TIDMFOXT
RNS Number : 0733W
Foxtons Group PLC
30 July 2018
INTERIM RESULTS FOR THE HALF YEARED 30 JUNE 2018
30 JULY 2018
Foxtons Group plc, London's leading estate agent, today
announces its financial results for the half year ended 30 June
2018.
Half year ended 30 June 2018 2017
------------------------------------------------------ ---------- ---------
Group revenue GBP53.0m GBP58.5m
Group Adjusted EBITDA(1) GBP0.1m GBP7.1m
(Loss)/Profit before tax (GBP2.5m) GBP3.8m
Net cash (outflow)/ inflow from operating activities (GBP4.5m) GBP3.8m
Net free cash (outflow)/inflow(2) (GBP6.0m) GBP2.1m
Basic (loss)/earnings per share (1.1p) 1.2p
Interim dividend per share - ordinary Nil 0.43p
------------------------------------------------------ ---------- ---------
Financial summary:
-- Group revenue declined by 9% as a resilient lettings
performance was offset by ongoing weakness in the London sales
market.
-- Adjusted EBITDA GBP0.1m (2017: GBP7.1m). Loss before tax
GBP2.5m (2017: Profit before tax GBP3.8m).
-- Decline in profitability was driven by lower revenue in the
sales business and additional planned investments in people, brand
and technology.
-- The lettings business continues to demonstrate resilience,
with revenue of GBP31.7m down 1% versus prior year and with
improving Q2 performance.
-- Sales revenue was GBP17.2m, down 23%, reflecting continued
market weakness due to lower sales transactions.
-- Alexander Hall mortgage revenue GBP4.1m, down 3%. A solid
performance driven by re-mortgages.
-- Strong balance sheet maintained with no debt and cash balance of GBP11.8m at 30 June 2018.
-- There will be no interim dividend in this financial period in line with our policy.
Operational highlights:
-- Strong single brand, clear proposition and exceptional
service continues to drive listings. Maintained No 1 market
listings position in both sales and lettings.
-- Ongoing improvements to My Foxtons including tenants' issue
tracker and app have been well received.
-- Focus on efficiency with marketing spend refocused towards
digital channels, reducing cost of acquisition.
Commenting on the results, Nic Budden, CEO, said:
"As expected the weak sales market impacted our performance in
the first half of 2018. After a slow start to the year, performance
in our lettings business improved throughout the period delivering
another consistent result for the first six months.
The property sales market in London is undergoing a sustained
period of very low activity levels with longer and less visible
transaction outcomes, which clearly impacts our business. We
continue, however, to achieve market leading share of listings
giving us confidence that our service led, results based model
remains highly relevant to consumers. Going forward we will
continue to invest in our proposition to enable us to maintain our
differentiation in the minds of buyers, sellers, landlords and
tenants.
Looking ahead, availability of mortgage finance, absorption of
stamp duty costs, and the return of confidence to the market will,
amongst other factors, determine the timing and rate of increased
activity levels.
London though remains an important global city. Our franchise is
well known and we remain debt free. Our ability continuously to
improve quality, adapt our business models to underlying shifts -
such as the expansion of digital capability and institutional
investment in the private rented sector - and keep a tight focus on
operating costs puts us in a strong position to benefit both from
the momentum in our lettings business and to capitalise on
increased sales activity as it returns. We remain confident of our
long term prospects."
For further information, please contact:
Foxtons Group plc
Mark Berry, Chief Financial
Officer
Jenny Matthews, Investor Relations
Manager +44 20 7893 6484
-------------------
Teneo Blue Rubicon
-------------------
Robert Morgan / Laura Stewart +44 20 7420 3194
-------------------
The Company will host a conference call today at 10am for
analysts and investors - dial in details: UK - +44 (0)330 336 9411,
US - +1 323 994 2093, Confirmation code: 3508627. There will also
be a replay of the call: UK - +44 (0)207 660 0134. US: +1 719 457
0820 or +1 888-203-1112.
1 Adjusted EBITDA is defined by the Group as profit before tax,
depreciation, amortisation, finance costs, finance income, other
gains, Adjusted items, profit on disposal of assets, and share
based payments.
2 Net free cash flow is defined as net cash from operating
activities less net cash used in investing activities.
3. A number of alternative performance measures are used by the
Board as they provide additional understanding of the underlying
operations of the Group. See Financial Review.
Performance at a Glance
Six months ended 30 June H1 2018 H1 2017
----------------------------------------- ---------- ---------- -------
Income statement
----------------------------------------- ---------- ---------- -------
Revenue GBP53.0m GBP58.5m (9%)
----------------------------------------- ---------- ---------- -------
Adjusted EBITDA GBP0.1m GBP7.1m (99%)
----------------------------------------- ---------- ---------- -------
Adjusted EBITDA margin 0.1% 12.2%
----------------------------------------- ---------- ---------- -------
(Loss)/Profit before tax (GBP2.5m) GBP3.8m (166%)
----------------------------------------- ---------- ---------- -------
Earnings per share
----------------------------------------- ---------- ---------- -------
Basic and fully diluted (loss)/earnings
per share (1.1p) 1.2p
----------------------------------------- ---------- ---------- -------
Dividends
----------------------------------------- ---------- ---------- -------
Interim proposed - 0.43p
Special - -
----------------------------------------- ---------- ---------- -------
Total Dividend for the period - 0.43p
----------------------------------------- ---------- ---------- -------
Cash flow
----------------------------------------- ---------- ---------- -------
Operating cash conversion(1) - 45.1%
----------------------------------------- ---------- ---------- -------
Net free cash (outflow)/inflow (GBP6.0m) GBP2.1m
----------------------------------------- ---------- ---------- -------
Net free cash flow as a percentage
of Adjusted EBITDA - 29.5%
----------------------------------------- ---------- ---------- -------
Period end cash balance GBP11.8m GBP10.6m
----------------------------------------- ---------- ---------- -------
KPIs
----------------------------------------- ---------- ---------- -------
Sales revenue GBP17.2m GBP22.2m
----------------------------------------- ---------- ---------- -------
Sales units 1,188 1,544
----------------------------------------- ---------- ---------- -------
Revenue per sales unit GBP14,450 GBP14,412
----------------------------------------- ---------- ---------- -------
Lettings revenue GBP31.7m GBP32.1m
----------------------------------------- ---------- ---------- -------
Lettings units 9,430 9,435
----------------------------------------- ---------- ---------- -------
Average revenue per lettings unit GBP3,365 GBP3,399
----------------------------------------- ---------- ---------- -------
Mortgage broking revenue GBP4.1m GBP4.2m
----------------------------------------- ---------- ---------- -------
Units 2,120 1,992
----------------------------------------- ---------- ---------- -------
Average revenue per broking unit GBP1,929 GBP2,119
----------------------------------------- ---------- ---------- -------
Definitions:
(1) Operating cash conversion is computed as Adjusted operating
cash flow/Adjusted EBITDA. Adjusted operating cash flow is defined
as the summation of Adjusted EBITDA, change in working capital and
net capital spend.
CHIEF EXECUTIVE'S REVIEW
Summary
Business performance in the first half of 2018 was impacted by a
further deterioration in the London sales market since the same
period last year. First half Group revenue was GBP53.0 million
(2017: GBP58.5 million) of which sales revenue was GBP17.2 million
(2017: GBP22.2 million), lettings revenue was GBP31.7 million
(2017: GBP32.1 million) and mortgage broking revenue was GBP4.1
million (2016: GBP4.2 million).
Sales revenue fell 23%, due to lower levels of sales
transactions in the period. Average revenue per unit increased
marginally to GBP14,450 (2017: GBP14,412). Sales revenue was down
27% in Q1 versus prior year, and by 19% in the second quarter
versus prior year. In addition, the under-offer pipeline has
improved substantially compared to the beginning of the year,
resulting in a closing level broadly in line with the prior year.
The lettings market continues to be extremely competitive but is a
stable and reliable business for the Group and now represents 60%
of our revenues. Lettings revenue was down 1% on the prior year,
driven by 2% lower year on year rents in Q1, a trend which had
flattened by the end of Q2. Alexander Hall, our mortgage broker,
was down 3% with a 6% increase in deal volumes offset by a greater
proportion of lower margin re-mortgage business. This was a solid
performance given the sales market backdrop.
Group Adjusted EBITDA reduced to GBP0.1 million (2017: GBP7.1
million) driven principally by lower revenue in the sales business
and our planned investments in brand, people and technology. These
targeted investments impact profitability in the short term but are
designed to enhance our differentiated model. We continue to review
our cost base to reflect market conditions.
The Group has a strong balance sheet with a cash balance of
GBP11.8m at the period end (2017: GBP10.6m).
Property sales market
The London sales market remains very subdued with transaction
levels now well below historic averages. This is due to a number of
factors including higher stamp duty affecting buyers of more
expensive properties; second home owners and buy to let investors;
plus ongoing affordability concerns which are particularly acute in
London.
Our listings share remains at consistent levels and we are
confident that our unique proposition is even more relevant in
today's challenging markets.
In the medium term we believe transaction levels will improve
because London has strong fundamentals as a global hub, a growing
population and structural demand driven by limited housing stock.
We will continue to manage the business such that we are ready to
benefit from any change in market conditions.
Lettings market
Lettings continues to deliver a consistent and stable revenue
stream for the Group. It's a market with good long-term
fundamentals, particularly in London where more than one million
households now rent. In the near term we believe we have a good
opportunity to do more with existing landlords and have introduced
enhanced dedicated account management to help target this group. In
addition, we continue to upgrade My Foxtons with the latest
version, launched in Q2, incorporating the tenants' issue tracker
and app which enables tenants to log their property issues
effectively and efficiently, and provides landlords with more
visibility.
During the period the portfolio remained broadly flat at the
same level as at the beginning of the year and the proportion of
actively managed properties in the portfolio increased in the
period, to 34% (2017: 32%).
Whilst demand for rental properties remains high, the first half
of the year saw broadly flat average rental prices representing a
stabilisation versus the prior year as the supply of rental
properties has returned to more normal levels.
As the lettings market grows, landlords are faced with increased
regulatory risk and want an agent that can navigate this
complexity, maximise the value of their property and secure high
quality tenants. Foxtons reach, covering all of London and
professional offering positions us well, over the longer term, to
benefit from these trends. We anticipate the implementation of the
Tenant Fees Bill in 2019. Though at this stage it is unclear
exactly what the legislation will look like, we are exploring ways
to mitigate the impact.
Investing for future growth
As per the plans we laid out earlier in the year we are shifting
investment away from branch roll out into other areas of our
business including our brand. Foxtons is the most recognised estate
agent in London but we feel our proposition - of excellent service
which delivers results - is both highly relevant in today's market
and not as well understood as it could be. To address this we will,
in the coming months, embark on a series of brand building
initiatives to reinforce our proposition amongst potential
customers, buyers and tenants.
Maintaining our leadership in technology is vital as it will
play an increasingly important role in enabling us to deliver
exceptional service to our customers. As part of our strategy to
identify future growth areas within residential real estate,
Foxtons regularly considers partnerships with companies that
potentially offer diversified income streams, complementary
technology, and access to new customer segments. In the first half
of this year, we made a GBP1m investment in Propoly, a young
company providing business to business white label digital estate
agency software services, currently focused on lettings. This
investment gives us access to nascent technology, which we may
potentially leverage in the future.
Outlook
Looking ahead the outlook is mixed. Whilst our sales pipeline
has recovered to a similar level to the same time last year, the
sales market remains very subdued with less visibility on exchanges
proceeding. There is momentum in the lettings business and we go
into the peak summer period with an enhanced offering and better
resourced than last year and so consequently are confident that we
can capitalise on demand.
We continue to review our cost base to reflect market
conditions. In the longer term we remain well placed with a strong
balance sheet and leading market position in London, one of the
world's most desirable cities and dynamic property markets.
Nic Budden
Chief Executive Officer
Financial review
Overview
The sales market remains very subdued, whilst the lettings
market continues to provide a consistent revenue stream despite
intense competition. Total revenue fell by 9% during the period and
whilst our cost base remains under constant review, we made a
number of planned investments in key areas during the period. These
included increased targeted spend in marketing and branding; a new
negotiator pay scheme to improve the incentivisation and retention
of our best people; and specific investments to enhance our
Lettings customer service offering. Each of these investments will
enhance the long term prospects of the business, however the net
impact was to increase our cost base in the short term.
Administrative expenses in the period were GBP1.0m higher than
prior year with GBP2.0m of new investments and GBP1.0m of general
cost inflation, being partially offset by GBP1.0m underlying cost
savings, GBP0.5m lower commissions and GBP0.5m lower depreciation.
Taken together with the lower sales revenue achieved in the period,
this led to a GBP7.0m fall in EBITDA. The Group remains profitable
at the EBITDA level and remains debt-free with GBP11.8million cash
as at 30 June 2018 (31 December 2017: GBP18.6 million). The loss
before tax was GBP2.5m (2017: GBP3.8m Profit before tax).
Summary income statement
Half year ended 30 June 2018 2017 % change
--------------------------------- ---------- --------- --------------------------
Group revenue GBP53.0m GBP58.5m (9%)
Group Adjusted EBITDA GBP0.1m GBP7.1m (99%)
(Loss)/Profit before tax (GBP2.5m) GBP3.8m -
Net cash (outflow)/inflow from
operating activities (GBP4.5m) GBP3.8m -
Net free cash (outflow)/inflow (GBP6.0m) GBP2.1m -
Basic (loss)/earnings per share (1.1p) 1.2p -
Interim dividend per share Nil 0.43p -
--------------------------------- ---------- --------- --------------------------
In reporting financial information the Group presents
Alternative Performance Measures (APMs) such as Adjusted EBITDA,
Contribution and Net Free Cash Flow which are not defined or
specified under the requirements of IFRS. The Group believes that
the presentation of APMs provides stakeholders with additional
helpful information on the performance of the business, but does
not consider them to be a substitute for or superior to IFRS
measures. Our APMs are aligned to our strategy and together are
used to measure the performance of the business and form the basis
of the performance measures for remuneration. Adjusted results
exclude certain items because if included, these items could
distort the understanding of our performance for the year and the
comparability between periods.
Revenue
The Foxtons Group comprises three business segments: Sales,
Lettings and Mortgage broking. The majority of operations are in
the London area with two branches in the adjacent area of
Surrey.
GBPm H1 2018 H1 2017 % variance
------------------ -------- -------- -----------
Sales 17.2 22.2 (23%)
Lettings 31.7 32.1 (1%)
Mortgage broking 4.1 4.2 (3%)
Total revenue 53.0 58.5 (9%)
------------------ -------- -------- -----------
Sales
The London property sales market worsened year on year as
continued market weakness caused lower transaction volumes.
Revenues fell by 23% versus the prior year, reflecting a 23% fall
in volumes. "Average revenue per transaction" increased marginally
versus the prior year to GBP14.5k. The increase was a reflection of
a combination of factors with a slightly higher proportion of
higher value transactions in the period being offset by lower
overall prices. The average price of a Foxtons property sale was
GBP582k (2017: GBP589k)
Lettings
The Lettings segment continues to provide a consistent recurring
revenue stream which comprises over half of group revenues.
Lettings revenue was down 1% versus prior year driven by marginally
lower rental rates in the first quarter alongside broadly flat deal
volumes. The Lettings business is seasonal with the peak period
occurring in the second half of the year.
Mortgage broking
Revenue at our Mortgage business, Alexander Hall, fell by 3%. In
the context of the wider London Sales market, this was a solid
performance driven by a higher proportion of re-mortgage deals
which typically attract a lower margin.
Balanced business
A key strategic priority for the Company is to maintain a
balanced business. This balance across the Sales and Lettings
segments enables the Group to withstand fluctuations in the
property market.
% of total revenue H1 2018 H1 2017
------------------- ------- -------
Sales 32% 38%
Lettings 60% 55%
Mortgage broking 8% 7%
Total revenue 100% 100%
------------------- ------- -------
Segmental Contribution and Adjusted EBITDA
A key metric for management is the contribution generated by the
three business segments. Contribution is defined as revenue less
direct salary costs of front office staff and costs of bad debt.
The Group contribution margin was lower than in the prior year
mainly due to the fall in sales revenue. We maintained headcount
levels in the period in order to re-build our under offer sales
pipeline with a view to increasing sales exchanges in the second
half of the year. Our front office headcount remains under constant
review.
Contribution 2018 2018 2017 2017
----------------------
GBPm margin GBPm margin
---------------------- ----- ------- ----- -------
Sales 8.8 51.2% 13.6 61.1%
Lettings 22.9 72.0% 23.4 73.0%
Mortgage broking 1.9 47.1% 2.1 49.2%
Group contribution 33.6 63.3% 39.1 66.8%
---------------------- ----- ------- ----- -------
Adjusted EBITDA comprises contribution less shared costs and
before Adjusted items:
Adjusted EBITDA 2018 2018 2017 2017
-------------------------
GBPm margin GBPm margin
------------------------- ------ -------- ----- -------
Sales (3.6) (21.0%) 1.4 6.5%
Lettings 3.0 9.5% 4.9 15.4%
Mortgage broking 0.7 16.4% 0.8 18.1%
Group Adjusted EBITDA 0.1 0.1% 7.1 12.2%
------------------------- ------ -------- ----- -------
The integrated nature of the business model means that a
relatively large proportion of the cost base is shared between the
sales and lettings segments.
Sales Adjusted EBITDA and margin reduced versus prior year
driven primarily by lower revenue.
Lettings Adjusted EBITDA and margin reduced versus prior year
driven primarily by lower revenue, and an increased apportionment
of shared costs, which for the purposes of segmental reporting are
allocated between the sales and lettings segments according to
headcount. As 2018 headcount was higher in the lettings business
than in the sales business, a higher proportion of shared cost has
been allocated to Lettings than in the prior year. A full
reconciliation of these items to Profit before tax is included in
note 3.
Loss/Profit before tax (PBT)
The Loss before tax in the period was GBP2.5 million (2017:
Profit before tax GBP3.8 million) and was after charging:
-- Direct salary costs of front office staff of GBP19.4 million (2017: GBP19.4 million)
-- Shared costs of GBP33.5 million (2017: GBP32.0 million)
-- Depreciation and amortisation GBP2.2 million (2017: GBP2.6 million)
-- Share based payment charge of GBP0.7 million (2017: GBP0.5 million)
-- Other gains (GBP0.3m) (2017: GBPnil)
-- Net finance costs GBPnil (2017: GBPnil)
The Loss before tax arose due to lower Group revenue and
specific long term investments in marketing, people and brand,
which were partially offset by underlying cost savings.
Taxation
The Group has a low risk approach to its tax affairs. All
business activities of Foxtons operate within the UK and are UK tax
registered and fully 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. Foxtons always sets out to be
transparent, open and honest in its dealings with tax authorities.
Foxtons effective tax rate for the period was -17.1% (2017: 11.4%).
This compares to the statutory blended corporation tax rate of
19.0% (2017: 19.25%).
The main drivers leading to a taxable income on a forecasted
loss and the effect on the tax expense are depreciation on
leasehold improvements that are non-qualifying for capital
allowance purposes and share option charges.
Tax payments during the first half of the year totalled GBP1.4
million (2017: GBP1.1 million). The 2017 figure included a GBP0.4m
refund in respect of prior years.
Earnings per share (EPS)
Basic and fully diluted (loss)/earnings per share was (1.1p)
(2017: 1.2p) driven by reduced profitability.
Cash flow
The operating cash inflow before movements in working capital in
the period was GBP0.1m (2017: GBP7.1m). A normal working capital
outflow of GBP2.5m, GBP0.7m payments in respect of prior year
Adjusted Items and income taxes paid of GBP1.4m in the period, gave
rise to a net cash outflow from operating activities of GBP4.5m
(2017: GBP3.8m inflow). After deducting GBP0.5m net capital
expenditure and the GBP1.0m investment in associate, the net free
cash outflow for the period was GBP6.0m (2017: GBP2.1 million
inflow). The reduction versus prior year of GBP8.1 million was due
to reduced cash generated by operations of GBP8.0 million, and
GBP0.3 million higher tax payments, partially offset by GBP0.2
million lower capital spend.
The Group held net cash of GBP11.8m as at the period end (31
December 2017: GBP18.6m), and has a GBP10 million Revolving Working
Capital Facility which remains undrawn. The facility expires in
July 2019. The Group will seek to re-finance the facility during
the second half of the year.
Dividends
The Board's priorities for free cash flow are to fund investment
in the future development of the business, maintain a strong
balance sheet and to return excess cash to shareholders.
Our immediate priorities are to maintain the strength of our
balance sheet and invest in the business to enhance our offer. We
have a policy of returning 35% to 40% of profit after tax as an
ordinary dividend but as the company did not make a profit this
period the board has taken the decision to not pay an interim
dividend.
Share buy-backs
No share buy-backs were undertaken during the period (2017:
GBPnil).
Post balance sheet events
There are no post balance sheet events to report.
Treasury policies and objectives
The Group's treasury policy is designed to reduce financial
risk.
Financial risk for the Group is low as:
-- The Group is debt-free;
-- The Group is entirely UK-based with no foreign currency risks; and
-- Surplus cash balances are held with major UK based banks.
As a consequence of the above, the Group has not had to enter
into any financial instruments to protect against 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
Company to make certain defined contribution payments for our
employees.
Mark Berry
Chief Financial Officer
Principal risks
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 Company and its Shareholders in the constantly
changing environment in which it operates. The Board regularly
reviews the principal risks facing the Company together with the
relevant mitigating controls and undertakes a robust assessment. In
reviewing the principal risks the Board considers emerging risks
and significant changes to existing risk ratings. 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 risk in the Group is undertaken by
specific executive risk committees which analyse overall corporate
risk, information technology risk and mortgage broking risk. Other
committees exist below this level to focus on specific areas such
as anti-money laundering. A common risk register is used across the
Group to monitor gross and residual risk with the results being
assessed by the Board. The Compliance department constantly reviews
operations to ensure that any non-standard transactions have been
properly authorised and that procedures are being properly adhered
to across the branch network. The Audit Committee monitors the
effectiveness of the risk management system through regular updates
originating from the various executive risk committees.
The principal risks table below sets out the risks facing the
business at the date of this Report analysed between external and
internal factors. These 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. A full assessment of
the Group's principle risks and risk management framework is set
out on pages 26 to 30 of the 2017 Annual Report and Accounts.
External factors
Risk Impact on Company
Market risk Continuous high property price inflation may impact
affordability which in turn may reduce transaction
levels in the market. The market may also be affected
by a reduction in London's standing as a major financial
city caused by the macro- economic and political
environment, including the UK's decision to leave
the EU.
The market is also reliant on the availability of
mortgage finance, a deterioration in which may adversely
affect Foxtons.
The market may also be impacted by any changes in
government policy such as increases in stamp duty
taxes or increased regulation in the lettings market.
----------------------------------------------------------
Competitor challenge Foxtons operates in a highly competitive marketplace.
New or existing competitors could develop new services
or methods of working including online and hybrid
agents which could give them a competitive advantage
over Foxtons.
----------------------------------------------------------
Compliance with Breaches of laws or regulations could lead to financial
the legal and regulatory penalties and reputational damage.
environment
The Mortgage broking division is authorised and
regulated by the FCA and could be subject to sanction
for non-compliance.
----------------------------------------------------------
Internal factors
Risk Impact on Company
IT systems and Foxtons business operations are dependent on sophisticated
cyber risk IT systems which could fail or be deliberately targeted
by cyber-attacks leading to interruption of service
or corruption of data, or the loss or theft of customer
data.
-----------------------------------------------------------
People There is a risk that Foxtons may not be able to
recruit and retain sufficient people to satisfy
its organic expansion plans. In addition, senior
staff may be recruited by competitors.
-----------------------------------------------------------
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 30 July 2018. 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.
Statement of Directors' responsibilities
We confirm that to the best of our knowledge:
(a) The condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting';
(b) The interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
(c) The interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
By order of the Board
Chief Executive Officer Chief Financial Officer
Nic Budden Mark Berry
30 July 2018 30 July 2018
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended 30 June 2018
Six months
to 30 June
2017
Six months Year ended
to 30 June 31 December
2018 (Unaudited) (unaudited) 2017 (audited)
Continuing operations Notes GBP'000 GBP'000 GBP'000
-------------------------------------- ----- ----------------- ------------ ---------------
Revenue 3 52,993 58,541 117,648
Administrative expenses (55,769) (54,727) (111,055)
-------------------------------------- ----- ----------------- ------------ ---------------
Operating (Loss)/Profit (2,776) 3,814 6,593
Other gains 257 - -
Finance income 31 (3) 1
Finance costs (29) (40) (70)
-------------------------------------- ----- ----------------- ------------ ---------------
(Loss)/Profit before tax (2,517) 3,771 6,524
Tax 5 (430) (431) (1,175)
-------------------------------------- ----- ----------------- ------------ ---------------
(Loss)/Profit and total comprehensive
income for the year (2,947) 3,340 5,349
-------------------------------------- ----- ----------------- ------------ ---------------
Earnings per share
Basic and diluted (pence per share) 7 (1.1) 1.2 1.9
Adjusted (pence per share)(1) 7 (1.1) 1.2 2.6
-------------------------------------- ----- ----------------- ------------ ---------------
1. Adjusted earnings per share is defined as earnings per share excluding Adjusted Items.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2018
30 June 31 December
2017 2017
30 June
2018 (unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
------------------------------------- ----- -------------------- ------------ -----------
Non-current assets
Goodwill 10 19,168 19,168 19,168
Other intangible assets 101,250 100,625 100,975
Property, plant and equipment 22,131 26,450 24,009
Interest in associate 4 1,039 - -
Deferred tax assets 763 909 1,015
------------------------------------- ----- -------------------- ------------ -----------
144,351 147,152 145,167
------------------------------------- ----- -------------------- ------------ -----------
Current assets
Trade and other receivables 12,040 11,700 7,082
Current tax assets 61 - -
Prepayments 5,865 5,729 6,341
Cash and cash equivalents 8 11,818 10,634 18,630
------------------------------------- ----- -------------------- ------------ -----------
29,784 28,063 32,053
------------------------------------- ----- -------------------- ------------ -----------
Total assets 174,135 175,215 177,220
------------------------------------- ----- -------------------- ------------ -----------
Current liabilities
Trade and other payables (13,419) (13,204) (12,634)
Current tax liabilities - (943) (1,003)
Provisions (1,109) (305) (1,307)
Deferred revenue and lettings refund
liability (4,937) (4,353) (4,524)
------------------------------------- ----- -------------------- ------------ -----------
(19,465) (18,805) (19,468)
------------------------------------- ----- -------------------- ------------ -----------
Net current assets 10,319 9,258 12,585
Non-current liabilities
Deferred tax liabilities (16,830) (16,830) (16,830)
------------------------------------- ----- -------------------- ------------ -----------
(16,830) (16,830) (16,830)
------------------------------------- ----- -------------------- ------------ -----------
Total liabilities (36,295) (35,635) (36,298)
------------------------------------- ----- -------------------- ------------ -----------
Net assets 137,840 139,580 140,922
------------------------------------- ----- -------------------- ------------ -----------
Equity
Share capital 2,751 2,751 2,751
Own shares held (720) (720) (720)
Other capital reserve 2,582 2,582 2,582
Capital redemption reserve 71 71 71
Retained earnings 133,156 134,896 136,238
------------------------------------- ----- -------------------- ------------ -----------
Total equity 137,840 139,580 140,922
------------------------------------- ----- -------------------- ------------ -----------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended 30 June 2018
Own Other Capital
Share shares capital redemption Share Retained Total
capital held reserve reserve premium earnings equity
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ----- -------- -------- -------- ----------- -------- --------- --------
Balance at 1 January
2018 2,751 (720) 2,582 71 - 136,238 140,922
------------------------- ----- -------- -------- -------- ----------- -------- --------- --------
Total comprehensive loss
for the year - - - - - (2,947) (2,947)
Dividends 6 - - - - - (742) (742)
Credit to equity for
share based payments - - - - - 607 607
------------------------- ----- -------- -------- -------- ----------- -------- --------- --------
Balance at 30 June 2018
(unaudited) 2,751 (720) 2,582 71 - 133,156 137,840
------------------------- ----- -------- -------- -------- ----------- -------- --------- --------
Own Other Capital
Share shares capital redemption Share Retained Total
capital held reserve reserve premium earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---- -------- -------- -------- ----------- -------- --------- --------
Balance at 1 January
2017 2,751 (1,540) 2,582 71 - 132,777 136,641
=========================== ==== ======== ======== ======== =========== ======== ========= ========
Total comprehensive income
for the period - - - - - 3,340 3,340
Dividends 6 - - - - - (908) (908)
Exercise of shares from
EBT - 820 - - - (820) -
Credit to equity for
share based payments - - - - - 507 507
Balance at 30 June 2017
(unaudited) 2,751 (720) 2,582 71 - 134,896 139,580
--------------------------- ---- -------- -------- -------- ----------- -------- --------- --------
Own Other Capital
Share shares capital redemption Share Retained Total
capital held reserve reserve premium earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ------------ -------- -------- ----------- -------- --------- --------
Balance at 1 January
2017 2,751 (1,540) 2,582 71 - 132,777 136,641
----------------------- ------------ -------- -------- ----------- -------- --------- --------
Total comprehensive
income for the year - - - - - 5,349 5,349
Dividends 6 - - - - - (2,089) (2,089)
Exercise of shares
from EBT - 820 - - - (820) -
Credit to equity for
share based payments - - - - - 1,021 1,021
----------------------- ------------ -------- -------- ----------- -------- --------- --------
Balance at 31 December
2017 2,751 (720) 2,582 71 - 136,238 140,922
----------------------- ------------ -------- -------- ----------- -------- --------- --------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Six months ended 30 June 2018
Six months to
30 June 2018
Six months Year ended
to 30 June 31 December
(unaudited) 2017 (unaudited) 2017 (audited)
Notes GBP'000 GBP'000 GBP'000
---------------------------------------------- ------------- ------------------- ---------------
Operating activities
Operating (loss)/profit (2,776) 3,814 6,593
Adjustments for:
Depreciation of property, plant and equipment 2,172 2,512 4,847
Loss on adjusted items - - 447
Other gains 257 - -
(Gain)/loss on disposal of property, plant
and equipment (125) 230 (59)
Amortisation of intangibles 75 51 101
(Decrease)/Increase in provisions (198) 17 1,021
Share based payment charges 715 535 1,292
Operating cash flows before movements in
working capital 120 7,159 14,242
(Increase)/Decrease in receivables (4,482) (3,994) 11
Increase in payables 1,229 1,742 1,334
Cash generated by operations (3,133) 4,907 15,587
Income taxes paid (1,380) (1,112) (2,136)
---------------------------------------------- ------------- ------------------- ---------------
Net cash (absorbed by)/ from operating
activities (4,513) 3,795 13,451
---------------------------------------------- ------------- --------- -------- ---------------
Investing activities
Interest received 31 (3) 1
Proceeds on disposal of property,
plant and equipment 314 20 340
Purchases of property, plant and
equipment (484) (1,134) (1,507)
Purchases of intangibles (350) (572) (972)
Purchases of investments (1,039) - -
Net cash used in investing activities (1,528) (1,689) (2,138)
---------------------------------------------- ------------- --------- -------- ---------------
Financing activities
Dividends paid 6 (742) (908) (2,089)
Interest paid (29) (40) (70)
Net cash used in financing activities (771) (948) (2,159)
---------------------------------------------- ------------- --------- -------- ---------------
Net (Decrease)/ Increase in cash
and cash equivalents (6,812) 1,158 9,154
Cash and cash equivalents at beginning
of year 18,630 9,476 9,476
---------------------------------------------- ------------- --------- -------- ---------------
Cash and cash equivalents at end
of year 11,818 10,634 18,630
---------------------------------------------- ------------- --------- -------- ---------------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT
1. General information
Foxtons Group plc (the "Company") is a company incorporated in
the United Kingdom under the Companies Act. 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.
2. Significant accounting policies
The consolidated preliminary results of the Company for the half
year ended 30 June 2018 comprise the Company and its
subsidiaries.
The annual financial statements of Foxtons Group plc are
prepared in accordance with IFRSs as adopted by the European Union.
The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting',
as adopted by the European Union.
These condensed financial statements have been prepared on the
historical cost basis. Historical cost is generally based on the
fair value of the consideration given in exchange for the
assets.
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Financial Reviews. The Financial Review also
includes a summary of the Group's financial position and its cash
flows.
After making enquiries, the Directors have a reasonable
expectation that the Group and Company have adequate resources to
continue in operational existence for the foreseeable future,
having considered the Group and Company forecasts and projections,
taking account of reasonably possible changes in trading
performance and the current economic uncertainty. Accordingly, they
have adopted the going concern basis in preparing the financial
statements.
The financial information for the half year ended 30 June 2018
does not constitute statutory accounts as defined in sections 435
(1) and (2) of the Companies Act 2006. Statutory accounts for the
year ended 31 December 2017 have been delivered to the Registrar of
Companies and those for 2017 will be delivered following the
Company's Annual General Meeting convened for 17 May 2018. 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.
The accounting policies applied by the Group in these
consolidated preliminary results are the same as those applied by
the Group in the Foxtons Group plc annual financial statements for
the year ended 31 December 2017, with the exception of certain new
standards and interpretations adopted in the current period which
had no significant effect on the Group's results, unless stated
herein and specifically within note 4.
Seasonality of the business is discussed in the financial review
section.
3. 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
Directors are the chief operating decision-makers in accordance
with the requirements of IFRS 8 'Operating segments'.
The operating and reportable segments of the Group are (i)
Sales, (ii) Lettings and (iii) Mortgage Broking.
The Sales segment generates commission on sales of residential
property. The Lettings segment earns fees from the letting and
management of residential properties and income from interest
earned on tenants' deposits. As these two segments operate out of
the same premises and share support services, a significant
proportion of costs have to be apportioned between the segments.
The basis of apportionment used is headcount in each segment.
The Mortgage Broking segment receives commission from the
arrangement of mortgages and related products under contracts with
financial service providers and receives administration fees from
clients.
The accounting policies of the operating segments are the same
as the Group's accounting policies described in note 2. Adjusted
EBITDA represents the profit before tax for the period earned by
each segment before allocation of finance costs, finance income,
other gains, depreciation, amortisation, profit on disposal of
fixed assets, share based payments and Adjusted items. This is the
measure reported to the Directors for the purpose of resource
allocation and assessment of segment performance.
Adjusted items include costs or revenues which due to their
size, incidence and departure from the Group's strategy require
disclosure in the financial statements to give a true
representation of the underlying performance of the Group and allow
comparability of performance from one period to another.
All revenue for the Group is generated from within the UK and
there is no intra-group revenue.
Segment revenues and results
The following is an analysis of the Group's revenue and results
by reportable segment for the half year ended 30 June 2018:
Notes Mortgage
Sales Lettings Broking Consolidated
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- ------- --------- --------- --------- ---------------------
Revenue 17,167 31,736 4,090 52,993
------------------------------------------ --------- --------- --------- ---------------------
Contribution(1) 8,787 22,853 1,927 33,567
Contribution margin(2) 51.2% 72.0% 47.1% 63.3%
------------------------------------------ --------- --------- --------- ---------------------
Adjusted EBITDA (3,612) 3,002 671 61
Adjusted EBITDA margin (21.0%) 9.5% 16.4% 0.1%
------------------------------------------ --------- --------- --------- ---------------------
Depreciation (2,172)
Amortisation (75)
Profit on disposal of property,
plant and equipment 125
Other gains 257
Finance income 31
Finance cost (29)
Share based payment charge (715)
------------------------------------------ --------- --------- --------- ---------------------
Loss before tax (2,517)
------------------------------------------ --------- --------- --------- ---------------------
1. Contribution is defined as revenue less directly attributable
salary costs and bad debts in each business unit.
2. Contribution margin is defined as Contribution divided by revenue.
3. 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.
The following is an analysis of the Group's revenue and results
by reportable segment for the half year ended 30 June 2017:
Mortgage
Sales Lettings Broking Consolidated
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- --------- --------- --------- -------------
Revenue 22,252 32,069 4,220 58,541
--------------------------------------- --------- --------- --------- -------------
Contribution(1) 13,593 23,424 2,077 39,094
Contribution margin(2) 61.1% 73.0% 49.2% 66.8%
--------------------------------------- --------- --------- --------- -------------
Adjusted EBITDA 1,452 4,926 763 7,141
Adjusted EBITDA margin 6.5% 15.4% 18.1% 12.2%
--------------------------------------- --------- --------- --------- -------------
Depreciation (2,512)
Amortisation (51)
Profit on disposal of property, plant
and equipment (230)
Finance income (3)
Finance cost (40)
Share based payment charge (534)
--------------------------------------- --------- --------- --------- -------------
Profit before tax 3,771
--------------------------------------- --------- --------- --------- -------------
1. Contribution is defined as revenue less directly attributable
salary costs and bad debts in each business unit.
2. Contribution margin is defined as Contribution divided by revenue.
3. 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.
4. Interest in Associate
During the period, the company acquired an interest in an
associate as follows:
2018 2017
GBP'000 GBP'000
Name Country of incorporation
------------------------------- --------- ---------
Propoly Limited United Kingdom 1,039 -
------------------------------- --------- ---------
Opening balance - -
Additions 1,039 -
Share of results - -
----------------- ------
Closing balance 1,039 -
----------------- ------
The company has a seat on the board of directors and can
exercise significant influence over the business and as such will
equity account its interest.
5. Tax
Six months
to 30 June
2018
Six months Year ended
to 30 June 31 December
(unaudited) 2017 (unaudited) 2017 (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------
Current tax
Current tax charge 316 872 1,955
Deferred tax (credit)/charge 114 (441) (780)
------------------------------------- ------------ ----------------- ---------------
Tax on profit on ordinary activities 430 431 1,175
------------------------------------- ------------ ----------------- ---------------
From 1 April 2017, the UK corporate tax rate fell to 19% and
there will be a further reduction in the UK corporation tax rate to
17% from April 2020. The effective corporation tax rate for the
year ended 31 December 2018 is likely to be circa -20% (year ended
31 December 2017: 17%) of the estimated loss for the period.
6. Dividends
Six months
to 30 June
2018
Six months Year ended
to 30 June 31 December
(unaudited) 2017 (unaudited) 2017 (audited)
GBP'000 GBP'000 GBP'000
---------------------------------------------- ------------
Amounts recognised as distributions to equity
holders in the period:
Final and special dividends year ended 31
Dec 2016: 0.33p (2015: 6.23p) per ordinary
share - 908 908
Interim dividends year ended 31 Dec 2017:
0.43p (2016: 1.67p) per ordinary share - - 1,181
Final and special dividends year ended 31
Dec 2017: 0.27p (2016: 0.33p) per ordinary
share 742 -
---------------------------------------------- ------------ ----------------- ---------------
742 908 2,089
---------------------------------------------- ------------ ----------------- ---------------
As the company did not make a profit this period at the profit
after tax level, in line with policy, the Board has taken the
decision to not pay an interim dividend.
7. Earnings per share
Six months
to 30 June
2018
Six months Year ended
to 30 June 31 December
(unaudited) 2017 (unaudited) 2017 (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------------
Earnings for the purposes of basic and
diluted earnings per share being profit
for the half year (2,947) 3,340 5,349
Adjusted for:
Adjusted items(1) - - 1,909
Adjusted earnings (2,947) 3,340 7,258
Number of shares
Weighted average number of ordinary shares
for the purposes of basic earnings per
share 274,870,477 274,710,237 274,791,016
Effect of dilutive potential ordinary
shares 899,373 525,366 727,703
------------------------------------------- ------------ ----------------- ---------------
Weighted average number of ordinary shares
for the purpose of diluted earnings per
share 275,769,850 275,235,603 275,518,719
------------------------------------------- ------------ ----------------- ---------------
Basic and diluted earnings per share (in
pence per share) (1.1) 1.2 1.9
------------------------------------------- ------------ ----------------- ---------------
Adjusted earnings per share (in pence
per share) (1.1) 1.2 2.6
------------------------------------------- ------------ ----------------- ---------------
(1) Adjusted items totalling GBP2,277k, less associated tax of
GBP368k, resulting in an after tax cost of GBP1,909k
8. Cash and cash equivalents
Cash and cash equivalents comprise cash and short-term bank
deposits with an original maturity of three months or less, net of
outstanding bank overdrafts. The carrying amount of these assets is
approximately equal to their fair value. Cash and cash equivalents
excludes client monies. See note 12.
9. Financial instruments
The Group does not hold any financial instruments categorised as
level 1, 2 or 3 as detailed by IFRS 13.
Management considers that the book value of financial assets and
liabilities recorded at amortised cost and their fair value are
approximately equal.
The book value and fair value of the Group's financial assets
and liabilities are as follows:
Six months
to 30 June
2018
Six months Year ended
to 30 June 31 December
(unaudited) 2017 (unaudited) 2017 (audited)
GBP'000 GBP'000 GBP'000
---------------------------- ------------ ----------------- ---------------
Cash and cash equivalents 11,818 10,634 18,630
---------------------------- ------------ ----------------- ---------------
Trade and other receivables 12,040 11,700 7,082
---------------------------- ------------ ----------------- ---------------
Trade and other payables (13,419) (13,204) (12,634)
---------------------------- ------------ ----------------- ---------------
Cash and cash equivalents comprise cash and short-term bank
deposits with an original maturity of three months or less, net of
outstanding bank overdrafts. Cash and cash equivalents exclude
client monies. See note 12.
10. Goodwill
Impairment review
Goodwill of GBP19,168k as at 30 June 2018 and 30 June 2017 has
been allocated to segments as follows: Sales GBP9,819k, Lettings
GBP9,349k and mortgage broking (GBPnil). The brand intangible asset
as at 30 June 2018 and 30 June 2017 is GBP99,000k and relates to
the Sales and Lettings business combined.
As set out in the Chief Executive's Review, the sales market has
remained very subdued during the first half of 2018, principally as
a result of declining transaction volumes, where sales revenue fell
23% compared to the first half of 2017. The subdued market and
further decline in performance from 2017, together with the
performance of sales against forecast in the first half, is
considered to represent an impairment indicator and therefore
management has undertaken a full impairment review at 30 June in
respect of the Group's intangible assets.
Management has historically assessed the Group's intangible
assets for impairment using the Group's three year business plan.
However, given the extended nature of the current downturn and the
associated macro political environment, the length of the forecast
period has been extended from 3 to 5 years, so as to recognise the
potentially prolonged nature of the expected sales market
recovery.
The impairment review has been undertaken using cash flow
projections from formally approved budgets and forecasts covering a
five-year period for each cash generating unit (CGU). The key
assumptions in determining the cash flows are expected changes in
sales and lettings volumes throughout the forecast period, together
with likely changes to associated direct costs to be incurred
during the forecast period. These assumptions are based upon a
combination of past experience of recently observable trends and
expectations of future changes in the market.
To evaluate the recoverable amount of each CGU, a terminal value
has been assumed after the fifth year and includes a growth rate in
the cash flows of 2.0% (2017:2.0%) into perpetuity. The discount
rates used reflect the risks specific to the CGUs. The pre-tax rate
used to discount cash flows from Sales is 9.9% (2017: 9.9%), from
Lettings is 9.4 % (2017: 9.4%) and from the aggregation of Sales
and Lettings is 9.7% (2017: 9.7%)
The brand asset has been tested for impairment by aggregating
the value in use amounts computed in the goodwill impairment test
for Sales and Lettings. This grouping of CGUs represents the lowest
level at which management monitors the brand internally, and
reflects the way in which the brand asset is viewed as relating to
the Sales and Lettings segments as a whole, rather than being
allocated to each segment on an arbitrary basis.
It remains management's view that given the relative stability
of the Lettings CGU, the significant uncertainty over the extent
and timing of the recovery in the Sales CGU represents the key
judgement and the impairment assessment is highly sensitive to
these assumptions. Assuming a reduction in sales revenue against
forecast of 10% per annum, and including appropriate controllable
cost mitigations, the headroom over the Sales goodwill is reduced
to nil. The headroom over the brand asset reduces to nil if sales
revenue reduces by 21% per annum against forecast, including
appropriate controllable cost mitigations.
As set out in the Chief Executive's Review, the short term
outlook is mixed, and whilst our under offer sales pipeline has
recovered to a similar level to last year, there is less visibility
on exchanges proceeding. However, in the medium term we believe
transaction levels will improve because London has strong
fundamentals, not least an underlying structural demand driven by
limited housing stock, although there remains uncertainty over the
timing of this recovery.
11. Related party transactions
Balances and transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note.
Trading transactions
During the period, no Group companies entered into transactions
with related parties who are not members of the Group.
12. Client monies
At 30 June 2018, client monies (all held by Foxtons Limited) in
approved bank and building society accounts amounted to GBP92.5
million (30 June 2017: GBP90.5 million). Neither this amount nor
the matching liabilities to the clients concerned are included in
the consolidated balance sheet. Foxtons Limited's terms and
conditions provide that interest income on these deposits accrues
to the Company.
Client funds are protected by the Financial Services
Compensation Scheme (FSCS) under which the government guarantees
amounts up to GBP85,000 each. This guarantee applies to each
individual client's deposit monies, not the sum total on
deposit.
13. Operating cash conversion and net free cash flow
The Group utilises two key performance indicators for cash,
namely:
-- Operating cash conversion; and
-- Net free cash flow
Operating cash conversion is defined as the ratio of Adjusted
operating cash to Adjusted EBITDA. Adjusted operating cash is
defined as Adjusted EBITDA less the movement in working capital and
net capital spend.
Six months
to 30 June
2018
Six months Year ended
to 30 June 31 December
(unaudited) 2017 (unaudited) 2017 (audited)
GBP'000 GBP'000 GBP'000
------------------------------------------- --- ------------ ----------------- ---------------
Adjusted EBITDA 61 7,141 15,051
------------------------------------------------ ------------ ----------------- ---------------
(Increase)/Decrease in receivables (4,482) (3,994) 11
Other gains included in receivables 257 - -
Increase in payables 1,927 1,770 1,334
Adjusted items included in payables
and provisions (730) - (1,467)
(Decrease)/Increase in provisions (198) 18 1,021
Purchases of property, plant and equipment (484) (1,134) (1,507)
Less NI on share based payment 32 (28) -
Purchases of intangibles (350) (572) (972)
Purchases of investments (1,039) - -
Proceeds on disposal of property,
plant and equipment 314 20 340
------------------------------------------------ ------------ ----------------- ---------------
Adjusted operating cash (4,692) 3,221 13,811
------------------------------------------------ ------------ ----------------- ---------------
Operating cash conversion - 45.1% 91.8%
------------------------------------------------ ------------ ----------------- ---------------
Net free cash flow is used as a measure of financial
performance. It is defined as net cash from operating activities
less net cash used in investing activities exclusive of exceptional
items.
Six months
to 30 June
2018
Six months Year ended
to 30 June 31 December
(unaudited) 2017 (unaudited) 2017 (audited)
GBP'000 GBP'000 GBP'000
---------------------------------------------- --- ------------ ----------------- ---------------
Net cash from operating activities (4,513) 3,795 13,451
--------------------------------------------------- ------------ ----------------- ---------------
Investing activities
Interest received 31 (3) 1
Proceeds on disposal of property,
plant and equipment 314 20 340
Purchases of property, plant and equipment(1) (484) (1,134) (1,507)
Purchases of investments (1,039) - -
Purchases of intangibles (350) (572) (972)
--------------------------------------------------- ------------ ----------------- ---------------
Net cash used in investing activities (1,528) (1,689) (2,138)
--------------------------------------------------- ------------ ----------------- ---------------
Net free cash flow (6,041) 2,106 11,313
--------------------------------------------------- ------------ ----------------- ---------------
INDEPENT REVIEW REPORT TO FOXTONS GROUP PLC
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2018 which comprises the condensed
consolidated statement of comprehensive income, the condensed
consolidated statement of financial position, the condensed
consolidated statement of changes in equity, the condensed
consolidated cash flow statement and related notes 1 to 13. We have
read the other information contained in the half-yearly financial
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
Company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2018 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Deloitte LLP
Statutory Auditor
London, United Kingdom
30 July 2018
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR SEFFMWFASEEW
(END) Dow Jones Newswires
July 30, 2018 02:00 ET (06:00 GMT)
Foxtons (LSE:FOXT)
Historical Stock Chart
From Apr 2024 to May 2024
Foxtons (LSE:FOXT)
Historical Stock Chart
From May 2023 to May 2024