Foxtons is best estate agent in UK, says City analyst

The debt-free Foxtons has been hailed as the best estate agent in the UK after reporting a 17.9% rise in group turnover for the quarter to the end of September, to stand at £41.4m.

The City appears impressed by Foxtons, with Credit Suisse praising the firm’s “superior profitability”, adding: “We view Foxtons as the best-in-class estate agent in the UK, which we believe is reflected in its 35% p/e [price/earning] premium to UK estate agency peers.”

Third-quarter revenue from house sales went up 29%, while lettings revenue grew 8.7% and mortgage income was up 64%.

The firm said that although it is confident about its prospects for the remainder of the year, it does not expect to see a significant upturn in London property sales. It said that sales in London, where it has most of its 44 offices, have been flat this year because of a shortage of supply and low mortgage availability.

Foxtons, which did not disclose any transaction figures, also questioned whether Help to Buy would lead to a rise in sales.

The firm’s shares are currently trading at around 315p, valuing it at some £900m. It started conditional trading on the London Stock Exchange on September 20 with the shares at 230p.

Group chief executive Michael Brown said: “Our first interim management statement as a listed company shows encouraging performance across the business.

“The IPO has left the group in a strong position with no debt and we have a highly cash generative growth strategy which is not heavily dependent on a recovery in the sales market.

“We remain confident about Foxtons’ prospects for the rest of the year but do not expect to see a significant upturn in London property sales transactions.”

Foxtons opened five new branches during the first half of 2013 (Brixton, Barnet, Enfield, Hackney and West End) and two new branches last month in Crystal Palace and Twickenham.