Foxtons calls time on new branches as emphasis shifts to IT and people

Foxtons says its long-term branch expansion programme is now “largely complete” and it is shifting its attention to using technology to make its core business more profitable.

In the company’s annual report, released yesterday, chief executive Nic Budden says that since Foxtons floated on the London stock market in 2013 it had increased its branch footprint by 60 per cent and now has some 70 offices. 

But this is “a smaller network than we originally planned” he admits. 

Budden says the “multi-year branch roll out” is now largely complete and investment has shifted to make the firm increasingly profitable rather than simply larger.

“This investment programme is now focused on areas that are both core to our offering and where we can reinforce our differentiation, namely in our brand, people and technology” explains Budden. 

“We know customers want results, they want to sell their house or let their property for the best price with a professional, personal service. Estate agency remains a people business and customers value experienced, knowledgeable and professional people committed to working hard to achieve results.” 

Budden himself took home a bonus of £218,000 in 2017, taking his total package to £914,000. That sum - which includes salary, bonus, pension and other payments - was down slightly on 2016‘s figure of £982,000. 

Budden’s salary comes despite poor figures for the company for 2017. Sales revenue was down 23 per cent and lettings dipped a more modest three per cent. Its profit before tax was £6.5m - worse than analysts expected.

The annual report includes a fascinating section on brand awareness for Foxtons, based on a survey of 1,078 adults living inside the M25, undertaken late last year. 

In terms of ‘spontaneous awareness’ - when those surveyed were asked to name an estate agent - the Foxtons brand had a huge lead over Savills, Purplebricks, Bairstow Eves, Haart and Winkworth; responses also included the Rightmove and Zoopla portals, which recorded relatively low scores - although were not agents at all.

“Heightened brand awareness and consideration continues to support a low cost of customer acquisition” says Foxtons annual report. 

“Our digital pay per click Facebook and programmatic campaigns are continuously being optimised through vigorous testing of landing pages, target audiences messaging and creative. We work closely with Rightmove and Zoopla, beta-testing new products to help identify which customer groups are most receptive to direct response methods and how best to convert them” it continues.

It says this data-driven approach is also applied to more traditional channels which are run alongside digital activity, with an example of canvassing campaigns being followed up by emails - these “have helped to halve the number of letters it takes to find a seller or landlord.” 

Foxtons also emphasises in the report its strong Trustpilot review performance - an average score of 9.2 out of 10. 

Foxtons’ chairman, Garry Watts, in a forward to the report, says his company retains a strong balance sheet, high cash generation and no debt “which allows us selectively to invest in areas that will drive long-term growth of the business.” 

He continues that despite the volatile sales market “Foxtons remains the number one property agent in London by instructions with an unrivalled network focused on delivering the best service to buyers, sellers, tenants and landlords.”

You can see the report in full here.