LONDON - Foxtons Group plc (LSE:FOXT), the London-based estate agency, has expanded its presence in the UK property market with the acquisition of Haslams Estate Agents and Imagine Property Group, two leading agencies in the Reading and Watford commuter towns, respectively. The initial consideration for these acquisitions totals £12.6 million, with additional deferred payments contingent on performance targets.
The strategic move, completed on October 29, 2024, aims to leverage the Group's existing operational strengths and further increase its exposure to recurring lettings revenues, which accounts for approximately 60% of the revenue for each acquired business. With these acquisitions, Foxtons' network grows to 64 branches, adding roughly 2,900 tenancies to its portfolio, which now encompasses over 31,000 tenancies.
Haslams, with a focus on Reading and additional coverage of Wokingham and Crowthorne, reported unaudited total revenue and operating profit of £6.5 million and £0.8 million for the year ended December 31, 2023. Imagine, centered around Watford, reported revenue and profit of £3.3 million and £0.5 million for the year ended March 31, 2024.
Both acquired entities are expected to significantly increase their profitability following the implementation of growth initiatives and operating synergies. The acquisitions are anticipated to be accretive to Foxtons' 2025 adjusted earnings per share, with expectations of further accretion in 2026 as synergies fully annualize.
Funded through the Group's revolving credit facility, the acquisitions are part of Foxtons' broader strategy to achieve £25-30 million in adjusted operating profit over the medium term. The Group's proforma net debt to adjusted EBITDA ratio is projected to remain just below 1x at the close of 2024.
Foxtons CEO Guy Gittins expressed confidence in the acquisitions, citing the quality of the businesses and their leadership positions in local markets as key drivers for the decision. Both managing directors of the acquired companies, Steve Woodford of Haslams and Mike Cole of Imagine, echoed Gittins' sentiments, highlighting the potential for growth and market advancement through leveraging Foxtons' operational platform.
This strategic expansion by Foxtons is based on a press release statement and reflects the company's continued focus on growing its lettings business and entering new markets with strong economic growth forecasts.
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