efficiency of the segments before the allocation of shared costs.

Adjusted operating profit and adjusted operating profit margin

Adjusted operating profit represents the profit before tax for the period before amortisation of acquired intangibles, adjusted items (defined in Note 1.5), finance income, finance cost and other gains/losses. Adjusted operating profit margin is defined as adjusted operating profit divided by revenue. As explained in Note 16, these measures are used by the Board to measure delivery against the Group's strategic priorities, to allocate resource and to assess segmental performance.

As explained in Note 1.5, the definitions of adjusted operating profit and adjusted operating profit margin have been updated in the year to exclude the amortisation of acquired intangibles. The 2023 comparatives (Group and segmental metrics) have been restated as detailed within this note to ensure a fair comparison.

Segment revenues and results

The following is an analysis of the Group's results by reportable segment for the year ended 31 December 2024:

1  Total depreciation of £13.2 million consists of £2.5 million of property, plant and equipment depreciation and £10.7 million of IFRS 16 lease depreciation (refer to Note 8).

The following is an analysis of the Group's results by reportable segment for the year ended 31 December 2023:

1 The adjusted operating profit/loss and adjusted operating profit/loss margin lines have been restated under the Group's revised definitions of these measures which now both exclude the amortisation of acquired intangibles. Refer to Note 16 for further details including a reconciliation of the metrics under the revised definition versus the previous definition.

1 Total depreciation of £12.9 million consists of £2.4 million of property, plant and equipment depreciation and £10.5 million of IFRS 16 lease depreciation (refer to Note 8).

3. Adjusted items

Adjusted operating profit, adjusted operating profit margin, adjusted EBITDA, adjusted EBITDA margin, adjusted profit before tax, adjusted earnings per share, exclude adjusted items. These APMs are defined, purpose explained and reconciled to statutory measures in Note 2 and Note 16. The following items have been classified as adjusted items in the period.

1  The 2023 branch asset impairment charge related to property and equipment (£1,037k) and right-of-use assets (£2,373k) (refer to Note 8).

2 Net property related / other (reversal)/charge includes dilapidations, rates, service charges and other unavoidable costs under onerous leases, offset by net gains on the disposal of IFRS 16 balances.

3 Transaction related costs relate to costs involved with the acquisition of Imagine and Haslams (2023: for the acquisition of Atkinson McLeod and Ludlow Thompson).

Net cash outflow from adjusted items during the year totalled £1.2 million (2023: £0.6 million).

4. Taxation

Recognised in the Group comprehensive income statement

The components of the tax charge recognised in the Group income statement are:

Corporation tax for the year ended 31 December 2024 is calculated at 25% (2023: 23.5%) of the estimated taxable profit for the period.

In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase to 25%. This new law was substantively enacted on 24 May 2021. For the financial year ended 31 December 2024 the tax rate was 25% (2023: the weighted average tax rate was 23.5%). Deferred tax at the balance sheet date has been measured using this enacted tax rate.

Reconciliation of effective tax charge

The tax on the Group's profit before tax differs from the standard UK corporation tax rate of 25% (2023: 23.5%), because of the following factors:

Group relief is claimed and surrendered between Group companies for consideration equal to the tax benefit.

Tax arising in the reporting period and not recognised in net profit or loss or other comprehensive income but directly credited to equity is £941k (2023: £248k), comprising £750k (2023: £248k) of deferred tax and £191k (2023: £nil) of current tax. This relates to share-based payment schemes.

5. Dividends

For 2024, the Board has proposed a final dividend of 0.95p per ordinary share (£2.9 million) to be paid on 16 May 2025.

6. earnings per share

Basic earnings per share is calculated by dividing the earnings for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year, excluding own shares held.

Diluted earnings per share is calculated by dividing the earnings attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the financial period, excluding own shares held, plus the weighted average number of ordinary shares that would be issued on conversion of all the potentially dilutive ordinary share awards into ordinary shares. The Company's potentially dilutive ordinary shares are in respect of share awards granted to employees.

As explained in Note 1.5, the definition of adjusted earnings per share has been updated in the year to exclude the amortisation of acquired intangibles. The 2023 comparative has been restated as detailed within this note to ensure a fair comparison.

1 Adjusted items credit of £331k (2023: £4,466k charge) per Note 3, and associated tax charge of £17k (2023: £881k credit), resulting in an after tax credit of £314k (2023: £3,585k charge).

2 The 2023 'adjusted earnings for the purposes of adjusted earnings per share' comparative has been restated to exclude the amortisation of acquired intangibles net of tax of £1,047k, increasing the metric from £9,075k (as presented in 2023) to £10,122k.

3 The 2023 'adjusted earnings per share (basic and diluted)' has been restated to reflect the adjusted earnings noted above. The 2023 adjusted earnings per share (basic) has increased from 3.0p to 3.4p and 2023 adjusted earnings per share (diluted) has increased from 2.9p to 3.2p.

7. Goodwill and other intangible ASSETS