Strategic Report
1 2023 Highlights
2 About Us
4 Chairman’s Statement
6 Chief Executive’s review
9 Q&A with Guy Gittins
10 The London Property Market
12 Resilient Business Model
14 Foxtons Operating Platform
16 Delivering Against Our Strategy
18 Stakeholder Engagement
22 Key Performance Indicators
24 Financial review
32 Risk Management
34 Principal Risks and Uncertainties
38 Prospects and Viability
40 Responsible Business
63
Non-financial Information and
Sustainability Statement
Corporate Governance Report
64 Chairman’s Governance Introduction
66 Board of Directors
68 Executive Leadership Team
69 Corporate Governance Report
78 Nomination Committee Report
84
Environmental, Social and
Governance Committee Report
86 Audit Committee Report
92 Directors' Remuneration Report
122 Directors’ Report
125 Directors’ Responsibilities Statement
Financial Statements
126
Independent Auditor’s report to the
Members of Foxtons Group plc
134 Consolidated Income Statement
135 Consolidated Statement of Comprehensive Income
136 Consolidated Statement of Financial Position
137 Consolidated Statement of Changes in Equity
138 Consolidated Cash Flow Statement
139 Notes to the Financial Statements
179 Parent Company Statement of Financial Position
180 Parent Company Statement of Changes in Equity
181 Notes to the Parent Company Financial Statements
Information for Shareholders
183 Information for Shareholders
CONTENTS
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 1
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
2023 HIGHLIGHTS
FINANCIAL HIGHLIGHTS
Revenue
from continuing operations
+5%
£147.1 million
2022: £140.3 million
Adjusted
operating profit
1
from continuing operations
+2%
£14.3 million
2022: £13.9 million
Adjusted EBITDA
1
from continuing operations
+6%
£17.5 million
2022: £16.5 million
Profit before tax
2
from continuing operations
34%
£7.9 million
2022: £11.9 million
Adjusted earnings
per share
3
from continuing operations
3.0p
2022: 3.1p
Non-cyclical and
recurring revenues
4
from continuing operations
72%
of total revenue
2022: 65% of total revenue
OTHER HIGHLIGHTS
Lettings
market share
4
+16%
6.0%
2022: 5.1%
Sales
market share
4
+21%
4.1%
2022: 3.4%
Customer
satisfaction
4
Trustpilot
4.7 OUT OF 5
2022: 4.7 out of 5
1
Measures are alternative performance measures (APMs). APMs are defined, purpose explained and reconciled to
statutory measures within Note 28 of the financial statements. Adjusted EBITDA excludes share-based payment charges
(2023: £1.0 million; 2022: £0.9 million) in order to be consistent with the definition of adjusted EBITDA used to calculate
the Group’s revolving credit facility covenants.
2
Proft before tax includes £4.5 million of adjusted item charges primarily reflecting one-off charges relating to the
integration of the Ludlow Thompson acquisition. On an adjusted basis, adjusted profit before tax is up 3% at £12.4 million
(2022: £12.0 million) as reconciled in Note 28 of the financial statements.
3
Refer to Note 9 of the financial statements for a reconciliation of adjusted earnings per share to statutory earnings per share.
On a statutory basis, earnings per share from continuing operations is 1.8p (2022: 3.0p).
4
Refer to PAGES 22 AND 23 for definitions of these key performance indicators.
*Source: TwentyCI data, H1 2023 v H1 2022 market share and market growth of New Instructions at a brand level
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FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 20232
ABOUT US
Founded in 1981, Foxtons started as a two-person estate agency in Notting Hill
and established itself as an iconic estate agency brand. Today the Group
operates from a network of interconnected single brand branches providing a
range of residential property services through our Lettings, Sales and Financial
Services businesses. Lettings, which now contributes around 70% of total
revenue, is the largest part of the Group, delivering non-cyclical and recurring
revenues from a portfolio of over 28,000 tenancies.
*
Source TwentyCI data, 2023 v 2022 market share and market growth of new instructions at brand level.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 3
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
OUR PURPOSE
TO GET THE RIGHT DEAL DONE
FOR LONDON’S PROPERTY OWNERS
OUR MISSION
TO BE LONDON'S GOTO ESTATE AGENT
Read more about our purpose on PAGE 70
OUR VALUES
INNOVATIVE
PROFESSIONAL
AMBITIOUS
RELENTLESS
AUTHORITATIVE
4 STRATEGIC PRIORITIES
SALES
MARKET SHARE GROWTH
FINANCIAL SERVICES
REVENUE GROWTH
Read more about our values on PAGE 57Read more about our strategic priorities on
PAGES 16 AND 17
LETTINGS
ACQUISITIVE GROWTH
LETTINGS
ORGANIC GROWTH
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 20234
CHAIRMAN'S STATEMENT
I am confident that there is significant further
progress that Foxtons can and will make, due
to the management leadership, the scalable
technology platform, the customer database,
and the prominence of the brand.”
Nigel Rich CBE Chairman
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 5
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Following his appointment in September 2022, 2023 was Guy Gittins’
first full year as CEO. Under his leadership it was a transformational
year for the business, putting Foxtons firmly on the front foot
with fee earner headcount rebuilt across the business, the culture
re-energised, the data and technology capabilities upgraded, and
the brand reinvigorated.
Significant changes to the culture within the Company have improved
employee retention and motivation leading to better customer
service and enabling us to reclaim our leading position in our sector
of the market.
Helped by a series of acquisitions since 2020, around 70% of the
Group’s revenues are now derived from the Lettings business, creating
a more recurring and resilient earnings stream, and lessening the
impact of the volatility of the sales market. In addition, much effort
has been made to successfully rebuild the market share of our Sales
business, which should lead to better results going forward.
Building new data capabilities onto Foxtons’ technology platform
has been a major focus in order to deliver a competitive advantage
and unlock the latent value in Foxtons’ unique database, which has
been built up over the last 20 years. The platform drives fee earner
productivity, enables organic market share growth, and due to its
scalability facilitates the efficient integration of lettings acquisitions.
Market and financials
The sales market was challenging in 2023 as a consequence of high
interest rates and their effect on the mortgage market. As a result,
sales transaction volumes in London were down 22% compared with
2022. In contrast, the lettings market was strong due a high level of
tenant demand and shortage of stock leading to a sustained rise in
rental levels in the year.
Revenue was up 5% to £147.1 million, with Lettings delivering
£101.2 million, and surpassing the £100 million milestone for the
first time. Adjusted operating profit increased marginally from
£13.9 million to £14.3 million. The revenue increase was greater
than the profit increase largely due to the costs of rebuilding our
capabilities across the organisation.
As a result of using debt to fund our latest lettings acquisition, we
ended the year with net debt of £6.8 million (2022: £12.0 million
net cash). In addition to £13.9 million spent on acquisitions, changes
in our billing practices to improve our competitiveness in the lettings
market resulted in a negative movement in our working capital of
£10.8 million as explained in the Financial Review on
PAGE 24.
In June the Group’s revolving credit facility was refinanced and the
new facility provides £20 million of committed borrowing capacity
until June 2026, with an option to extend for two years thereafter.
The terms have remained materially the same as the previous facility.
Dividends and share buybacks
With more recurrent and resilient earnings, as a result of the
investments in lettings businesses, the Board has decided to adopt
a progressive dividend policy with respect to the 2024 financial year.
The aim being to offer a reliable and growing income stream to
investors whilst still being able to maintain our current capital
allocation policy.
For 2023, the Board is proposing a final dividend of 0.7p per share
under the existing policy, the same as the final dividend for 2022.
Under the new policy we would expect total dividends paid in 2024
and 2025 to at least maintain the level paid in 2022 and 2023.
£1.1 million of share buybacks were completed during the year at
an average price of 38p per share. The Board will continue to keep
share buybacks under review in the context of other potential uses
of capital.
Board
Annette Andrews and Jack Callaway joined the Board in February
2023. Annette chairs the Remuneration Committee and brings
considerable knowledge of people management and related
remuneration skills to her role. Jack is a very experienced investment
banker with M&A expertise. Their respective skills are invaluable to
the Board and the Company.
Medium-term outlook
I am confident that there is significant further progress that Foxtons
can and will make, due to the management leadership, the scalable
technology platform, the customer database, and the prominence
of the brand. We will continue to drive organic growth in Lettings,
supplemented by further acquisitions. And, as the market share of
Sales increases, so will its contribution to the Group’s results with
Financial Services also a beneficiary from the greater number of
sales transactions. We firmly believe that we are on track to deliver
£25 million to £30 million of adjusted operating profit over the
medium term.
Nigel Rich CBE
Chairman
4 March 2024
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 20236
CHIEF EXECUTIVE'S STATEMENT
Following a year of reinvigorating the business, and
with improving market conditions, the Group is on track
to deliver against its target of £25 million to £30 million
of adjusted operating profit over the medium term and
live up to our brand ethos: “We get it done”.”
Guy Gittins Chief Executive Officer
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 7
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
2023 was a year of significant turnaround and growth for Foxtons,
as operational upgrades and investment in the Foxtons Operating
Platform drove good operational and financial progress despite a
significantly weaker sales market backdrop, highlighting the Group’s
increased resilience.
Upon joining the business 18 months ago, I initiated an operational
review which, as reported in March 2023, revealed just how much
of the Foxtons’ competitive edge had been eroded. Operational
upgrades have been delivered at pace and ahead of the planned
timeframes, demonstrating the talent and commitment within
the business. Consequently, 2023 was a year of investing in core
capabilities, building fee earners to an appropriate level and reigniting
the culture to attract, develop and retain the best talent.
A lot has been achieved in a short space of time, as the business has
embraced change and developed a sense of urgency in execution.
We delivered record Lettings revenue of over £100 million and
significantly grew market share across all our businesses; Lettings
market share of instructions grew 16%, Sales market share of
exchanges grew 21% and Financial Services share of mortgage
underwriting grew 11%. Foxtons is now the largest lettings estate
agency brand in the UK and was the fastest growing large UK lettings
and sales estate agency brand in 2023.
Key aspects of the business have now been transformed, and most
significantly, we have strengthened the Foxtons Operating Platform,
the most comprehensive and advanced platform in UK estate agency
underpinned by leading technology and data capabilities. The
platform is a key driver of our future growth and strengthens
Foxtons’ position as an effective sector consolidator.
At the start of 2023, I set out my vision to once again make
Foxtons London’s go-to agent and deliver £25 million to £30 million
of adjusted operating profit in the medium term. Our progress is on
track, and with improving market conditions, I am confident we
will deliver our medium term profit target through organic and
acquisitive growth.
2023 market conditions
The Lettings market in London remains attractive, as high levels
of demand underpin rents and create a valuable non-cyclical and
recurring market dynamic. Rental prices rose in the first half of 2023,
as high levels of tenant demand outstripped supply, driving price
growth. This dynamic eased in the second half of 2023, as stock levels
increased and tenant demand normalised, with rental price growth
moderating, albeit at elevated levels.
In comparison, the sales market remained weak through 2023, as
the impact of the September 2022 mini-budget, higher interest rates
and a weaker macroeconomic backdrop weighed on buyer demand
and affordability levels. The sales market in London was over 24%
lower in value versus the prior year and reflected a 22% reduction in
transaction volumes and a 2.4% reduction in average prices. In fact,
transaction volumes were at some of the lowest levels since 2008
and 2020, years impacted by the Global Financial Crisis and the
Covid-19 market shutdown respectively. More positively, with
mortgage rates starting to dip below 4% towards the end of the
year there was an increase in buyer demand, reflecting high levels
of pent-up demand in the market.
Financial results
The business delivered a modest increase in adjusted operating profit,
despite a much weaker sales market and investments in rebuilding
core capabilities, driven by the enhanced size of our Lettings business
which provides more recurring and non-cyclical earnings.
Revenue was up 5% to £147.1 million and adjusted operating profit
was up 2% to £14.3 million. Profit before tax was down 34% to
£7.9 million, but up 3% to £12.4 million on an adjusted basis which
excludes one-off restructuring charges. The cost savings associated
with the restructuring charges will provide annualised cost savings
of c.£3 million as the Group delivers acquisition synergies and
consolidates certain branches within the Foxtons network. Net debt
at the end of the period was £6.8 million reflecting our decision to
utilise debt to accelerate our acquisition strategy.
Lettings revenue was up 16% to £101.2 million, and at an improved
margin of 26%, delivered £25.8 million of adjusted operating profit.
Operational improvements, including increased cross-sell of higher
value property management services and a focus on securing longer
tenancies, alongside higher rental prices, increased organic revenue
by 7%. £3.9 million of incremental acquisition revenue, alongside the
delivery of cost synergies, and £4.1 million of additional interest on
client monies also contributed to revenue and earnings growth.
Significant market share gains were delivered in Sales, outperforming
a challenging market which was down over 24% in value. Against this
backdrop, Sales revenue was down c.14% versus 2022. Sales made an
adjusted operating loss of £10 million due to lower revenues and
investment in fee earner headcount to rebuild capacity and bench
strength. With the right number of fee earners now in the business,
and significantly better fee earner retention, the Sales business has
a clear path to profitability under improving market conditions and
increasing levels of market share.
Financial Services revenue was 14% lower at £8.8 million as
non-cyclical and recurring refinance mortgage volumes and market
share gains partially mitigated lower purchase mortgage volumes.
Delivering our strategic priorities
Our strategy is to deliver long-term growth by growing non-cyclical and
recurring Lettings revenues, both organically and through acquisition,
alongside returning the Sales business to profitability. By doing so, our
target is to deliver £25 million to £30 million of adjusted operating
profit in the medium term and create significant shareholder value.
Whilst significant progress has already been made, and the Group is
on track with delivery of its medium-term profit target, fundamentally
2023 was a year of rebuilding for the business. I am confident further
growth lies ahead, as we fully leverage the capabilities of the unique
Foxtons Operating Platform.
At the end of 2023, the Group has delivered good progress against
its strategic priorities:
1. Lettings organic growth: 7% organic revenue growth in 2023
(excluding growth in interest on client monies), with total Lettings
revenue passing the £100 million revenue milestone for the first time
in Foxtons’ history.
Medium-term target: 3% – 5% revenue CAGR.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 20238
CHIEF EXECUTIVE'S STATEMENT CONTINUED
2. Lettings acquisitions: Completed the acquisitions of Atkinson
McLeod and Ludlow Thompson in 2023, adding over 2,800 new
tenancies to the Group’s portfolio. Prior acquisitions continue to
perform well, delivering 25% average annual return since acquisition.
With over 3,600 agents in London, the lettings industry is highly
fragmented and so offers significant consolidation opportunities.
Medium-term target: 20%+ return on capital.
3. Sales: Grew sales exchange market share by 21% to 4.1% (2022:
3.4%). Achieving exchange market share of 4.5%, combined with
market volumes recovering to more normalised levels, will support
the Sales business’ return to profitability.
Medium-term target: 4.5%+ exchange market share in the
medium term.
4. Financial Services: 14% revenue decrease resulting from a
significantly weaker mortgage market. Operational upgrades delivered
in the year include investing in adviser capacity and increasing the
cross-sell of Financial Services products across the Group.
Medium-term target: 7% – 10% revenue CAGR.
The Foxtons Operating Platform
Through 2023 we have strengthened the Foxtons Operating
Platform, a unique and industry-leading platform that underpins
our medium-term £25 million to £30 million adjusted operating
profit target. This represents a powerful and unique asset to facilitate
expansion and industry consolidation in the longer-term.
The platform drives high levels of lead generation, deal excellence
and lifetime customer value, whilst also creating high levels of
scalability, all key to delivering growth and ensuring we reach our
adjusted operating profit target in the shortest space of time.
The Foxtons Operating Platform comprises five key elements:
1. “BOS” (Business Operating System) technology platform
The Foxtons Business Operating System, known as “BOS”, is an
end-to-end, fully integrated and internally-developed CRM and
workflow system powering all aspects of the Foxtons business.
BOS is the most advanced technology platform in UK estate
agency and is a key driver of innovation, productivity, workforce
collaboration and Foxtons' unique competitive culture.
As BOS remains fully internally managed and developed, Foxtons is
able is able to deliver process upgrades and new technology products
at speed, in contrast to the majority of estate agents which utilise
third party systems with limited customisation or new product
innovation. This is a significant competitive advantage to the
Group and a key route to driving innovation in the sector.
In 2023, the Group continued to strengthen the BOS platform,
including developing the UK’s first fully digital end-to-end lettings
system allowing tenants to complete a Lettings transaction
completely digitally, which has been a driver in supporting market
share gains in the Lettings business.
2. Foxtons Data Platform
In 2023, we developed and rolled out the Foxtons Data Platform.
The platform is industry leading, combining best in class data
infrastructure, rich historical databases, real-time market data,
and advanced data science capabilities including AI and machine
learning plug-ins.
Foxtons databases have been built up over 20 years, with over
1.6 billion data points including customer and property details,
transactional data, and in-depth customer behaviour insights. Paired
with advanced data science capabilities, the platform is future-fit and
provides a long-term competitive advantage. The platform is already
driving increased market share of property instructions and deals
through data-driven marketing and algorithmic lead-scoring.
In addition, a comprehensive internal reporting suite has been created
and implemented across the business, improving visibility of all
aspects of estate agency performance and enabling data led decision
making. This is driving a cultural shift across the business and is
unlocking operational upgrades to drive outperformance and growth.
3. Hub and spoke operating model
Foxtons operates a unique hub and spoke model with a network of
inter-connected, single-brand branches supported by specialised sales
and operational support teams. This role specialisation drives high
levels of branch productivity with fee earners able to focus on results
for customers, whilst centralised support functions benefit from
economies of scale, optimised processes and best-in-class technology.
Throughout 2023 we forensically reviewed all processes across the
business and, supported by our new reporting suites, have initiated an
optimisation programme to ensure we are always delivering the best
results for customers with the highest levels of service.
As an example, to successfully deliver against our Lettings organic
growth strategy, and retain landlords and drive brand loyalty with
tenants, we must deliver consistently high levels of property
management service excellence. Headcount, training, technology, and
core processes have been enhanced in 2023 to support continuous
improvement in this important area. New real-time customer
experience feedback systems have been implemented alongside new
remuneration packages that are better aligned to customer service
delivery. Today over 40% of Foxtons’ Lettings portfolio is actively
managed, against a long-term average rate of 33%.
In November 2023, as part of the Ludlow Thompson acquisition,
we acquired an out-of-London lettings property management hub.
This hub plays an important role in our Lettings growth strategy, and
will be developed into a property management centre of excellence
focused on customer service delivery, whilst benefitting from reduced
operating costs and a good supply of quality talent.
By expanding the out-of-London hub, and fully utilising existing
branch real estate, we will be able to downsize the Group’s Chiswick
Park headquarters and generate meaningful cost savings. To this end,
we are engaging with our landlord to explore early surrender options
for the lease which ends in 2027.
4. Brand
The Foxtons brand occupies a unique position in London, with the
highest levels of brand recognition in a highly fragmented industry.
However, this asset had been neglected over the past few years
leading to a lack of brand visibility. This was coupled with an unclear
customer proposition as Foxtons increasingly struggled to live up to
its brand ethos: delivering best in class results for customers with the
highest levels of service.
Through 2023, new data-driven marketing initiatives have been
launched that make clear what Foxtons stands for and why landlords
and sellers should choose us, driving growth in brand consideration.
Our website, Foxtons.co.uk, is the most visited estate agent website
in the UK, and by a factor of five compared to the next leading
competitor brand.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 9
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
A focus on providing the highest levels of customer service once again
permeates everything we do at Foxtons. And this, combined with
operational excellence through leveraging the Foxtons Operating
Platform, has allowed us to hold our premium fee position whilst
growing at the fastest rate in the UK and taking a leadership position
in our markets.
5. People, culture and training
Fundamentally, estate agency remains at heart a people business.
And a large part of Foxtons outperformance is driven by focus on
training and retaining the best estate agents alongside a unique
high-performance culture. This area has been neglected over the
past few years with the knock-on impact on performance.
Through 2023 we have invested in fee earner headcount to reflect the
market opportunity, alongside rewarding success, focusing on training
and career progression to support retention, and aligning incentives
with our strategic priorities. In addition, a new employee value
proposition has been implemented and, alongside an overhauled
recruitment approach, is significantly improving the attractiveness of
Foxtons to high-calibre prospective employees. Together, these have
turbocharged a high-performance sales culture, improving Lettings
and Sales fee earner retention rates by 11% and average tenure by
9% compared to 2022, and creating one of the most productive
and engaged workforces in the industry.
2024 trading and outlook
Lettings is expected to remain resilient with the business continuing to
display strong recurring and non-cyclical characteristics. Lettings market
supply and demand dynamics have normalised, with increased levels of
available rental stock and fewer tenants registering for each available
rental property compared to 2023. As expected, year-on-year rental
growth has moderated with rental prices remaining at elevated levels.
Through our leading market position, and by leveraging the Foxtons
Operating Platform, the improved supply of available rental properties
provides a good opportunity to deliver organic market share growth.
In Sales, continued market outperformance, alongside some recovery
in buyer demand levels as mortgage rates have begun to reduce, has
resulted in a 31% year-on-year increase in the value of the under
offer pipeline at the end of February. The growth in the value of the
under-offer pipeline is expected to deliver good year-on-year revenue
growth in the first half of the year, with further growth expected in
the second half if mortgage rates continue to stabilise and pent-up
demand is released.
Financial Services has also benefited from improving mortgage and
sales market conditions, with the underwritten pipeline at the end
of February 16% higher than the same time last year.
Following a year of reinvigorating the business, and with improving
market conditions, the Group is on track to deliver against its target
of £25 million to £30 million of adjusted operating profit over the
medium term and live up to our brand ethos: “We get it done”.
Guy Gittins
Chief Executive Officer
4 March 2024
Q&A WITH GUY GITTINS
HOW WOULD YOU DESCRIBE YOUR
FIRST YEAR IN CHARGE?
It’s been a year of rapid and significant progress.
We have reinvigorated our culture, improved our
processes, refreshed our brand identity and invested
in our data. These changes are already yielding results
– we have regained our position as London’s leading
estate agency. I have been delighted by the enthusiastic
reaction of all my colleagues to the changes we needed
to make at Foxtons. They have embraced the challenges
I have set them, and thanks to their hard work and
dedication, Foxtons is back on top where it belongs.
WHAT IS YOUR FOCUS THIS YEAR?
In 2023 our focus was on rebuilding the business and our
focus this year will be continuing to execute our strategy
to deliver long-term growth by decoupling earnings from
sales market cycles, with a focus on non-cyclical and
recurring revenues. We will also work hard to continue to
win market share and further entrench Foxtons’ position
as London’s leading estate agency.
IS FOXTONS ON TRACK TO MEET ITS
MEDIUMTERM TARGETS?
We are on track to deliver £25 million to £30 million of
adjusted operating profit in the medium term, as we
deliver organic and acquisitive growth, and supported by
improving market conditions. By doing so, we will create
significant shareholder value. Our growth is underpinned
by the Foxtons Operating Platform, which is a unique
and industry-leading platform, that has been significantly
strengthened over the past year.
It’s been a year of rapid and
significant progress. We have
reinvigorated our culture,
improved our processes, refreshed
our brand identity and invested in
our data and in our people.”
Guy Gittins Chief Executive Officer
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202310
THE LONDON PROPERTY MARKET
London is a uniquely valuable residential property market. Historically, the sales market has
displayed cyclical characteristics, while the lettings market is more stable. By operating across
both markets, but with a greater weighting towards non-cyclical lettings revenues, the Group is
well positioned for growth.
LONDON ALREADY FACES A
SHORTAGE OF HOUSING STOCK
having built on average just 30,000 new
homes each year since 2011.
LONDON ACCOUNTED FOR
40%
of the UK’s lettings market value in 2023.
AND WITH LONDON’S
POPULATION EXPECTED TO GROW
by 60,000 people annually over the next
five years, we expect demand within sales
and lettings to remain strong and for process
and rents to remain resilient.
MARKET UNDERPINNED BY LONGTERM SUPPLY AND DEMAND IMBALANCE
25%
OF THE UK'S 2023 PROPERTY
MARKET VALUE IS IN LONDON
13%
OF THE UK POPULATION
LIVES IN LONDON
3,600+
estate agents in London
providing significant
opportunity for sector
consolidation.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
All (3,600+)Top 1,000Top 500Top 100Top 50Top 10
Share of London's lettings
39%
48%
74%
87%
100%
23%
Cumulative share of London lettings agents by agency rank
HIGHLY FRAGMENTED INDUSTRY WITH CONSOLIDATION OPPORTUNITY
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 11
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
LONDON IN NUMBERS
31%
of London's
population in Private
Rental Sector
40%
of the UK's total residential
lettings market value was
in London in 2023
£34 BILLION
was the value of
London's lettings
market in 2023
8%
annualised growth rate
of London's lettings
market since 2000
19%
of the UK's total sales
market value was in
London in 2023
17%
house price growth
in London over the
last five years
LETTINGS MARKET
London attracts people from all over
the world to stay, work and study,
driving structural demand for quality
lets. Lower levels of house purchase
affordability alongside the flexibility
provided by renting drives growing
levels of tenant demand, which is
unmatched by the volume of new
private landlords entering the market.
These dynamics have created a
uniquely valuable market with strong
long-term growth characteristics; since
2000 the lettings market has delivered
on average 8% growth per annum.
SALES MARKET
Key drivers of the sales market, which
is cyclical in nature, include property
prices, mortgage availability and rates,
affordability levels and consumer
confidence. 2023 London sales
market transactions were subdued,
approximately 22% lower than 2022
market volumes, primarily attributable
to the higher interest rate environment
and a weaker macroeconomic backdrop.
With improved stability in the
mortgage market in 2024, sales market
transactions are expected to improve.
FINANCIAL SERVICES MARKET
The mortgage broking market is primarily
driven by the availability of mortgage
products, interest rates offered and the level
of demand for refinance mortgages and new
mortgages for property purchases. Whilst the
provision of new mortgages is closely linked
to volumes in the residential sales market,
the refinance business is more recurring and
non-cyclical in nature and not dependent
on sales market transaction volumes.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202312
RESILIENT BUSINESS MODEL
Our business model is underpinned by non-cyclical recurring revenue streams, generated by
Lettings and refinance activity within Financial Services. In 2023, 72% of total revenue was
generated from non-cyclical and recurring revenue streams.
Lettings
Sales
Financial Services
2023 Revenue
Non-cyclical and recurring
revenues 72%:
Lettings and Financial Services
refinance activity
6%
Cyclical revenues 28%:
Sales and Financial Services
transactional activity
OUR REVENUE STREAMS
LETTINGS
London’s largest lettings agent
brand operating across the
private rental sector
SALES
London’s number 1 sales agent with
the highest brand prominence
FINANCIAL SERVICES
Award winning independent mortgage
broker and financial products provider
We are the largest lettings estate
agency brand in London, with a
portfolio of over 28,000 tenancies.
We provide tenant find, rent collection,
tenancy renewal and property
management services. We are a market
leading agent in the growing Build to
Rent sector, supporting developers
and operators to let large-scale
developments at speed.
We provide a residential property sales
agency for private sellers and new
homes developers. Our success-based
pricing model means we are focused on
getting the best result for sellers.
Under our Alexander Hall brand we
provide mortgage broking and ancillary
financial services products.
Lettings delivers non-cyclical and
recurring revenue and earnings
Sales is highly correlated to
residential sales property market
cycles and offers significant
medium-term upside potential
Financial Services delivers
non-cyclical and recurring
revenue through its
refinance business
69%25%28% 72%
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 13
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
OUR SHAREHOLDERS
Delivering total shareholder returns
59%
total shareholder return (TSR) in 2023,
including share price growth and dividends
OUR CUSTOMERS
AND SUPPLIERS
Providing exceptional service and results for
landlords, sellers, tenants and buyers,
supported by our trusted supplier base
4.7 OUT OF 5
on Trustpilot
OUR PEOPLE
Company confidence
85%
of our employees believe that the
Company is in a position to really
succeed over the next three years
1
OUR COMMUNITIES
Engaging with and contributing
to communities through our
Career Ready partnership
OVER 400
talented young people supported through
internships, virtual masterclasses and panel
discussions over the last three years
1
Result from the 2023 employee engagement/culture
survey independently administered by CultureAmp.
68% of the workforce responded to the 2023 survey.
VALUE FOR STAKEHOLDERS
POWERED BY THE FOXTONS OPERATING PLATFORM
OUR REVENUE STREAMS
The Foxtons Operating Platform
consists of 5 elements:
Read more about the power of the Foxtons Operating
Platform on
PAGE 14.
DATA PLATFORM
BRAND
PEOPLE, CULTURE AND TRAINING
HUB AND SPOKE
TECH PLATFORM
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202314
FOXTONS OPERATING PLATFORM
Foxtons Operating Platform is the most comprehensive and advanced platform in UK
estate agency. The platform has been significantly strengthened over the course of 2023
driving organic market share growth across the Group, as well as supporting the integration
of acquired lettings portfolios.
B
R
A
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D
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B
A
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D
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P
O
K
E
D
A
T
A
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A
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F
O
R
M
SCALABILITY
DEAL
EXCELLENCE
LEAD
GENERATION
LIFETIME
CUSTOMER
VALUE
T
E
C
H
P
L
A
T
F
O
R
M
V
A
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U
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D
I
F
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P
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E
,
C
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&
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R
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I
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G
Scalability
The Foxtons Operating Platform
is highly scalable, supporting
significant levels of growth with
limited investment requirement.
Lifetime
customer value
Delivering best in class
customer results with the
highest levels of service
drives repeat business and
cr
oss-sell across the Group.
Lead generation
High levels of lead
generation makes
Foxtons the largest
estate agent in London
and lettings agent in
the UK.
Deal excellence
Matching more buyers and renters
with more properties to deliver
the best results for our customers.
£25M£30M
Adjusted
operating profit
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 15
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Innovation in the estate agency sector:
> Developed and launched the UK’s first
fully digital end-to-end lettings system
which enables us to digitalise and
automate the onboarding of over
500,000 lettings applicants annually
Transitioning to a data-led business:
> Developed and rolled out the Foxtons
Data Platform
> 16% increase in property instructions
versus 2022 across Lettings and Sales
Reinvigorating the Foxtons brand:
> 19% increase in brand consideration
versus 2022
1
> Foxtons.co.uk is the most visited
estate agent website in the UK by
a factor of five compared to the next
leading competitor brand
Highest levels of
productivity and service:
> 4% increase in revenue per branch
versus 2022
> New out-of-London lettings property
management hub acquired in 2023
Rebuilding our
high-performance culture:
> Tenfold increase in in-person training
versus 2022
> 11% reduction in fee earner attrition
rates and 9% increase in fee earner
tenure versus 2022
TECH PLATFORM
Foxtons technology platform, known as “BOS”, is an end-to-end, fully
integrated and internally-developed CRM and workflow system powering
all aspects of the Foxtons business. BOS is the most advanced technology
platform in UK estate agency and is a key driver of innovation, productivity,
workforce collaboration and Foxtons’ unique competitive culture.
DATA PLATFORM
Foxtons Data Platform combines best in class data infrastructure,
rich historical databases built up over 20 years, real-time market
data, and advanced data science, analytics and insights. Key areas
the platform drives include data-led marketing, stock acquisition,
matching buyers and renters to properties and forensically reporting
all areas of internal performance.
BRAND
Built up over 40 years, the iconic Foxtons brand is synonymous with
residential property in London and generates the highest levels of
brand recognition in a highly fragmented industry. The brand’s ethos
is to deliver best in class customer results with the highest levels of
service and uniquely commands a premium fee position.
HUB AND SPOKE
Foxtons operates a unique hub and spoke model with a network of
inter-connected, single-brand branches supported by specialised sales
and operational support teams. This role specialisation drives high levels
of productivity with fee earners able to focus on customer results, whilst
support functions benefit from economies of scale, optimised processes
and best-in-class technology.
PEOPLE, CULTURE AND TRAINING
Estate agency remains, at heart, a people business. A key driver of
Foxtons performance is a focus on training and retaining the best estate
agents alongside a unique high-performance culture which promotes
delivering customer results with the highest levels of service.
1
Brand consideration is measured as the volume of
customer property valuations requested in the period.
2023 PROGRESSHOW THE PLATFORM WORKS
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202316
Our strategy is to deliver long-term growth by decoupling earnings from sales market cycles,
with a focus on non-cyclical and recurring revenues. By doing so, our target is to deliver
£25 million to £30 million of adjusted operating profit in the medium term and create
significant shareholder value in doing so.
DELIVERING AGAINST OUR STRATEGY
+21% exchange market
share growth
> 4.1% in 2023 vs. 3.4% in 2022
Track record of 25% average
annual return on investment
> c.2,800 tenancies acquired
in 2023
> 2023 acquisitions now fully
integrated onto the Foxtons
Operating Platform
+£6.3m (+7%) organic
revenue growth
> 9% growth in cross-sell of
property management
> Increased average tenancy length
driving customer retention
> 11% increase in the market share
of organic instructions
4.5%+
Market
share
7%10%
CAGR
LETTINGS
ACQUISITIVE GROWTH
Our scalable operating platform enables us to be
a consolidator in the fragmented lettings market.
Acquired portfolios can be rapidly integrated
unlocking revenue and cost synergies.
20%+
Return
on capital
LETTINGS
ORGANIC GROWTH
Lettings organic growth enables us to grow
non-cyclical and recurring revenue streams,
which will significantly enhance the quality
of our earnings.
3%5%
CAGR
(14%) revenue decline
> 11% market share growth despite
turbulent mortgage market
SALES
MARKET SHARE GROWTH
Sales provides high levels of profitability in
more buoyant markets and, through cross-sell,
complements our Lettings and Financial Services
businesses. There is significant upside potential
in the medium term by increasing market
share, combined with a return to more
normalised markets.
FINANCIAL SERVICES
REVENUE GROWTH
The Financial Services business is sub-scale and yet
to reach its full potential. The business presents a
compelling proposition: high levels of recurring
revenues from refinance activity and new purchase
transactional revenues from Sales cross-sell.
2023 PROGRESS
STRATEGIC PRIORITIES AND TARGETS
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 17
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
DELIVERING ON OUR ADJUSTED OPERATING PROFIT TARGET
2023 PROGRESS
The Group has delivered good progress against its strategic priorities:
£(0.7m)
£1.9m
£8.9m
£13.9m
£14.3m
2019 2020 2021 2022 2023 Medium term
£30.0m
£25.0m
89,000
83,000
109,000
104,0 00
81,000
2019 2020 2021 2022 2023
Transforming the Group’s financial profile
to deliver growth through sales market cycles
Limited organic growth
Group earnings highly
geared to sales market
Strong foundations
Strengthened
operating platform
delivering growth
Resilient business
Delivering growth through
sales market cycles
Our strategic priorities aim to drive earnings growth by increasing revenues from non-cyclical and recurring
activities, particularly from Lettings. It is also a priority to return Sales to profitability across the market
cycle by driving market share growth.
Prior to 2022, the Group’s performance was tied to the cyclical sales market, however now, by delivering
against our strategic priorities, the Group’s financial profile is more resilient. In 2023, the Group delivered
higher levels of profitability than in the more buoyant sales market years of 2021 and 2022, and significantly
higher levels of profitability than in the comparative sales markets of 2019 and 2020.
By leveraging the Foxtons Operating Platform to drive organic and acquisitive growth, the Group is on
track to deliver against its medium-term target of delivering £25 million to £30 million of adjusted
operating profit.
Source: Land Registry, TwentyCi, Foxtons
Adjusted operating profit progression
Sales market volumes
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202318
STAKEHOLDER ENGAGEMENT
HOW WE PROMOTE THE SUCCESS OF FOXTONS FOR THE BENEFIT OF ALL
The Board recognises the importance of effective stakeholder engagement and that stakeholders’ views should be considered in its
decision making. Read more about the Board’s approach to stakeholder engagement in the context of the UK Corporate Governance Code
on
PAGE 69.
In line with Section 172(1) of the Companies Act 2006, the Directors believe that, individually and together as a Board, they have acted in the
way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members as a whole, having
regard to the stakeholders and matters set out below in the decisions taken during the year ended 31 December 2023.
Section 172 factor Report section Page reference
The likely consequences of any decision
in the long-term
Resilient business model
PAGES 12 AND 13
Foxtons Operating Platform
PAGES 14 AND 15
Delivering against our strategy
PAGES 16 AND 17
Stakeholder engagement
PAGES 18 TO 21
Financial review
PAGES 24 TO 31
Risk management, principal risks and uncertainties
PAGES 32 TO 37
Prospects and viability
PAGES 38 AND 39
Board leadership and purpose
PAGES 70 AND 71
Board activity in 2023
PAGE 75
Directors’ Remuneration Report
PAGES 92 TO 121
The interests of the Group’s employees Delivering against our strategy
PAGES 16 AND 17
Stakeholder engagement
PAGES 18 TO 21
Responsible business – People, culture and training
PAGES 52 TO 58
Board leadership and purpose
PAGES 70 AND 71
Board activity in 2023
PAGE 75
Directors’ Remuneration Report
PAGES 92 TO 121
The need to foster the Group’s business
relationships with suppliers, customers
and others
Stakeholder engagement
PAGES 18 TO 21
Key performance indicators
PAGES 22 AND 23
Responsible business – Other responsibilities
PAGES 61 AND 62
Board activity in 2023
PAGE 75
The impact of the Group’s operations
on the community and the environment
Risk management, principal risks and uncertainties
PAGES 32 TO 37
Responsible business – Environment
PAGES 42 TO 51
Responsible business – Community
PAGES 59 AND 60
Board activity in 2023
PAGE 75
ESG Committee Report
PAGES 84 AND 85
The desirability of the Group maintaining
a reputation for high standards of
business conduct
Delivering against our strategy
PAGES 16 AND 17
Risk management, principal risks and uncertainties
PAGES 32 TO 37
Responsible business – People, culture and training
PAGES 52 TO 58
Responsible business – Community
PAGES 59 AND 60
Responsible business – Other responsibilities
PAGES 61 AND 62
Board leadership and purpose
PAGES 70 AND 71
The need to act fairly between
stakeholders of the Group
Stakeholder engagement
PAGES 18 TO 21
Board leadership and purpose
PAGES 70 AND 71
Board activity in 2023
PAGE 75
Engaging with stakeholders is critical to our long-term success and in turn supports
our purpose, our business model and the delivery of our strategic priorities.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 19
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
OUR STAKEHOLDERS
Effective engagement with our four stakeholder groups plays an important role throughout our business and helps us to gain a better
understanding of the impact of our decisions on stakeholder interests. Further details are set out on
PAGES 65 AND 71.
Refer to
PAGES 20 AND 21 for further details of other stakeholder engagement in the year.
OUR SHAREHOLDERS
Setting strategic priorities that will drive profitable growth
and create substantial shareholder value is the key focus.
Specifically, accelerating growth in Lettings will make the
Group more resilient to fluctuations in the sales market
and protect future profitability.
OUR PEOPLE
Investing in our people through industry leading training
drives our high-performance culture and is essential in the
delivery of our strategic priorities, and will ensure Foxtons is
a rewarding workplace for employees to develop and grow.
OUR CUSTOMERS AND SUPPLIERS
Our purpose, to get the right deal done for
London’s property owners, reflects our
commitment to deliver outstanding results for
customers, supported by our trusted suppliers.
OUR COMMUNITIES
Making a positive contribution to the communities we
work in continues to be an important part of our culture.
Our community programmes will evolve alongside the
delivery of our strategic priorities.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202320
STAKEHOLDER ENGAGEMENT CONTINUED
Key matters and outcomes from engagement
Customer service improvements: Continuous review
of customer feedback resulting in training and process
improvements. As a result of engagement, our customer
feedback platform has been reviewed and upgraded to
enable more regular and relevant feedback to be obtained
and acted upon.
Supplier interactions: Improving supplier relationships
within our Property Management function continues to be
a key focus of the operational improvements and regaining
market share. We continue to focus on our suppliers’
approach to environment, social and governance matters.
Refer to
PAGE 62 for details of our supplier relationships
and responsibilities.
OUR CUSTOMERS AND SUPPLIERS
Why we engage
Engaging with customers helps us to satisfy changing needs,
innovate and deliver better results. Our suppliers support us
in maintaining the highest levels of customer service and
business conduct.
How we engage
We engage with our customers throughout a property
transaction, as well as through other channels such as
consumer review platforms, customer surveys, social media
and our marketing channels. Service levels are reviewed
regularly, as well as monitoring the integrity of the way we
do business. We engage with our supplier partners through
regular service reviews and supplier payment practices are
reviewed on a regular basis by the Audit Committee.
Key interests
• Quality of customer service and results
• Effectiveness of our technology
• Navigating legislation and compliance changes
• Supplier engagement and payment practices
Key matters and outcomes from engagement
Board changes: Appointment of two Non-Executive Directors
was approved at the Group’s AGM. Refer to
PAGE 78 of the
Nomination Committee Report for details of Board changes in
the year.
Strategic priorities and operational progress: Shareholder
engagement following the 2023 results announcement
included discussing the findings from the CEO’s operational
review and strategic direction. Shareholders were supportive
of the turnaround strategy and provided the Board with an
external perspective relevant to the execution of the strategy.
Capital allocation: Engagement over the use of capital,
including dividend policy, share buyback programme and
lettings acquisitions. As explained on
PAGE 30, the Board
refined the Group’s dividend policy which incorporates
shareholder feedback and reflects the importance of a
progressive dividend whilst providing flexibility to progress
strategic growth priorities.
OUR SHAREHOLDERS
Why we engage
Shareholders provide funds that support investment in the
business and generate long-term and sustainable returns.
Engagement enables the Board to make well informed
decisions that take into account shareholder views.
How we engage
The Board regularly interacts with shareholders to facilitate
effective dialogue, both through recurring scheduled events,
such as investor roadshows and trading updates, and through
one-to-one shareholder meetings led by the Chairman or CEO.
Shareholder communications are also supported by regular
coverage from external analysts who cover the financial
performance of the Group.
Key interests
• Financial performance and position
• Strategic direction and execution
• ESG
• Capital allocation
• Executive remuneration
• Board composition
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 21
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Key matters and outcomes from engagement
Training and technology: Employee training continues to be
critical to our success with materials continuously improved
from employee feedback. We also regularly obtain employee
feedback on our technology platform in order to improve the
competitive advantage of key systems. Refer to
PAGE 58
for further details.
Responsible business practices: Informing our diversity
network programmes, ESG programmes and community
engagement through feedback at the EEC and through
informal employee engagement. Refer to
PAGES 40 TO 62
for details of our responsible business practices.
Remuneration: Workforce and Director remuneration strategy
discussed with the EEC by the Remuneration Committee Chair.
Refer to
PAGE 92 of the Directors’ Remuneration Report for
details of our approach to workforce remuneration.
Employee value proposition: In 2023, the Group’s employee
value proposition has been redesigned in partnership with an
external talent acquisition specialist to attract and retain the
best talent. Key elements of the employee value proposition
were informed through engagement and workshops with
current employees. Refer to
PAGE 54 for more details.
OUR PEOPLE
Why we engage
Our people are key to our future success. The Board engages
with our people to better understand their views, enable
them to influence matters that affect them and encourage
workforce participation in shaping strategic initiatives.
How we engage
We engage with our people through a number of mechanisms,
including the Employee Engagement Committee (EEC), branch
visits, staff meetings, diversity networks, exit interviews and
the annual employee engagement survey.
Key interests
• Business performance and operating procedures
• Employee communication, working practices and
health and safety
• Workforce remuneration
• Workforce diversity, culture and training
OUR COMMUNITIES
Why we engage
Foxtons is very visible in our communities and our people want
to play an active, local role. A current key focus is advancing
social mobility and helping create stronger communities.
How we engage
We engage with our communities primarily through our
social mobility partnership and through wider community
initiatives. Engagement includes hosting community events
and workshops and allowing our employees to take paid time
off to support a charity or cause of their choice. The Board’s
ESG Committee receives updates from management on the
Group’s contributions to our community partnerships.
Key interests
• Informing ongoing community engagement programmes
and areas of focus
• Maximising value from support offered
Key matters and outcomes from engagement
In 2023, through engagement with our existing
community partner, Career Ready, our contribution
programme has been further developed and refined.
For 2024, following engagement with a number of
potential community partners, we have selected a new
community partner, Single Homeless Project, which will
enable employees to engage in a range of activities and
actively support the communities we operate in.
As pictured above, we also commissioned a piece of
artwork which was installed on our Notting Hill office
as we joined in the Notting Hill Carnival celebrations.
Refer to
PAGES 59 AND 60 for more details of our
community programmes.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202322
KEY PERFORMANCE INDICATORS
FINANCIAL KEY PERFORMANCE MEASURES
REVENUE AND PERCENTAGE OF REVENUE BY SEGMENT
£ million /
% of revenue
Revenue
% of revenue
by segment
2023 2022 2023 2022
Lettings 101.2 86.9 69% 62%
Sales 37.2 43.2 25% 31%
Financial Services 8.8 10.2 6% 7%
Group 147.1 140.3 100% 100%
Revenue generated in line with the Group’s accounting policies from continuing operations and percentage of revenue contributed
by each operating segment.
2023 performance
Revenue increased by 5% to £147.1 million, with Lettings revenue up
16%, Sales revenue down 14%, and Financial Services revenue down
14%, compared to 2022. Lettings continues to contribute the largest
proportion of revenue in the Group, increasing to 69% of total Group
revenue (2022: 62%).
2023 performance
In line with our Lettings growth strategy, which includes acquiring high
quality lettings portfolios, the proportion of non-cyclical and recurring
revenue continued to increase, now representing over 70% of Group
revenue. Non-cyclical and recurring revenue brings resilience to our
business model and protects profitability in lower volume sales markets.
2023 performance
Lettings volumes were down in 2023 compared to 2022 due to lower
renewal volumes as a consequence of longer average tenancy terms
reducing the number of renewal opportunities. Sales and Financial
Services volumes were lower due to a reduced number of new purchase
transactions in 2023’s higher interest rate environment.
2023 performance
Group adjusted operating profit was £14.3 million (2022: £13.9 million)
and adjusted operating profit margin was 9.7% (2022: 9.9%). The year-
on-year changes reflect significant revenue growth in Lettings, offset
by an increased adjusted operating loss in Sales due to reduced market
transaction volumes and investments in fee earner headcount to drive
future growth.
Non-cyclical and recurring revenue consists of Lettings revenue and Financial Services refinance revenue, both of which are
non-cyclical and recurring in nature. Transactional revenue consists of Sales revenue and Financial Services new purchase revenue.
Total number of Lettings transactions (including renewals), Sales transactions and Financial Services products arranged
from continuing operations.
Adjusted operating profit represents the profit before tax for the period before finance income, finance cost, other gains/losses
and adjusted items (defined in Note 1 of the financial statements) from continuing operations.
The Group uses key performance indicators to measure its performance and to assess progress
against its strategic priorities and monitor the impact of principal risks.
Refer to PAGES 16 AND 17 for details of the Group’s strategic priorities.
2023 2022
Non-cyclical and
recurring revenues 72% 65%
Transactional revenues 28% 35%
Volumes 2023 2022
Lettings 19,334 20,640
Sales 2,871 3,215
Financial Services 5,033 5,003
Adjusted
operating profit
Adjusted
operating profit
margin
£ million / % 2023 2022 2023 2022
Lettings 25.8 18.0 25.5% 20.7%
Sales (10.0) (3.2) (26.8%) (7.5%)
Financial Services 0.7 1.8 7.4% 17.3%
Corporate costs (2.3) (2.6) n/a n/a
Group 14.3 13.9 9.7% 9.9%
NON-CYCLICAL AND RECURRING REVENUE %
VOLUMES BY SEGMENT
ADJUSTED OPERATING PROFIT AND MARGIN
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 23
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
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. Metric is from continuing and
discontinuing operations.
£ million 2023 2022
Net free cash flow (0.1) 7.7
OTHER KEY PERFORMANCE MEASURES
MARKET SHARE GROWTH
Year-on-year percentage change in market share measured over a 12-month period. Lettings market share is calculated as Foxtons Lettings
instructions divided by the number of instructions in Foxtons’ market. Sales market share is calculated as Foxtons Sales exchanges divided
by the number of exchanges in Foxtons’ market. Measures are calculated using third party data provided by TwentyCi.
2023 performance
Average revenue per branch increased by 4%, which is reflective of Group
revenue growth utilising the existing branch network. Average revenue
per fee earner decreased by 6%, which reflects investment in fee earner
headcount in order to drive future growth.
2023 performance
Market share growth has been delivered in both Lettings and Sales, with
Foxtons holding 6.0% of Lettings market share (2022: 5.1%) and 4.1% of
Sales market share (2022: 3.4%).
2023 performance
When benchmarked externally the 2023 employee engagement score
is broadly in line with the relevant comparator groups. Specific areas of
success from the 2023 engagement/culture survey include confidence
in leadership, diversity programmes and understanding Foxtons’ values,
whilst areas which can be further improved include social connection and
employee involvement.
2023 performance
We continue to maintain an excellent Trustpilot rating which
is reflective of our continued investment in customer service,
employee training and technology.
Average revenue per branch is Group revenue (from continuing operations) divided by the average number of branches (from continuing
operations). Average revenue per fee earner is Group revenue (from continuing operations) divided by the average number of fee earning
employees (from continuing operations).
Employee engagement score from the Group’s annual employee engagement/culture survey independently administered by a third party,
CultureAmp. The engagement score is determined with reference to specific survey questions, designed by CultureAmp, which measure
employee engagement. 68% of the workforce responded to the 2023 survey. 2023 was the first year the CultureAmp platform was used,
and the Group plans to expand its use for both leaver feedback and pulse surveys to capture regular and insightful employee feedback.
Customer satisfaction is measured with reference to Trustpilot, an independent consumer review platform that enables our
customers to review and rate the quality of our service.
£'000 2023 2022
Average revenue per branch 2,418 2,332
Average revenue per fee earner 177 188
2023
Lettings market share growth (year-on-year) +16%
Sales market share growth (year-on-year) +21%
2023
Employee engagement score 65%
2023 2022
Trustpilot score (out of 5) 4.7 4.7
PRODUCTIVITY
EMPLOYEE ENGAGEMENT
CUSTOMER SATISFACTION
NET FREE CASH FLOW
2023 performance
Net free cash flow decreased to a £0.1 million outflow (2022: £7.7 million
inflow), driven by a £10.8 million working capital outflow (2022: £1.2m
outflow) as a result of the introduction of shorter landlord billing periods
in order to improve the competitiveness of our Lettings proposition and
support the retention and organic growth of the Lettings portfolio over
the medium term. Refer to Note 28 of the financial statements for a
reconciliation to net cash from operating activities.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202324
FINANCIAL REVIEW
Earnings protected by strong
Lettings revenue growth despite
challenging Sales market conditions
and investment in fee earners to
drive future growth.”
Chris Hough Chief Financial Officer
AT A GLANCE
Revenue
from continuing operations
+5%
£147.1 million
(2022: £140.3 million)
Adjusted EBITDA
1
from continuing operations
+6%
£17.5 million
(2022: £16.5 million)
Net free cash flow
1
from continuing and discontinued operations
£(0.1)million
(2022: £7.7 million)
Adjusted operating profit
1
from continuing operations
+2%
£14.3 million
(2022: £13.9 million)
Profit before tax
from continuing operations
34%
£7.9 million
(2022: £11.9 million)
Non-cyclical and recurring revenue
3
from continuing operations
72%
of total revenue
(2022: 65% of total revenue)
Notes: All results and measures within the financial review are presented on a continuing operations basis unless otherwise stated.
Values in tables may have been rounded and totals may therefore not be the sum of presented values in all instances.
1
Measures are alternative performance measures (APMs). APMs are defined, purpose explained and reconciled to statutory measures within Note 28 of the
financial statements. Adjusted EBITDA excludes share-based payment charges (2023: £1.0 million; 2022: £0.9 million) in order to be consistent with the
definition of adjusted EBITDA used to calculate the Group’s revolving credit facility covenants.
2
Profit before tax includes £4.5 million of adjusted item charges primarily reflecting one-off charges relating to the integration of the Ludlow Thompson
acquisition. On an adjusted basis, adjusted profit before tax is up 3% at £12.4 million (2022: £12.0 million) as reconciled in Note 28 or the financial statements.
3
Key performance indicator as defined on PAGES 22 AND 23.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 25
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
FINANCIAL OVERVIEW
2023
£m
2022
£m Change
Revenue and profit measures
Revenue 147.1 140.3 +5%
Contribution
1
93.2 91.3 +2%
Contribution margin
1
63 .4% 65.1% (170 bps)
Adjusted EBITDA
1
17.5 16.5 +6%
Adjusted EBITDA margin
1
11.9% 11.8% +11 bps
Adjusted operating profit
1
14.3 13.9 +2%
Adjusted operating profit margin
1
9.7% 9.9% (20 bps)
Profit before tax 7.9 11.9 (34%)
Profit after tax 5.5 9.6 (43%)
Earnings per share
Adjusted earnings per share (basic) 3.0p 3.1p (3%)
Earnings per share (basic) 1.8p 3.0p (40%)
Net free cash flow and net (debt)/cash
Net free cash (outflow)/inflow
1,2
(0.1) 7.7 n/a
Net (debt)/cash as at 31 December
1
(6.8) 12.0 n/a
Dividends
Interim dividend per share 0.2p 0.2p –
Final dividend per share 0.7p 0.7p –
1
APMs are defined, purpose explained and reconciled to statutory measures within Note 28 of the financial statements.
2
Net free cash flow is from continuing and discontinued operations.
Financial overview
As presented in the table above, key financial performance measures include:
• Revenue increased by 5% to £147.1 million (2022: £140.3 million), with Lettings revenue up 16%,
Sales revenue down 14% and Financial Services revenue down 14%.
• Adjusted EBITDA increased by 6% to £17.5 million (2022: £16.5 million) and adjusted operating profit
increased by 2% to £14.3 million (2022: £13.9 million).
• Profit before tax from continuing operations decreased to £7.9 million (2022: £11.9 million) and profit
after tax decreased to £5.5 million (2022: £9.6 million).
• Basic adjusted earnings per share was 3.0p (2022: 3.1p) and basic earnings per share was 1.8p (2022: 3.0p).
• Net free cash flow was a £0.1 million outflow (2022: £7.7 million inflow) and net debt at the year end was
£6.8 million (2022: £12.0 million net cash) reflecting the uses of cash explained on
PAGE 29.
• An interim dividend of 0.2p per share was paid in September 2023. The Board has proposed a final dividend
of 0.7p per share which maintains the total dividend for the year at 0.9p per share (2022: 0.9p per share).
Revenue
Revenue Volumes
1
Revenue per transaction
1
2023
£m
2022
£m
Change 2023 2022 Change 2023
£
2022
£
Change
Lettings 101.2 86.9 +16% 19,334 20,640 (6%) 5,234 4,210 +24%
Sales 37.2 43.2 (14%) 2,871 3,215 (11%) 12,942 13,431 (4%)
Financial Services 8.8 10.2 (14%) 5,033 5,003 +1% 1,745 2,043 (15%)
Total 147.1 140.3 +5%
1
‘Volumes’ and ‘Revenue per transaction’ are defined in Note 28 of the financial statements.
The Group consists of three operating segments: Lettings, Sales and Financial Services. Lettings represents 69% (2022: 62%), Sales 25%
(2022: 31%) and Financial Services 6% (2022: 7%) of total revenue. Non-cyclical and recurring revenue streams, generated by Lettings and
refinance activity within Financial Services, represents 72% (2022: 65%) of Group revenue.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202326
FINANCIAL REVIEW CONTINUED
Lettings revenue
Lettings revenue increased by 16% to £101.2 million (2022: £86.9 million),
reflecting a 24% increase in average revenue per transaction, partially
offset by a 6% reduction in transaction volumes. Transaction volumes
were lower year-on-year due to lower renewal volumes as a
consequence of longer average tenancy terms reducing the number
of renewal opportunities.
Revenue growth included organic growth of £6.3 million or 7%,
£3.9 million of acquisitive growth, and £4.1 million of additional
interest earned on client monies.
Organic revenue growth of £6.3 million (+7%) was driven by the
following factors:
• An operational focus to secure longer tenancy terms to drive
customer retention, which results in a greater proportion of
revenue being recognised at the start of tenancies.
• Growth in the cross-sell of our higher value property
management service, increasing the penetration of new deals
under management by 9% year-on-year.
• 11% increase in the market share of organic instructions which
boosted available stock supporting organic transaction volumes.
• 8% year-on-year increase in rental prices for new deals
completed in the period, with new deals representing 53%
of 2023 total Lettings revenue.
The £3.9 million of acquisitive growth reflects five incremental months
of trading from the May 2022 acquisitions, 10 months of trading from
the March 2023 acquisition of Atkinson McLeod and two months of
trading from the November 2023 acquisition of Ludlow Thompson.
The £4.1 million of additional interest earned on client monies
reflects higher interest rates and growth in client money held.
Interest earned on client money supports the operating costs of
managing client money, which includes staff costs, bank and card
fees, and compliance costs.
Sales revenue
Sales revenue decreased by 14% to £37.2 million (2022:
£43.2 million), with the decrease driven by an 11% decrease
in Sales exchange volumes compared to 2022. Sales volumes
outperformed the market which saw a 22% reduction in volumes
(source: TwentyCi).
Average revenue per transaction was 4% lower than 2022 reflecting a
1% decrease in the average price of properties sold (2023: £586,000;
2022: £590,000) as sellers adjusted prices to market conditions,
whilst commission rates remained robust at 2.25% (2022: 2.29%).
The 1% decrease in the average price of properties sold compared to
2.4% reduction in London property values (source: Nationwide House
Price Index) reflecting market share growth in higher value properties.
Financial Services revenue
Financial Services revenue decreased by 14% to £8.8 million
(2022: £10.2 million), reflecting a 1% increase in volumes and a
15% decrease in average revenue per transaction. Lower average
revenue per transaction was driven by lower average loan sizes,
reduced new purchase volumes and an increase in lower value
product transfers within the refinance business. In 2023, £4.4 million
(51% of revenue) was generated from non-cyclical refinance activity
and £4.3 million (49% of revenue) from purchase activity which is
more cyclical in nature.
Contribution and contribution margin
2023 2022
£m margin £m margin
Lettings 75.4 74.5% 64.8 74.5%
Sales 14.5 38.9% 22.0 51.0%
Financial Services 3.4 38.8% 4.5 43.9%
Total 93.2 63.4% 91.3 65.1%
Contribution, defined as revenue less direct salary costs of front
office staff and bad debt charges, increased to £93.2 million
(2022: £91.3 million). Contribution margin for the period was 63.4%
(2022: 65.1%) reflecting the following segmental margin changes:
• Lettings contribution margin remained flat at 74.5%
reflecting growth in higher margin revenues, such as property
management services, cross-sell of ancillary services and higher
interest on client monies, offset by 12% growth in Lettings fee
earner headcount year-on-year in order to drive organic revenue
growth in future periods.
• Sales contribution margin decreased to 38.9% (2022: 51.0%)
due to reduced market volumes and a 9% increase in fee earner
headcount to build bench strength ahead of improving sales
market conditions. Within Sales, dependent on market
conditions, it takes at least 12 months for fee earners to
become fully productive.
• Financial Services margin decreased to 38.8% (2022: 43.9%)
due to reduced market purchase volumes, a lower margin
revenue mix and a 9% increase in fee earner headcount.
Similar to Sales, dependent on market conditions, it takes at
least 12 months for fee earners to become fully productive.
Total average fee earner headcount across Lettings, Sales and
Financial Services is up 11% at 829 (2022: 749) as fee earner capacity
is rebuilt. Furthermore, a 9% improvement in staff retention across
Lettings and Sales reflecting investment in the culture is driving
continuous improvement in the average tenure of fee earners which
will drive future growth opportunities.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 27
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Adjusted operating profit and adjusted
operating profit margin
2023 2022
£m margin £m margin
Lettings 25.8 25.5% 18.0 20.7%
Sales (10.0) (26.8%) (3.2) (7.5%)
Financial Services 0.7 7.4% 1.8 17. 3%
Corporate costs (2.3) n/a (2.6) n/a
Total 14.3 9.7% 13.9 9.9%
Adjusted operating profit for the period was £14.3 million (2022:
£13.9 million) and adjusted operating margin was 9.7% (2022: 9.9%).
Refer to Note 2 of the financial statements for a reconciliation of
adjusted operating profit to the closest equivalent IFRS measure.
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 increased by £7.9 million to
£25.8 million, which includes organic growth of £3.1 million,
incremental acquisition growth of £0.7 million and £4.1 million of
additional interest on client monies. Sales adjusted operating loss
increased by £6.8 million to £10.0 million and Financial Services
adjusted operating profit decreased by £1.1 million to £0.7 million,
reflecting the fall in new purchase market volumes and investment
in fee earners as previously mentioned.
Within adjusted operating profit the following non-cash charges
were incurred:
2023
£m
2022
£m
Depreciation – property, plant
and equipment
2.4 2.1
Amortisation – non-acquired intangibles 0.4 0.5
Amortisation – acquired intangibles 1.4 1.0
Share-based payments 1.2 1.0
Total non-cash charges 5.4 4.7
Adjusted EBITDA and adjusted EBITDA margin
2023 2022
£m margin £m margin
Total 17.5 11.9% 16.5 11.8%
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 28 of the financial statements for a reconciliation of
adjusted EBITDA to the closest equivalent IFRS measure.
Adjusted EBITDA increased by 6% to £17.5 million (2022: £16.5 million)
and Adjusted EBITDA margin increased to 11.9% (2022: 11.8%).
Adjusted EBITDA growth of 6% outpaced adjusted operating profit
growth of 2% due to higher property, plant and equipment
depreciation (£0.3 million higher than 2022), higher amortisation
(£0.2 million higher than 2022) and higher non-adjusted share-based
payment charges (£0.1 million higher than 2022).
Adjusted items
A net adjusted items charge of £4.5 million (2022: £0.1 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 period.
2023
£m
2022
£m
Branch asset impairment
charge / (reversal)
3.4 (0.3)
Net property related charge / (credit) 0.7 (0.4)
Transaction related costs 0.4 0.2
Reorganisation costs – 0.6
Total net adjusted items charge 4.5 0.1
£4.3 million of the total net adjusted items charge relates to the
following items, of which £3.3 million is cash related and £1.0 million
is non-cash related:
• £3.6 million relates to the decision to integrate Ludlow Thompson
into the Foxtons network to deliver cost synergies; and
• £0.7 million relates to the closure of three Foxtons branches as
the Group consolidates branches to deliver cost savings.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202328
FINANCIAL REVIEW CONTINUED
Profit before tax and adjusted profit before tax
2023
£m
2022
£m
Adjusted operating profit 14.3 13.9
Less: adjusted items (4.5) (0.1)
Operating profit 9.8 13.8
Less: net finance costs and other losses (1.9) (1.9)
Profit before tax 7.9 11.9
Add back: adjusted items 4.5 0.1
Adjusted profit before tax 12.4 12.0
Profit before tax has decreased by 34% to £7.9 million
(2022: £11.9 million) due to £4.5 million (2022: £0.1 million) of
adjusted item charges as previously noted. Net finance costs and
other losses of £1.9 million (2022: £1.9 million), of which £2.0 million
relates to IFRS 16 lease finance costs, were incurred in the period.
Adjusted profit before tax, which excludes adjusted items, is
£12.4 million (2022: £12.0 million).
Profit after tax
2023
£m
2022
£m
Profit before tax 7.9 11.9
Less: current tax charge (2.8) (2.2)
Less: deferred tax credit/(charge) 0.4 (0.2)
Profit after tax 5.5 9.6
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 £5.5 million (2022: £9.6 million) is after a total tax
charge of £2.4 million (2022: £2.4 million), of which £0.4 million
credit (2022: £0.2 million charge) relates to non-cash deferred tax
accounting and £2.8 million (2022: £2.2 million) relates to current tax.
The effective tax rate for the period was 30.5% (2022: 19.9%),
which compares to the statutory corporation tax rate of 23.5%
(2022: 19.0%). The 2023 effective tax rate is higher than the
statutory corporation tax rate due to non-deductible expenses
and adjustments in respect of previous periods.
Net deferred tax liabilities totalled £26.2 million (2022: £25.7 million),
which comprise £28.2 million (2022: £27.0 million) of deferred tax
liabilities relating to the Group’s intangible assets, offset by deferred
tax assets of £2.0 million (2022: £1.4 million). The deferred tax assets
relate to tax losses brought forward which are expected to be
recovered through future taxable profits.
The Group received £0.3 million in tax refunds during the year
(2022: £nil).
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:
2023
£m
2022
£m
Revenue 147.1 140.3
Less: Adjusted operating profit (14.3) (13.9)
Difference between revenue and
adjusted operating profit
132.9 126.4
Less: Property, plant and equipment
depreciation
(2.4) (2.1)
Less: Amortisation (1.8) (1.6)
Adjusted operating cost base 128.7 122.8
The table below analyses the adjusted operating cost base into five
categories. The adjusted operating cost base increased by £5.9 million
to £128.7 million (2022: £122.8 million), with £1.9 million attributable
to incremental acquisition related operating costs.
2023
£m
2022
£m
Direct costs
1
53.9 49.0
Branch operating costs
2
32.5 32.0
Centralised revenue generating
operating costs
3
14.9 13.5
Revenue generating operating costs 101.4 94.5
Central overheads
4
25.1 25.7
Corporate costs
5
2.3 2.6
Adjusted operating cost base 128.7 122.8
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 2023 versus
2022 are as follows:
• Direct costs increased by £4.9 million due to £2.2 million
higher basic salaries, reflecting an 11% investment in fee earner
headcount, £3.0 million increase in variable pay reflecting
Lettings revenue growth and lower bad debt charges.
• Centralised revenue generating operating costs increased
by £1.4 million primarily due to a £0.9 million investment in
centralised Lettings functions reflecting growth in the Lettings
portfolio and a £0.5 million investment in centralised lead
generation headcount.
• £0.9 million of cost savings across central overheads and
corporate costs reflecting initiatives to reduce overhead costs.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 29
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Earnings per share
2023
£m
2022
£m
Profit after tax 5.5 9.6
Add back: adjusted items (net of tax) 3.6 –
Adjusted earnings for the purposes
of adjusted earnings per share
9.1 9.6
Earnings per share (basic) 1.8p 3.0p
Earnings per share (diluted) 1.7p 3.0p
Adjusted earnings per share (basic) 3.0p 3.1p
Adjusted earnings per share (diluted) 2.9p 3.0p
Cash flow from operating activities and net
free cash flow
From continuing and
discontinued operations
2023
£m
2022
£m
Operating cash flow before movements
in working capital
28.7 27.8
Working capital outflow (10.8) (1.2)
Income taxes paid (2.2) (2.7)
Net cash from operating activities 15.7 23.9
Repayment of IFRS 16 lease liabilities (12.5) (12.7)
Net cash used in investing activities
1
(3.2) (3.5)
Net free cash flow (0.1) 7.7
1
Excludes £13.9 million (2022: £8.5 million) of cash outflows relating to the
acquisition of subsidiaries (net of any cash acquired), £nil (2022: £3.7 million)
relating to the disposal of discontinued operations (net of cash disposed) and
£nil (2022: £0.4 million) related to the purchase of investments.
Net cash flow before movements in working capital increased by
£0.9 million to £28.7 million (2022: £27.8 million) reflecting
improvements in operating cashflows.
Net cash from operating activities decreased by £8.2 million to
£15.7 million (2022: £23.9 million) due to a working capital outflow
driven by the introduction of shorter landlord billing periods in order
to improve the competitiveness of our Lettings proposition and
support the retention and organic growth of the Lettings portfolio
over the medium term.
This landlord billing initiative has been successful in driving an
increase in average tenancy lengths, which under the Lettings revenue
recognition policy, also resulted in a greater proportion of revenue
being recognised at the start of tenancies. With Lettings revenue
recognition outpacing cash collections, there was a working capital
outflow of £10.8 million (2022: £1.2 million outflow). Working capital
flows will normalise in the second half of 2024 as the portfolio
transitions to shorter billing periods.
Net free cash flow, from continuing and discontinued operations, was
a £0.1 million outflow (2022: £7.7 million inflow), with the reduction
due to the Lettings working capital outflow previously noted.
Net debt
Net debt at 31 December 2023 was £6.8 million (2022: £12.0m net
cash). The net debt position reflects £13.9 million of acquisition
related spend, £10.8 million of working capital investment in Lettings
growth initiatives, £3.6 million of capital expenditure, £2.7 million of
dividends paid and £1.1 million of share buybacks.
Revolving credit facility
In June 2023, the Group refinanced its revolving credit facility (RCF),
increasing the size of the committed facility from £5m to £20m
and extending the facility to June 2026, with an option to extend
for a further two years. At 31 December 2023, £11.7 million of the
RCF was drawn (31 December 2022: £nil). The facility provides
increased strategic flexibility and supports the acceleration of the
Group’s Lettings portfolio acquisition strategy. The terms of the
facility have remained materially the same as the previous facility
and it remains unsecured. Drawdowns on the facility accrue interest
at SONIA +1.65%.
The RCF is subject to a leverage covenant (net debt to EBITDA not
to exceed 1.75) and an interest cover covenant (interest to EBITDA
not to be less than 4) as defined in the facility agreement. Both
covenants are calculated using pre-IFRS 16 accounting principles.
At 31 December 2023 the leverage ratio was 0.4x and the interest
cover ratio was 59x.
Acquisitions
Atkinson McLeod
On 3 March 2023, the Group acquired the entire issued capital of
Atkinson McLeod. Gross purchase consideration was £8.2 million,
with £7.5 million paid to date and £0.7 million deferred for a period
of 12 months post completion. Acquired net assets were fair valued
and include £2.6 million of customer contracts and relationships
and £5.6 million of acquired goodwill. The acquisition contributed
£1.8 million of revenue and £0.5 million of adjusted operating profit
in 2023, with cost synergies delivered in H2 2023.
Ludlow Thompson
On 6 November 2023, the Group acquired the entire issued capital
of Ludlow Thompson. Gross purchase consideration was £8.3 million,
with £6.3 million paid to date and £2.0 million deferred for a period
of 12 months post completion. Acquired net assets were fair valued
and include £3.2 million of customer contracts and relationships
and £9.0 million of acquired goodwill. The acquisition contributed
£1.0 million of revenue and a £0.1 million adjusted operating loss in
2023, with synergies planned to be delivered in H1 2024.
Refer to Note 13 of the financial statements for further details of the
2023 acquisitions.
Discontinued operations
In 2022, discontinued operations related to D&G Sales, which was
acquired alongside D&G Lettings and disposed of on 11 February
2022. In 2023, there were no discontinued operations. Refer to
Note 7 of the financial statements for details of the 2022
discontinued operations.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202330
FINANCIAL REVIEW CONTINUED
Other balance sheet positions
Significant balance sheet movements in the period:
• Goodwill of £40.7 million (2022: £26.0 million) and other
intangible assets of £114.9 million (2022: £109.3 million), with
the increase in goodwill and other intangible assets due to the
acquisitions in the year which contributed £14.7 million of
goodwill and £5.9 million of customer contracts and relationships.
• Total contract assets of £19.0 million (2022: £7.4 million) and
total contract liabilities of £12.2 million (2022: £10.0 million),
with the increase in contract assets driven by a focus on securing
longer tenancy terms, and the introduction of shorter billing
periods for landlords opting to agree to longer tenancy terms.
The increase in contract liabilities was mainly driven by acquired
contract liabilities of £1.9 million.
• Intangible assets under construction of £1.5 million
(2022: £0.8 million) with the increase reflecting increased
capital technology development spend in the period.
• Trade and other payables of £21.3 million (2022: £16.7 million),
with the increase in the balance due to an increase in trade
creditors of £0.9 million, an increase in contingent and deferred
consideration of £1.2 million, an increase in accruals and other
creditors of £1.4 million and an increase in VAT payable of
£1.0 million.
• Borrowings of £11.8 million (2022: nil), with the increase in the
balance mainly due to a £11.7 million RCF drawdown to fund
acquisitions and working capital requirements.
• Total current liabilities of £57.1 million (2022: £38.7 million)
have increased due to a £11.7 million RCF drawdown, an increase
in trade and other payables of £4.6 million and an increase in
contract liabilities of £2.1 million.
Dividend policy and capital allocation
In March 2023, the Group set out its revised strategy, medium-term
targets and its approach to capital allocation. Reflecting the Group’s
evolution over the past few years to a business which is now focussed
upon lettings, and whilst maintaining the Group’s approach to capital
allocation, the Board has decided to revise its dividend policy.
For 2024, the Board intends to adopt a progressive dividend policy
whilst maintaining strong dividend cover. The new policy aims to
provide a more reliable and growing income stream to investors, as
well as enabling the Group to pursue its strategic growth objectives.
The Group’s approach to capital allocation, which includes the
progressive dividend policy referred to above, aims to support
long-term growth and shareholder returns. The Group’s capital
allocation priorities are set out below:
• Maintain balance sheet strength to enable the Group to meet its
operational cash requirements and manage through cyclical
sales markets.
• Invest in areas that drive organic growth and rebuild our
competitive advantages.
• Pay a progressive ordinary dividend.
• Deploy capital to acquire high quality lettings portfolios to drive
inorganic lettings growth.
• Return excess capital, not used for profitable growth,
to shareholders.
An interim dividend of 0.2p per share was paid in September 2023.
The Board has proposed a final dividend of 0.7p, which maintains
the full year dividend at 0.9p per share (2022: 0.9p per share).
The proposed dividend will be paid on 28 May 2024 to shareholders
on the register at 12 April 2024, subject to shareholder approval at
the AGM due to be held on 7 May 2024. The shares will be quoted
ex-dividend on 11 April 2024.
Share buy back
A total of £1.1 million (2022: £4.9 million) of shares were bought back
in the year to return excess capital to shareholders. The Board will
continue to keep share buybacks under review, but in the context of
other potential uses of capital.
Related party transactions
Related party transactions are disclosed in Note 25 of the
financial statements.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 31
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT 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 as a consequence
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.
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 32 TO 37 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 will have
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. The prospects and viability statement is set out
on
PAGES 38 AND 39.
Chris Hough
Chief Financial Officer
4 March 2024
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202332
RISK MANAGEMENT
RISK MANAGEMENT
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.
Our principal risks
Principal risks are those risks within the Group’s risk register that we
consider could have a potentially material impact on our operations
and/or achievement of our strategic priorities.
Employee training
Independent
whistleblowing
service
1
Divisional
management
Audit Committee
Internal
audit
function
and other
3
rd
party
assurance
Policies and procedures
Health & Safety
Committee
IT Security
Committee
Risk & Compliance
Committee
(Foxtons and
Alexander Hall)
The Board
Executive Committee
2nd line of defence 3rd line of defence1st line of defence
Risk framework overview
The broad structure of our risk management framework, which comprises three lines of defence, is presented in the chart below.
1
Should whistleblowing matters relating to Senior Management be raised, these matters are reported directly to the Audit Committee Chair.
Reputation and brand
Market risk
People
IT systems and cyber risk
Compliance with the legal and regulatory environment
Competitor challenge
Details of each principal risk is provided on PAGES 35 AND 36,
including an overall risk rating and whether the risk has changed over
the course of the year. 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.
Further information on the Group’s risk management procedures can
be found in the Audit Committee Report on
PAGE 86.
Our principal risks
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.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 33
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
RISK APPETITE
The risk appetite statement details the Group’s approach to risk, by risk type, and includes a series of risk assertions which are aligned to
our strategy, together with the risk parameters within which we expect our people to work. Compliance with the risk appetite statement is
monitored through the Group’s standard monitoring and reporting mechanisms. The Board reviews the risk appetite statement annually.
Risk appetite statement
The Group operates in markets with high growth potential which are subject to volatility, particularly in the residential sales market.
We continue to pursue ambitious growth targets and are willing to accept certain levels of risk to increase the likelihood of achieving or
exceeding our strategic objectives, subject to the relevant risk parameters.
Risk appetite varies depending on the risk type
The Board’s appetite for risk varies depending on the risk type as set out in the table below. The Group measures risk by estimating the
potential for loss of profit, customer service issues, staff turnover and brand or reputational damage. The Board has a low tolerance for
compliance-related risk. Conversely, it has a higher tolerance for strategic risk. The Board will adjust the short-term appetite for risk to
reflect prevailing conditions as necessary.
Risk type Risk assertion Risk parameter Risk appetite
Strategic We will not pursue growth at all costs and expect
high margins and strong returns on capital.
We will pursue growth strategies to deliver against
our strategic priorities. We aim for industry leading
operating margins and returns on capital while
protecting the long-term viability of the Group.
High
Financial We will manage/avoid situations or actions
that might adversely impact the integrity of
financial reporting.
Delivering the highest standards of financial reporting
integrity through financial reporting processes and
controls is critical to the Group.
Low
Operational We will manage/avoid situations or actions that
could adversely impact the Group’s ability to
provide a premium service level to our customers
and to protect the assets of the Group.
The costs of control systems must be commensurate
with the benefits achieved.
Moderate
Compliance We will ensure we comply with all legal requirements
and manage/avoid situations or actions that could
have a negative impact on our reputation or brand.
Breaches of:
• Legislative/statutory requirements
• Delegated authority levels
• Group and divisional policies
• Health and safety regulations
Low
Assessment of risk versus Board’s appetite for risk
The Board has assessed the risks of the Group and considers all risks to be within the Board’s appetite for risk. The Board recognises the
Group’s Sales business operates in a market which is cyclical and subject to volatility, and as such, the Board’s risk appetite for market risk is
high. Although there continues to be heightened market risk due to the external macro environment, the Board considers appropriate actions
have been taken to mitigate the impact on the Group, in particular prioritising organic growth in Lettings and investing in high quality lettings
portfolios to further increase our resilience to sales market volatility.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202334
PRINCIPAL RISKS AND UNCERTAINTIES
1
Residual Likelihood
Residual Impact
External risks
1 Market risk
2 Competitor challenge
3 Compliance with the legal and
regulatory environment
Internal risks
4 IT systems and cyber risk
5 People
6 Reputation and brand
moderatelow
high
moderatelow
high
4
3
2022 risk assesment
(only presented if
year-on-year movement)
2023 risk assesment
6
2
2
1
1
Small
reduction
Small
reduction
PRINCIPAL RISKS HEAT MAP
The heat map presented below provides a visual representation of the principal risks facing the Group and movement of risks in the year.
Risks shown in the bottom left-hand corner of the chart have a low risk rating as they have a low residual likelihood of occurring and a low
residual potential impact on the Group. Conversely, risks shown in the top right-hand corner of the chart have a high risk rating as they have
a high residual likelihood of occurring and a high residual potential impact on the Group.
There have been the following movements in residual likelihood or residual impact of the principal risks.
2023 movements in residual likelihood/residual impact
(1) Market risk Small reduction in both the residual likelihood and residual impact of market risk. This reduction is reflective
of improved stability in the mortgage market and falling mortgage rates. Furthermore, following continued
investment in the Lettings business, the Group as a whole is more resilient to any downturn in the sales market
which reduces the impact of any sales market volatility on earnings.
(2) Competitor challenge Small reduction in the residual likelihood of competitor challenge risk. This reduction is reflective of continued
delivery against the Group’s strategic priorities which has enabled the business to grow its market share and be
more resilient to competitor pressures as a whole.
5
No change
vs 2022
No change
vs 2022
No change
vs 2022
No change
vs 2022
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 35
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
The assessment of residual likelihood, residual impact and overall residual risk is based on the
following definitions:
Residual likelihood Residual impact
Overall residual
risk rating
Low potential of the
risk crystallising
Very limited or isolated impact to the
Group and/or its broader customer base
Low
Moderate potential of
the risk crystallising
Moderate impact to the Group and/or our
broader customer base
Moderate
High potential of the
risk crystallising
Potentially significant impact to the
Group and/or our broader customer base
High
Principal risks
Impact Mitigation of risk
Assessment of change
in risk year-on-year
Market risk Risk Type: Strategic
The key factors driving market risk are:
• Affordability, including ongoing cost of living
increases, which in turn may reduce market
transaction levels.
• The market being reliant on the availability of
affordable mortgage finance, a deterioration
in availability or an increase in borrowing
rates may adversely impact the performance
of the Sales business. In 2023, borrowing rates
increased reflecting increases in the Bank of
England base rate. Since the start of 2024,
there is improved stability of borrowing rates,
with rates beginning to fall which may support
additional market activity;
• The market being impacted by changes in
government policy such as renters reform or
changes in stamp duty legislation;
• A reduction in London’s standing as a major
financial city caused by the macro-economic
and political environment; and
• Heightened geopolitical risk which may increase
market uncertainty and customer confidence.
The Group targets an appropriate balance between the Sales
and Lettings businesses through residential property market
cycles, with the Lettings business providing valuable protection
against the cyclical sales market.
The Group’s strategic priorities include Lettings organic growth
and investing in high quality lettings portfolios, both of which
mitigate the sales market risk.
In a significant downturn of the residential sales market, the
Board will make appropriate cost decisions bearing in mind the
long-term prospects of the Sales business.
Reduction in both likelihood and impact
of risk but no change in overall residual
risk rating
Residual likelihood
Residual impact
Overall residual risk rating
Competitor challenge Risk Type: Strategic
The Group operates in a highly competitive
marketplace. and there is a risk the Group could
lose market share.
Market share loss could be the result of competitors
scaling up (organically or through acquisition),
developing new customer service propositions,
changing pricing structures or launching alternative
business models to drive a competitive advantage.
We continually assess competitor activity and utilise our
centralised structure to review competitor intelligence, monitor
market share and respond accordingly. Targeted marketing
and operational responses enable the Group to respond
to competitor challenge and tailor our offering for certain
segments of the market.
Furthermore, the Board regularly reviews our business model
and strategic investments are made to protect and develop our
competitive advantages.
Reduction in likelihood of risk but no
change in overall residual risk rating
Residual likelihood
Residual impact
Overall residual risk rating
Our strategic priorities
1. Lettings: Organic growth
2. Lettings: Acquisitive growth
3. Sales: Market share growth
4. Financial Services: Revenue growth
Refer PAGES 16 AND 17 for details
of our strategic priorities.
Linked strategic priorities
1. Lettings: Organic growth
2. Lettings: Acquisitive growth
3. Sales: Market share growth
Linked strategic priorities
1. Lettings: Organic growth
2. Lettings: Acquisitive growth
3. Sales: Market share growth
4. Financial Services: Revenue growth
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202336
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Impact Mitigation of risk
Assessment of change
in risk year-on-year
Compliance with the legal and regulatory environment Risk Type: Compliance
Breaches of laws or regulations could lead to
financial penalties and reputational damage.
Our estate agency business operates under a
range of legal and regulatory requirements, such
as complying with certain money laundering
regulations and protecting client money in line
with the relevant regulations.
Our Financial Services business is authorised and
regulated by the Financial Conduct Authority (FCA)
and could be subject to sanctions for non-compliance.
During periods of interest rate volatility there is an
increased risk of compliance issues arising which
require specific management.
The Group’s centralised systems and Legal and Compliance
team enable management to monitor ongoing compliance
with the legal and regulatory environment.
The Financial Services business utilises third party assurance
providers to monitor compliance with FCA regulations.
Additionally, the Alexander Hall Risk and Compliance
Committee provides regular oversight to compliance
related matters.
The Group’s compliance and legal team regularly monitors
regulatory reform proposals and participates in industry
forums to enable the Group to respond to regulatory change
in an efficient and coherent manner.
No change in overall residual risk rating
Residual likelihood
Residual impact
Overall residual risk rating
IT systems and cyber risk Risk Type: Strategic, Operational
Our business operations are dependent on
sophisticated and bespoke IT systems which could fail
or be deliberately targeted by cyber attacks leading to
interruption of service, corruption of data or theft of
personal data.
Such a failure or loss could also result in reputational
damage, fines or other adverse consequences.
Our IT and Cyber Security functions, supported by external
specialists, ensure that we have a full suite of preventative and
detective systems, processes, and controls in place to identify
and mitigate risks:
• Disaster recovery, business continuity and incident
response plans;
• Continued investment in the latest security solutions
across the entire estate;
• Comprehensive monitoring and reporting from an
independent 24/7 security operations centre;
• Independent security testing from CREST certified
penetration testers;
• Active data loss prevention on common data
exfiltration channels;
• Training and awareness for all staff; and
• Investigation and response capabilities to detect,
respond and contain any threats
No change in overall residual risk rating
Residual likelihood
Residual impact
Overall residual risk rating
People Risk Type: Strategic, Operational
There is a risk the Group may not be able to recruit
or retain quality staff to achieve its operational
objectives or mitigate succession risk. As experienced
in the current labour market, increased competition
for talent leads to a reduction in the available talent
pool and an increased cost of labour. Additional risk
could arise in the event there are changes in our
industry or markets that result in less attractive
career opportunities.
The Group has an internal recruitment function, supplemented
by external specialists, to recruit sufficient number of high
quality staff.
Over the last 18 months, the Group has increased its focus
on training and development, as well as succession planning,
to improve staff retention and to enable future leaders to be
identified and nurtured. Additionally, the Group’s employee
value proposition has been redesigned in order to improve
employee attraction and retention.
Employee turnover rates are reviewed by management on a
regular basis and action taken to understand and address higher
than expected leaver rates.
No change in overall residual risk rating
Residual likelihood
Residual impact
Overall residual risk rating
Reputation and brand Risk Type: Strategic, Operational
Foxtons is an iconic estate agency brand with high
levels of brand recognition. Maintaining a positive
reputation and the prominence of the brand is critical
to protecting the future prospects of the business.
There is a risk our reputation and brand could be
damaged through negative press coverage and
social media due to customer service falling below
expectations or because our actions are considered
to be inappropriate.
We recognise the need to maintain our reputation
and protect our brand by delivering consistently high
levels of service and maintaining a culture which
encourages our employees to act with the highest
ethical standards.
A brand management programme is in place to ensure Foxtons’
brand positioning and identity is clear, appropriately protected
and reflects the way we do business. Our social media
presence and press engagement is managed centrally within an
established framework to ensure press statements reflect the
Group’s purpose, values and strategy.
Maintaining the right culture, underpinned by the right values,
is key to protecting our reputation and brand. The Board
monitors culture on an ongoing basis (refer to
PAGE 71 for
further details) and the ESG Committee provides oversight of
the governance framework relating to ESG matters including
training programmes.
Through established policies, controls and processes we
monitor the quality of our customer service. We continue to
invest in our customer proposition in order to strengthen our
service offering and reputation for delivering results.
No change in overall residual risk rating
Residual likelihood
Residual impact
Overall residual risk rating
Linked strategic priorities
1. Lettings: Organic growth
3. Sales: Market share growth
4. Financial Services: Revenue growth
Linked strategic priorities
1. Lettings: Organic growth
3. Sales: Market share growth
4. Financial Services: Revenue growth
Linked strategic priorities
1. Lettings: Organic growth
2. Lettings: Acquisitive growth
3. Sales: Market share growth
4. Financial Services: Revenue growth
Linked strategic priorities
1. Lettings: Organic growth
3. Sales: Market share growth
4. Financial Services: Revenue growth
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 37
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Emerging risk description Risk management
1) Future significant changes in government housing policies The Board monitors government housing policy on an ongoing basis and
incorporates possible changes into its strategic and risk management decisions.
Furthermore, the Board engages with key industry to debate and assess the
impact of potential changes.
Future significant changes in government housing policies, under
the current government or linked to a change in government, may
lead to structural changes in the markets the Group operates in.
Although future government policy cannot be reliably predicted,
potential risks could include general market disruption, the
introduction of pricing control mechanisms, private landlords
exiting the private rental sector due to punitive legislation or tax
changes that adversely affect the residential property markets.
2) Climate-related risk The Group utilises the TCFD framework to identify, assess and manage
emerging climate-related risks.
The ESG Committee has responsibility of reviewing and providing oversight
of the implementation of the Group’s ESG strategy. The ESG Committee
provides recommendations to the Audit Committee on climate-related risks as
applicable, following which the Audit Committee considers such risks as part of
its wider risk management responsibilities. Refer to
PAGES 84 AND 85 for
the ESG Committee’s report.
The Executive Committee monitors the delivery of the Group’s environmental
programmes and also monitors and manages climate-related risk as part of the
Group’s overall risk management framework.
Climate change is an emerging risk that may have medium
to long-term implications for the Group. Further details
of the potential climate-related risks, as well as potential
climate-related opportunities, are set out on
PAGE 46 in
the Group’s TCFD statement.
Emerging risks
The Board considers emerging risks on a regular basis and manages them accordingly, taking into account the expected timing of the risk.
The Group has procedures in place to identify emerging risks, including horizon scanning, and to monitor market and consumer trends.
Two emerging risks and the associated risk management approach are set out below.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202338
PROSPECTS AND VIABILITY
Long-term prospects
Market risk continues to present the highest risk to the Group.
The Group’s resilience to market risk continues to improve as
non-cyclical and recurring Lettings and Financial Services revenues
grow, which when combined now represent c.70% of Group revenues.
Within Sales, the Group is exposed to the London residential sales
market which is more cyclical in nature. Growing market share within
Sales is a strategic priority which will help mitigate any reductions in
sales market volumes due to the macro environment. This, along with
the continued focus to grow Lettings organically and by acquisition,
helps reduce volatility in the Group’s results and protects earnings
and net free cash flow.
With an increasing focus on growing Lettings, and recovery in Sales
market share throughout 2023, the Group is well positioned to
withstand a variety of market conditions.
Viability approach
The Group’s viability is assessed through the strategic planning
process which includes financial projections for the next five years
and takes into account the Group’s principal risks. Key assumptions
within the strategic plan include market volumes, market pricing,
market share and cost base assumptions, including inflationary
pressures, required investment and cost savings.
Other factors taken into consideration when assessing viability
include use of cash resources and liquidity. At 31 December 2023,
the Group was in a net debt position of £6.7 million (2022: £12.0 million
net cash), including £11.7 million drawdown on the Group’s
£20.0 million revolving credit facility (‘RCF’).
Assessment of viability
In accordance with the UK Corporate Governance Code, the Directors
have assessed the prospects of the Group over a longer period than
the 12 months required by the going concern provision. The Directors
have determined that five years is the most appropriate timeframe
over which the Board should assess long-term viability, with this
being the longest period over which the Board considered an
appropriate assessment of the principal risks could be made. This is
consistent with the period over which the Group’s strategic review is
assessed by the Board and the minimum vesting and holding period
for Executive Director share schemes.
This viability assessment has considered the potential impact of
the principal risks on the business model, future performance and
liquidity of the Group. In making this statement, the Directors
have considered the resilience of the Group under varying market
conditions together with the timing and effectiveness of any
mitigating cost actions.
Foxtons has an increasingly resilient business model underpinned by non-cyclical recurring revenues
from Lettings and Financial Services. Long-term prospects and viability is a key consideration when
determining and assessing the Group’s business model and strategic priorities, and also a key area
of focus when managing principal risks.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 39
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Severe but plausible scenario
For the purpose of testing viability, a severe but plausible scenario has been determined under which the Group is significantly impacted by
market risk, which has been assessed to have the highest residual likelihood and impact on the performance of the Group from a range of
scenarios considered (refer to the principal risks heat map on
PAGE 34 for further details).
The severe but plausible scenario assumes a sustained downturn in the sales and mortgage markets with an adverse impact on transaction
volumes and pricing while lettings market rental prices reduce and supply is restricted. The scenario captures the risk of ongoing adverse
macroeconomic and political events.
As well as capturing market risk, the scenario incorporates the associated reduction in costs due to reduced revenue and the availability and
effectiveness of controllable mitigating actions, including reducing capital expenditure and reducing costs primarily by reducing the salesforce
to reflect market conditions. Each of these actions would be available to limit the impact of the identified risks.
The key assumptions assumed in the severe but plausible downside scenario are summarised below.
Lettings volumes and pricing 2024 lettings revenue reduces by 7% against the base plan, reflecting lower units and a decline
in average rental prices to 2022 levels, which then gradually recovers over the remaining
forecast period. This rental price assumption means the rental increases seen across the last
18 months fully reverse in 2024, and track general inflation thereafter.
Sales volumes and pricing 2024 market sales volumes reduce to 2009 levels (i.e. market volumes following the global
financial crash) before recovering to 2019 levels by the end of 2028. House prices decline
by 5% in 2024 before recovering 2.5% year-on-year to 2028.
Financial Services volumes New purchase mortgage transactions reduce in line with the sales volume reduction
noted above. Refinance business is unaffected due to the resilient nature of the revenue.
Direct operating costs and mitigating actions Mitigating actions to reduce discretionary expenditure and headcount managed to
reflect demand.
Revolving credit facility (RCF) The £20m RCF facility which expires in June 2026 is assumed to be extended by two years
under the current facility agreement.
Future Letting acquisitions No additional lettings acquisitions are included in the viability scenario.
Under the severe but plausible scenario, the Group would be able to withstand the adverse conditions and would have sufficient cash resources
throughout the period. Based upon the results of this analysis, 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 the five-year viability period.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202340
RESPONSIBLE BUSINESS
OVERVIEW
Our purpose is to get the right deal done for London’s property owners. In doing this we aim to deliver value for our customers, provide
opportunities and progression for our staff and ensure we contribute to the communities in which we operate.
ESG COMMITTEE
The Board’s ESG Committee oversees the implementation of the Group’s ESG strategy, with the Executive Leadership Team responsible for
the day-to-day delivery of the strategy. Furthermore, we actively encourage employees to get involved in ESG activities since we believe every
single employee can have a positive impact on their colleagues, the environment and our communities.
Refer to
PAGES 84 AND 85 for the ESG Committee’s report.
FTSE4Good
The Group has been independently assessed according to the FTSE4Good criteria and satisfies the requirements
to be a constituent of the FTSE4Good Index Series, which measures the performance of companies demonstrating
specific ESG practices.
Our commitment to being a responsible business focuses on the areas that
are most important to our stakeholders and to our long-term success.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 41
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
OUR ENVIRONMENTAL AND
SOCIAL COMMITMENTS
We have established environmental and social
commitments that provide ambitious, but achievable,
goals on which we can focus our sustainability efforts.
Environmental commitments:
• Electrifying our entire vehicle fleet by 2030 in line
with our EV100 commitment.
• 30% reduction in Scope 1 and Scope 2 emissions
by 2030 against the 2021 baseline. This target will
act as a milestone to our longer-term target of
reaching net zero across Scope 1, Scope 2 and
Scope 3 emissions by 2050.
• Reaching net zero across Scope 1, Scope 2 and
Scope 3 emissions by 2050.
Social commitments:
• Continuing to drive diversity initiatives to make
a meaningful contribution to social mobility and
diversity in London.
• Helping people within the communities we serve
move up in the world, through our partnership
with the Single Homeless Project onwards, and
working more closely with our local communities.
Thanks to the collective efforts of everyone at
Foxtons we have made good progress towards these
commitments in 2023 and have plans to make further
improvements in the year ahead.
Our responsible business report is split into four sections which
reflects those areas that are most important to our stakeholders
and to our long-term success:
1. ENVIRONMENT
As a people based business, the culture that we develop within
our workforce is key to our success and supports the delivery of
stakeholder value. We are proud to have a diverse and inclusive
workforce that has developed organically through our focus on
hiring, training, developing and retaining high-performing talent.
Refer to
PAGES 52 TO 58 for more details.
2. PEOPLE, CULTURE AND TRAINING
We aim to use natural resources as efficiently as possible and
minimise the impact our business has on the environment.
Refer to
PAGES 42 TO 51 for more details.
As a responsible business, we contribute to the wellbeing and
development of the communities in which we operate.
Refer to
PAGES 59 AND 60 for more details.
3. COMMUNITY
We recognise the importance of maintaining the highest
standards of business ethics, protecting human rights and
maintaining health and safety standards.
Refer to
PAGES 61 AND 62 for more details.
4. OTHER RESPONSIBILITIES
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202342
RESPONSIBLE BUSINESS CONTINUED
We are committed to reducing our environmental impact and carbon footprint.
OUR APPROACH ENVIRONMENT
Although Foxtons has a relatively simple infrastructure and supply chain, with a smaller impact on the environment than some other listed
businesses, we are committed to reducing our environmental impact and continue to take steps to support the government’s long-term
environmental pledges, as well as our own long-term ESG commitments.
We use the TCFD framework (refer to
PAGES 46 TO 51) or to identify and assess emerging climate-related risks, use natural resources as
efficiently as possible and take steps to change our business practices and operations where relevant to ensure that we minimise our impact
on the environment.
The Board has ultimate oversight of our approach to climate change, with the ESG Committee monitoring progress against ESG commitments
and the Audit Committee monitoring climate-related risks as part of its risk management responsibilities. The Executive Leadership Team,
which is responsible for day-to-day management of the business and ensuring that the ESG commitments are delivered upon, provides regular
updates to the ESG Committee on a regular basis (refer to
PAGE 85 for the ESG Committee’s key activities during the year).
1. ENVIRONMENT
2023 HIGHLIGHTS
Electric/hybrid vehicle rollout
31%
of the vehicle fleet was either fully
electric or hybrid by the year end
(31 December 2022: 16%)
GHG emissions intensity ratio
10%
reduction in tonnes of CO
2
e per
full-time employee (location based
measurement method)
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 43
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
KEY INITIATIVES AND PROGRESS
MADE IN 2023
Vehicle fleet electrification
Our vehicle fleet is used in the day-to-day operations of our business,
including transporting customers to property viewings and carrying
out property inspections. Through the electrification of our fleet we
aim to reduce our emissions and cut pollution in the communities
in which we operate. As a member of EV100, the global climate
initiative from The Climate Group, we have set a target to switch
all of our vehicles to electric by 2030.
In 2023, we continued our progress against this target by replacing
petrol vehicles with fully electric or hybrid vehicles. At 31 December
2023, 31% of the vehicle fleet was either fully electric or hybrid
(31 December 2022: 16%).
Energy sourcing and reduction initiatives
Renewable energy sources
We continue to reduce the environmental footprint of our leased
head office and branch network, working closely with our energy
supplier to monitor our usage and use a REGO backed electricity
product (REGO – Renewable Energy Guarantees of Origin) across
our branches. Through REGO, our branch electricity is backed by
renewable sources, which helps reduce our carbon footprint and
is another step towards carbon neutrality and becoming net zero
across Scope 1, Scope 2 and Scope 3 emissions by 2050.
Head office and branch efficiency
In 2023 we continued with our energy efficiency initiatives
which included upgrading our head office lighting system to be
compatible with low energy LED bulbs. This builds on the work
completed in 2022 to install LED lighting and timers for lighting,
air conditioning and fresh air systems to reduce energy usage
across the branch network.
Energy efficient data centres and technology
The Group has two modern eco efficient data centres, with one
designed to BREEAM excellent standard. Both data centres use
highly efficient cooling technologies to reduce energy consumption
and reuse waste heat in communal areas. In the year we have
completed infrastructure refresh programmes to enhance our
technology capabilities and improve our energy efficiency.
The Foxtons Mini over the years
2003 Urban Graffiti Mini
2005 Camo Mini
2004 Flower Power Mini
2006 Punk Mini
2007 Property Chase Mini
2008 Space Mini
2010 X-ray Mini
2014 Anniversary Edition Mini
2022
Launch of the Foxtons
Electric Mini
2001 Italian Job Mini
2002 Hot Rod Mini
1. ENVIRONMENT
2022 saw the arrival of our greenest Mini ever
Since its launch in 2001, the Foxtons Mini has been a key part of
Foxtons’ identity, with the designs over the years catching the spirit
of Foxtons and London’s residential property market. 2022 was a
milestone year for the Foxtons Mini, with the first fully electric
version being launched. The Foxtons Electric Mini, which emits zero
emissions, is a perfect car for the city and reflects progress against
our commitment to fully electrify our fleet by 2030.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202344
RESPONSIBLE BUSINESS CONTINUED
Emissions
We have a long-term target to reduce our total value chain to net zero, across Scope 1, Scope 2 and Scope 3 by 2050. Additionally, we have an
interim target to reduce our combined Scope 1 and Scope 2 emissions by 30% by 2030 against the 2021 baseline. We will primarily achieve this
through electrification of the vehicle fleet, as well as identifying ways to reduce the size of our fleet and further efficiency measures across our
property estate.
Scope 1 and Scope 2 reporting
Our Streamlined Energy and Carbon Reporting (SECR) reports emissions from fuel consumption and the operation of our facilities (Scope 1)
and from purchased electricity (Scope 2), both of which are mandatory. Our Scope 1 and Scope 2 footprint, measured in line with mandatory
reporting requirements on a location basis, is 1,983 tonnes CO
2
e in 2023 (2022: 1,942 tonnes CO
2
e). All emissions and energy usage are
incurred within the UK.
GHG emissions 2023 2022 2021
Scope 1 emissions
Combustion of fuel (tonnes CO
2
e) 1,294 1,191 1,224
Other – gas, diesel and LPG (tonnes CO
2
e) 45 45 114
Scope 2 emissions
Purchased electricity (tonnes CO
2
e) Location based 645 706 910
Purchased electricity (tonnes CO
2
e)
1
Market based 149 79 –
Total: Scope 1 & Scope 2 emissions
Total: Scope 1 & 2 emissions (tonnes CO
2
e) Location based 1,983 1,942 2,248
Total: Scope 1 & 2 emissions (tonnes CO
2
e)
1
Market based 1,488 1,315 1,338
Intensity ratio
Tonnes of CO
2
e per full-time employee Location based 1.46 1.62 1.94
Tonnes of CO
2
e per full-time employee
1
Market based 1.10 1.09 1.15
Energy consumption
Aggregate energy consumption (kWh) 8,890,962 8,874,847 9,186,775
Total CO
2
e by emission type
Electricity: lighting, heating and cooling 645 706 910
Combustion of fuel 1,294 1,191 1,224
Other: gas, diesel and LPG 45 45 114
Methodology
Base line: 2021
Emission factor data source: UK Government GHG Conversion Factors for Company Reporting
Assessment methodology: The Greenhouse Gas Protocol
Intensity ratio: Emissions per full-time employee
1
Market based measurement of Scope 2 purchased
electricity reflects procured renewable energy (REGO
certified) reducing scope 2 emissions by 496 tonnes CO
2
e
(2022: 627 tonnes CO
2
e).
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 45
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Scope 1 and Scope 2 reporting
Scope 1 emissions have increased year-on-year as a result of increased
vehicle mileage driven, offset by the continued electrification of the
vehicle fleet, with total Scope 1 emissions up 8% to 1,339 tonnes
CO
2
e (2022: 1,236 tonnes CO
2
e). Scope 2 emissions (location based
methodology) have fallen by 9% to 645 tonnes CO
2
e (2022: 706
tonnes CO
2
e) reflecting ongoing energy saving initiatives within the
branch portfolio and at head office.
Scope 3 reporting
Like other companies, we are adopting a staged approach of
assessing our Scope 3 emissions. Through a desktop exercise,
the Scope 3 categories have been considered for relevance, and
where relevant, an initial quantification exercise completed to
assess whether the associated emissions are material to the
Group (refer to
PAGE 46 for materiality considerations).
The Scope 3 categories with the highest associated emissions
are purchased goods and services and the element of employee
commuting not already captured in Scope 1. The desktop exercise
has concluded Scope 3 emissions are not material, however, a more
detailed assessment will be undertaken to validate this assertion
in due course, with further disclosure as necessary.
Recycling and water
Recycling
We have a recycling policy and our offices are equipped with
designated bins for the recycling of widely used materials in order to
reduce our consumptive waste. We actively encourage a paperless
environment and try to limit any written correspondence to email.
The use of the ‘My Foxtons’ customer portal continues to increase
meaning customers can transact without paper and use digital signing
technology. Additionally, within our branches, we use recyclable glass
bottles for customer drinking water, rather than plastic bottles.
Water consumption
Our water consumption relates to water consumed in our offices,
primarily for drinking and staff facilities, and water consumed to
clean our vehicle fleet. Although our water consumption is not
considered to be significant, we regularly review our operations
with a view to reducing water usage noting it is a resource that is
under increasing pressure.
1. ENVIRONMENT
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202346
RESPONSIBLE BUSINESS CONTINUED
Assessing materiality of climate-related risks
The Board has assessed the materiality of climate-related matters taking into consideration the extent to which climate change poses a material
risk to the business and after considering the following points:
Following the assessment, the Board has concluded that climate-related risks are not material to the Group and has taken this into account
when applying the TCFD framework to ensure the level of disclosure is commensurate to the level of risk.
Materiality consideration points Assessment outcome
TASK FORCE ON CLIMATERELATED FINANCIAL DISCLOSURES
Whether there are any business segments, elements of the
business model or locations that could be more significantly
impacted by climate risks.
No particular business segment or element of the business model
has a heightened exposure to climate change risk. Since Foxtons
operates in Greater London no special location considerations
are required.
Size of environmental footprint.
Foxtons is a service based business with relatively low levels of
Scope 1, 2 and 3 emissions.
The complexity of the Group’s supply chain and exposure
to climate-related factors.
Foxtons operates in a service industry with a relatively asset light
business with a non-complex supply chain.
The possible impact of climate risks.
Within the scenario analysis presented on
PAGES 48 AND 49 the
climate risk impacts have been assessed as being low to medium.
Whether the likelihood of risks and the associated financial
impacts could significantly evolve over time.
The assessment has considered risks over the short, medium and
long term. Management will continue to evaluate the long-term
impact and evolve the risk assessment accordingly.
The Group has applied the TCFD framework to support our understanding and management
of climate-related risks and opportunities.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 47
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Climate-related risks and opportunities
The TCFD divides climate-related risks into two major categories: (1) Risks related to the transition to a lower carbon economy (“Transition risks”);
and (2) Risks related to the physical impacts of climate change (“Physical risks”). The risks are presented below, having considered the TCFD all
sector guidance points, alongside climate-related opportunities.
The Board will continue to assess climate-related risks under review as an emerging risk as noted within the risk management disclosures
on
PAGES 47 TO 49.
Transition risks
Short term (to 2030) Medium term (2030 to 2040) Long term (beyond 2040)
Market risk: Climate-related
regulation could reduce the supply
of stock and impact growth
plans. For example, property
energy performance regulation
may increase landlord operating
costs, discouraging landlords from
operating in the private rental sector.
Operational risk: There will be additional costs of becoming net zero across Scope 1, Scope 2 and Scope
3 emissions due to the cost of renewable energy, electric vehicles, environmental levies and carbon
offsets. The cost of investment is likely to be partially offset by lower energy costs.
Market risk: Changes in customer behaviour could result in changes in supply and demand for residential
property and cause volatility in property and rental prices.
Market risk: Vulnerable social groups and lower income households may be disproportionately affected
by climate change which may impact local property markets and balance of business.
Reputational risk: If we do not transition our business model quickly enough there may be increased
reputational risk.
Physical risks
Short term (to 2030) Medium term (2030 to 2040) Long term (beyond 2040)
Business disruption as a result of
extreme weather events.
As temperature rises and extreme weather events
become more regular, climate change predictions
suggest that by the 2050s London could be some
2 degrees hotter with wetter winters and drier
summers, leading to changes in customer behaviour
and wider social impacts. There may also be business
disruption as a result of extreme weather events.
It is likely that a significant proportion of
London’s critical infrastructure will be at
increased risk from flooding and there
are likely to be more people living on a
floodplain which may impact customer
behaviour and potentially reduce available
housing stock.
Climate-related opportunities
Short term (to 2030) Medium term (2030 to 2040) Long term (beyond 2040)
In the short term there are
investments that we can make to
improve our energy efficiency across
our business operations which will
reduce operating costs.
Over the medium to long term there will need to be significant investment by property owners to ensure
existing homes are low carbon and resilient to the changing climate. This is a major UK infrastructure
priority and is expected to be supported by the Treasury. There could be an opportunity for the Group to
increase its property management revenues by supporting property owners make the required changes.
1. ENVIRONMENT
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202348
RESPONSIBLE BUSINESS CONTINUED
Climate scenario analysis
To evaluate the resilience of the Group’s approach to climate-related
risks and opportunities, analysis under two possible climate scenarios
has been completed:
i) The rise in global temperature is limited to less than 2°C.
ii) The global temperature rises by more than 2°C.
The risks and opportunities under each scenario are presented against
short, medium, and long-term time horizons. Further work will be
undertaken to define the resilience of the business model in the
longer term as market practice and market intelligence develops.
Low impact
Key:
Medium impact High impact
Short term (to 2030) Medium term (2030 to 2040) Long term (beyond 2040)
Risks: Higher transition risks associated with
moving to a low carbon economy
• Climate-related regulation could
reduce the supply of stock and
impact revenue growth plans.
• Transition costs to meet
emission targets and/or imposed
climate levies.
• Reputation risk due to a
slow transition to a low
carbon economy.
Continued
transition risks
• Transition costs to meet
emission targets and/or imposed
climate levies.
• Potential market volatility
impacting local markets and
balance of business.
• Reputation risk due to a
slow transition to a low
carbon economy.
Less significant increase
in physical risks
• Isolated extreme weather events
expected causing manageable
business disruption to operations.
Impact assessment: Impact assessment: Impact assessment:
Opportunities:
• There is an opportunity for the Group to benefit from increased demand for property management services as landlords
seek to make properties more energy efficient.
• Opportunity to reduce running costs by adopting lower energy technologies and electric vehicles.
Impact assessment:
i) The rise in global temperature is limited to less than 2°C.
Under the less than 2°C scenario, transition risks, as a result of transitioning to a low-carbon economy pose a greater risk to our business model,
whilst physical risks, pose a lower risk. Overall, we expect the Group’s business model to be resilient under this scenario as summarised in the
table below.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 49
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
ii) The global temperature rises by more than 2°C.
Under the greater than 2°C scenario, global climate policy is less effective and cause climate change above that envisaged by the Paris
Agreement. Under this scenario, physical risks pose a greater risk as a result of more extreme weather events, whilst transitional risks pose
a lower risk. Overall, we expect the Group’s business model to be resilient under this scenario as summarised in the table below.
Short term (to 2030) Medium term (2030 to 2040) Long term (beyond 2040)
Risks: Slight increase in transition
and physical risks
• More regular extreme weather
events expected to cause
manageable business disruption
to operations.
• Insurance cost rises due to increase
in physical damage to properties
and vehicles.
Increasing physical risks due to a failure to adequately transition to
a low-carbon economy
• More regular extreme weather events expected causing more significant
business disruption to operations.
• Market volatility impacting local markets and balance of business.
• Reputation risk due to a slow transition to a low-carbon economy.
• Increase in energy costs as energy sources become constrained
or compromised.
Impact assessment: / Impact assessment: /
Opportunities:
• There is an opportunity for the Group to benefit from increased demand for property management services as landlords
seek to make properties more energy efficient or make a greater use of our property management services to manage
climate-related issues.
• Opportunity to reduce running costs by adopting lower energy technologies and electric vehicles.
Impact assessment:
Low impact
Key:
Medium impact High impact
1. ENVIRONMENT
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202350
RESPONSIBLE BUSINESS CONTINUED
TCFD recommended
disclosure and compliance Activities to date and actions to achieve compliance
Governance
(a) Describe the
Board’s oversight of
climate-related risks
and opportunities
The Board has overall accountability for ESG and is responsible for maintaining the Group’s system of risk
management and internal control, including climate-related risks. This is informed by the work of the ESG
Committee and the Audit Committee.
The ESG Committee regularly reviews environmental and social related risks to the Group and makes
recommendations to the Audit Committee regarding inclusion in the Group’s risk management practices.
Climate-related opportunities will also be reported directly to the Board by the ESG Committee.
Where relevant and material, the Board will consider climate-related matters when making strategic
decisions, such as deciding the speed at which the vehicle fleet is electrified.
Planned actions – The Board will continue to receive updates from the ESG Committee and Audit
Committee to inform strategic decisions.
Governance
(b) Describe
management’s
role in assessing and
managing climate related
risks and opportunities
The Executive Leadership Team is responsible for day-to-day management of the business and ensuring that
the ESG strategy is actioned appropriately within the business. The Executive Leadership Team monitors
the delivery of the Group’s environmental programmes and also monitors climate-related risk as part of
the Group’s overall risk management framework. The Executive Leadership Team receives progress reports
on environmental and social initiatives from relevant departmental heads. The ESG Committee, which
meets three times a year and otherwise as required, receives reports from the Executive Leadership Team
or relevant department heads. The ESG Committee Chair reports key matters to the Board following each
Committee meeting.
Planned actions – As our environmental programmes progress, we will assign specific responsibilities
to Senior Managers to ensure that climate-related risks and opportunities are assessed and managed
effectively throughout the business.
Strategy
(a) Describe the
climate-related risks
and opportunities the
organisation has identified
over the short, medium,
and long term
On
PAGES 47 TO 49 we describe the possible climate-related risks and opportunities that may impact
our business over the short, medium and long term.
Planned actions – The Board will continue to monitor risks on a short, medium and long-term basis and
monitor the emerging climate-related risk.
Strategy
(b) Describe the impact
of climate-related risks
and opportunities on
the organisation’s
businesses, strategy,
and financial planning
The Board has not identified any material climate-related risks that impact the Group’s business model,
strategy, financial planning or viability of the Group. This conclusion is supported by the risk assessment
set out on
PAGES 47 TO 49. No material cost investment is required to meet our medium-term
environmental commitments, with the relevant costs incorporated into financial projections for the next
five years.
Planned actions – The Board will continue to monitor risks on a short, medium and long-term basis and
monitor the emerging climate-related risk.
Strategy
(c) Describe the resilience
of the organisation’s
strategy, taking into
consideration different
climate-related
scenarios, including a
2°C or lower scenario
On
PAGES 48 AND 49 the impact on the Group’s strategy under two climate-related scenarios has been
assessed: i) a 2°C or lower scenario; and ii) a more than more than 2°C scenario.
Planned actions – The Board will continue to monitor the resilience of the Group’s strategy, and in
particular the longer-term impacts which are inherently more difficult to assess.
Alignment with the recommendations of the TCFD
Our TCFD compliance statement is set out below. In line with the requirements of LR 9.8.6(8)R, we are reporting on a ‘comply or explain’ basis
against the eleven recommended TCFD disclosures. The table below sets out our compliance status in relation to each of the recommendations
and, where relevant, the actions we are taking to achieve compliance.
For 2023, our disclosures were either compliant or partially compliant with all of the TCFD recommendations. We will continue to develop our
disclosure in future years as market practice develops or in the event our materiality assessment evolves.
Compliant
Key:
Partially compliant
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 51
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
TCFD recommended
disclosure and compliance Activities to date and actions to achieve compliance
Risk Management
(a) Describe the
processes for identifying
and assessing
climate-related risks
Climate-related risks are identified through the Group’s risk management processes. The Group utilises the
TCFD framework to identify climate risks and horizon scans for changes in the risk environment.
Planned actions – We will continue to review our risk register to ensure effective identification of our
climate-related risks.
Further information – Refer to
PAGE 32 for details of the Group’s risk identification process.
Risk Management
(b) Describe the
processes for managing
climate-related risks
Climate-related risks are managed through the Group’s risk management processes. The Executive
Leadership Team regularly reports progress to the ESG Committee, including actions to manage the impact
of emerging climate-related risks.
Planned actions – The Board and Audit Committee will continue to regularly review the Group’s principal
and emerging risks.
Further information – Refer to
PAGE 32 for details of the Group’s risk management process.
Risk Management
(c) Describe how
processes for identifying,
assessing, and managing
climate-related risks are
integrated into overall
risk management
The Group’s risk management framework includes the key process for identifying, assessing and managing
climate-related risks alongside non-climate-related risks.
Planned actions – The Board and Audit Committee will continue to regularly review the Group’s principal
and emerging risks.
Further information – Refer to
PAGE 32 for details of the Group’s risk management process.
Metrics and Targets
(a) Describe the
metrics used to assess
climate-related risks and
opportunities in line with
the strategy and risk
management process
The metrics used by the Group to assess the climate-related risks and opportunities include:
• GHG emissions (Scope 1 and Scope 2)
• Intensity ratio
• Energy consumption
Planned actions –Continue to monitor our total GHG emissions, intensity ratio and energy consumption.
We will also keep these metrics under review and consider whether to add further metrics in the future.
Further information – Refer to
PAGES 44 AND 45 for more detail on our environmental impacts and
climate-related targets.
Metrics and Targets
(b) Disclose Scope 1,
Scope 2, and, if
appropriate, Scope 3
GHG emissions, and
related risks
GHG Scope 1 and 2 emissions reported in line with the Streamlined Energy and Carbon Reporting (SECR)
regulations. Scope 3 GHG emissions are not considered to be material for the Group and are therefore not
currently disclosed.
Planned actions
• We will continue to report on GHG Scope 1 and 2 emissions.
• A desktop exercise has concluded Scope 3 emissions are not material, however, a more detailed
assessment will be undertaken to validate this assertion in due course, with further disclosure
as necessary.
Further information – Refer to
PAGE 124 for the Group’s Streamlined Energy and Carbon Reporting and
PAGE 43 for details of the Group’s Scope 3 emission assessment.
Metrics and Targets
(c) Describe the
targets used to manage
climate-related risks
and opportunities
and performance
against targets
The Group has a number of targets to manage climate-related risks as set out on
PAGES 46 AND 47.
In summary these are:
• Electrifying our entire vehicle fleet by 2030 in line with our EV100 commitment.
• 30% reduction in Scope 1 and Scope 2 emissions by 2030 against the 2021 baseline.
• Reaching net zero across Scope 1, Scope 2 and Scope 3 emissions by 2050.
Planned actions – To keep our targets under review and continue to monitor progress against them.
1. ENVIRONMENT
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202352
RESPONSIBLE BUSINESS CONTINUED
2. PEOPLE, CULTURE AND TRAINING
People, culture and training is critical to our success. Guided by our purpose and values, 2023 has
been a year of significant focus for Foxtons’ customer-centric and results-based culture.
OUR APPROACH
Working at Foxtons is exciting, sociable and rewarding. We reward hard work and those who demonstrate our values and deliver for
customers. We provide the opportunity for talented and enthusiastic individuals to thrive in their careers and our highly incentivised
remuneration structures reward exceptional performance and customer delivery. In 2023, we worked tirelessly to embed our refreshed
purpose and values to reflect Foxtons’ estate agency DNA through a combination of focus groups, training workshops, and manager support
and guidance. This gives our people a clear focus and underpins our high-performance culture that recognises and celebrates the role we play
in facilitating that often highly emotional and consequential transaction of letting or selling a house. In our 2023 employee engagement/culture
survey
1
, 88% of employees said that they have a good understanding of what our company values mean reflecting the importance of values in
everything we do as a company.
1
Results from the 2023 employee engagement/culture survey, independently administered by CultureAmp. 68% of the workforce
responded to the 2023 survey.
2023 HIGHLIGHTS
Diverse and inclusive workplace
81%
of employees believe that the
Company values diversity and builds
teams that are diverse
1
Company confidence
85%
of employees believe that the Company
is in a position to really succeed over
the next three years
1
Rebuilding culture
MORE THAN 1,100
employees attended an interactive training
workshop to discuss how to embody the
Company’s values to deliver exceptional
service and drive performance
Training & development
MORE THAN 375
Negotiators completed our
market leading five-day
induction programme
Continuous learning
MORE THAN 2,200
hours of face-to-face
classroom-based training
delivered across the business
Respectful workplace
TRAINING ROLLED OUT
to Directors, Managers,
and Team leaders,
delivered by external
subject matter experts
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 53
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
2. PEOPLE, CULTURE, SKILLS & KNOWLEDGE
PEOPLE
We are committed to
recruiting and retaining a
highly motivated, skilled and
experienced workforce that
mirrors the diversity of London,
the city we predominantly serve.
This approach enables us to
access a diverse mix of people
and skills, with different ideas
and creates a culture where each
employee can feel motivated to
perform at their best.
CULTURE
We are committed to
investing in and maintaining a
high-performance culture that
attracts and retains talented
people who deliver outstanding
results for our customers.
This culture will enable us
to rebuild our competitive
advantages, deliver our strategic
priorities and ultimately enhance
the success of the Group.
TRAINING
We are committed to ensuring
our people receive the best
training and career development
opportunities with a view to
building a long-term career.
Our industry leading training
consists of formal and informal
training, mentor programmes
and networking events, giving
everyone the support and the
resources they need to enhance
their development.
Refer to PAGES 54 AND 55
for details of our initiatives
and progress made in 2023.
Refer to PAGES 56 AND 57
for details of our initiatives
and progress made in 2023.
Refer to PAGE 58 for details
of our initiatives and progress
made in 2023.
Our people strategy aims to embed the
right skills and values in our workforce
to deliver the very best results for our
customers. Our approach to recruitment,
our employee value proposition and our
diversity networks all play an important
role in maintaining an engaged,
productive and diverse workforce.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202354
RESPONSIBLE BUSINESS CONTINUED
Recruitment
Attracting high quality candidates from diverse backgrounds remains
a critical part of our talent strategy and is underpinned by consistent
and objective hiring practices.
Our employee value proposition aims to attract high calibre
candidates, backed by our recruitment practices which use a range of
selection and assessment methods to recruit quality talent. We aim
to judge the merits of candidates’ abilities and achievements in the
context of their background, not simply the absolutes of any
achievements. Our equal opportunities policy supports this
approach. We have backed this with a programme of unconscious
bias training across our hiring managers and recruitment team.
In 2023, to ensure we continue to attract the best diverse talent, we:
• Reviewed and upgraded our external recruitment partners to
support candidate attraction.
• Continued to enhance our interview and assessment methods
to ensure we are selecting talent to support our future.
• Invested in growing, training and developing our internal
recruitment team.
• Reviewed and overhauled our employee value proposition,
further details are provided below.
Employee value proposition
In 2023, we embarked on a full review of our employer brand and
partnered with an external agency to ensure that our talent attraction
and engagement initiatives are set up for success through the
development of a refreshed and compelling employee value
proposition. Working alongside our chosen partner, we conducted an
in-depth analysis of our current employer brand through a combination
of focus groups, stakeholder interviews, and desktop research. We will
unveil our updated employee value proposition in 2024 to successfully
attract, recruit, retain and engage the best talent.
Workforce retention
This year there has been a continued focus on improving our
workforce retention to ensure that we see the most value from our
investment in training and development. In 2023 we enhanced our
analysis of leaver data to get a better understanding of why employees
leave the business and empowered heads of departments to review
and report on key trends. Employee retention will be a key focus
throughout 2024 and is key to rebuilding our competitive advantages.
Our diversity networks
Across the business, our diversity networks, Women@Foxtons, Afro
Foxtons and Foxtons LGBTQ+, continue to be active and engaged.
Women@Foxtons brings together female team members at various
levels of their careers to provide personal and professional career
development support and to help increase the number of women in
management and senior roles.
Throughout the year, senior women mentored more junior women,
with a view to helping them develop skills which will enable them to
excel in their roles and progress their careers. Female colleagues are
encouraged to share their experiences and provide career
advancement support, advice and training to one another.
In 2023, the Women@Foxtons network continued working
towards our goal of developing and promoting more women
into senior management via a programme of “Lunch and Learns”,
mentoring schemes, and a combination of internally and externally
facilitated masterclasses.
KEY INITIATIVES AND PROGRESS MADE IN 2023
PEOPLE
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 55
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Diversity reporting: gender and ethnicity
The table below presents gender and ethnicity diversity ratios across the Group as at 31 December 2023. Gender splits reflect employer
information we hold on employees’ legal sex, and ethnicity splits reflect diversity information anonymously collated as part of our annual
employee survey or specific returns made by the Board and Senior Management. We use our annual disclosure as a benchmark to monitor
our progress as we further enhance our gender and ethnic diversity at all levels of the Group.
Gender Ethnicity
Male Female
White ethnic
background
Non-white or ethnic
minority background
Prefer not
to say
Board 71% 29% 100% 0% 0%
Executive Leadership Team
1
75% 25% 88% 12% 0%
Senior Management
2
80% 20% 78% 22% 0%
All other employees 56% 44% 57% 38% 5%
1
Executive Leadership Team includes two Executive Directors, refer to PAGE 68 for Executive Leadership Team membership.
2
Senior Management includes the Executive Leadership Team and their direct reports, excluding Executive Assistants.
Below the Senior Management level the gender balance was 56% male and 44% female and of those employees who responded to the annual
employee survey, 38% identified as non-white or from an ethnic minority background. Although this ethnic diversity is lower than London’s
ethnic diversity with 46% of London identifying as non-White in the 2021 Office for National Statistics census there has been an improvement
in the metric year-over-year.
At more senior levels of the business we recognise there is more work to do to improve both gender and ethnic diversity of Senior Management,
the Executive Leadership Team and the Board. Our employee development programmes continue to be a key area of focus to improve the
diversity across the Group.
Foxtons LGBTQ+ promotes Foxtons as a safe and inclusive
workplace where everyone can feel included, represented and
allowed to be themselves.
Throughout 2023, Foxtons LGBTQ+ network offered a mix of social,
insight and community engagement activities. In April, we explored
the relationship between the LGBTQ+ community and the
Metropolitan Police with the Bow Street Police Museum, and in June
we engaged with the network to consider the visibility of our support
for the LGBTQ+ trans and ethnic minority communities.
AFRO Foxtons is an inclusive network which allows employees
to share their stories, support each other’s ambitions and promote
career development. The network plays a vital role in supporting the
Group’s aims of increasing the level of black leadership representation.
2023 saw the number of AFRO Foxtons members grow by 12%.
This is attributed to an active calendar of events aimed to further
stimulate the promotion of talent within the community. Such events
included a personal growth and leadership event hosted by external
speakers SharpEdged, a Black History Month social and quiz, and a
celebration of the one year anniversary of Foxtons’ first DEI Podcast
series ‘TopTalk’, which now has a total of 10 shows.
2. PEOPLE, CULTURE AND TRAINING
A RO
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202356
This year we embedded the Group's
refreshed values to reflect our new
ambitions and expectations for the
business as well as providing a framework
from which we can build and strengthen
our culture. This encapsulates an
increasing focus on delivering exceptional
results for our customers, driven by our
new purpose: to get the right deal done
for London’s property owners.
RESPONSIBLE BUSINESS CONTINUED
In 2023, the EEC covered a range of areas including:
• Employee wellbeing and how to further promote our
current wellbeing initiatives.
• Executive Directors' pay structures and the 2022 Directors’
Remuneration Report.
• Discussing employee attraction and retention and the
‘Moments that Matter’ in the context of customer service.
• Discussing our marketing strategy and engagement
with customers.
Key outcomes from the EEC meetings in 2023 included:
• Identifying areas that require additional management
focus to improve the working environment, culture and
staff retention.
• Employees having a better understanding of the decisions
made by the Remuneration Committee in the context of
wider workforce remuneration as set out in the 2022
Directors’ Remuneration Report.
• Employees inputting into our new employee value
proposition by sharing their ‘Moments that Matter’.
• Identifying innovative ideas to improve customer service,
experience and competitiveness.
Monitoring and assessing culture
The Board monitors culture in a number of ways, including engaging
with the Employee Engagement Committee (EEC), reviewing the
results of the annual employee engagement/culture survey and
more informal mechanisms, such as branch visits and attending
employee meetings.
Refer to
PAGE 71 for further details as to how the Board
monitors culture.
Employee Engagement Committee
The EEC is designed to give our people another route into our
leadership to directly discuss any issues they wish and to help
the Board monitor our culture. Each EEC meeting is attended by
a Non-Executive Director on a rotational basis, who reports back
to the Board to ensure it is fully informed of employee views when
making decisions.
KEY INITIATIVES AND PROGRESS MADE IN 2023
CULTURE
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CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
We ran our annual employee engagement/culture survey
at the end of 2023 using 45 new questions in comparison
to the ones we had previously asked which enabled us to
measure 14 new engagement factors across the organisation,
as well as deep dive into employee sentiment at a team level.
68% of the workforce responded to the 2023 survey.
Highlights from the survey include:
• 78% of employees would recommend Foxtons as
a great place to work.
• 75% of employees are proud to work for Foxtons.
• 81% of employees have confidence in the CEO and
senior leadership team.
• 85% of employees believe that Foxtons is in a position
to really succeed over the next three years.
• 81% of employees believe that Foxtons values diversity.
The survey also helped identify those areas where
management should focus their attention to drive continuous
improvement, these areas include developing employee social
connection and increasing employee involvement.
The Board has reviewed all areas of feedback from the
survey and incorporated areas for improvement into the
2024 people related strategy.
2023 employee engagement/culture survey
The annual employee engagement/culture survey acts as a
formal mechanism for the Board and Senior Management to
monitor culture, assess year-on-year progress, and form a
tangible action plan in response to employee feedback.
Last year we reviewed our entire employee listening strategy and
partnered with a new survey provider, CultureAmp, to provide us
with feedback on the entire employee lifecycle, from recruitment
and onboarding, to annual feedback and pulse surveys, right up to
the point of exit.
OUR VALUES
Our culture is shaped and underpinned by our values
which have been embedded this year after being
refreshed at the end of 2022. Over the course of the
year we have sought to inspire employees to use the
values to deliver the best results for customers and
to be their best selves.
Our values guide our employees on how they
contribute to the Group’s success and adhere to
the highest ethical standards:
INNOVATIVE
Constantly looking for new and market leading ways
to get the right deal done for our customers.
PROFESSIONAL
Providing the most efficient, reliable and dedicated
customer journey, whilst maintaining the highest
standards of business ethics.
AMBITIOUS
Striving to get the best results for our customers.
RELENTLESS
maintaining consistently high standards day in and day
out to consistently deliver the best results for our clients.
AUTHORITATIVE
Being the most knowledgeable agents in the market.
Employee recognition
Employee recognition is an important part of our high-performance
culture. Throughout the year employee success is celebrated and
model behaviours shared across the Company.
A highlight of the year was the Foxtons Awards held in December
2023, which saw 75 employees receive awards for outstanding
customer delivery. 2023 saw the launch of a refreshed salesforce
compensation scheme, along with other staff performance
incentives, to reward exceptional performance and enhance our
high-performance culture.
Employee wellbeing
Mental health and employee wellbeing is an important part of
our health and safety programme.
At Foxtons we use OpenBlend, a digital performance
management platform, to monitor colleagues’ development,
performance and wellbeing. The platform includes a wellbeing
measurement tool that tracks colleagues’ happiness, confidence,
and capability to manage stress, which is self-reported by users.
Our average 2023 wellbeing score across the business was 77%,
which is 1% higher than the OpenBlend customer average.
2. PEOPLE, CULTURE AND TRAINING
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202358
RESPONSIBLE BUSINESS CONTINUED
Employee onboarding
Our intensive five-day onboarding programme, widely accepted across
the industry as being the most comprehensive introduction to estate
agency, covers all aspects of selling and letting property, providing
essential skills and on-the-job learning experiences for those starting
their career at Foxtons, as well as ensuring that every employee
quickly understands the business and is equipped with the tools
they need to start delivering results for customers straight away.
This induction week also ensures that all of our new starters
understand how they can play their part in delivering our purpose
and can adopt values that we live by, which is what creates our
unique culture.
1
Results from the 2023 employee engagement/culture survey, independently administered by CultureAmp. 68% of the workforce responded to the 2023 survey.
KEY INITIATIVES AND PROGRESS MADE IN 2023
Management training programme
In 2023, 55 line managers completed our in-house management
training programme, “Impact”, which is designed to drive
performance and develop our future leaders. Impact training is a
tailored management development programme which takes place
over several months with the aim of developing market leading
managers who will play a critical role in maintaining the right culture
and delivering results for our customers. The programme culminates
in a development centre-style end-point assessment which
comprises five challenging assessments including the opportunity
to present to the CEO as well as other members of the senior
leadership team on how they are using their new skills, behaviour,
and knowledge to make an impact within their departments.
Internal mentoring
We understand the importance of providing comprehensive
support to employees who have recently been promoted into
a new role. As such, all newly promoted Valuers and Associate
Negotiators are enrolled onto a ten-week peer-to-peer mentoring
scheme during which they are assigned a mentor to support them
with their enhanced responsibilities.
Diversity, respect and inclusion training
As part of the Group’s commitment to creating an inclusive
workplace, where individual differences are respected and valued,
2023 saw the launch of a new diversity, respect and inclusion training
programme to ensure the Board, and our employees, understand
their role in this important area.
TRAINING
Training to improve skills
55
employees completed our in-house management
training programme, Impact, in 2023.
87%
of employees agree or strongly agree that they
know what to do to be successful in their role.
1
81%
of employees believe the information to do their job
effectively is readily available.
1
78%
of employees believe they have access to the learning and
development they need to do their job well.
1
Our training and employee development
programme delivers tailored and
meaningful training, which aims to help all
our employees deliver the best results for
customers and reach their career goals.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 59
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
OUR APPROACH
Social mobility and diversity are a key part of what make Foxtons’ culture and ultimately drives our success. As a result Foxtons has
consistently given opportunities to Londoners from all backgrounds and walks of life. This organic approach to social mobility and diversity
led us to partner with organisations that help us to improve the wellbeing of the communities in which we operate and provide opportunities
to the young people that live within them.
OUR KEY INITIATIVES AND PROGRESS IN 2023
Career Ready
In 2021 we established our partnership with Career Ready, a national social mobility charity that works with employers, schools, and
volunteers to support young people across the UK. 2023 was the final year of this partnership that has enabled us to work directly with
young people, primarily 16 to 18 year olds based in London, who face barriers in education and employment.
During the partnership Foxtons welcomed 17 Career Ready students to our Head Office and branch network across London for month-long
internships. These internships were aimed at developing participants’ core employability skills and helping students find the right career path
for them. Members of the Foxtons team volunteered their time to run masterclasses for over 400 students on communication and leadership.
These masterclasses drew on the hosts’ own experiences and gave an insight into what it is like to work at London’s leading estate agent.
Through our partnership we have provided financial support to Career Ready and supported them with our time and expertise. Everyone at
Foxtons has had the opportunity to get involved in Career Ready’s structured programme and we have helped to make a positive difference
to social mobility in our communities.
We support the communities we serve through our mix of community outreach
partnerships and charitable activities.
3. COMMUNITY
2023 HIGHLIGHTS
Career Ready partnership
100
Students sponsored through our
annual donation
OVER 400
Students supported through skills
masterclasses over the last three years
17
Student internships at our head office and
branch network over the last three years
3. COMMUNITY
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202360
RESPONSIBLE BUSINESS CONTINUED
Pride Month
All of Foxtons’ London offices are LGBTQ+ safe spaces, so should a
member of the community need a safe place to spend some time
they can ask our teams for help in a safe and secure environment.
This commitment also means that our clients from the community
know they are working with an agent who will respect them.
Notting Hill Carnival
In 2023, we commissioned a piece of artwork by graffiti artist ATOM
and his team of local artists, which was installed on our Notting Hill
office as we joined in the Notting Hill Carnival celebrations.
MY NAME’5 DODDIE FOUNDATION
In 2023 we sponsored a fitness challenge to support James
Clarke, a former Foxtons colleague, in his efforts to raise
awareness of Motor Neurone Disease (MND) and fundraise
for the My Name'5 Doddie Foundation. Our efforts saw 80
Foxtons and Alexander Hall employees take part in the fitness
challenge, set by TV's Jason Fox and MANOR LONDON gym
which raised over £20,000.
£20,000
Raised through fundraising activity for the
My Name’5 Doddie Foundation
Selecting a new charity partner
In 2023 we explored new partnerships in social mobility, homelessness, and social issues, and
following a process selected three potential partners in the homelessness space to work with
and asked our workforce to vote for their preferred partner. Following the process we selected
the Single Homeless Project, a London-wide charity that provides supported accommodation
and community-based support for people who are homeless or at risk of homelessness, as our
new charity partner.
Foxtons will be supporting the Single Homeless Project by providing volunteers, knowledge
and donations to support the charity in helping people avoid homelessness or support people
out of a homeless situation. Single Homeless Project’s work makes a difference to 10,000 lives
every year across all 32 of London’s boroughs.
Social Mobility Pledge
In 2018 we signed the Social Mobility Pledge, a coalition of 550
businesses globally that encourages organisations to be a force
for good by putting social mobility at the heart of their business.
We continue to be a signatory today.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 61
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Governance and ethics
The Board promotes the highest ethical standards when carrying
out our business activities, and the Group has clear and available
policies for:
• Dealing with gifts and hospitality.
• Anti-money laundering.
• The use of inside information.
• Guarding against bribery and corruption.
All of these policies are included in our employee handbook and are
backed by mandatory training for our people and adherence to the
policies is monitored on a regular basis.
Whistleblowing
The Group is committed to conducting its business with honesty and
integrity, and all employees are expected to maintain high standards.
However, all organisations face the risk of things going wrong from
time to time, or of unknowingly harbouring illegal or unethical
conduct. A culture of openness and accountability is essential in
order to prevent such situations occurring or to address them when
they do occur.
The Board recognises its wider responsibilities, and through a number of established policies and
practices, governs compliance with legislation and governance guidance.
4. OTHER RESPONSIBILITIES
The Group’s whistleblowing policy aims to:
• Encourage employees to report suspected wrongdoing,
in the knowledge that their concerns will be taken seriously
and investigated as appropriate, and that their confidentiality
will be respected.
• Provide employees with guidance as to how to raise
those concerns.
• Reassure employees that they should be able to raise
genuine concerns in good faith without fear of reprisals,
even if they turn out to be mistaken.
Employees have a number of routes to report whistleblowing matters,
including through our confidential whistleblowing helpline run by an
independent third party. The whistleblowing helpline is advertised in
the business, including prominently in the staff handbook which is
accessible to all employees. The Audit Committee regularly reviews
any matters reported to the whistleblowing helpline as detailed
on
PAGE 89.
4. OUR OTHER RESPONSIBILITIES
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202362
RESPONSIBLE BUSINESS CONTINUED
Supplier/customer relationships and responsibilities
The Group has a range of established supplier relationships, as well
as trusted and vetted supply partners who provide a range of lettings
property management services to our landlords and tenants.
We carefully manage our supplier relationships and regularly review
our supplier engagement policies with a view to maintaining a high
quality of service, both for the Group and our customers. We engage
with all our suppliers in a fair and transparent manner.
The Board, supported by the Audit Committee, regularly reviews our
supplier payment practices and associated statutory reporting.
We also recognise our responsibility to encourage good ESG
behaviour among our suppliers and maintain a policy that
seeks commitments and minimum standards in this respect
from our suppliers.
One of the strengths of our business is our ongoing relationship
with tens of thousands of customers. We use these relationships to
promote improvements, including environmental policy. For instance,
we advise all our landlords proactively on improving the energy
efficiency of their homes and will not do business with anyone who
does not comply with government energy efficiency standards.
Human rights and modern slavery
The Board has reviewed the risk of modern slavery within the Group
and maintains the risk to be low. This assessment is based upon the
nature of the business, which operates almost exclusively within
Greater London. The Group’s standard practice is to check that
prospective employees have the right to work in the UK and we do not
generally employ agency staff. Where we work with suppliers, these
are generally large organisations. We publish our modern slavery
statement on both our Group and the Foxtons Limited website, as
well as on the government’s Modern Slavery Statement Registry for
organisations. Refer to www.foxtonsgroup.co.uk/modern-slavery for
the latest modern slavery and human trafficking statement.
We are committed to ensuring that there is no slavery or human
trafficking in our organisation or our supply chain, and regularly
review supplier service and behaviours. Before we contract with
a supplier, we issue detailed contractor guidelines that contain our
clear requirements to ensure that staff employed or contracted by
these companies are entitled to work in the UK and are free from
slavery, servitude, forced or compulsory behaviour and to comply
with other laws, including health and safety. Through our contractor
management procedure, we undertake and collect due diligence
documents on potential suppliers before we engage their services.
Health and safety
Foxtons is committed to providing a safe and healthy working
environment for staff and visitors in compliance with the Health and
Safety at Work etc. Act 1974 and the Management of Health and
Safety at Work regulations. Specifically the Group:
• Maintains safe and healthy working conditions.
• Provides adequate control of the health and safety risks arising
from its work activities.
• Provides adequate training to staff on health and
safety matters.
• Regularly reviews and revises its Health and Safety Policy.
All employees are required to comply with the Group’s Health and
Safety Policy and must not interfere with anything provided to
safeguard health and safety. They must take reasonable care of their
own health and safety and report all health and safety concerns
through the Group’s established reporting mechanism.
All employees are made aware of the Health and Safety Policy
through publication in the Employee Handbook and induction
training. It is also made available on the Group’s intranet. The Group
uses an appropriately qualified external third party expert to provide
support with the Group’s ongoing compliance with health and safety
regulations. During the year the ESG Committee reviewed health and
safety matters on a regular basis.
Our wider responsibilities and lobbying
The Board recognises the Group’s wider responsibility of supporting
society’s need for high quality housing and a well regulated estate
agency industry that supports this supply.
From time to time we engage with industry influencers, such as
regulators, industry bodies, government and the media, to discuss
sector regulation.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 63
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Non-financial
matter
Relevant polices/
documents that govern
our approach Risk management and additional information Associated KPIs and other published metrics
Business
model
• Our strategic priorities
(refer to
PAGE 16)
• Matters reserved for
the Board
1
• Principal risks: Market risk and
competitor challenge
• Stakeholder engagement
• Resilient business model
• Foxtons Operating Platform
• Delivering against our strategy
PAGES 32 TO 37
PAGES 18 TO 21
PAGES 12 AND 13
PAGES 14 AND 15
PAGES 16 AND 17
• Refer to key
performance
indicators section
PAGES 22 AND 23
Employees • Data protection policies
• Health and safety policies
• Employee handbook
• Equal opportunities policy
• Whistleblowing policy
• Principal risks: People
• Stakeholder engagement
• Responsible business
• Directors’ Report
• Corporate Governance Report
• Directors' Remuneration Report
PAGE 36
PAGES 18 TO 21
PAGES 40 TO 62
PAGES 122 TO 124
PAGES 69 TO 125
PAGES 92 TO 121
• Employee
engagement score
• Gender and
ethnicity diversity
• Workforce
remuneration
• Gender pay gap
PAGE 23
PAGE 55
PAGE 108
PAGE 110
Human
rights
• Environmental, social and
governance policy
• Modern slavery and
human trafficking policy
1
• Our other responsibilities
(governance and ethics,
whistleblowing, supplier
relationships and human rights
and modern slavery)
PAGES 61 TO 62
• Modern slavery and human trafficking
statement (www.foxtonsgroup.co.uk/
modern-slavery)
Social
matters
• Environmental, social
and governance policy
• ESG Committee terms
of reference
1
• Board diversity policy
1
• Principal risks: People, and
reputation and brand
• Stakeholder engagement
• Responsible business
PAGE 36
PAGES 18 TO 21
PAGES 40 TO 62
• Employee
engagement score
• Employee survey
outcomes
• Gender and
ethnicity diversity
• Community
engagement metrics
PAGE 23
PAGES 23, 55
AND 57
PAGE 55
PAGE 59
Anti-corruption
and bribery
• Anti-money laundering
and anti-bribery policies
• Employee handbook
• Environmental, social and
governance policy
• Principal risks: Compliance
with the legal and
regulatory environment
• Responsible business
• Audit Committee Report
PAGE 36
PAGES 40 TO 62
PAGES 86 TO 91
• Whistleblowing
reporting review
PAGES 89 AND 90
Environmental
matters
• Environmental, social and
governance policy
• Recycling policy
• Emerging risks:
Climate-related risks
• Stakeholder engagement
• Task force on climate-related
financial disclosures
• Responsible business
• ESG Committee Report
PAGE 37
PAGES 18 TO 21
PAGES 46 TO 51
PAGES 40 TO 62
PAGES 84 AND 85
• Streamlined Energy
and Carbon Reporting
• Progress against
environmental
commitments
PAGE 44
PAGE 42
1
Published at www.foxtonsgroup.co.uk/our-responsibility/corporate-governance. Other listed policies/documents are internal policies and not published externally.
The Strategic Report, from PAGES 1 TO 63, has been reviewed and approved by the Board of Directors on 4 March 2024.
Guy Gittins Chris Hough
Chief Executive Officer Chief Financial Officer
NONFINANCIAL INFORMATION AND
SUSTAINABILITY STATEMENT
The table below, and information throughout the 2023 Annual Report and Accounts
and on our website that it refers to, is intended to help our stakeholders to
understand our position on key non-financial and sustainability matters and satisfy
the requirements of Section 414CA and 414CB of the Companies Act 2006.
(www.foxtonsgroup.co.uk/our-
responsibility/gender-pay-gap)
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202364
CORPORATE GOVERNANCE REPORT
Chairman’s governance introduction
I am pleased to introduce my third Corporate Governance Report,
in which we describe our governance arrangements, the operation
of the Board and its Committees, and how the Board discharged
its responsibilities.
Board priorities
The Board continues to focus on delivering against the strategic
priorities set out in March 2023 with the target to deliver £25 million
to £30 million of adjusted operating profit in the medium-term and
maximise stakeholder value. One of the key areas of focus for the
Board has been improving operational fundamentals so that the
Company is better equipped to fulfil its true potential. This includes
enhancing internal processes, data capabilities and investing in staff
training and development.
Governance
The Board is entrusted with the task of steering the Group and
ensuring the implementation of a robust and solid governance
framework. This structure is designed to foster vigorous discussions
and challenge all Board members, thereby facilitating effective
decision making within acceptable timeframes and based on precise
information. Our commitment to achieving excellent governance
standards is a crucial element in delivering on our strategic objectives
and in creating shareholder value, while also addressing broader
stakeholder interests. The Group has adhered to the UK corporate
governance code issued in July 2018 throughout the year.
Purpose, culture and values
Our purpose remains getting the right deal done for London’s
property owners, a testament to our results-driven approach.
Our brand message, we get it done, coupled with our core values,
forms the bedrock of our culture. These values guide our employees
in their contributions towards the Group’s success, support business
growth, and promote a collaborative environment to achieve
our goals.
The Board is committed to investing in and maintaining a
high-performance culture that attracts and retains talented
people who deliver outstanding results for our customers.
Fostering this high-performance culture is critical to delivering
on our strategic priorities and ultimately enhances the success
of the Group.
Further details on our purpose, culture and values can be found
on
PAGES 52 TO 58.
A focus on strategic clarity, while
being committed to a high standard
of governance, is key to delivering
sustainable success for the benefit
of all our stakeholders.”
Nigel Rich CBE Chairman
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 65
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Stakeholder engagement
In line with the provisions of Section 172 of the Companies Act 2006,
the Board has consistently taken into account the interests of all
stakeholders when making significant decisions throughout the year.
Utilising various methods, the Board has interacted with all
stakeholders over the year, including both formal and informal
channels of communication with employees. These channels are
crucial in enabling the Board to effectively monitor the Company’s
culture. As we progress with the turnaround plan, open dialogue with
shareholders has been especially important and is key to fostering
mutual understanding. We maintain regular communication with
our major shareholders and in 2023, we enhanced our scheduled
shareholder engagement programme with additional discussions on
the business’ key developments.
A comprehensive review of our stakeholder engagement, including
our Section 172 statement and examples of how we considered
stakeholders in making key board decisions, can be found on
PAGES 18 TO 21 of the Strategic Report.
Board changes
Alan Giles and Sheena Mackay stepped down from their Non-Executive
Director roles at the 2023 AGM. Annette Andrews and Jack Callaway
were recruited as Independent Non-Executive Directors and joined the
Board on 1 February 2023. Annette Andrews became Chair of the
Remuneration Committee and Chair of the ESG Committee at the
2023 AGM. Additionally, Rosie Shapland became Senior Independent
Director at the 2023 AGM.
Further details regarding these Board changes can be found in the
Nomination Committee Report on
PAGES 78 TO 83.
Shareholder returns
During the year the Board paid an interim dividend of 0.2p per
share (2022: 0.2p) and proposed a final dividend of 0.7p per share
(2022: 0.7p) providing a total dividend of 0.9p per share (2022: 0.9p).
Additionally, £1.1 million of share buybacks were completed which
utilised the authority that was in place at the end of 2022.
Further information on the share buyback activity is set out on
PAGES 5 AND 29.
Remuneration
As set out in the 2022 Directors' Remuneration Report, minor
changes to the Group’s remuneration policy were proposed and
presented to shareholders at the 2023 AGM. The policy received
approval from shareholders and has been implemented accordingly
in 2023. Details on remuneration can be found in the Directors’
Remuneration Report on
PAGES 92 AND 121.
Audit, risk and internal control
The Audit Committee’s work has continued to focus on protecting
the interests of shareholders and strengthening the Group’s risk
management and internal control systems. The Audit Committee has
focused on monitoring and strengthening internal controls and risk
management processes. The internal audit programme has continued
to progress with PwC internal audit reporting on three reviews in the
year. Further information on audit, risk and internal controls can be
found in the Audit Committee report on
PAGES 86 TO 91.
Environmental, social and governance (ESG)
The ESG Committee plays an important role in providing oversight of
the Group’s ESG strategy and related responsibilities. The Committee
has reviewed a number of areas including our environmental
commitments, compliance with the Task Force on Climate-Related
Financial Disclosures (TCFD), reviewing the employee engagement/
culture survey results, workforce health and safety metrics, and our
broader community programmes. Further information on the work
of the ESG Committee can be found on
PAGES 84 AND 85.
Board evaluation
An internal Board evaluation was completed in the second half of
2023 to review the performance of the Board, its Committees and
the individual Directors. Rosie Shapland, Senior Independent Director,
led the Directors in evaluating my performance as Chairman.
Details of the process undertaken and a summary of the results
and proposed actions for 2024 are set out on
PAGES 82 AND 83.
Annual General Meeting
We plan to hold our AGM on 7 May 2024 with details of
the arrangements for the meeting set out in the AGM notice
which is included as a separate document within this mailing.
The AGM notice is also available on our website at
www.foxtonsgroup.co.uk/investor-relations/agm.
Nigel Rich CBE
Chairman
4 March 2024
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202366
BOARD OF DIRECTORS
Nigel Rich CBE
Chairman
Appointed
to the Board
1 October 2021
Committee memberships
Skills and experience
Extensive UK and international,
listed Board experience in a
career spanning more than five
decades. Nigel qualified as a
Chartered Accountant before
joining Jardine Matheson where
he spent 20 years working in a
variety of roles primarily across
Asia, including Managing Director
of Hong Kong Land, a leading
Hong Kong property company,
and thereafter Managing Director
of Jardine Matheson Holdings.
He previously served as the
Chairman of Hamptons
International, Exel plc, CP Ships
Limited, Xchanging plc and
SEGRO plc, and held numerous
Non-Executive Director positions
at companies including Granada
Group plc, ITV plc, Pacific Assets
Trust plc and AVI Global Trust plc.
He has also served as a Member
of The Takeover Panel (UK).
External appointments
Non-Executive Chairman of
Urban Logistics Reit plc and
Non-Executive Director of
Matheson & Co.
NONEXECUTIVE DIRECTORS
Annette Andrews
Independent
Non-Executive Director
Appointed
to the Board
1 February 2023
Committee memberships
Skills and experience
30 years’ HR and people
experience, leading HR
functions in both regulated and
commercial businesses. Annette
was previously Chief People
Officer at Lloyd’s of London and
before that held senior HR
leadership positions at Catlin
Insurance, Lloyds Banking
Group PLC and the Ford Motor
Company. Her HR experience
covers compensation regimes
and leadership development.
External appointments
Non-Executive Director and Chair
of the Remuneration Committee
at Cavendish Finance PLC and
Sole Director of Acaria Coaching
& Consulting Ltd.
Peter Rollings
Independent
Non-Executive Director
Appointed
to the Board
1 December 2021
Committee memberships
Skills and experience
Extensive estate agency
experience having started his
career at Foxtons in December
1985, and holding the position of
Managing Director between 1997
and 2005 where he made a
significant contribution to both
the growth and dynamics of the
business. From 2005 to 2016
Peter was CEO of Marsh &
Parsons where he presided
over significant expansion and
value creation.
External appointments
Non-Executive Director at
Viewber Limited.
Rosie Shapland
Senior Independent
Non-Executive Director
Appointed
to the Board
5 February 2020
Committee memberships
Skills and experience
Chartered Accountant with
extensive knowledge of
accounting and financial
reporting, risk management
and governance. A former audit
partner at PwC with over 30
years of audit experience across
multiple sectors within public and
private companies, Rosie has
worked with numerous boards
and their audit committees.
External appointments
Non-Executive Director and Chair
of the Audit Committee at
PayPoint plc and Workspace
Group plc. Senior Independent
Director at Workspace Group plc.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 67
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
1
Rosie Shapland was appointed Senior Independent Non-Executive Director upon Alan Giles retiring from the Board at the 2023 AGM.
2
Annette Andrews was appointed as Chair of the Remuneration Committee and ESG Committee upon Alan Giles’s and Sheena Mackay’s
retirement from the Board at the 2023 AGM.
EXECUTIVE DIRECTORS
Guy Gittins
Chief
Executive Officer
Appointed
to the Board
5 September 2022
Committee memberships
N/A
Skills and experience
Significant estate agency and
leadership experience having
been CEO of Chestertons, the
London and international
residential property specialist,
prior to joining Foxtons.
Guy started his early career
at Foxtons, leaving in 2006 to
become Sales and Marketing
Director for Peter de Savary.
In May 2010 he joined Savills,
before moving to Chestertons
in 2012, as head of their flagship
Chelsea office before becoming
CEO in 2018.
External appointments
None
Chris Hough
Chief
Financial Officer
Appointed
to the Board
1 April 2022
Committee memberships
N/A
Skills and experience
A Chartered Accountant having
qualified with Deloitte LLP
where he was a Director within
Deloitte’s audit and assurance
practice working across a range of
sectors. Prior to his appointment
as CFO, Chris joined the Group
in 2019 as the Group’s Director
of Finance and Company
Secretary, and played a key role
in the financial management of
the business.
External appointments
None
Directors who served during the year: Alan Giles Senior Independent Non-Executive Director (until 9 May 2023)
and Sheena Mackay Independent Non-Executive Director (until 9 May 2023).
C inside the circle indicates
Committee Chair
Key Audit Committee
Nomination Committee Remuneration Committee ESG Committee
Jack Callaway
Independent
Non-Executive Director
Appointed
to the Board
1 February 2023
Committee memberships
Skills and experience
Experienced financial services
executive with over 30 years of
investment banking, mergers
and acquisitions and financing
experience. He was recently
a Non-Executive Director of
Euromoney Institutional Investor
plc and was previously Global
Chairman of Barclays Telecom,
Media and Technology
Investment Banking business.
Jack formerly held senior
leadership positions at Lehman
Brothers and Rothschild.
External appointments
Board Member of the
Cholangiocarcinoma Foundation.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202368
EXECUTIVE LEADERSHIP TEAM
The Board delegates responsibility for the day-to-day operational management to the Executive
Directors, who are supported by the Executive Leadership Team.
The Executive Leadership Team is made up of our Executive Directors and other Executives responsible for key areas of the business.
Developing the Group’s strategy and delivering against the strategic priorities
Developing and implementing key policies, procedures and operating plans
Monitoring and driving performance and managing risk across the Group
Allocating resources effectively across the Group
Jean Jameson,
Chief Sales Officer
Gareth Atkins,
Managing Director | Lettings
Richard Merrett
1
,
Managing Director |
Financial Services
Imran Soomro,
Chief Information Officer
Fran Giltinan,
Managing Director | Lettings
Property Management &
Customer Experience
Guy Gittins,
Chief Executive Officer
Chris Hough,
Chief Financial Officer
Sarah Tonkinson,
Managing Director |
Lettings Build to Rent
EXECUTIVE LEADERSHIP TEAM
THE EXECUTIVE LEADERSHIP TEAM IS RESPONSIBLE FOR:
1
Appointed 2 January 2024
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 69
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
CORPORATE GOVERNANCE REPORT OVERVIEW
This report has been structured to follow the Principles of the Code, which are categorised under the following headings: Board leadership and Group
purpose, values and strategy; Division of responsibilities; Composition, succession and evaluation; Audit, risk and internal control; and Remuneration.
This report sets out our governance framework and illustrates how we have applied the Code Principles and complied with its Provisions.
Code Category Code Principles Key elements of the Code Report detail
1
BOARD LEADERSHIP
AND GROUP
PURPOSE, VALUES
AND STRATEGY
A. Effective Board
B. Purpose, values
and strategy
C. Governance
Framework and
Board resources
D. Stakeholder
engagement
E. Workforce policies
and practices
The Board’s role is to:
• Establish a purpose, values and strategy and ensure these
are aligned with its culture.
• Promote the long-term sustainable success of the Group,
generating value for shareholders and contributing to
wider society.
• Ensure the necessary resources are in place for the Group
to meet its objectives and measure its performance.
• Establish a framework of prudent and effective controls
for the assessment and management of risk.
• Ensure effective engagement with shareholders
and other stakeholders.
• Ensure workforce policies are consistent with the Group’s
values and that the workforce can raise any concerns.
This section explains:
(i) The role of the Board and matters reserved
for the decision of the Board.
(ii) How we have assessed the basis on which
the Group generates and preserves value
over the long term.
(iii) Our purpose and how we have assessed and
monitored our culture.
(iv) The methods used to engage with our
shareholders and other key stakeholders,
including engagement with our workforce.
Refer to
PAGES 70 AND 71.
2
DIVISION OF
RESPONSIBILITIES
F. Board roles
G. Independence
H. External
commitments
and conflicts
of interest
I. Board policies,
processes
and resources
The Chairman leads the Board and is responsible for its
overall effectiveness.
The Board should include an appropriate balance of Executive
and Independent Non-Executive Directors. There should be a
clear division of responsibilities between the leadership of the
Board and the executive leadership of the business.
Non-Executive Directors should devote sufficient time to
meet their responsibilities.
The Board, supported by the Company Secretary, should
ensure it has appropriate policies, processes and resources
to function effectively.
This section explains:
(i) The Group’s governance framework including
Board and Board Committee membership.
(ii) The role of the Chairman, Executive Directors,
the Senior Independent Director and other
Non-Executive Directors.
(iii) Board and Committee meetings and Director
attendance during the year.
(iv) Board activity in 2023.
Refer to
PAGES 72 AND 77.
3
COMPOSITION,
SUCCESSION AND
EVALUATION
J. Appointments to
the Board
K. Board skills,
experience
and knowledge
L. Annual Board
evaluation
Board appointments should be subject to a formal, rigorous and
transparent process. A succession plan should be maintained for
Board and Senior Management.
The Board and its Committees should have a combination of
skills, experience and knowledge.
The annual evaluation of the Board should consider its
composition, diversity and how effectively members work
together to achieve objectives.
The report of the Nomination Committee
includes a review of:
(i) The role of the Nomination Committee.
(ii) The activities of the Committee during 2023,
including succession planning and related
Board changes.
(iii) The Group’s policies and practices in relation
to Board appointments, Directors’ induction
and professional development.
(iv) The Board’s diversity policy.
(v) The nature of the performance evaluation
and outcomes for 2023.
Refer to
PAGES 78 AND 83.
4
AUDIT, RISK
AND INTERNAL
CONTROL
M. Financial reporting
and external and
internal audit
N. Fair, balanced and
understandable
O. Internal financial
controls and
risk management
The Board should establish formal and transparent policies to
ensure the effectiveness of internal and external audit functions.
The Board should satisfy itself as to the integrity of the
financial and narrative statements and should present a fair,
balanced and understandable assessment of the Group’s
position and prospects.
The Board should establish procedures to manage risk, oversee
internal controls and determine the nature and extent of the
principal and emerging risks facing the Group.
The report of the Audit Committee includes
details of the policies, and the activities of the
Audit Committee during 2021, in relation to:
i) Financial and narrative reporting.
(ii) Significant accounting judgements.
(iii) The relationship with and appointment
of the external auditor.
(iv) Risk management and internal controls,
including reviewing the work of the Group’s
internal auditor.
Refer to
PAGES 86 AND 91.
5
REMUNERATION
P. Linking
remuneration
with purpose
and strategy
Q. Procedure for
developing policy
on Executive
remuneration
R. Judgement and
discretion when
authorising
outcomes
Remuneration policies should be designed to support strategy
and promote long-term sustainable success.
There should be a formal and transparent procedure for
developing policy on executive remuneration and for
determining Director and Senior Management remuneration.
Directors should exercise independent judgement and discretion
when authorising remuneration outcomes.
The report of the Remuneration Committee
sets out:
(i) The annual statement from the Chair of
the Remuneration Committee.
(ii) Summary of the remuneration policy.
(iii) 2023 Annual Report on Remuneration.
Refer to
PAGES 92 AND 121.
CORPORATE GOVERNANCE REPORT
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202370
CORPORATE GOVERNANCE REPORT CONTINUED
The role of the Board
The Board is responsible for promoting the long-term sustainable
success of the Group, delivering value for shareholders and
contributing to wider society. It agrees the strategic priorities of the
Group, ensuring that these are consistent with the Group’s culture
and achieved within an appropriate framework of effective controls
that enable risk to be assessed and managed. It also ensures effective
engagement with shareholders and other stakeholders, and that
workforce policies are consistent with the Group’s values.
Further details of our engagement with stakeholders and how we
promote success are set out on
PAGES 18 TO 21.
Responsibility for day-to-day operations is delegated by the Board
to the Executive Directors within defined authority limits, which
are regularly reviewed and updated by the Board.
Matters reserved to the Board
The Board maintains a schedule of matters reserved for decision
by the Board, which details the key aspects of the affairs of the
Group which the Board does not delegate to management or
any Board Committees, though it may consider recommendations
from them. The schedule of matters reserved for the Board is
regularly reviewed and is available at
www.foxtonsgroup.co.uk/our-responsibility/corporate-governance.
The Board’s specific responsibilities include:
• Setting the strategic aims, purpose and values.
• Approving the Group’s budget and financial plans.
• Ensuring alignment of culture, policy, practices and behaviour
throughout the business with the Group’s purpose, values
and strategy.
• Approval of capital expenditure, significant investments,
acquisitions and share buybacks.
• Approval of annual and interim results and trading updates.
• Payment of interim dividends and recommendation of final
dividends to shareholders.
• Setting the Group’s risk appetite and oversight of the internal
control, risk management and governance frameworks.
• Monitoring management’s performance.
• Ensuring succession plans are in place.
• Ensuring a satisfactory dialogue with shareholders and
other key stakeholders.
Matters outside the schedule of matters reserved for decision by
the Board or the Committees’ terms of reference fall within the
responsibility and authority of the Executive Directors, including
all executive management matters.
Statement of Compliance with the UK Corporate Governance Code
In the year ended 31 December 2023 the Group has applied the Principles and complied with all the Provisions of the UK Corporate
Governance Code published in July 2018. This report outlines the key features of the Group’s corporate governance framework and sets
out how the Group has applied the Principles of the Code.
A copy of the Code is available on the Financial Reporting Council’s website at www.frc.org.uk.
Our purpose
To get the right deal done for London’s property owners – in
2022, our business embarked on a journey of transformation with
refreshed purpose, under the guidance of new leadership. Our newly
appointed CEO steered the Company towards a results-based
business model, focusing on delivering measurable outcomes and
creating value for our stakeholders.
In 2023 we have continued to drive growth through a multi-pronged
strategy that includes organic growth, strategic acquisitions, and
expanding our market share. Our focus is not just achieving success
across the Group, but also making a positive impact on our
customers, employees, and the communities we serve.
An explanation of the basis on which the Group generates and
preserves value over the longer term is set out in the business model
on
PAGES 12 AND 13.
1
BOARD LEADERSHIP
AND PURPOSE
Our culture
The Board is dedicated to upholding a high-performance sales
culture, which is pivotal in attracting and retaining talented
individuals. Our focus is on delivering results for our clients, and our
culture has been instrumental in the reconstruction of our estate
agency’s DNA. The Board being the driving force behind our culture,
sets the tone from the top and promotes a high-performance sales
environment. This approach not only allows us to remain competitive
in the market but also ensures that we consistently deliver value to
our stakeholders. We believe in maintaining an optimal culture,
underpinned by robust corporate governance. This is reflected in our
commitment to acting responsibly and making the right decisions.
Effective monitoring and regular assessments facilitate this while
helping us to ensure we continue to thrive in a competitive market.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 71
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
How we monitor culture
The Board monitors culture through a number of
mechanisms including:
• Non-Executive Directors attending the Employee
Engagement Committee (EEC) meetings on a rotational
basis to directly canvass the views of employees,
including areas of improvement and areas of success.
More detail on the EEC, its operation and its areas of
focus is provided on
PAGE 56.
• Reviewing the outcome of the annual employee
engagement/culture survey and identifying themes
from the survey relevant to the monitoring of culture.
• Regular engagement with Senior Management to
understand the internal tools used to monitor culture,
including employee retention metrics, training
programme materials, exit interview feedback and
social media scanning.
• Informal engagement with the workforce through
branch visits, regular engagement with line managers,
involvement in divisional meetings and shadowing
departmental activity.
• Reviewing whistleblowing reports and outcomes.
• Receiving regular updates from Senior Management
on the Group’s compliance programmes and results.
• Receiving regular updates on progress against the
Group’s people strategy, including training and
recruitment strategies.
• Reviewing workforce diversity, equality and
inclusion initiatives.
Board stakeholder engagement
Proactive engagement with our stakeholder groups remains a central focus for the Board, which ensures the Directors have regard to the
matters set out in Section 172. The Board receives regular stakeholder insights and feedback, which enables stakeholder views to be considered
in key Board decisions.
The Board engages with stakeholders both directly and by receiving updates from the Executive Directors on management led
stakeholder engagement.
The Board regularly interacts with shareholders to facilitate effective dialogue, both through recurring scheduled events, such as investor
roadshows and trading updates, and through one-to-one shareholder meetings led by the Chairman or CEO.
Shareholder communications are also supported by regular coverage from external analysts who cover the financial performance of the Group.
For further information on the Group’s engagement with stakeholders, and the Group’s Section 172 statement, refer to
PAGES 18 TO 21 of
the Strategic Report.
Our values
Our values are the architects of our culture. They serve as a
compass for our employees, directing their contributions towards
the Group’s success and instilling a commitment to uphold the
highest ethical standards.
INNOVATIVE
Constantly looking for new and market leading ways
to get the right deal done for our customers.
PROFESSIONAL
Providing the most efficient, reliable and dedicated
customer journey, whilst maintaining the highest
standards of business ethics.
AMBITIOUS
Wanting to get the best results for our customers.
RELENTLESS
Maintaining consistently high standards day in and day out.
AUTHORITATIVE
Being the most knowledgeable agents in the market.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202372
CORPORATE GOVERNANCE REPORT CONTINUED
2
DIVISION OF
RESPONSIBILITIES
Our governance model in 2023
At 31 December 2023, the Board comprised the Non-Executive Chairman, four independent Non-Executive Directors and two Executive
Directors. This page shows the Group’s corporate governance structure and provides an overview of the Committees of the Board.
2023 roles and responsibilities
There is clear delineation of responsibility between the Chairman and the CEO, which is set out in writing. This division of responsibilities,
together with the schedule of matters which are reserved for the Board, ensures that no individual has unfettered powers of decision making.
By delegating specific responsibilities to its Committees, the Board can ensure that it is operating effectively and efficiently with the right level
of attention and consideration being given to relevant matters. The role and responsibilities of each Board Committee are set out in formal
terms of reference, which are reviewed annually. The Chairman ensures that the very significant work of the Committees feeds into, and is
influenced by, the full Board.
The Chair of each Committee reports to the Board after each Committee meeting on the matters discussed and minutes of each meeting are
provided to the Board for information as appropriate. The terms of reference of the Committees are available at www.foxtonsgroup.co.uk/
our-responsibility/corporate-governance.
Nomination
Committee
Chair: Nigel Rich
Other members: Annette
Andrews, Jack Callaway,
Peter Rollings, Rosie Shapland
Key responsibilities:
Responsibility for reviewing
Board composition, identifying
and nominating candidates for
Board appointments and for
succession planning.
Refer to PAGES 78 TO 83
for more information.
Audit
Committee
Chair: Rosie Shapland
Other members: Annette
Andrews, Jack Callaway,
Peter Rollings
Key responsibilities: Provides
oversight and governance over
the Group’s financial reporting,
risk management and internal
controls, internal audit function
and relationship with the
external auditor.
Refer to PAGES 86 TO 91
for more information.
Remuneration
Committee
Chair: Annette Andrews
Other members: Jack Callaway,
Nigel Rich, Peter Rollings,
Rosie Shapland
Key responsibilities: Reviews
and recommends the
remuneration policy and sets and
monitors the level and structure
of remuneration for Executive
Directors and Senior
Management. Sets the
Chairman’s fee.
Refer to PAGES 92 TO 121
for more information.
ESG
Committee
Chair: Annette Andrews
Other members: Jack Callaway,
Nigel Rich, Peter Rollings,
Rosie Shapland
Key responsibilities: Reviews
and has oversight of the
implementation of the Group’s
ESG strategy and initiatives.
Refer to PAGES 84 AND 85
for more information.
Chair: Nigel Rich
Other members: Annette Andrews, Jack Callaway, Peter Rollings,
Rosie Shapland, Guy Gittins, Chris Hough.
Key responsibilities: Responsible for the long-term sustainable
success of the Group.
Board activities in 2023, refer to
PAGE 75.
Board biographies, refer to
PAGES 66 AND 67.
Roles and responsibilities, refer to
PAGES 72 AND 73.
THE BOARD
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 73
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
The roles and responsibilities of the Board members and Company Secretary as at 31 December 2023 are set out below.
Chairman
Nigel Rich
• Provides leadership and promotes a culture of openness and debate between Executive and Non-Executive
Directors, facilitating constructive Board relations and the effective contribution of all Directors, and
providing constructive challenge to management.
• Sets the Board agenda and ensures that Directors are provided with accurate, timely and clear information
to enable the Board to operate effectively.
• Responsible for the integrity and effectiveness of the systems of governance.
• Seeks regular engagement with major shareholders in order to understand their views on performance and
governance, and ensures the Board has an understanding of their views.
• Acts on the results of the annual Board evaluation by recognising the strengths and addressing any
weaknesses of the Board.
Senior Independent Director
Rosie Shapland
• Available to shareholders if they have concerns that cannot be addressed through normal channels.
• Internal sounding board for the Chairman, providing support in the delivery of his objectives.
• Leads the evaluation of the Chairman on behalf of the other Directors as part of the annual
evaluation process.
• Acts as an intermediary for the other Directors with the Chairman, if necessary, working with the
Chairman, other Directors and/or shareholders to resolve significant issues in order to maintain
effectiveness and stability.
Non-Executive Directors
Annette Andrews, Jack Callaway,
Peter Rollings, Rosie Shapland
• Provide a broad range of skills and experience to the Board to assist in formulating the Group’s strategy.
• Provide constructive challenge, strategic guidance and support to the Executive Directors based on their
breadth of knowledge and experience.
• All of the Non-Executive Directors are regarded by the Group as independent and are free
from any business or other relationship which could materially interfere with the exercise of their
independent judgement.
Chief Executive Officer
Guy Gittins
• Responsible for the development and delivery of the strategic priorities agreed by the Board.
• Responsible for leading the Group’s operating performance, day-to-day management and risk management
programmes in conjunction with the CFO.
• Managing relationships with key stakeholders and advising the Board accordingly.
Chief Financial Officer
Chris Hough
• Responsible for the Group’s financial affairs, including treasury and tax matters.
• Responsible for financial strategy, budgeting, monitoring key internal controls, risk management and
delivering the investor relations programme.
• Supports the CEO in the development and delivery of the Group’s strategic priorities.
Company Secretary
Link Company Matters
• Supports the operation of the Board and its Committees through the provision of company secretarial
services, including providing guidance and advice on corporate governance matters.
2023 Board changes
The Board underwent some changes in 2023.
On 1 February 2023, Annette Andrews and Jack Callaway were appointed as Non-Executive Directors, with Annette Andrews becoming Chair of
the Remuneration and ESG Committees at the 2023 AGM.
Both Alan Giles and Sheena Mackay retired at the 2023 AGM.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202374
CORPORATE GOVERNANCE REPORT CONTINUED
Board governance
The Board is comprised of the Chairman, four Independent
Non-Executive Directors and two Executive Directors. The
Independent Non-Executive Directors have an appropriate balance
of skills and experience, and consider that, collectively, they have
substantial recent and relevant experience in a variety of sectors
which enable robust discussion and appropriate challenge at Board
and Committee discussions. The Chairman was independent on his
appointment as Chairman and is deemed by his fellow independent
Board members to be independent in character and judgement and
free of any conflicts of interest.
The Board has established a governance framework to discharge its
collective responsibilities. This framework supports our Directors’
compliance with their duty to promote the success of the Group
under Section 172 of the Companies Act 2006, which requires the
Directors to act in the way they consider, in good faith, would most
promote the success of the Group for the benefit of its shareholders,
having regard to certain other matters including other key
stakeholders. Agendas for Board meetings identify matters that
require a Board decision, and an overview of Section 172 is included
in the papers for each Board meeting to act as a reference for Board
decisions. Information about how this duty has been performed
by our Directors, including the Section 172 statement, is detailed
on
PAGES 18 TO 21.
Board and Committee meetings
The Chairman sets the agenda and determines the format of
discussions at Board meetings. At each scheduled Board meeting, the
CEO and CFO present reports on operational performance, financial
performance and progress against the Group’s strategic priorities.
Other members of Senior Management are invited to attend during
the year to update the Board on key priorities, with the Chief Sales
Officer and Managing Director of Lettings attending every Board
meeting. External advisers also attend meetings as required.
To ensure the continued effectiveness of the Board, the Chairman
meets with the Non-Executive Directors without the presence of the
Executive Directors when necessary. Similarly, the Senior Independent
Director consults when necessary with the other Non-Executive
Directors, without the Chairman being present, to consider the
Chairman’s performance. Refer to
PAGES 77, 82 AND 83 of the
Nomination Committee Report on the Group’s evaluation procedures.
Directors’ attendance at scheduled Board and Board Committee meetings held during 2023 is provided in the table below:
Meetings attended
Director
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
ESG
Committee
Nigel Rich
Guy Gittins
Chris Hough
Annette Andrews (appointed 1 February 2023)¹
Jack Callaway (appointed 1 February 2023)
Alan Giles (retired 9 May 2023)
Sheena Mackay (retired 9 May 2023)
Rosie Shapland
2
Peter Rollings
Eligible meetings attended out of those scheduled Non-attendance at eligible meetings
¹ Annette Andrews could not attend the June 2023 Board meeting due to a pre-existing commitment arranged prior to appointment to the Board.
² Rosie Shapland could not attend the June 2023 Board meeting due to an unavoidable medical appointment.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 75
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Board activity in 2023
The Board has a rolling agenda of items that are regularly considered, which includes reviewing key areas of the business throughout the year,
monitoring delivery against strategic priorities and covering any topical matters that arise. The Board dedicates an additional meeting every
year to focus on reviewing the Group’s strategy and to consider annual objectives. The Board monitors the achievement of the Group’s
objectives through regular Board reports which include updates from the Executive Directors, members of the Executive Leadership Team
and other Senior Management.
The Board held six scheduled meetings during the year, with one additional meeting held to approve the appointment of two new
Non-Executive Directors. The main activities of the Board during 2023 were as follows:
Strategy and execution Shareholder engagement Employees and culture
• Reviewing technology, data and
marketing strategies.
• Considering market outlook and
competitor activity.
• Reviewing financial and operational
performance, cost base reduction
initiatives and resource allocation.
• Reviewing ongoing customer
service levels.
• Reviewing acquisition proposals and
sector consolidation.
• Reviewing potential impact of the
Renters Reform Bill.
• Reviewing strategic options for
the Group.
• Engagement with shareholders through
recurring scheduled events such as
investor roadshows and trading updates.
• One-on-one shareholder meetings
covering topical matters including results,
strategy, capital allocation, Director
remuneration and ESG matters.
• Considering views of investors, including
feedback from external brokers and
shareholders following investor meetings.
• Consideration of market reaction to
key announcements.
• Reviewing outcomes from employee
engagement at EEC meetings and
considering any follow up actions.
• Review of external social / community
engagement programmes.
• Review of people programmes
including recruitment, engagement
and performance management/
recognition (underpinned by
diversity, equity and inclusion).
• Monitoring culture through a range
a mechanisms (refer to
PAGE 56
for further details).
• Reviewing and making
recommendations in relation to
employee training programmes.
Stakeholders impacted:
• Our Shareholders
• Our Customers
• Our People
Stakeholders impacted:
• Our Shareholders
Stakeholders impacted:
• Our People
Internal control and risk management Financial oversight Governance
• Reviewing risk appetite and principal
and emerging risks.
• Assessing the effectiveness of internal
controls and risk management systems,
including considering internal
audit reviews.
• Reviewing the cyber security strategy
and compliance reviews.
• Reviewing the health and safety
framework and related updates.
• Reviewing and approving the annual
budget and reviewing the five-year
strategic plan.
• Approving 2022 annual results and 2023
interim results for 2023. Annual results
for 2023 were approved in March 2024.
• Reviewing acquisition opportunities.
• Approving trading updates.
• Considering the Group’s financial
position, including viability and
going concern.
• Reviewing capital allocation and
buyback programme strategy.
• Reviewing refinance of Revolving
Credit Facility.
• Reviewing the dividend policy.
• Reviewing compliance with the Code,
including the approval of the Annual
Report and Accounts.
• Reviewing terms of reference of
Committees and matters reserved
for the Board.
• Reviewing governance, legal and
regulatory matters and the impact
of regulatory changes on the Group.
• Considering Board evaluation results
for 2023.
• Reviewing ongoing ESG programmes
and targets.
• Reviewing remuneration matters.
Stakeholders impacted:
• Our Shareholders
• Our Customers
• Our Suppliers
• Our People
Stakeholders impacted:
• Our Shareholders
• Our Suppliers
• Our People
Stakeholders impacted:
• Our Shareholders
• Our Customers
• Our Suppliers
• Our People
• Our Communities
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202376
CORPORATE GOVERNANCE REPORT CONTINUED
2023
Month
Board and
committee meetings Key business considered at Board meetings Key market announcements
January • Unscheduled Board
Meeting¹
• Unscheduled Nomination
Committee meeting¹
• Appointment of Non-Executive Directors • Year end trading update
• Directorate change
February • Main Board
• Audit Committee
• Remuneration Committee
• Nomination Committee
• ESG Committee
• 5 year plan review
• Capital allocation
• Approval of acquisition of Atkinson McLeod Ltd
March • Acquisition of Atkinson McLeod Ltd
• 2022 final results & final dividend declared
• 2022 Annual Report & Accounts
• Notice of AGM 2023
April • Q1 trading update
May • Main Board
• ESG Committee
• AGM proxy voting results
• Cash management & RCF refinancing
• Results of 2023 AGM
June • Main Board • Lettings market regulatory changes (RRB)
• Technology updates
• Revolving credit facility approval
• Annual review of management advisers
July • Main Board
• Audit Committee
• Nomination Committee
• Capital allocation
• Half year results
• Interim dividend approval
• 2023 half year results & interim dividend
September • Main Board
• Audit Committee
• Remuneration Committee
• ESG Committee
• Acquisition update
• Board strategy day – reviewing all elements of the Group’s
strategy and operation
October • Q3 trading statement
November • Acquisition of Ludlow Thompson Holdings Ltd
December • Main Board
• Audit Committee
• Remuneration Committee
• Nomination Committee
• Review and approval of 2024 budget
• Review of 5 year plan
• Review of 2023 Board evaluation results
• Review of Financial Services business
1
Additional meetings held in the year beyond the original schedule of Board and Committee meetings.
Key business considered at Board meetings and key market announcements across the year.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 77
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Conflicts of interest
Directors have a statutory duty to avoid situations in which they have
or may have interests that conflict with those of the Group, unless
that conflict is first authorised by the Directors. This includes
potential conflicts that may arise when a Director takes up a position
with another company. Foxtons’ Articles of Association allow the
Board to authorise such potential conflicts, and there is in place a
procedure to deal with any actual or potential conflict of interest.
During the year, no actual or potential conflicts were identified which
required approval by the Board. Should a Director become aware that
they, or their connected parties, have an interest in an existing or
proposed transaction with the Group, they should notify the Board.
The Board deals with each actual or potential conflict and takes into
consideration all the relevant circumstances.
Time commitment
All Non-Executive Directors are required to set aside sufficient time
to carry out their Board responsibilities and show commitment to
their role. During the year the Nomination Committee, as part of
their review of the results of the Board evaluation process, considered
the time commitment of all the Directors and agreed that the
required time commitment is still appropriate. For the year ended
31 December 2023, and at the date of the publication of this Annual
Report, the Board is satisfied that none of the Directors are over
committed and that each Director devotes sufficient time to
discharge their responsibilities.
Independence
The Nomination Committee reviews the independence of the
Non-Executive Directors annually and has confirmed to the Board
that it considers all of the Non-Executive Directors to be independent
in accordance with the matters set out in the Code.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202378
NOMINATION COMMITTEE REPORT
3
COMPOSITION, SUCCESSION
AND EVALUATION
The Nomination Committee regularly reviews the structure, size and
composition of the Board and its Committees to ensure they are best
placed to drive operational performance, oversee the delivery of the
Group’s strategic priorities and support the management team.
Maintaining the right composition of the Board underpins the quality
of debate and constructive challenge during Board discussions. The
process for Board appointments is led by the Committee which
makes recommendations to the Board for its approval.
2023 area of focus
• Appointment of two new Non-Executive Directors
• Appointment of the Senior Independent Director
• Board and Senior Management succession planning
Non-Executive Director changes
As announced on 27 January 2023, Annette Andrews and Jack
Callaway joined the Board as Independent Non-Executive Directors
on 1 February 2023. Annette Andrews became Chair of the
Remuneration Committee and ESG Committee and Rosie Shapland
became Senior Independent Director at the 2023 AGM. Further
details regarding the recruitment process are set out on
PAGE 80.
Board and Senior Management succession planning
During the yearly strategy meeting, the Committee evaluated and
deliberated on the succession planning of the Board and Senior
Management. This was done to ensure the continued presence of a
variety of viewpoints and perspectives at the Board and leadership
level, which we consider crucial for our success. The Committee
continues to monitor succession planning and talent development
to guarantee that we possess the necessary skills for our future.
Board performance evaluation
An internal Board evaluation was completed in the second half of
2023. This exercise was carried out to review the performance of the
Board, its Committees and the individual Directors. The internal
Board evaluation was facilitated by Link Company Matters Limited,
which has no connection to the Group (other than the provision of
Company Secretarial services) or its individual Directors and was led
by the Chair.
We set out on
PAGES 78 AND 79 details of the composition and
work of the Nomination Committee during the year.
On behalf of the Nomination
Committee, welcome to our report
for the financial year ended
31 December 2023.”
Nigel Rich CBE Chair of the Nomination Committee
Members of the Nomination Committee
and attendance at meetings
The membership of the Committee is set out below.
All of the Non-Executive Director Committee members
are considered independent by the Board and in
accordance with the Code. The Chair of the Committee
was considered to be independent on his appointment
as Chair of the Group. Biographical information can be
found on
PAGES 66 AND 67. Members’ attendance
at Committee meetings is set out in the table on
PAGE 74. The Company Secretary acts as Secretary
to the Committee.
Chair: Nigel Rich
Members as at 31 December 2023¹: Annette Andrews,
Jack Callaway, Peter Rollings, Rosie Shapland
¹
Annette Andrews and Jack Callaway were appointed to the Board and Nomination Committee on 1 February 2023
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 79
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Role and responsibilities and activities undertaken during the year
The Committee’s main responsibilities, as outlined in its terms of reference, are:
• To keep under review the structure, size and composition of the Board and the membership of its Committees.
• To review succession planning processes for the Board and other Senior Management positions and the opportunities available to the
Company to further promote diversity and inclusion.
• To ensure a formal rigorous and transparent process is adopted for the appointment of new Directors, both Executive
and Non-Executive.
Terms of reference were reviewed during the year and set out in detail the Committee’s role and responsibilities. The terms of reference can be
found on the Company’s website at: www.foxtonsgroup.co.uk/our-responsibility/corporate-governance.
Since the last Nomination Committee Report, the Committee held two scheduled Committee meetings. The Committee’s main activities and
areas of focus were as follows:
The Board has a formal procedure in respect of the appointment of new Directors, with the Nomination Committee leading the process and
making recommendations to the Board.
Board composition
• Appointed two Non-Executive Directors.
• Reviewed the time commitment required from the
Chairman and Non-Executive Directors to fulfil their roles
• Reviewed the structure, size and composition of the Board.
• Reviewed the skills, experience and knowledge of each
Board member and of the Board as a whole, against the
needs of the Board (refer to
PAGES 66 AND 67 for details
of Board members’ experience).
• Considered and recommended to the Board the re-election
of Directors at the 2024 AGM.
Governance
• Considered and confirmed that each Non-Executive
Director remained independent and committed to their role.
• Approved the report from the Nomination Committee in
the 2023 Annual Report and Accounts.
• Reviewed its terms of reference.
• Reviewed the gender balance of those in Senior
Management and their direct reports.
• Reviewed Board performance evaluation results relating to
composition of the Board.
• Reviewed and updated the Company’s Board Diversity Policy.
Succession planning
• Assessed the tenure of Board members in order to review
the succession plan.
• Considered succession plans for Executive Directors and
Senior Management.
Committee effectiveness
• Reviewed progress against matters arising from the 2022
Board evaluation and considered the matters arising from
the 2023 Board evaluation.
• Participated in the evaluation of its performance and agreed
a plan to address any issues arising.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202380
NOMINATION COMMITTEE REPORT CONTINUED
Appointment of Non-Executive Directors in 2023
On 27 January 2023 the Company announced the appointment of
Annette Andrews and Jack Callaway as Non-Executive Directors
with effect from 1 February 2023. Fidelio Partners, an independent
external search consultancy which has no connection to the
Company or its individual Directors, was engaged to assist with
the search for both candidates with the search process led by the
Chairman. The search specification for the first Non-Executive
Director, who was also to be appointed Remuneration Chair,
included experience of overseeing remuneration policies and
having the capability of chairing a listed Remuneration Committee.
The search specification for the second Non-Executive Director role
included corporate finance experience. Fidelio Partners were directed
to include diverse candidates, women in particular, in line with the
Board’s diversity policy.
From a long list of potential candidates, a number were selected
for interview by a subcommittee of the Nomination Committee
which excluded the retiring Non-Executive Directors. After due
consideration, the Committee recommended the appointment
of Annette Andrews and Jack Callaway to the Board, which then
agreed their appointment. Biographical details can be found on
PAGES 66 AND 67.
At the end of the 2023 AGM Annette Andrews became Chair of the
Remuneration Committee and Chair of the ESG Committee, Rosie
Shapland became Senior Independent Director (SID).
Directors’ service contracts
All of the Directors have service agreements or letters of
appointment which are available for inspection at the Company’s
registered office during normal business hours. Details of the letters
of appointment for Non-Executive Directors and the service
contracts for Executive Directors can be found in the Directors’
Remuneration Report on
PAGES 92 TO 121. No other contract with
the Company or any subsidiary undertaking of the Company in which
any Director was materially interested subsisted during or at the end
of the financial year.
Board appointment criteria are considered automatically as part of
the Committee’s review of succession planning. Currently, all the
independent Non-Executive Directors and the Chairman have been
appointed for less than nine years. Non-Executive Directors are
typically expected to serve a minimum of two three-year terms,
and thereafter their appointment is reviewed on an annual basis.
All Directors must seek re-election at each AGM.
Directors’ induction and professional development
The Company has in place an induction programme, led by the
Chairman, for new Directors to provide them with a full, formal and
tailored introduction on joining the Board, which ensures that they
attain sufficient knowledge of the Company to discharge their duties
and responsibilities effectively. The programme includes meeting
with Senior Management, heads of departments, advisers and visits
to the Group’s branches.
The Board calendar is planned to ensure that Directors are briefed on
a wide range of topics, including updates on corporate governance,
regulatory matters and regular briefings on market conditions.
Throughout the year Directors are also given the opportunity and
encouraged to visit the Group’s branches and discuss aspects of the
business directly with branch managers and employees. As well as
internal briefings, Directors are encouraged to attend externally
facilitated training sessions to ensure their knowledge is up to date
on relevant legal, regulatory and financial developments or changes.
All Directors have access to the advice and services of the Company
Secretary who is responsible to the Board for ensuring the Board
procedures are complied with and that Directors have access to
independent and professional advice at the Company’s expense,
where they judge this to be necessary to discharge their
responsibilities as Directors.
Overview of Non-Executive Directors’
inductions to the Board
Annette Andrews and Jack Callaway both received an
induction post-appointment that focused on the culture,
operations, markets, risks and opportunities for the Group.
Key elements of the induction comprised:
• An introductory meeting with the Chairman to discuss
the process, the Group’s culture and stakeholders.
• A comprehensive document pack which included
analyst and market reports, governance reports,
financial reporting matter reports and other
operational data.
• A series of meetings with the CEO, CFO and Senior
Management. During these meetings, strategy,
operating and financial performance, budget and
forecasts, compliance, customer service, diversity
and people strategy were discussed.
• Meetings with external advisers to receive briefings on
listed company regulations and to obtain background
on relevant governance and shareholder matters.
• A branch visit schedule to understand local market
factors, branch competitive position, the strength
of leadership and speak to a range of employees to
obtain feedback on the culture of the business.
Election and re-election of Directors
The relevant experience and effectiveness of the Directors, and
how that furthers the Company’s business, is kept under review.
The Committee and the Board have concluded that each Director
standing for election and re-election at the AGM continues to
demonstrate the necessary skills, experience and commitment
to contribute effectively and add value to the Board. Biographies
setting out the skills, experience and knowledge of each Director are
available on
PAGES 66 TO 67. It is the Committee’s and the Board’s
view that the Directors’ biographies illustrate why each Director’s
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 81
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
contribution is, and continues to be, important to the Company’s
long-term sustainable success.
Details of the Board evaluation and effectiveness process can be
found on
PAGES 81 AND 82.
Succession planning
Succession planning is a key priority for the Committee and enables
the Board to deal with strategic and operational opportunities and
challenges by ensuring that there is a systematic process in place to
refresh the Board. Board succession planning takes into account the
Board diversity policy (available at www.foxtonsgroup.co.uk/our-
responsibility/corporate-governance) and the existing skills and
experience of the Board and future requirements. The policy has been
implemented as part of the succession planning activity in 2023,
particularly during the search and appointment process for our two
recent Non-Executive Director appointments effective in February 2023.
The Board’s approach to Senior Management succession is to develop a
talent pipeline. The Committee will continue to oversee the succession
plans for the Board and Senior Management and is focused on ensuring
there is a robust talent pool from which high-potential colleagues
identified are developed and supported to prepare for leadership roles.
This includes strengthening the leadership development proposition,
supporting mentoring initiatives and planning role moves to provide
more experience earlier in the careers of potential future successors.
Due to the Company’s size, it is not always practicable for the
Company to have an internal successor identified for all Senior
Management roles. Where there is no obvious successor, the
Committee is satisfied that the Company has a plan for appropriate
short-term cover until a permanent successor can be recruited.
In 2023, in addition to the policy implementation following the
selection and appointment of the Non-Executive Directors
referenced, the Committee also reviewed the CEO’s Senior
Management succession plan and necessary actions were agreed
following the review.
Diversity
The Board recognises the importance and benefits of diversity
throughout the organisation and on the Board. We believe that the
business benefits from having a diverse workforce, at all levels and in
all roles, that reflects the communities in which the Group operates
as this enables us to better understand and meet the needs of our
customers. Diversity includes different nationalities, race, religion,
age, sexual orientation and gender, as well as different personalities,
education, backgrounds and culture.
Board diversity
The Board’s policy on diversity is to ensure that the Directors on the
Board have a broad range of experience, skills and knowledge, with
diversity of thinking, background and perspective. When identifying
suitable candidates for appointment to the Board, the Nomination
Committee considers candidates on merit against objective criteria,
having regard to the recommendations of the FTSE Women Leaders
Review, the Parker Review and the Financial Conduct Authority’s
Listing Rule 9.8.6R(9), alongside the established needs of the
Company. Any search firm engaged to assist the Nomination
Committee in identifying candidates for appointment to the
Board will be expected to include diverse candidates.
Targets set in Listing Rule 9.8.6.R (9) provides:
(i) At least 40% of individuals on the Board of directors
are women;
(ii) At least one senior position on the Board of directors is held
by a woman; and
(iii) At least one Director from a minority ethnic background
on the Board.
The Board had not, as at the date of this Annual Report, met the
targets set out in (i) or (iii) above however, target (ii) was met when
Rosie Shapland, Chair of the Audit Committee, was appointed
Senior Independent Director at the AGM on 9 May 2023, and
Annette Andrews became Chair of both the Remuneration and
ESG Committee at the same time.
Gender identity
Number
of Board
members % of the Board
Number of
senior Board
positions
1
Number in
Executive
Leadership
Team
% of Executive
Leadership
Team
Men 5 71% 3 6 75%
Women 2 29% 1 2 25%
Ethnic background
White British or other White (including minority-white groups) 7 100% 4 7 87.5%
Mixed/Multiple Ethnic Groups – – – – –
Asian/Asian British – – – 1 12.5%
Black/African/Caribbean/Black British – – – – –
Other ethnic group, including Arab – – – – –
Not specified/prefer not to say – – – – –
¹
Senior Board positions are defined as the Chairman, Senior Independent Director, CEO and CFO.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202382
NOMINATION COMMITTEE REPORT CONTINUED
Workforce diversity
The Committee continues to be broadly satisfied with the diversity at
employee level within the Group but aspires to improve the gender
balance and ethnic diversity at the senior level. In 2023 we prioritised
succession planning for women and developing female talent pools.
A key step taken in the year includes forming the Talent Management
and Succession Planning Committee to identify top female talent to
pipeline into senior positions, refining the Senior Management
promotion process with clearer, more objective competency-based
promotion criteria, and introducing a standardised interview and
selection process to reduce bias across the recruitment and
promotion process. Other initiatives in this area include mentoring,
development programmes and flexible working, and the Committee
will continue to monitor progress on behalf of the Board.
The Group’s diversity reporting and diversity and inclusion initiatives
are set out on
PAGES 55 AND 56. This includes details of the
gender and ethnicity breakdown of Directors, Executive Leadership
Team, Senior Management and all other employees.
Foxtons Limited, the Group’s main trading entity, published its
gender pay gap figures as at 5 April 2023 in line with the relevant
regulations. The report can be found on the Group’s website at
www.foxtonsgroup.co.uk/our-responsibility/gender-pay-gap.
Board evaluation and effectiveness
An internal Board evaluation was completed in the second half of 2023.
This exercise was carried out to review the performance of the Board, its
Committees and the individual Directors. The internal Board evaluation
was led by the Chairman and facilitated by Link Company Matters
Limited, the Group’s Company Secretary. The evaluation took the form
of a questionnaire which gave Directors the opportunity to provide
comments on areas of focus, including the structure of the Board and
the effectiveness of the Board and its Committees. The responses to the
evaluation of the Board and the Committees were collated, analysed
and reported on by Link Company Matters Limited. The actions agreed
by the Directors will be monitored by the Board during 2024.
As a separate exercise, the Senior Independent Director, together
with the Non-Executive Directors, conducted the Chairman’s
evaluation. The views of the Executive Directors were also taken
into account.
Overview: Our internal Board evaluation process
Outcomes
In December 2023, the Board reviewed the results of the
evaluation exercise and agreed actions for 2024.
The Nomination Committee reviewed the evaluation results
in December 2023 as far as responses impacted on Board size,
composition, induction and training.
The diagram on
PAGE 83 summarises the 2023 evaluation
outcomes and proposed actions. Additionally, we have set out
the 2022 evaluation outcomes and actions taken.
Evaluation
The Chairman reviewed the results of the evaluation exercise
and shared the findings with Board members at the December
2023 Board meeting.
Appraisal
Following receipt of the completed questionnaires
during December 2023, Link Company Matters Limited
reviewed the responses and produced a report which compiled
the results of the evaluation exercise.
Questionnaire
The evaluation process was conducted using a questionnaire in
which Board members were asked to score questions and to
provide additional commentary where appropriate.
Questions were designed to focus the evaluation by Board
members in a number of key areas and to cover the
performance of the Board and its Committees as well as
that of the Chairman and areas of focus for 2023.
Board composition as at 31 December 2023
Board gender split
2
5
Female
Male
Board ethnicity
7
White
Tenure
1
2
2
2
<1 year
1-2 years
2-3 years
>3 years
Role
1
4
2
Chair
Non-Executive
Executive
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 83
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
2022 outcomes and actions taken
2022 assessment outcomes Actions taken in 2023
• Ensure updates from the Executive Leadership Team articulate
broader strategic progression as well as in year performance.
• More frequent and in depth engagement with Alexander Hall’s
leadership team.
• Ensure sufficient time is available for Board and committee
agenda items so that discussions can be sufficiently detailed
as required.
• With technology and data becoming an increasingly important
part of the strategy more discussion at the Board level on IT
strategy would be important.
• Senior Management succession planning should be a priority
following 2022’s Senior Management changes.
• Executive Leadership Team presentations reported against the
Group’s refreshed strategic priorities to enable medium-term
strategic progression to be tracked and monitored by the Board.
• Increased engagement with Alexander Hall’s leadership team,
including additional Board presentations and increased strategic
oversight of Alexander Hall.
• Timings of Board meetings were reviewed to enable more
in-depth Board discussions. Additional opportunities for
informal Board discussion were incorporated into the
Board planner.
• Increased frequency of IT strategy discussion at the Board, with
updates to focus on progression against technology and data
related strategic priorities.
• Senior Management succession planning and review of the
Group’s broader talent pipeline was a Nomination Committee
area of priority in 2023.
2023 outcomes and proposed actions
2023 assessment outcomes Proposed actions
• Overall positive feedback for the refreshed Board.
• Consideration to be given to holding separate days for
Board and committee meetings thus allowing more time
for focus on strategic matters as well as operational and
governance matters.
• The development of a workforce KPI dashboard will
enhance the Board’s review of key workforce matters.
• Provision of refresher training on governance matters
for Directors.
• Key Board and committee meeting sessions to be held over two
days to enable additional discussion on strategic matters.
• Workforce dashboard covering a wide range of measures to be
developed and reviewed periodically by the ESG Committee.
• Individual Directors to monitor their own training needs as part
of continuous development.
Annual evaluation of the Nomination Committee’s performance
As part of the internal Board evaluation this year, the performance of the Nomination Committee was reviewed and no material concerns
were identified.
Governance
During the year, the Committee received briefings from the Company Secretary on corporate governance matters. We have reported on the
Company’s compliance with the Code on
PAGE 70 of the Corporate Governance Report.
Priorities for 2024
The Committee will continue to focus on succession planning for both the Board and Senior Management, taking into account our Board
diversity policy and the FCA’s Board diversity rules applicable for 2024. Furthermore, across the wider organisation, management continues to
strive to develop a workforce that reflects the communities we serve and cultivate an environment where every employee feels motivated to
excel and empowered to reach their full potential.
Nigel Rich CBE
Chairman of the Nomination Committee
4 March 2024
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202384
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE COMMITTEE REPORT
The ESG Committee provides an important forum for ESG matters to
be discussed by members of the Board and the Executive Leadership
Team. The ESG Committee has enabled the Board to allocate time to
discuss the Group’s ESG strategy and oversee a range of responsible
business topics including employee engagement matters, diversity
and inclusion matters, environmental matters and social matters.
Our Responsible Business report on
PAGES 40 TO 62 provides
details on a range of environmental and social matters, including
our environmental and social commitments.
2023 areas of focus
• Reviewing the Group’s ESG governance framework.
• Reviewing the Group’s environmental, social and
governance priorities.
• Reviewing ESG related targets, measures and commitments.
• Reviewing the Group’s environmental footprint and
compliance with the Task Force on Climate-Related
Financial Disclosures (TCFD).
• Consideration of proxy agency ESG views.
Environmental matters
Although the Group has a relatively simple infrastructure and does
not operate in a high-risk environmental sector, our environmental
targets will reduce the Group’s environmental impact by lowering
emissions and reducing energy consumption. To support our target
of reaching net zero by 2050 (across Scope 1, Scope 2 and Scope 3
emissions), the Committee has established an interim emissions
target to reduce Scope 1 and Scope 2 emissions by 30% by 2030
against the 2021 baseline. The commitment to electrify our vehicle
fleet by 2030 and the ongoing work to improve the efficiency of our
offices will support this goal.
Social matters
Recruiting and retaining an engaged workforce is key to our success,
and therefore our workforce social programmes, including diversity
and inclusion, continue to be an area of focus. Externally, our social
mobility partnerships have enabled us to support the communities
we work within.
Governance
During the year, the Committee received briefings from the Company
Secretary on ESG related corporate governance matters as relevant.
We have reported on the Company’s compliance with the Code on
PAGE 70 of the Corporate Governance Report.
The environmental and social governance framework, which
establishes the reporting lines on environmental and social
matters and Senior Management responsibilities, has been
reviewed in the period.
The Committee focuses on
enhancing our approach to ESG
issues, which in turn strengthens
our overall business performance
and stakeholder relationships.”
Annette Andrews Chair of the ESG Committee
Members of the ESG Committee
and attendance at meetings
The membership of the Committee is set out below.
All Committee members are considered independent by
the Board and in accordance with the Code. Nigel Rich
was considered to be independent on his appointment as
Chairman of the Company. Biographical information can
be found on
PAGES 66 AND 67. Members’ attendance at
Committee meetings is set out in the table on
PAGE 74.
The Company Secretary acts as Secretary to the Committee.
The Committee Chair has relevant ESG experience having
30 years’ HR and people experience in both regulated and
commercial businesses. Other Committee members have
relevant experience through other external appointments,
knowledge of the Group’s operations and broader
experience of working in customer facing businesses.
Chair: Annette Andrews
1
Members as at 31 December 2023: Jack Callaway
1
,
Nigel Rich, Peter Rollings, Rosie Shapland
1
Annette Andrews and Jack Callaway were appointed to the Board and ESG Committee on 1 February 2023. Annettee Andrews was appointed as Chair of the Committee
at the 2023 AGM.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 85
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Since the last ESG Committee Report, the Committee held three
scheduled Committee meetings. The Committee’s main activities and
areas of focus were as follows:
Environment
• Reviewing the annual Streamlined Energy and Carbon Reporting
statement and other relevant key performance indicators.
• Reviewing progress of the Group’s emission reduction initiatives,
including the vehicle fleet electrification programme, the branch
energy usage reduction programme and progress against the
Group’s interim 2030 emission reduction target.
Social – employees
• Reviewing the Group’s people programme, and specifically
the Group’s employee value proposition.
• Reviewing the annual employee engagement/culture survey
results and review of management’s response plan.
• Reviewing employee diversity and inclusion activities.
• Reviewing the Group’s health and safety governance framework
and performance.
• Reviewing the Group’s modern slavery statements and
ongoing compliance.
Social – communities
• Reviewing the Group’s community initiatives.
• Providing oversight to the Group’s selection of a new charity
partner in the context of the Group’s values and priorities.
Governance
The ESG Committee provided oversight of the environmental and
social governance framework, including:
• Reviewing the framework, strategy, activities and commitments
relating to the Group’s environmental and social responsibilities.
• Agreeing the Committee’s agenda for 2023 and 2024.
• Reviewing ESG related Annual Report disclosures, including
TCFD reporting.
Annual evaluation of the ESG Committee’s performance
As part of the internal Board evaluation this year, the performance of
the ESG Committee was reviewed and found to be satisfactory with
no issues identified.
Priorities for 2024
The Committee’s priorities include reviewing the implementation of
the redesigned employee value proposition (refer to
PAGE 54 for
further details), reviewing charitable activities relating to the Group’s
new charity partner, Single Homeless Project, and continuing to
monitor progress against the Group’s environmental commitments.
Annette Andrews
Chair of the ESG Committee
4 March 2024
Role and responsibilities and activities
undertaken during the year
The Committee’s main responsibilities, as outlined in its
terms of reference, are:
• To provide oversight of the governance framework
relating to environmental and social matters.
• To review the Group’s environmental and social
strategy to ensure alignment with the Group’s overall
strategy, including consideration of related risks
and opportunities.
• To actively look for opportunities to promote
environmental and social matters within the Group.
• To receive updates on performance against the
Group’s environmental and social strategy and target.
• To receive updates on regulatory changes which could
impact the implementation of the Group’s
environmental and social strategy.
• To receive updates on the social and community
initiatives of the Group, including community
engagement and partnerships.
• To review the extent and effectiveness of the Group’s
external reporting of its environmental and social
performance, and to review the external social
reporting prior to its publication.
• To review environmental and social related risks to the
Group and make recommendations to the Audit
Committee regarding inclusion in the Group’s risk
management practices.
Terms of reference were reviewed during the year and set
out in detail the Committee’s role and responsibilities.
The terms of reference can be found on the Group’s
website at: www.foxtonsgroup.co.uk/our-responsibility/
corporate-governance.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202386
AUDIT COMMITTEE REPORT
4
AUDIT, RISK AND
INTERNAL CONTROL
The Committee’s work continues to focus on protecting the
interests of shareholders by monitoring the effectiveness of risk
management processes, internal controls and financial reporting
processes. The Committee has focused on monitoring and
strengthening internal controls, risk management processes and
monitoring emerging risks, including the impact of climate change.
The Committee also monitors the control environment of Alexander
Hall, the Group’s FCA regulated Financial Services arm, by engaging
with management, reviewing third party internal control reports, and
receiving a specific update on the risk and compliance framework.
The Group’s internal audit programme has continued to be delivered
by PwC with three internal audit reviews providing assurance over
significant risk or strategically important areas. Internal audit reviews
in the year have covered Lettings acquisition execution, Alexander
Hall compliance and the estate agency workforce performance
management framework. During the year, PwC also reported to the
Committee management’s progress in addressing audit findings
identified from prior reviews and validated management’s response.
During the year, the Committee reviewed a number of key financial
reporting matters including the annual brand impairment review,
with particular focus on the cash flow forecasts, charges presented
as adjusted items in the period, alternative performance measures,
acquisition accounting and the Group’s going concern assumption
and longer-term prospects and viability statement.
Role of the Audit Committee
The primary function of the Audit Committee is to assist the Board
in fulfilling its responsibilities to protect the interests of shareholders
with regard to the integrity of financial reporting, risk management
and internal controls and governing the relationship with the internal
and external auditors. Key responsibilities include:
• Monitoring the integrity of the financial statements and half
year report and other formal announcements relating to
financial performance.
• Monitoring, reviewing and challenging when necessary the
financial reporting processes, including significant financial
reporting issues, accounting policies and judgements.
• Recommending to the Board the appointment, reappointment
and removal of the external auditor, approving the terms of
engagement and remuneration and monitoring the independence
of the auditor and the provision of non-audit services.
• Monitoring the statutory audit of the Group’s annual
financial statements.
• Reviewing internal audit’s strategy, plans, programmes,
effectiveness, results of work undertaken and resolution of any
matters arising.
• Reviewing the Group’s systems and controls for the prevention
of bribery and procedures for detecting fraud.
• Reviewing the effectiveness of internal financial controls and
risk management policies and systems.
• Reviewing the Group’s processes and procedures for ensuring
that material risks are properly identified, assessed, managed
and reported and that appropriate systems of monitoring and
control are in place.
The Committee’s terms of reference were reviewed during the year
and can be found on the Group’s website at: www.foxtonsgroup.co.
uk/our-responsibility/corporate-governance.
I am pleased to present the report
of the Audit Committee setting out
its key activities and principal and
ongoing responsibilities.”
Rosie Shapland Chair of the Audit Committee
Members of the Audit Committee and
attendance at meetings
The membership of the Committee is set out below.
All Committee members are considered independent by
the Board and in accordance with the Code. Biographical
information can be found on
PAGES 66 AND 67.
Members’ attendance at Committee meetings is set out
in the table on
PAGE 74. The Company Secretary acts
as Secretary to the Committee.
Chair: Rosie Shapland
Members as at 31 December 2023¹: Annette Andrews,
Jack Callaway and Peter Rollings
1
Annette Andrews and Jack Callaway were appointed to the Board and Audit Committee on 1 February 2023.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 87
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Composition of the Committee
Each member of the Committee is an Independent Non-Executive
Director. The Chair, as a Chartered Accountant, former audit
partner with over 30 years of audit experience across multiple
sectors within public and private companies, and Chair of the Audit
Committee at both PayPoint plc and Workspace Group plc, satisfies
the requirement of having appropriate recent and relevant financial
experience. The Committee members as a whole have competence
relevant to the business, in addition to general management and
commercial experience.
The Audit Committee usually invites the full Board, our outsourced
internal audit partner and external auditor to attend each meeting.
Other members of management attend as and when requested.
The Committee holds private sessions with the external and internal
auditor as necessary without members of management being
present, and at least once a year.
Significant financial reporting matters
The Committee considered the following significant
financial reporting matters which require judgement or are
sources of estimation uncertainty. The matters, and how
they were addressed by the Committee, are detailed below.
The matters are disclosed as critical accounting judgements
and key sources of estimation uncertainty within Note 1 of
the financial statements.
The Group has an indefinite life brand intangible asset with
a carrying value of £99 million:
• Useful economic life of the brand intangible asset
The Committee challenged the appropriateness of the
indefinite useful economic life assigned to the brand
intangible asset. It considered whether there had been
any changes in the period over which the brand asset
is expected to generate cash inflows. Following this
assessment, it was confirmed that there is no
foreseeable limit to the period over which the asset
is expected to generate cash inflows. Therefore, it
continues to be appropriate for the brand asset to
be assigned an indefinite useful economic life.
• Impairment of the brand intangible asset
The Committee challenged management’s
impairment review methodology of the indefinite
life brand intangible asset, including the relevant
forecasts, discount rates and long-term growth rates.
The Committee concurred with management’s view
that no impairment of the Group’s brand asset is
required. However, the Committee noted that a
reasonable possible change in key assumptions within
the impairment model would remove the headroom
between recoverable amount and carrying value of
the brand asset and appropriate sensitivity disclosure
is included within Note 10 of the financial statements.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202388
AUDIT COMMITTEE REPORT CONTINUED
Other relevant financial reporting matters
The Committee also reviewed other relevant financial reporting matters in the period.
• Adjusted items and alternative performance measures
The Committee considered the presentation and disclosure of £4.5 million of adjusted items which have been recognised in
the period (refer to Note 4 of the financial statements for further details). The Committee reviewed the quantification and the
nature of the adjusted items, with reference to the Group’s adjusted items policy (refer to Note 1 of the financial statements),
and concluded the classification and disclosure of the items was appropriate and the policy had been consistently applied across
financial years. Additional alternative performance measures have been presented in the year: adjusted EBITDA; adjusted EBITDA
margin; and adjusted profit before tax. These measures provide readers of the financial statements with additional information to
assess the performance of the Group (refer to Note 28 for further details). The Committee determined the Group’s alternative
performance measures disclosure to be appropriate.
• Going concern and longer-term prospects and viability statement
The Committee reviewed management’s assessment of the Group’s going concern assumption and longer-term prospects
and viability statement. The review included consideration of forecast cash flows, specifically uncertainties in relation to the
macroeconomic outlook, the reverse stress scenario sensitivity and the Group’s liquidity over the relevant forecast period.
For the purposes of assessing the going concern assumption, an 18-month forecast period from the date of the approval of the
2023 financial statements was considered, including the results of a reverse-stress scenario. A longer period of five years was
used for assessing viability, which is consistent with the Group’s strategic planning period. The viability assessment included
the consideration of severe, but plausible, scenarios and the impact such scenarios could have on the Group’s future financial
position. The Committee confirmed preparing the financial statements on a going concern basis continues to be appropriate
and recommended the approval of the long-term prospects and viability statement as set out on
PAGES 38 AND 39.
The Committee also reviewed other key estimates:
• Acquisition accounting
As set out in Note 13 of the financial statements, the Group acquired two businesses in the year. Management’s purchase price
allocation exercises identified £5.9 million of acquired intangible assets relating to customer contracts and relationships and
£14.7 million of goodwill arising on the acquisitions. The Committee reviewed the key valuation assumptions and is satisfied
that the acquisition accounting is appropriate.
• Provisions
The Group has provisions of £4.6 million (refer to Note 20 of the financial statements) which primarily relate to property related
liabilities. The Committee reviewed the key assumptions used to determine the year end provision balance and concluded the
valuation of the provision is appropriate.
• Branch impairment assessment
The Committee also reviewed management’s branch impairment assessment and is satisfied that the carrying value of branch
property, plant and equipment and right-of-use assets as at 31 December 2023 is appropriate (refer to Note 11 and Note 12 of
the financial statements).
• Impairment of trade receivables and contract assets
The Committee reviewed the Group’s approach to measuring impairment of trade receivables and contract assets, and
concluded the recognised expected credit losses against both balances to be appropriate (refer to Note 16 and 19 of the
financial statements).
The Committee also reviewed the continuing rationale for not recording client monies in the Group’s financial statements.
The Committee concluded there was no judgement in this area, and no amounts should be recorded in the Group’s financial
statements, since these funds belong to tenants. Refer to Note 26 of the financial statements for details of the value of client money
held at 31 December 2023.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 89
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Financial reporting
The Committee regularly reviews the robustness of financial reporting
processes. The Group maintains a comprehensive financial review cycle,
which includes a detailed annual financial planning process where
budgets are prepared for challenge and approval by the Board.
Management reviews key performance indicators on a regular basis
which enable business performance and the market to be monitored on
an ongoing basis, allowing corrective action to be taken as necessary.
At a Group level, a comprehensive management accounts pack, including
income statements, a balance sheet, a cash flow statement, and key
performance indicators, is reviewed monthly by the Board. Reforecasts
of current year performance are carried out on a regular basis during the
year. Management monitors the publication of new accounting and
reporting standards and reports on any updates to the Committee.
Risk management and internal controls
The Committee, on behalf of the Board, keeps under review the
effectiveness of the Group’s risk management and internal control
systems through management update reports, output from the
executive risk committees and reports from PwC internal audit to
ensure that controls in place are effective in order to safeguard
shareholders’ investments and the Group’s assets. Such a system
is designed to manage rather than eliminate the risk of failure to
achieve business objectives and can only provide reasonable and
not absolute assurance against material misstatement or loss.
The Board has defined its risk appetite for strategic, financial,
operational and compliance risks as set out on
PAGE 33 of the
Strategic Report. A standard methodology for risk assessment is
applied across the Group to assist with monitoring gross and residual
risk and comparing residual risk against risk appetite. As required by
the Code, the Board, through the Audit Committee, has carried out
a robust assessment of the principal and emerging risks facing the
Group, including those that could threaten its business model, future
performance, solvency or liquidity. Further details can be found on
PAGES 35 AND 36 of the Strategic Report.
The Group has the following key procedures and monitoring
processes in place to provide effective internal control:
• An ongoing process to identify, evaluate and manage significant
risks, which is monitored and regularly reviewed by the Executive
Leadership Team with significant issues presented to the Board
and Audit Committee.
• The Group’s compliance department continuously reviews
operations to ensure that transactions have been properly
authorised and procedures are adhered to across the Group.
• Appropriate segregation of duties are embedded across
the organisation.
• Management reports to the Audit Committee on the
mechanisms in place to monitor the effectiveness of key internal
controls, which includes mapping key entity level processes and
controls to the Group’s three lines of defence.
• On behalf of the Board, the Audit Committee reviews fraud,
anti-bribery and whistleblowing policies and procedures and
considers any whistleblowing incidents, and the appropriate
response. There have been no recorded instances of
whistleblowing, bribery or corruption during the period
under review.
• An annual fraud risk assessment and financial risk assessment is
prepared and is subject to review by the Audit Committee.
• A system for planning, reporting and reviewing financial
performance, including performance against strategy and the
business plan as described above.
• The Environmental, Social and Governance (ESG) Committee
reviews the TCFD climate related disclosures.
• Key management personnel, including the Chief Financial
Officer, Chief Information Officer, Legal and Compliance
Director and Alexander Hall’s Risk and Compliance Committee,
provide regular risk and control updates to the Audit Committee.
• Compliance with the risk appetite statement is monitored through
the Group’s standard monitoring and reporting mechanisms. The
Board reviews the risk appetite statement annually.
• The Audit Committee reviews internal risks, including IT systems
and cyber risk, to ensure that the Group’s IT function effectively
implements preventative and detective controls to monitor and
mitigate risk.
On the basis of the above procedures and the monitoring processes
employed, the Board, supported by the Audit Committee, has
reviewed the effectiveness of the risk management and internal
control systems during 2023, and up to the date of the approval
of the Annual Report and Accounts. No significant failings or
weaknesses were identified during the period under review.
Internal audit
PwC is the Group’s outsourced internal audit partner and has the
remit to provide independent and objective assurance over the
Group’s operations. PwC’s internal audit plan is reviewed and
approved by the Committee annually and can be updated during the
year should the need arise. The internal audit plan is determined with
reference to the Group’s strategy and the risks that may prevent the
Group from meeting its strategy. Following each review, PwC issues
an independent report to the Committee with findings graded and
any remedial actions agreed as necessary. Remediation progress is
monitored and reported to the Committee on a regular basis by PwC.
During 2023 PwC reported on three internal audits covering lettings
acquisition execution, Alexander Hall compliance and the estate agency
workforce performance management framework. The independent
reports issued in these areas were scoped with reference to the risk
profile of each area and all areas were reported to be satisfactory, with
only low or medium findings being reported against certain areas.
Appropriate remediation plans have been put in place to respond to
the findings with good progress made against these items in the year.
The Committee assesses the effectiveness of internal audit on a
regular basis.
Whistleblowing
The Group believes that it is important to have a culture of openness
and accountability in order to prevent situations relating to possible
impropriety, financial or otherwise, from occurring or to address them
when they do occur. The Group’s independent whistleblowing helpline
open to all employees, continues to be in operation and activity reports
are provided to the Committee, with any matters relating to Senior
Management being reported directly to the Audit Committee Chair.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202390
AUDIT COMMITTEE REPORT CONTINUED
Any material whistleblowing matters are raised to the Board and
responded to accordingly. The Committee is satisfied that the
whistleblowing policy and its administration remain effective.
Fair, balanced and understandable
The Group has a comprehensive and thorough assurance process in
respect of the preparation, verification and approval of periodic financial
reports and the Annual Report and Accounts. The process involves:
• The involvement of qualified and appropriately experienced
staff, under the direction of the CFO.
• A comprehensive review and verification process which deals
with the factual content of the reports and ensures consistency
across various sections.
• A common understanding amongst senior staff which ensures
consistency and overall balance.
• A transparent process to ensure full disclosure of information to
the external auditor.
• Engagement of a professional and experienced external audit
firm who understands the Foxtons business and business model.
• Oversight by the Audit Committee which, among other
things, reviews:
• The key accounting judgements and key sources of
estimation uncertainty.
• The consistency of, and any changes to, significant
accounting policies and practices.
• Significant adjustments arising from the external audit.
• The Group’s statement on risk management and
internal control.
• The going concern and viability assumptions.
• The overall balance of the Annual Report and Accounts
disclosures with reference to the Committee’s
understanding of the Group’s business model, strategy,
financial position and drivers of performance.
The process outlined, together with the review and challenge of
management by the Committee and its recommendation to the
Board, provides comfort to the Board that the Annual Report and
Accounts taken as a whole is fair, balanced and understandable
and provides the information necessary for shareholders to assess
the Group’s business model, strategy, position and performance.
The Directors confirm this statement within the Directors’
Responsibilities Statement on
PAGE 125.
External auditor
BDO were re-appointed as external auditor by shareholders at the
AGM in 2023. The 2023 audit was led by Tim Neathercoat. Under the
partner rotation rules set out in the applicable ethical standards, his
final year as partner will be 2024 after five years of service.
As noted, the Committee has reviewed the effectiveness and quality
of the external audit process. The Committee did this by:
• Reviewing the external auditor’s plan, with specific focus on the
auditor’s approach to auditing areas of heightened interest to
the Audit Committee, or are new or unique to the 2023 audit,
such as the acquisition accounting for the two businesses
acquired in the year and an increase in the Group’s contract
asset balance driven by the introduction of shorter billing terms.
• Discussing the results of the external auditor’s testing, including
their views on material accounting issues, key judgements and
estimates, and their audit report. The auditor’s reporting to the
Committee included details of how the audit procedures
challenge management’s key judgements in relation to the other
financial reporting matters set out on
PAGES 87 AND 88.
• Considering the robustness of the audit process, specifically how
the auditor has challenged management’s key assumptions and
demonstrated professional scepticism throughout the audit.
• The Committee assessed the auditor’s professional scepticism in
a number of ways, including making enquiries with the audit
partner in relation to the extent of audit procedures, challenging
the auditor’s IT specialist on the extent of general IT controls
testing, and as noted above, challenging the auditor’s
assessment of management’s key assumptions and judgements.
Specific attention was paid to the auditor’s professional
scepticism in relation to the significant financial reporting
matters and other relevant financial reporting matters set out
on
PAGES 87 AND 88.
• Reviewing the quality of people and service provided by BDO,
including a review of the FRC’s latest Audit Quality Review of
BDO and BDO’s response to the FRC’s findings.
• Confirming the independence and objectivity of BDO.
The Committee concluded that it was satisfied with the performance,
ongoing quality and independence of BDO as external auditor.
Non-audit services
In brief, there are certain services termed ‘excluded services’ that
are not permitted to be provided by the external auditor as set
out in the Group’s non-audit service policy (full policy available at
www.foxtonsgroup.co.uk/our-responsibility/corporate-governance).
Excluded services comprise services prohibited under the applicable
regulatory and ethical guidance. All permitted non-audit services
provided by the external auditor are subject to prior approval by
the Committee. With the exception of the interim review performed
under International Standard on Review Engagements (UK and
Ireland) 2410 and an accountant’s report required as a Propertymark
member, there were no other non-audit services undertaken during
the year. Total non-audit fees for services provided by BDO for the
year ended 31 December 2023 were £47,000 (2022: £45,000).
Audit fees for the year were £475,000 (2022: £375,000).
Evaluation of the Audit Committee’s performance
As part of the internal Board evaluation this year, the performance of
the Committee was reviewed. No areas of concern were identified and
it was concluded that the Committee had effectively fulfilled its role.
Conclusion
As a result of its work during the year, the Committee has concluded
that it has acted in accordance with its terms of reference and has
ensured the independence of the external auditor during the year.
1
Annette Andrews and Jack Callaway were appointed to the Board and Audit Committee on 1 February 2023.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 91
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
KEY ACTIVITIES
Since the last Audit Committee Report, the Committee has held four meetings, with the principal work being:
Role Tasks
July
2023
Sept
2023
Dec
2023
Feb
2024
Financial
reporting
Monitoring and reviewing the Group’s accounting policies, practices and significant accounting
judgements, including any relevant changes in accounting or reporting standards.
Review of key financial reporting matters (key matters are set out on PAGES 87 AND 88).
Reviewing the plan for the production of the 2023 Annual Report and Accounts, including the plans
for reporting on the UK Corporate Governance Code.
Receiving the annual and half yearly financial statements and advising the Board on whether the Annual
Report and Accounts are fair, balanced and understandable. In fulfilling this task, the Audit Committee
reviewed the process undertaken to produce the Annual Report and Accounts, which included guidance
given to contributors, internal verification processes and content approval procedures.
Reviewing the going concern paper which analysed the profitability and cash generation of the
Group and agreeing with the adoption of the going concern basis.
Reviewing the Group’s assessment of the Task Force on Climate-Related Financial Disclosures
framework and reviewing the related disclosures in the Annual Report and Accounts with reference
to the ESG Committee’s recommendations.
Considering and reviewing the viability statement and supporting sensitivity analysis which
assessed the potential impact of the principal risks on the future performance and liquidity of the
Group over a five-year period.
External
audit
Approving the appointment of the external auditor and their terms of engagement and fees for the
financial year 2023.
Considering the scope of work to be undertaken by the external auditor, assessment of the
auditor’s professional scepticism and reviewing the results of the work undertaken.
Receiving the external auditor’s audit planning paper for 2023 and reviewing materiality thresholds
and areas of risk where the auditor would concentrate.
Reviewing and monitoring the independence of the external auditor and approving their provision
of non-audit services.
Reviewing the effectiveness of the external auditor.
Reviewing the external auditor’s interim review, pre year end and year end report (no material
issues were identified in any of BDO’s reports).
Internal
audit
Reviewing internal audit’s assurance map and risk assessment. Approving the internal audit plan
for 2024.
Reviewing internal audit reports following the completion of specific audits, monitoring progress
against the internal audit plan and assessing ongoing effectiveness of internal audit.
Internal
controls
Ensuring compliance with the UK Corporate Governance Code.
Reviewing the whistleblowing policy and helpline reports.
Reviewing internal control reports from external audit, internal audit and relevant management
committees; and advising the Board on the effectiveness of the Group’s systems of internal
controls in order to allow the Board to assert as such in the Annual Report and Accounts.
Risk
Management
Reviewing the Group’s risk appetite and risk monitoring systems which assess gross risk, mitigating
controls and residual risk across the Group and comparing residual risk against the Board’s risk appetite.
Reviewing controls within the IT function through reports received from the Chief Information
Officer, the internal auditor and the external auditor, including progress with the Group’s cyber
security strategy, response to cyber threats and attacks and the general IT control environment.
Reviewing a report on legal and compliance matters within the Group.
Governance Reviewing the Committee’s terms of reference.
Reviewing the Group’s non-audit services policy.
Rosie Shapland
Chair of the Audit Committee
4 March 2024
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202392
DIRECTORS’ REMUNERATION REPORT
5
REMUNERATION
The Remuneration Policy,
approved by shareholders at
the May 2023 AGM, has been
implemented with the outturns
reflecting the significant progress
made in 2023 against the Group’s
strategic priorities.”
Annette Andrews Chair of the Remuneration Committee
Members of the Remuneration Committee
and attendance at meetings
The membership of the Committee is set out below. All of
the Non-Executive Directors who are Committee members
are considered independent by the Board and in accordance
with the UK Governance Code. Nigel Rich was considered
to be independent on his appointment as Chairman of
the Company. Biographical information can be found on
PAGES 66 AND 67. Members’ attendance at Committee
meetings is set out in the table on
PAGE 74. The
Company Secretary acts as Secretary to the Committee.
Chair: Annette Andrews
1
Members as at 31 December 2023: Jack Callaway
1
, Nigel
Rich, Peter Rollings, Rosie Shapland
Overview statement from the Committee Chair providing
relevant background for remuneration decisions and a summary
of key decisions.
An overview of our work in the year.
A summary of remuneration in respect of 2023.
Summary of the Policy that was approved at the 2023 AGM, and
how it will be implemented in 2024.
The Annual Report on Remuneration includes the following
sub-sections:
• Our approach to fairness and wider workforce considerations.
• How we implemented the Policy in 2023.
• Additional information.
Annual Statement from the Remuneration
Committee Chair
Refer to PAGES 93 AND 94
The work of the Committee
Refer to PAGE 95
Directors’ Remuneration Report at a glance
Refer to PAGES 96 TO 98
Summary of Directors’ Remuneration Policy
Refer to PAGES 99 TO 102
2023 Annual Report on Remuneration
Refer to PAGES 102 TO 121
The 2023 Annual Report on Remuneration, including the Annual Statement from the Remuneration Committee Chair, will be subject to an
advisory vote at the 2024 AGM.
1
Annette Andrews and Jack Callaway were appointed to the Board and Remuneration Committee on 1 February 2023. Annette Andrews was appointed as Chair of the
Committee at the end of the 2023 AGM.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 93
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
On behalf of the Board, I am delighted to present my first Directors’
Remuneration Report as the Chair of the Remuneration Committee,
for the year ended 31 December 2023. I would like to thank AIan
Giles, my predecessor, for his support throughout our transition,
and all members of the Committee over the period.
2023 was the first year of implementation of the Remuneration
Policy approved by shareholders in May 2023, which received
overwhelming support of 97.45%. This annual statement sets out a
summary of business performance, the incentive outcome for this
year as well as remuneration decisions for implementation in 2024.
Introduction
In a year where macro pressures, in particular rising mortgage rates,
have significantly impacted the sector and influenced customer
trends, Foxtons has performed well delivering resilient earnings
despite a challenging sales market. Significant progress has been
made against the Group’s turnaround plan, with market share gains
delivered across Lettings, Sales and Financial Services reflecting the
operational changes made to date.
Management and the broader team have also demonstrated
continued progress against our strategy to drive recurring and
non-cyclical earnings growth, with the successful completion of
two lettings acquisitions in 2023. The Group’s strategy of acquiring
lettings businesses, coupled with Lettings organic growth, has
protected profitability in a lower volume sales market to a far greater
extent than in previous years. This strong performance has been
reflected in the shareholder experience, with share price growth over
the period of 55%, and the full year dividend being maintained at
0.9p per share.
2023 variable pay
Variable pay continues to form a core part of the reward for
Executive Directors, Senior Management and fee earners, reflective
of the culture at Foxtons, and in the residential property industry
more generally. Full year earnings were ahead of consensus market
expectations, with adjusted operating profit of £14.3 million
(2022: £13.9 million) despite sales market headwinds. Non-financial
KPIs performed well, in particular market share growth which has
been driven by improvements in data, core processes, culture and
brand, alongside investment in fee earners.
The formulaic outcome under the Bonus Banking Plan (BBP) for
Executive Directors is 82.7% of maximum for the year ending
31 December 2023. This reflects strong performance against the
adjusted operating profit, Lettings market share % growth, Sales
market share % growth and employee experience performance
measures. Further details of performance against each of the 2023
BBP targets are set out on
PAGE 115.
The Committee carefully considered the appropriateness of the
2023 BBP targets and the respective formulaic BBP outcomes in
light of the overall business performance on a holistic basis, including
consideration of the experience of stakeholders in 2023. Shareholders
will recall that the Committee exercised downwards discretion in
respect of the 2022 BBP outcome having taken a number of factors
into consideration in addition to the formulaic outcome, however the
Committee determined that no discretionary adjustment would be
appropriate to the 2023 BBP outcome and that the formulaic
outcome fairly reflects the underlying performance of the business.
Further details of the experience of stakeholders in 2023 are set out
on
PAGE 98.
Whilst neither of the current Executive Directors, nor the Former CEO
and Former CFO have 2021 RSP awards that will vest in May 2024,
the Committee considered the issue of windfall gains given that a
pro-rated award is due to vest to the Former COO, Patrick Franco.
Following detailed consideration, the Committee has determined
that no adjustment would be appropriate to the vesting of the award
on the basis it was granted at a share price that was stable for much
of the period of 2021, and has not materially increased over the
vesting period, and therefore there is no windfall gain incorporated
within the value of the award. The final vesting of this award will be
disclosed in the Directors’ Remuneration Report next year.
In line with the 2023 Remuneration Policy, the CEO and CFO
received an RSP grant of 100% and 75% of salary, respectively in
2023. As set out in detail in last year’s report, a qualitative holistic
underpin continues to apply to the RSP, which will be assessed at the
point of vesting. This allows the Remuneration Committee to make
adjustments to the level of vesting if the Committee believes due to
business performance, individual performance or wider Company
considerations that the vesting should be adjusted.
2024 implementation
CEO base salary review
Following appointment in September 2022, the Committee has not
awarded the CEO with a salary increase to date. Following review,
the Remuneration Committee has awarded the CEO with a 4% base
salary increase from 1 April 2024, in line with the average salary
increase awarded to eligible employees. This results in a base salary
of £468,000.
CFO base salary review
Chris Hough was appointed as CFO with a gross base salary of
£250,000 which is significantly below that of his predecessor
(£305,400) and below the market rate for a business of the size
and complexity of Foxtons. As set out in last year’s Chair letter, the
Committee did this with the intention of keeping his salary under
review with the potential to move it towards the market rate as the
CFO developed and established himself in the role.
ANNUAL STATEMENT FROM THE REMUNERATION COMMITTEE CHAIR
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202394
DIRECTORS’ REMUNERATION REPORT CONTINUED
As disclosed in last year’s report the Committee considered moving
the CFO’s base salary in early 2023 to align with pay levels for
equivalent roles in the market. In light of inflationary pressures the
wider workforce had experienced and the cost of living crisis, the
Committee determined it inappropriate to award either Executive
Director a salary increase at that time. The Committee committed to
keep this under review with the intention of aligning the CFO’s salary
with the market in 2024, subject to continued performance in role.
Having reviewed the CFO’s continued strong performance and
progression within the role over 2023, the Committee determined
that the CFO’s salary should be increased in line with the market rate
for a business the size and complexity of Foxtons. Having considered
this carefully, the Committee agreed that an appropriate salary level
for the CFO is around £300,000 which is positioned between the
lower quartile and median of the FTSE Small Cap, and remains below
that of the previous CFO. This salary level will be achieved over two
years subject to continued strong performance in role as follows;
from 1 April 2024, the CFO’s salary will increase by 9.6% to
£274,000, and by a further 9.5% to £300,000 from 1 April 2025.
The CFO will be eligible for normal annual salary increases as
determined appropriate by the Committee following 2025.
The CFO will continue to receive a proportion of his salary in Salary
Substitute Restricted Shares, creating further alignment to the
shareholder experience. The Committee has determined that the
proportion of the CFO’s salary that will be paid in Salary Substitute
Restricted Shares from 1 April 2024 will be set at 10%, reduced from
the current 20%, to align his arrangements with the approach taken
for the CEO.
2024 incentives
2024 incentives will be operated in line with the shareholder
approved 2023 Remuneration Policy. As such, the CEO and
CFO will be eligible for a BBP opportunity of 150% and 125%
of salary, respectively, and an RSP grant of 100% and 75% of
salary, respectively.
The BBP will continue to be based on adjusted operating profit,
Sales market share growth, Lettings market share growth and an
assessment of the employee experience. A qualitative holistic
underpin will continue to apply annually to the unpaid balance of
the BBP and at the point of vesting for the RSP.
The discretionary underpin allows the Remuneration Committee
to make adjustments to the level of vesting if the Committee
believes due to business performance, individual performance or
wider Company considerations that the vesting should be adjusted.
The Committee is satisfied that the operation of a holistic underpin
is the most appropriate approach for Foxtons, and the Committee
will continue to implement the framework that was developed last
year to assess performance over the period, to ensure that it is
robustly and thoroughly assessed.
Wider workforce
During 2023, Foxtons reviewed wider workforce salaries in light
of the continued high inflation levels and cost of living crisis and
awarded an average salary increase of 3.3% across the business.
For those members of the wider workforce who receive variable
pay, which includes commission payments and bonuses, the
average increase from 2022 to 2023 was 13%.
For 2024, base salary increases for eligible employees will average
c.4%, with certain junior employee groups receiving higher base
salary increases, for example Trainee Negotiators will receive a
c.10% base salary increase in April 2024 to reflect the uplift in the
National Living Wage.
ESG measures
Employee engagement continues to be a well-established component
of our annual bonus performance measures, and for 2023 the
Committee modified the measure in order for it to make a broader
assessment of how employees have been managed and their overall
experience rather than a single narrow engagement measure.
As described in the ESG Committee report, the Group has various
environmental commitments, including an interim emissions target
to reduce Scope 1 and Scope 2 emissions by 30% by 2030 (from a
2021 baseline) and to electrify the vehicle fleet by 2030.
The Committee will continue to review the importance of a range of
ESG measures, including those that relate to the environment, but do
not propose to introduce further measures into incentive plans unless
they are material to the Group’s strategy and can be robustly measured.
Conclusion
The performance in 2023 was strong on a range of metrics and the
Executive team have continued to establish themselves in role
following their respective appointments, delivering on the business’s
strategy. We look forward to receiving any shareholder feedback and
hope to receive support in favour of our Remuneration Report at our
upcoming AGM.
Annette Andrews
Chair of the Remuneration Committee
4 March 2024
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 95
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
How many times did the Committee meet and what did we do?
We met as a Committee three times since the last Directors’ Remuneration Report. We believe it is important that the Committee keeps up to
date on an ongoing basis during the year to ensure discussions are timely where business decisions may affect remuneration. The Committee’s
key activities since the 2022 Directors’ Remuneration Report was issued are set out below.
THE WORK OF THE COMMITTEE
February 2024
Matters relating to 2023:
• Reviewed and approved the outturn of 2023
bonus payments for Executive Directors and
Senior Management.
• Reviewed and approved the 2023 Directors’
Remuneration Report.
• Reviewed workforce remuneration.
• Reviewed the latest Gender Pay Gap Report.
Matters relating to 2024, policies and other matters:
• Reviewed Executive Director remuneration, including
2024 packages, BBP 2024 targets and 2024 share awards.
• Reviewed Senior Management remuneration, including
2024 packages and share-based awards.
December 2023
• Reviewed the Committee’s performance
evaluation results.
• Reviewed the training and development needs of
the Committee.
• Reviewed trends and governance developments.
• Reviewed Senior Management remuneration.
• Reviewed the Executive Directors’ and the Chairman’s
remuneration for 2023.
September 2023
• Reviewed ESG remuneration trends and developments.
• Reviewed wider workforce topics, including pay fairness
and the employee value proposition.
Who supports the Committee?
During the year, we sought internal support from the CEO
and CFO whose attendance at Committee meetings was by
invitation from the Chair, to advise on specific questions raised
by the Committee and on matters relating to the performance
and remuneration of the Senior Management team. The
Company Secretary acts as Secretary to the Committee.
No Director was present for any discussions that related
directly to their own remuneration. Our adviser is PwC,
with further details provided on
PAGE 121.
What are the Committee’s responsibilities?
The key responsibilities of the Remuneration Committee are to:
• Determine the Remuneration Policy for Executive
Directors and Senior Management, in the context of pay
and conditions across the wider workforce.
• Review workforce remuneration and related policies
across the Company as a whole.
• Design and approve specific remuneration packages and
their implementation, which include salaries, bonuses,
equity incentives, pension rights and benefits.
• Review the Executive Directors’ service contracts.
• Consider the external business environment, market
changes and benchmarking data.
• Ensure failure is not rewarded and that steps are
always taken to mitigate loss on termination, within
contractual obligations.
• Approve the terms, recommend grants and approve the
vesting outcomes under the Group’s incentive plans.
The Committee’s terms of reference, which are
reviewed regularly, are set out on the Company’s website
(www.foxtonsgroup.co.uk).
Annual evaluation of the Remuneration
Committee’s performance
As part of the internal Board evaluation this year, the
performance of the Remuneration Committee was reviewed
and no material concerns were identified.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202396
DIRECTORS’ REMUNERATION REPORT CONTINUED
DIRECTORS’ REMUNERATION REPORT AT A GLANCE
Remuneration in respect of 2023
The Remuneration Policy operated as intended during the year. The following tables set out what our Executive Directors
earned during the year:
Fixed components
Current Executive Directors
Guy Gittins, CEO Chris Hough, CFO
Salary: £450,000 (10% in Salary Substitute Restricted Shares) Salary: £250,000 (20% in Salary Substitute Restricted Shares)
Pension: 3% of base salary Pension: 3% of base salary
Benefits: Company car (or allowance), life assurance and private
medical insurance
Benefits: Company car (or allowance), life assurance and private
medical insurance
Variable components
2023 Annual BBP outcome
Bonus
outcome
(% of
maximum)
Maximum
bonus
(% of salary)
Salary
(£’000)
Bonus
outcome
(£’000)
Bonus
outcome
(% of salary)
CEO
82.7%
Guy Gittins 150% 450.0 558.0 124%
CFO
Chris Hough 125% 250.0 258.3 103%
More detail on the performance condition outcomes are set out on PAGE 116.
Each year the bonus outcome contributes to the participants’ plan account with a proportion paid out in cash and a proportion paid out in
shares. 100% of the balance in the final fourth year of the plan will normally be settled in the form of shares transferred or allotted to the
participant. 2023 was the fourth year of the first cycle of the BBP and as such, the full balance of cycle one will be settled in shares and cycle
two of the BBP comes into operation.
The table below summarises the movements in participants’ cycle one plan account from 31 December 2023 onwards:
CEO
Guy Gittins
(£’000)
CFO
Chris Hough
(£’000)
Value of deferred notional shares in plan account at 31 December 2023 (end of year four of the plan) 110.7 118.0
Bonus contribution made at the start of 2024 in respect of performance over 2023 – –
Cumulative account following contribution and dividends 113.0 120.4
Less: 2024 cash payment out of the plan account – –
Value of deferred notional shares to be paid in shares in early 2024 (£'000) 113.0 120.4
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 97
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
The table below summarises the movements in participants’ cycle two plan account from 31 December 2023 onwards:
CEO
Guy Gittins
(£’000)
CFO
Chris Hough
(£’000)
Value of deferred notional shares in plan account at 31 December 2023 (end of year one of the plan) n/a n/a
Bonus contribution made at the start of 2024 in respect of performance over 2023 558.0 258.3
Cumulative account following contribution and dividends 558.0 258.3
Less: 2024 cash payment out of the plan account (279.0) (129.2)
Value of deferred notional shares carried forward over to 2024 279.0 129.2
Long-term incentive plans vesting during 2023
Long-term incentives
CEO
Guy Gittins
(£’000)
CFO
Chris Hough
(£’000)
No RSP awards were due to vest during the year
1
n/a n/a
1
No RSP awards were due to vest during the year for incumbent Executive Directors. In line with the default treatment, the Former CEO’s unvested RSP awards were
forfeited on cessation of employment. This treatment also applied to the Former CFO’s in-flight RSP awards.
Total single figure of remuneration
0
200
400
600
800
1000
1200
1400
1600
1800
2000
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2023
CEO (Guy Gittins)
279
279
450
1,496
488
2023
CFO (Chris Hough)
717
271
129
129
188
Total fixed pay BBP RSP Share price growth
(£000’s)
Fixed Pay Bonus (cash) Bonus (notional shares) RSP shares granted
1
In line with the remuneration reporting regulations, and as explained on PAGE 116, the RSP awards (which have a 3 year vesting period and a 2 year holding period)
have been included in the year of grant for the purposes of calculating the total single figure of remuneration. Fixed pay includes base salary (cash and Salary Substitute
Restricted Shares), pension and benefits.
In line with the remuneration reporting regulations, the RSP awards have been included in the year of grant, which impact both the 2022 and
2023 total single figure. While the RSP award is included in the total single figure amount in the year of grant, it does not actually vest until
three years after grant and is then subject to a further two-year holding period. Only once it vests is the Executive Director unconditionally
entitled to the award.
When considering the appropriateness of incentive outcomes, the Committee considers these in light of business performance, as set out in
the Annual Statement from the Remuneration Committee Chair, as well as the wider stakeholder experience. The table below sets out the
stakeholder experience in the year. On this basis, the Committee is satisfied that the above incentive outcomes are appropriate.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 202398
DIRECTORS’ REMUNERATION REPORT CONTINUED
Experience during 2023
Employees • The overall employee base of the Group has remained stable with fewer than 5 redundancies in the year.
• Wider workforce inflationary basic salary increases of c.3% (excluding Executive Directors) and wider
workforce variable pay outcomes were c.13% up on 2022 (excluding Executive Directors).
• Bonus outcomes of 87% of maximum bonus opportunity for Senior Management, excluding
specific outliers.
• Enhanced employee experience through several CEO led initiatives, including improving employee
communication, investing in training, reviewing employee incentive schemes and reviewing the employee
value proposition.
Investors • Share price increased by 55% from 29.7p at the end of 2022 to 46p at the end of 2023.
• Total shareholder return (TSR) performance of 59% in 2023.
• Total 2023 dividend of 0.9p per share (interim dividend of 0.2p per share and final dividend of 0.7p per
share proposed), compared to a total 2022 dividend of 0.9p per share.
• Bought back £1.1 million of shares to return excess capital to shareholders following the strong trading
performance during the period.
Directors • No increase to base salary for Non-Executive Director fees for 2023, including the Chairman.
• No increase to base salary for Executive Directors for 2023, with both the CEO and CFO appointed
on a reduced package compared to predecessors.
• CEO and CFO took 10% and 20% of salary in shares respectively with significant vesting and
holding periods.
Customers • Increased focus on driving customer service across all elements of the business through customer
engagement and feedback, employee training and rewarding excellent customer service delivery.
• Continued to deliver high levels of customer satisfaction as evidenced by the 2023 Trustpilot score
of 4.7 out of 5.
Wider society • Environmental and social initiatives continue to be progressed, further details are provided in the ESG
Committee’s report set out on
PAGES 84 AND 85.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 99
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Executive Director remuneration under the 2023 Remuneration Policy
This section sets out a summary of the Group’s Remuneration Policy for Executive and Non-Executive Directors which was approved by
shareholders at the AGM on 9 May 2023 and is intended to apply for three years. The full policy report is set out on
PAGES 103 TO 113 of
our 2022 Annual Report and Accounts which is available at www.foxtonsgroup.co.uk.
The Company applies the following remuneration principles throughout the organisation at all levels:
• The Company’s policy is to target a remuneration package that is at around median, for median performance, and in the upper quartile
for exceptional performance, and which is closely linked with the Company’s strategic objectives;
• In setting all elements of remuneration the Company seeks to benchmark itself against comparable companies; and
• The aim of the Company’s policy is to attract, retain and continue to motivate talented employees while aligning remuneration with the
achievement of the Company’s strategic objectives.
The diagram below sets out the key components of Executive Director remuneration with each element colour coded and referred to
throughout the Report.
Base Salary Benefits Pension BBP RSP
Competitive
salary to attract
the right calibre
of Executive
Paid 10% in
Salary Substitute
Restricted Shares
for the CEO and
CFO
1
, respectively
+
Competitive
benefits to attract
the right calibre
of Executive
+
Both Executive
Directors:
In line with
workforce (3%)
+
150% (CEO),
125% (CFO) of
salary maximum
Key financial,
operational and
stakeholder
performance
indicators
50% deferral
in shares
+
100% (CEO),
75% (CFO) of
salary maximum
Three-year
vesting subject
to underpin
Two-year
holding period
=
Total
Remuneration
Shareholding guidelines: 250% of salary for CEO and 200% for CFO,
extending in full for two years post–cessation of employment
1
The Committee has determined that the proportion of the CFO’s salary that will be paid in Salary Substitute Restricted Shares from 1 April 2024 will be set at 10%,
to align his arrangements with the approach taken for the CEO. The current approach of 20% of salary will continue to apply until this date.
Our key objective for the Remuneration Policy is to help promote the long-term sustainable success of the Company by providing fair and
competitive remuneration packages that attract, retain and motivate Executive Directors and Senior Management of the right calibre to deliver
the Company’s strategy, while aligning remuneration with shareholder interests. This is achieved by a significant proportion of remuneration
being in the form of variable pay, linked to the achievement of stretching targets that align with the Company’s strategic goals, as well as a
significant proportion of remuneration delivered in long-term equity to encourage sustainable shareholder value creation. The Committee
aims to ensure that remuneration arrangements are clear, simple, not excessive and are aligned with the Company’s purpose, culture and values,
with mechanisms in place to ensure there are no rewards for failure. When setting the Remuneration Policy, the Committee takes into account
remuneration across the organisation as a whole, where variable pay is a relatively high component throughout.
SUMMARY OF THE DIRECTORS’ REMUNERATION POLICY AND
IMPLEMENTATION IN 2024
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023100
DIRECTORS’ REMUNERATION REPORT CONTINUED
A summary of the Policy and how it is intended to operate in 2024 is set out in the following table.
Purpose and link to strategy Operation/details Implementation in 2024
Base salary
Core element of remuneration
set at a level to attract and retain
Executive Directors of the required
calibre to successfully deliver the
Group’s strategy.
Salary Substitute Restricted
Shares increase alignment to
the shareholder experience.
Salary increases are typically in line with those of
the wider workforce.
Typically reviewed on an annual basis considering
several factors, including:
• Scope and responsibilities of role.
• Individual skills, experience and performance.
• Business performance and the external
economic environment.
• Appropriate market data.
• Pay and conditions elsewhere in Foxtons.
A portion of base salary will typically be paid in
Salary Substitute Restricted Shares.
Note that the full gross base salary (cash plus
Salary Substitute Restricted Shares) will be used to
calculate all other remuneration elements that are
set as a percentage of base salary.
Base salary from 1 April 2024:
CEO: £468,000 (paid 90% in cash and 10% in
Salary Substitute Restricted Shares) (4% rise).
£450,000 prior to 1 April 2024.
CFO: £274,000 (paid 90% in cash and 10% in Salary
Substitute Restricted Shares) (9.6% rise). £250,000
prior to 1 April 2024.
Base salary increases for eligible employees
estimated to be 4% on average.
Benefits
To provide Executive Directors
with market competitive benefits
consistent with the role.
May include (but are not limited to) a company car
or cash equivalent, life assurance, private medical
insurance, health club membership and other
benefits as appropriate.
All Executive Directors: Company car (or allowance),
life assurance and private medical insurance.
Pension
To provide funding for Executive
Directors’ retirement.
Pension contributions are, and will continue to be,
set in line with the majority employer contribution
for the wider workforce.
CEO: 3% of base salary
CFO: 3% of base salary
BBP
Variable pay opportunity set at a
market competitive level designed
to motivate and reward Executive
Directors for the achievement of
business objectives on an annual basis
to enable successful implementation
of the Group’s strategy.
Aligns the interests of Executive
Directors with shareholders and
contributes to the retention of key
individuals by deferring part of
the annual bonus in shares or
share-linked units.
Maximum opportunity is 150% of salary.
For threshold performance, 25% of the maximum
will be payable.
For target performance, 50% of the maximum will
be payable.
For maximum performance, 100% of the maximum
will be payable.
Upon annual assessment of performance by the
Committee, a contribution will be made by the
Company into the participant’s plan account and
50% of the cumulative balance will be paid in
cash for each of the first three years of the plan.
Any remaining balance will be converted into
shares or share-linked units.
100% of the balance in the final fourth year of the
plan will normally be settled in the form of shares
transferred or allotted to the participant.
Malus and clawback provisions apply.
Maximum opportunity for 2024:
CEO: 150% of base salary
CFO: 125% of base salary
Performance measures for 2024 (% weighting):
• 70% adjusted operating profit;
• 10% sales market share growth;
• 10% lettings market share growth; and
• 10% assessment of the employee experience
Targets are considered commercially sensitive and
will be disclosed retrospectively for all information
that is no longer commercially sensitive.
The deferred balance in the participant’s plan
account is subject to an annual discretionary
forfeiture underpin, see below for further details.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 101
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Purpose and link to strategy Operation/details Implementation in 2024
RSP
To encourage and facilitate substantial
long-term share ownership and reward
the delivery of sustainable value over
time in a cyclical business.
Maximum award of 100% of salary.
Awards vest after three years, subject to continued
employment and assessment of an underpin.
Following vesting, an additional two-year holding
period will apply, such that shares are not released
until five years from grant.
Malus and clawback provisions apply.
CEO: 100% of base salary
CFO: 75% of base salary
No performance measures are associated with the
grant of awards. Vesting is subject to a discretionary
underpin. See below for further details.
Shareholding guidelines
The Committee believes that
Executive Directors should build a
sizeable shareholding in the Company
over time to ensure that they are as
closely aligned as possible with the
shareholder ownership experience.
The minimum shareholding guideline is 250% of gross basic salary for the CEO, and 200% of gross basic
salary for other Executive Directors. Executive Directors are required to retain the post-tax number of
vested shares from the RSP until the minimum shareholding requirement is met and maintained.
Shares that count towards the shareholding requirement include:
• Shares owned outright.
• Unvested shares which are not subject to further performance conditions, on a net of tax basis.
Employment conditions and performance underpins may apply to these shares i.e. unvested Salary
Substitute Restricted Shares.
• Shares which have vested, but which remain subject to a holding period and/or clawback, may count
towards the shareholding requirement.
On cessation of employment, Executive Directors are required to retain the lower of their minimum
shareholding requirement and actual shareholding immediately prior to departure for two years.
Malus and clawback policies / Malus is the adjustment of annual bonus contributions or the balance in a participant’s plan account,
unvested RSP awards or unvested Salary Substitute Restricted Share Awards, because of the occurrence of one or more circumstances listed
below. The adjustment may result in the value being reduced to nil.
Clawback is the recovery of payments made under the annual bonus, vested RSP awards or vested Salary Substitute Restricted Share Awards
as a result of the occurrence of one or more circumstances listed below. Clawback may apply to all or part of a participant’s payment or award
and may be affected, among other means, by requiring the transfer of shares, payment of cash or reduction of awards or bonuses.
The circumstances in which malus and clawback could apply are as follows:
• Discovery of a material misstatement resulting in an adjustment in the audited accounts of the Group or any Group Company.
• If the assessment of any performance condition or condition was based on error, or inaccurate or misleading information.
• The discovery that any information used to determine the plan contribution or RSP award was based on error, or inaccurate or
misleading information.
• Action or conduct of a participant which amounts to fraud or gross misconduct.
• A material failure of risk management.
• Corporate failure.
• Events or the behaviour of a participant have led to the censure of a Group Company by a regulatory authority which has led to a
significant detrimental impact on the reputation of any Group Company provided that the Board is satisfied that the relevant participant
was responsible for the censure or reputational damage and that the censure or reputational damage is attributable to the participant.
BBP RSP
Malus Up to the date of a payment under the plan To the end of the three–year vesting period
Clawback Two years post the date of any payment under the plan Two years post–vesting
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023102
DIRECTORS’ REMUNERATION REPORT CONTINUED
Framework to assess the BBP and RSP qualitative underpin
Payouts and vesting under the BBP and RSP are subject to a discretionary underpin that allows the Remuneration Committee to make
adjustments to the level of vesting if the Committee believes due to business performance, individual performance or wider Company
considerations that the vesting should be adjusted.
The Committee is satisfied that the operation of a holistic discretionary underpin is the most appropriate approach for Foxtons. Given the
challenges inherent in setting long-term targets, it is essential that the Committee retains the flexibility to assess performance ‘in the round’
and review all elements of performance as a whole, rather than implementing quantitative targets that may reduce the relevance of the
underpin at the point of final assessment.
To ensure that the qualitative underpin is robustly and thoroughly assessed, the Committee has developed a framework to assess performance
over the period, which will be used going forward. In particular, the Committee will reduce the vesting level of the BBP and RSP if any of the
following are considered to be below a satisfactory level:
• Underlying financial performance, considering key financial indicators in particular.
• ESG performance and impact.
• Operational performance.
• Individual performance.
• Stakeholder experience, including, but not limited to shareholders.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 103
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
RSP
Measuring performance
Financial performance
Revenues
Transaction volumes
Adjusted operating profit
Net free cash flow
Employees and customers
Employee engagement
and experience
Customer satisfaction
Operational performance
Market share growth
Balance of business
Productivity
BBP
Adjusted operating profit
Market share growth
(sales and lettings)
Supports the delivery of sustainable shareholder value through the build-up of a material shareholding
and provides a shared ownership experience with the Group’s shareholders.
Employee experience
The following 2024 performance measures support the implementation of our strategy:
OUR STRATEGIC PRIORITIES
1. LETTINGS
ORGANIC
GROWTH
2. LETTINGS
ACQUISITIVE
GROWTH
3. SALES
MARKET SHARE
GROWTH
4. FINANCIAL
SERVICES
REVENUE GROWTH
Refer to PAGES 16 AND 17 of the Strategic Report for further details on the Group’s strategic priorities.
How our BBP performance measures in 2024 support the implementation of our strategy
In executing our strategy, we aim to create sustainable value and positive outcomes for our shareholders and all other stakeholders. We have
reviewed the performance measures we use for our incentives to ensure that they support the delivery of our new strategy. The diagram below
demonstrates how our incentive measures align to our strategy.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023104
DIRECTORS’ REMUNERATION REPORT CONTINUED
External relativities
The following charts show for the CEO and CFO the position of their base salary and on-target total remuneration compared to the FTSE Small
Cap. The charts demonstrate the normal annual package of the CEO and CFO, i.e. salaries from 1 April 2024 on a full year basis and excluding
buyout awards that were awarded to the CEO on appointment to compensate for the forfeiture of incentive arrangements held with his
previous employer.
The CFO was appointed with a gross base salary significantly below that of his predecessor (£305,400) and below the market rate for a business
of the size and complexity of Foxtons. As set out in further detail in the Chair’s letter, the Committee considers an appropriate salary level for
the CFO is around £300,000 which is positioned between the lower quartile and median of the FTSE Small Cap and remains below that of the
previous CFO. The CFO’s salary will be level will be achieved over two years subject to continued strong performance in role as follows; from
1 April 2024, the CFO’s salary will increase by 9.6% to £274,000, and by a further 9.5% to £300,000 from 1 April 2025.
The CEO package is competitively positioned in relation to the FTSE Small Cap.
0
200
400
600
800
1000
1200
1400
1600
1800
Base
Salary
Total
Remuneration
Lower quartile to median
Median to upper quartile
CFO
CFO
£’000
0
200
400
600
800
1000
1200
1400
1600
1800
Base
Salary
Total
Remuneration
Lower quartile to median
Median to upper quartile
CEO
CEO
£’000
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 105
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Alignment to Provision 40
In determining the new Remuneration Policy, the Committee paid attention to Provision 40 of the 2018 UK Corporate Governance Code. The
table below sets out how the Committee addresses the factors of clarity, simplicity, risk, predictability, proportionality and alignment to culture,
as set out in Provision 40 of the Code.
Factor How the Committee addressed these factors
Clarity
Remuneration arrangements
should be transparent and promote
effective engagement with
shareholders and the workforce.
• The BBP performance conditions are based on the core KPIs (which includes the employee experience)
of the strategy and therefore there is a clear link to all stakeholders between their delivery and reward
provided to management.
• The RSP and Salary Substitute Restricted Shares provide annual grants of shares which must
be retained for the longer term to ensure a focus on sustainable performance in an inherently
cyclical market. This provides complete clarity of the alignment of the interests of management
and shareholders.
Simplicity
Remuneration structures should
avoid complexity and their
rationale and operation should
be easy to understand.
• The performance conditions for the BBP are based on the Group’s KPIs. This alignment of reward with
the delivery of key markers of the success of the implementation of the strategy ensures simplicity.
Restricted shares are a simple mechanism and avoid the setting of long-term performance conditions
which tend to inherently make remuneration more complex.
Risk
Remuneration arrangements
should ensure reputational and
other risks from excessive rewards,
and behavioural risks that can arise
from target-based incentive plans,
are identified and mitigated.
The Policy includes:
• Requiring the deferral of a substantial proportion of the incentives in shares for a material period.
• Aligning the performance conditions with the strategy of the Group.
• Ensuring a focus on long-term sustainable performance through the RSP and Salary Substitute
Restricted Shares.
• Forfeiture thresholds.
• Ensuring there is enough flexibility to adjust payments through malus and clawback and an overriding
discretion to depart from formulaic outcomes.
These elements mitigate against the risk of target-based incentives by:
• Deferring the value in shares for the long-term which helps ensure that the performance earning the
award was sustainable and thereby discouraging short-term behaviours.
• Aligning any reward to the agreed strategy of the Group.
• The use of an RSP supports a focus on the sustainability of the performance over the longer term.
• Reducing the awards or cancelling them if the behaviours giving rise to the awards are inappropriate.
• Reducing the awards or cancelling them if it appears that the criteria on which the award was based do
not reflect the underlying performance of the Group. We set out a clear framework for assessing the
BBP and RSP qualitative underpin to support this.
Predictability
The range of possible values of
rewards to individual Directors
and any other limits or discretions
should be identified and explained
at the time of approving the Policy.
• Our Policy sets out clearly the range of values and discretions in respect of the remuneration
of management.
• The RSP increases the predictability of the rewards received by Executive Directors, and the BBP, being
based on annual targets, operates over a time cycle where performance is more predictable compared
with traditional long-term incentive plan schemes thereby allowing the Remuneration Committee to
more effectively ensure desirable remuneration outcomes for all stakeholders.
Proportionality
The link between individual
awards, the delivery of strategy
and the long term performance
of the Company should be clear.
Outcomes should not reward
poor performance.
• The BBP provides a clear link between the reward provided to management and the delivery of the
strategy through incentivising management to deliver the KPIs.
• The RSP and salary substitute shares provides a focus on the long-term sustainable performance
of Foxtons through the build up of a long-term locked in shareholding.
• Both the BBP and the RSP includes performance underpins that allow the Remuneration Committee
to exercise its discretion to override formulaic outcomes.
Alignment to culture
Incentive schemes should
drive behaviours consistent
with Company purpose, values
and strategy.
• The BBP drives behaviours consistent with Foxtons’ strategy.
• The RSP drives behaviours consistent with the Group’s purpose and values which are focused on the
long-term future of the business throughout the business cycle.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023106
DIRECTORS’ REMUNERATION REPORT CONTINUED
Illustrations of total remuneration opportunity
The charts below provide estimates of the potential future reward opportunities under the Policy for the CEO and CFO (annualised basis) and
the potential split between the different elements of remuneration under four different performance scenarios: ‘Minimum’, ‘On Target’,
‘Maximum’ and ‘Maximum with share price growth of 50% over three years’. The ‘Minimum’ scenario includes base salary, pension and benefits
only (i.e. fixed remuneration).
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Minimum On-target
502
1,317
100% 37%
27%
Maximum
Max + 50%
share price
growth
1,665
1,922
29%
42%
28%
25%
37%
25%
13%
CEO remuneration
Total fixed pay BBP RSP Share price growth
36%
(£000’s)
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Minimum On-target
290
663
100%
43%
26%
Maximum
Max + 50%
share price
growth
830
949
34%
41%
25%
29%
21%
14%
CFO remuneration
31%
Total fixed pay BBP RSP Share price growth
(£000’s)
36%
Total fixed pay BBP RSP Share price growth
Element Assumptions
Total fixed pay
Base salary: Pro-rated to reflect salary increases and actual pay expected in 2024:
1 January 2024 – 31 March 2024:
• CEO £450,000 (10% paid in Salary Substitute Restricted Shares)
• CFO £250,000 (20% paid in Salary Substitute Restricted Shares)
1 April 2024 – 31 December 2024:
• CEO £468,000 (10% paid in Salary Substitute Restricted Shares)
• CFO £274,000 (10% paid in Salary Substitute Restricted Shares)
Pension: 3% of salary for the CEO and the CFO
Benefits: As disclosed in single figure table on
PAGE 114
BBP
Minimum: No payout
On-target: 50% of maximum (75% of salary for the CEO, 62.5% of salary CFO)
Maximum: 100% of maximum (150% of salary for the CEO; 125% of salary for CFO)
RSP
Minimum: No vesting due to operation of the underpin
On-target: 100% of maximum (100% of salary for the CEO, 75% of salary for the CFO)
Maximum: 100% of maximum (100% of salary for the CEO, 75% of salary for the CFO)
Share price growth
Impact of 50% share price appreciation on maximum remuneration over three years (on Restricted Shares and
Salary Substitute Restricted Shares).
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 107
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Policy for Chairman and Non-Executive Directors / The Non-Executive Directors, including the Chairman, do not have service contracts.
The appointment of the Chairman and each of the Non-Executive Directors is for an initial period of up to three years, which is renewable,
and is terminable by the Chairman/Non-Executive Director (as applicable) or the Company on three months’ notice. No contractual payments
would be due on termination. The Directors are subject to annual re-election at the AGM. Non-Executive Directors’ letters of appointment are
available to view at the Company’s registered office.
Non-Executive Directors do not receive benefits from the Company, and they are not eligible to join the Company’s pension scheme or
participate in any bonus or share incentive plans. Where specific cash or share arrangements are delivered to the Chairman or Non-Executive
Directors, these will not include share options or any other performance related elements. Any reasonable expenses that they incur in the
furtherance of their duties are reimbursed by the Company (including any tax liability thereon).
Details of the policy on Non-Executive Director fees are set out in the table below:
Purpose and link to strategy Operation Fee levels
To enable the Group
to attract and retain
Non-Executive Directors of
the required calibre by offering
market competitive fees.
The Chairman is paid an annual all-inclusive fee for all
Board responsibilities.
Non-Executive Directors receive a basic annual Board
fee. Additional fees may be payable for additional Board
responsibilities such as chairship or membership of a
Committee, or the role of Senior Independent Director.
The Chairman and/or Non-Executive Directors may
receive part of their fee(s) in company shares.
The Chairman’s fee is determined by the Committee,
and fees to Non-Executive Directors are determined by
the Board. Fees are reviewed periodically, considering
time commitment, scope and responsibilities, and
appropriate market data.
Expenses incurred in the performance of non-Executive
duties for the Company may be reimbursed or paid for
directly by the Company, including any tax due thereon.
Fee increases are typically expected to be in line with
wider employee rises. In exceptional circumstances
(including, but not limited to, material misalignment
with the market or a change in the complexity,
responsibility or time commitment required to fulfil the
role) the Board may make appropriate adjustments to
fee levels to ensure they remain market competitive and
fair to the Director.
The maximum annual aggregate fee for all Non-Executive
Directors will be within the limit set out in the Company’s
articles of association (currently £600,000).
Further information on the policy
The full Remuneration Policy, approved by shareholders at the 2023 AGM, is set out on
PAGES 103 TO 113 of the 2022 Annual Report and
Accounts and includes further information on:
• Considerations when determining remuneration policy.
• Committee discretions.
• Approach to remuneration on recruitment.
• Executive Directors’ service contracts and Non-Executive Directors’ letters of appointment.
• Policy on payment for loss of office.
• Consistency with remuneration for the wider Group.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023108
DIRECTORS’ REMUNERATION REPORT CONTINUED
Our approach to fairness and wider workforce considerations
This section in the report brings visibility of remuneration across the entire workforce together in one place. In this section, we provide context
to Executive remuneration by explaining our employee policies and our approach to fairness, including the following:
• General pay and conditions in the Group.
• Gender and diversity.
• Comparison metrics on Executive and employee remuneration.
In order for the Committee to carry out its oversight review of wider workforce pay, policies and incentives the Committee receives a report
annually setting out key details of remuneration throughout the Group. A summary of the information reviewed by the Committee and findings
are set out below.
Overview of workforce remuneration and the Committee’s review
The table below summarises the Group’s approach to workforce remuneration across five employee groups.
Variable pay
2
Employee group
% of
workforce
Average
increase
in base
salaries
1
Commission
schemes
Annual
bonus
Share
plans
3
Pension
4
Benefits
5
Executive Directors <1% 0% No Yes Yes Yes Yes
Senior Management 3% 2.6% No Yes Yes Yes Yes
Senior Sales Staff 14% 2.7% Yes Yes No Yes Yes
Sales and Sales
Support Staff
70% 4.2% Revenue
earners only
No No Yes Yes
Administrative Staff 13% 3.0% No Role dependent No Yes Yes
Total 100% 3.3%
1
Base salaries
• Base salaries are market competitive and determined with reference to role type, experience and market practice.
• Annual salary increases are applied on an equitable and objective basis dependent on role type. The base salaries of fee earners are subject to periodic market
benchmarking rather than annual salary reviews due to the commission structures in place.
• Average increase in base salaries are for 2023 versus 2022, and have been calculated by comparing basic salaries at the start of the year to those at the end of the year
(for those in employment for the full year).
2
Variable pay
• In line with our approach to Executive Director remuneration, a significant proportion of the remuneration of the wider workforce is in the form of variable pay, linked
to the achievement of stretching targets that align with the Group’s strategic goals.
• Approximately 80% of the workforce benefit from variable pay which is linked to the Group’s performance in the form of commission schemes or annual bonuses.
Variable pay is determined with reference to financial performance and/or the achievement of objectives which are aligned to the Group’s strategic priorities (refer to
PAGES 16 AND 17 of the Strategic Report).
3
Share plans
• Senior Management restricted share plans increase alignment to shareholder experience and cascade the principles of the Executive Director arrangements.
These awards are subject to a two-year vesting period and leaver provisions. No holding period applies.
4
Pension
• Employer contributions are consistent across the Group (3% employer contribution), with minor deviations appropriate for role type.
5
Benefits
• Consistent approach applied and determined with reference to role type, market practice and seniority.
2023 ANNUAL REPORT ON REMUNERATION
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 109
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
The Committee does not seek a homogeneous approach to workforce remuneration since the level and type of remuneration will vary across
the Group depending on the employee’s seniority and role. The Committee, when conducting its review of workforce remuneration, pays
particular attention to:
• Whether the element of remuneration is consistent with the Group’s remuneration principles see
PAGE 108.
• If there are differences, whether they are objectively justifiable.
• Whether the approach is fair and equitable in the context of other employees.
The key findings and outcomes from the Committee’s 2023 review are as follows:
• Average salary increases for employees across the Group are being applied on an equitable and objective basis.
• In light of the impact that rising inflation and the cost-of-living crisis has had on our workforce, Foxtons reviewed wider workforce salaries
and awarded an average salary increase of c. 3% across the business (excluding Directors), and there have been limited redundancies.
• For those members of the wider workforce who receive variable pay the average increase from 2022 was c.13%.
• Senior Management restricted share award arrangements cascade the principles applied to Executive Directors and increase alignment
to the shareholder experience for this population.
• The majority of employees have the ability to share in the success of the Group through incentive compensation in the form of variable
pay linked to performance.
• All employees are eligible for enrolment in a defined contribution pension arrangement and the Executive Directors’ pension contributions
are aligned to the wider workforce.
• Benefits are offered according to the level of seniority of the role in line with market practice.
The Committee is satisfied that the approach to remuneration across the Group is consistent with the Group’s principles of remuneration,
strategy and culture. Furthermore, in the Committee’s opinion the approach to Executive and Senior Management remuneration aligns with
the wider Group approach and there are no anomalies specific to the Executive Directors.
Communication and engagement with employees
The Board is committed to ensuring there is an open dialogue with our employees over various decisions and the Committee has the authority
to ask for additional information from the Group in order to carry out its responsibilities.
PAGES 23, 56 AND 57 explain the key approaches
used by the Board to engage with employees during 2023.
As explained on
PAGE 56, the Employment Engagement Committee (EEC) facilitates engagement between the Board and the workforce,
with each meeting attended by a Non-Executive Director. The Remuneration Committee Chair attends the EEC annually to discuss the
Executive Directors’ Remuneration Policy and its application with members of the EEC. At this meeting, the Chair provided employees with an
overview of the Group’s approach to Executive Remuneration, how Executive remuneration aligns with wider company pay policy and the key
elements of the policy and key considerations. There was a good level of employee engagement during the discussion, which allowed for a range
of topics to be debated and questions to be answered. The session further informed the Remuneration Committee Chair’s view of the workforce
on the Group’s approach to pay.
In 2023, a new engagement/culture survey was implemented which provides the Board with a rounded assessment of the Group’s culture.
Refer to
PAGE 57 for further details of the culture survey process and key findings.
Living wage, equal opportunities and diversity initiatives
A summary of the Group’s general policies in relation to living wage, equal opportunities and diversity initiatives are as follows:
Policy Description
Living wage employer Our policy is to ensure that all employees, whatever their age, are paid the National Living Wage or above.
Equal opportunities and
diversity initiatives
The Group is committed to an active equal opportunities policy from recruitment and selection, through training
and development, performance reviews and promotion. All decisions relating to employment practices are
objective, free from bias and based solely upon work criteria and individual merit. The Group is responsive to the
needs of its employees, customers and the community. We are an organisation which uses everyone’s talents and
abilities, and where diversity is valued. The Group ensures its promotion and recruitment practices are fair and
objective and encourages the continuous development and training of its employees, as well as the provision of
equal opportunities for the training and career development of all employees. Further details are provided in the
Strategic Report on
PAGES 52 TO 58.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023110
DIRECTORS’ REMUNERATION REPORT CONTINUED
Gender pay gap
Having a diverse workforce which reflects the communities we serve in is important to us and means we can better serve our customers. As set
out on
PAGES 54 AND 55, we hire from diverse backgrounds, and our recruitment policies, salary and bonus structures are designed to be
gender neutral. At 31 December 2023, the gender balance across the Group is split 56% men and 44% women.
As set out in our Gender Pay Gap report, which is available at www.foxtonsgroup.co.uk/our-responsibility/gender-pay-gap, a gender pay gap
exists which is primarily due to there being a higher proportion of male employees in senior roles. We are taking steps to reduce the gender pay
gap and are progressing a number of initiatives to increase female representation at more senior levels within the organisation.
CEO pay ratio
We have set out the ratio of CEO pay (based on the single total figure of remuneration) to that of employees for 2019 to 2023, in the table
below. The calculation has been performed in line with ‘Option A’ under the regulations in line with best practice and is based on the total single
figure of remuneration methodology.
CEO pay ratio
Financial year
Method
used
25th
percentile
pay ratio
50th
percentile
pay ratio
75th
percentile
pay ratio
CEO
total pay
(£000)
2023 Option A 50:1 38:1 24:1 1,496
2022
1
Option A 47:1 35:1 21:1 1,272
2021
2
Option A 66:1 45:1 27:1 1,707
2020
2
Option A 61:1 44:1 28:1 1,605
2019 Option A 48:1 37:1 22:1 1,257
1
As reported in the 2021 Remuneration Report, the Former CEO received an RSP grant on 1 April 2022 with a value of £434,700 in line with the Remuneration Policy,
which was subsequently forfeited on his departure. As a result, the value of this RSP award is not included in the total single figure of remuneration for 2022. As such, the
2022 single figure, and therefore pay ratio, is lower than if the 2022 RSP had not been forfeited due to the departure of the Former CEO.
2
The 2021 and 2020 single figure include £579,600 and £569,400 of RSP grants respectively which have been forfeited in full in 2022. Removing these grants reduces the
CEO 2021 and 2020 single figure to £1,127,000 and £1,036,000 respectively, which would reduce the CEO pay ratio at each of the percentiles as explained further below.
Total remuneration for each employee was calculated on a full-time equivalent basis and the lower quartile, median and upper quartile
employees identified as at 31 December 2023. The hourly rates were annualised using the same number of contractual hours as the CEO.
Employee total remuneration includes: basic salary, maternity/paternity pay, annual cash bonus, commissions earned and benefits. The total
remuneration for the relevant employees was compared to that of the CEO.
In 2023, the employee total pay and benefits at the 25th, 50th and 75th percentile was £29,734, £39,849 and £62,321 respectively, and the
basic salary for the same employees, excluding variable pay, was £29,000, £36,210 and £61,000 respectively.
In 2023, the pay ratios increased compared to 2022 at all three percentiles reflecting higher CEO total pay in 2023 compared to 2022.
The year-on-year increase is primarily due to the Interim CEO, who was in office 30 May 2022 to 18 September 2022, not participating in
any incentive arrangements.
The increase in the pay ratios in 2020 and 2021 compared to 2019 is due to 2020 being the first year the current Remuneration Policy was
implemented. In line with the remuneration reporting regulations for the CEO single figure, the RSP award has been included in the year of
grant for 2020 and 2021 (rather than in the year of vest as our previous share option scheme would be reported). Therefore, the CEO single
figure includes a long-term incentive in 2020 onwards, which it did not in 2019 and earlier.
In assessing our pay ratio versus last year’s market numbers from industry peers, we believe that we are well positioned comparably, but note
that annual and long-term incentive payments have varied considerably amongst this group. We also recognise that ratios will be influenced by
levels of employee pay and in the real estate sector employee pay will be lower than in many other sectors of the economy.
Over time, we expect that there may be significant volatility in the CEO pay ratio. We recognise that the ratio is driven by the different structure
of the pay of our CEO versus that of our employees (for example, the inclusion of a higher proportion of variable incentive pay), as well as the
make-up of our workforce. This ratio varies between businesses even in the same sector. What is important from our perspective is that this
ratio is influenced only by the differences in structure, and not by divergence in fixed pay between the CEO and wider workforce. Where the
structure of remuneration is similar, as for Senior Management and the CEO, the ratio is likely to be much more stable over time.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 111
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
CEO and average employee pay against total shareholder return (TSR)
The chart below shows the single figure of remuneration for our CEO over time, and the pay of our average employee, each rebased to
1 January 2014. We have also included our TSR performance over this period against the FTSE Small Cap and FTSE All Share indices, based
on £100 invested at listing.
Pay performance: TSR chart (£’000)
0
50
100
150
200
250
300
350
31/12/2013 31/12/2014 31/12/2015 31/12/2016 31/12/2017 31/12/2018 31/12/2019 31/12/2020 31/12/2021
31/12/2023
31/12/2022
Foxtons FTSE SMC FTSE All-Share
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023112
DIRECTORS’ REMUNERATION REPORT CONTINUED
2014
1
2015 2016 2017 2018 2019 2020 2021 2022
2
2023
Incumbent M. Brown /
N. Budden
N. Budden N. Budden N. Budden N. Budden N. Budden N. Budden N. Budden N. Budden /
P. Rollings /
G. Gittins
G. Gittins
CEO single figure
of remuneration
– excluding RSP
awards (2020 –
2023 only) (£’000)
3
257 / 327 856 982 914 910 1,257 1,036 1,127 534 /
135 /
459
1,046
RSP awards (2020 –
2023 only) (£’000)
4
– – – – – – 569 580 – /
n/a /
145
450
CEO single figure
of remuneration
(£’000)
257 / 327 856 982 914 910 1,257 1,605 1,707 534 /
135 /
603
1,496
Annual bonus /
BBP earning
(% of maximum)
5
n/a / 20% 51.5% 36.5% 26.4% 30% 70% 45.6% 51.2% 68.8% /
n/a /
68.8%
82.7%
Long-term
incentives
6
(% of maximum)
n/a / n/a n/a 0% 0% 0% 0% 100% 100% n/a /
n/a /
100%
100%
1
Michael Brown stepped down as CEO on 30 June 2014 and was replaced by Nic Budden on 1 July 2014.
2
Nic Budden stepped down as CEO on 30 May 2022. Guy Gittins was appointed Group CEO with effect from 5 September 2022. Peter Rollings, currently an Independent
Non-Executive Director, acted as Interim CEO between the date of Nic Budden stepping down and the date at which Guy Gittins took up his appointment. The single
figure for 2022, above, includes the amounts received by Nic Budden and Guy Gittins in relation to their Executive positions during the year (excluding the 2022 RSP
grant to the Former CEO which was forfeited on his cessation of employment), as well as the fee that Peter Rollings received during his time as Interim CEO.
3
The CEO single figure of remuneration is shown excluding the restricted stock awards that have been granted from 2020 onwards. This is because, while the regulations
require the restricted stock to be disclosed at the time of grant, the value is not released to the CEO until the end of the three-year vesting period following the
assessment of an underpin, and the shares are then subject to a further two-year holding period. Therefore, for transparency we also show the CEO’s single figure
excluding the restricted stock award as it better reflects the value that each CEO has earned and received in respect of that year.
4
From 2020 onwards the long-term incentive has been delivered in the form of an RSP award with a three-year vesting period subject to the achievement of the underpin.
Whilst the RSP grants are included in the above table, in line with the required single figure of remuneration treatment, we note that the Former CEO’s in-flight awards
were forfeited in full on cessation of employment, and the Interim CEO was not eligible to receive incentive awards. Therefore, the Former CEO’s 2022 RSP award with a
face value of £434,700 is excluded from the above table.
5
The 2022 annual bonus / BBP earnings figure relates to both the former and current CEOs, who were both eligible to receive a pro-rated annual bonus for 2022.
The Interim CEO was not eligible to receive any incentive awards.
6
The 2016 to 2019 long-term incentive value of 0% relates to the historic LTIP and Share Option Plan awards which did not vest in those years due to performance
conditions not being achieved. The first award under the LTIP was granted in 2014 and had a three-year performance period and therefore no awards were scheduled to
vest in 2014 and 2015. The Former CEO (Nic Budden) also had options under the 2017 Share Option Plan that were due to vest during 2022. These options lapsed due to
the TSR performance conditions and as such, paid out at 0% of maximum.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 113
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Percentage change in Directors’ remuneration
The Committee monitors the changes year-on-year between our Directors’ pay and average employee pay. As per our Policy, base salary
increases applied to Executive Directors will typically be in line with those of the wider workforce. The table below shows the percentage change
in Executive Director and Non-Executive Director total remuneration compared to the change for the average of employees within the Group.
The comparator group is based on all employees of the Group.
Salary/fees Taxable benefits Short-term variable pay
1
2019 2020 2021
6
2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
Executive Directors
Guy Gittins
2
– – – – 0% – – – – 25% – – – – 23%
Chris Hough
2
– – – – 0% – – – – 7% – – – – 20%
Non-Executive Directors
Nigel Rich – – – 0% 0% – – – – – – – – – –
Annette Andrews – – – – – – – – – – – – – – –
Jack Callaway – – – – – – – – – – – – – – –
Peter Rollings³ – – – 183% (65%) – – – – – – – – – –
Rosie Shapland
4
– – 6% 0% 4% – – – – – – – – – –
Former Non-Executive Directors
Sheena Mackay
2
0% (3%) 3% 16% 0% – – – – – – – – – –
Alan Giles
2
– 12% 3% 0% 0% – – – – – – – – – –
All other employees
5
7% 2% 2% 4% 3% 14% 1% 5% 1% 0% 23% (1%) 52% 22% 13%
1
Short-term variable pay includes annual bonus and/or BBP and commission payments.
2
This Director was not in office for a full 12 months in 2023 or 2022. Therefore, when calculating the year-on-year percentage change in remuneration, annualised
remuneration figures have been used for the year the Director was not in office for a full 12 months.
3
Peter Rollings acted as Interim CEO in the period between 30 May 2022 and 4 September 2022. During this period, and for a short handover period after the incoming
CEO joined, Peter Rollings’ annual Non-Executive Director fee was increased to an annual rate of £450,000. As such, his increase in 2022 remuneration and decrease in
2023 remuneration is reflective of this change in role.
4
Rosie Shapland’s fee increase in 2023 reflects the additional responsibility following appointment as Senior Independent Director.
5
Reflects the average of all employees of the Group due to the listed Parent Company having no employees who are not Directors.
6
For Board members, the 2021 increase in salary was calculated on a salary/fees paid basis (in line with the single figure methodology), which therefore incorporated the
impact of the 20% voluntary reduction in basic pay taken in April and May 2020 during Covid-19. For ‘All other employees’, the percentage change has been calculated
by comparing basic salaries at the start of the year to those at the end of the year (for those in employment for the full year), and therefore does not capture any
voluntary pay reductions taken by the workforce in April and May 2020.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023114
DIRECTORS’ REMUNERATION REPORT CONTINUED
How we implemented the Policy in 2023
This section provides details of how our Remuneration Policy was implemented during the financial year ended 31 December 2023.
Single figure of the Executive and Non-Executive Directors (audited)
The table below sets out a single figure for the total remuneration received by each Director for the year ended 31 December 2023 and the prior year.
Salary /
fees paid
4
Taxable
benefits
5
BBP
6
RSP
7
Buyout
awards
8
Pension
9
Total
10
Total fixed
remuneration
Total variable
remuneration
Guy Gittins 2023 450 24 558 450 – 14 1,496 488 1,008
2022 147 7 151 145 150 4 603 157 446
Chris Hough 2023 250 14 258 188 – 8 717 271 446
2022 188 9 161 141 n/a 6 504 203 302
Nigel Rich
1
2023 150 – – – – – 150 150 –
2022 150 – – – – – 150 150 –
Annette Andrews
2
2023 67 – – – – – 67 67 –
2022 n/a n/a n/a n/a n/a n/a n/a n/a n/a
Jack Callaway
2
2023 58 – – – – – 58 58 –
2022 n/a n/a n/a n/a n/a n/a n/a n/a n/a
Peter Rollings
3
2023 63 – – – – – 63 63 –
2022 179 – – – – – 179 179 –
Rosie Shapland 2023 76 – – – – – 76 76 –
2022 73 – – – – – 73 73 –
Former Non-Executive Directors
Alan Giles
2
2023 26 – – – – – 26 26 –
2022 73 – – – – – 73 73 –
Sheena Mackay² 2023 26 – – – – – 26 26 –
2022 73 – – – – – 73 73 –
1
Nigel Rich assumed the role of Chairman from 1 October 2021 and since appointment has been paid £150,000/annum in fees, of which, £50,000 is paid in shares at the
prevailing market price.
2
Alan Giles and Sheena Mackay stepped down from the Board at the 2023 AGM on 9 May 2023. Annette Andrews and Jack Callaway were appointed to the Board on
1 February 2023. 2023 fees for these individuals are therefore pro-rated reflecting the period of the year that they were in role.
3
Peter Rollings joined the Board as a Non-Executive Director with effect from 1 December 2021, and for the period 30 May 2022 to 5 September 2022 was Interim CEO.
Peter Rollings’ annual Non-Executive Director fee was increased to an annual rate of £450,000 for the period he was Interim CEO and for a short handover period from
5 September 2022 to 18 September 2022). Thereafter, his fees returned to the annual rate of £63,000 for Non-Executive Directors. During his tenure as Interim CEO,
Peter did not participate in any incentive arrangements, and his total fees received for his Interim Executive role were £134,659.
4
Salary includes base salary paid in cash and Salary Substitute Restricted Shares for Executive Directors, and fees paid in cash and shares for Non-Executive Directors.
5
Taxable benefits received in 2023 include a car or car allowance, medical and life assurance.
6
This column reflects the BBP contribution in respect of performance during the relevant year. In 2023 and 2022, amounts earned under the BBP are paid into the
participant’s plan account, with 50% paid as cash and the remaining 50% held in shares or share-linked units in the participants plan account. In addition, as the fourth
year of the first BBP cycle, 100% of the remaining balance of the first cycle is paid out in shares, in early 2024. Further details of the performance criteria, achievement
and resulting awards for the 2023 BBP are set out on
PAGE 115.
7
This column reflects the RSP awards granted in April 2022 and 2023 (refer to PAGE 116 for the face value of the April 2023 RSP award).
8
Buyout awards totalling £150,000 awarded in 2022 and paid as cash in two equal tranches; half was paid in February 2023 and the other half paid in February 2024.
9
During 2022 and 2023, the Executive Directors received a pension contribution or cash allowances in lieu of a pension contribution. For 2023, this was 3% of salary for all
Executive directors.
10
No share price appreciation (or estimate of) is included in the values included in the single figure table. The RSP is included in the single figure table based on the value at
grant. No performance measures are associated with the grant of awards; although the Committee will consider Group and individual performance before determining
any grant. Vesting is subject to a discretionary underpin that allows the Remuneration Committee to make adjustments to the level of vesting if the Committee believes
due to business performance, individual performance or wider Group considerations that the vesting should be adjusted.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 115
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
The following charts show the total single figure of remuneration for the CEO and CFO compared to the Policy scenarios under the 2023
Remuneration Policy which applied during the year.
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Minimum On-target
488
1,275
488 488
338
Maximum
Single Figure
2023
1,613
1,496
488
675
450
488
558
450
CEO remuneration
Total fixed Annual bonus/BBP RSP
450
(£000’s)
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Minimum On-target
271
615
271 271
156
Maximum
Single Figure
2023
771
717
271
313
188
271
258
188
CFO remuneration
Total fixed Annual bonus/BBP RSP
188
(£000’s)
Total fixed pay Annual bonus/BBP RSP
Annual BBP outcome in respect of 2023 (audited)
Executive Directors’ objectives continue to be linked to the delivery of the Group’s strategic priorities. In determining the outcome of some
objectives, the Committee sought input from the wider Board and other Board Committees as appropriate. The Committee is committed to
providing as much retrospective detail of the measures as possible, setting out clearly the decision-making process and the levels of attainment
achieved, but mindful that any information which could be considered commercially sensitive cannot be disclosed.
The table below sets out the 2023 annual bonus targets, performance against these targets and the resulting annual formulaic bonus outcome.
2023 annual bonus outcome
Weighting
Threshold
(25% payable)
Target
(50% payable)
Maximum
(100%
payable) Actual
Outcome
(% of
element)
Outcome
(% of
maximum)
Adjusted operating profit 60% £11.8m £12.7m £15.5m £14.3m 78% 47%
Lettings market share growth
1
15% 2.5% 5.0% 10.0% 11.4% 100% 15%
Sales market share growth 15% 2.5% 5.0% 10.0% 21.0% 100% 15%
Employee experience 10% Holistic assessment 60% 60% 6%
Bonus outcome
(% of maximum)
82.7%
1
Lettings market share growth calculated on an organic basis which removes the impact of acquisitions.
In making its holistic assessment of the employee experience in 2023 the Committee reviewed data on workforce pay, retention, internal
promotions, exit interviews, investment in recruitment, investment in training, employee engagement, health and wellbeing, Glassdoor and
Indeed reports, quality of internal communication, redundancies, grievances and whistleblowing, making comparisons to 2022 and, where
possible, external benchmarks. It concluded that on most measures there had been a good level of success during the year, with focus being
placed strengthening culture and overall employee experience.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023116
DIRECTORS’ REMUNERATION REPORT CONTINUED
Scheme interests granted during 2023 (audited)
RSP Share Awards
Executive Directors were granted the following nil-cost option awards over the Group’s ordinary shares under The Foxtons Group plc 2020 RSP.
Awards were granted on 1 April 2023, in line with the typical RSP grants.
No consideration was paid for the grant of the RSP Awards which are structured as nil cost options.
The number of ordinary shares granted under RSP Awards have been calculated using an ordinary share price of 40.12 pence per share being the
average of the closing share prices over the three dealing days preceding the date of grant.
Executive
Number of
Ordinary
Shares % of salary Face value
Share price
used for
calculation Option price Performance conditions
Guy Gittins 1,121,728 100% £450,000 40.12p £nil Awards will ordinarily vest after three
years subject to the grantee’s continued
service and a discretionary underpin that
allows the Remuneration Committee to
make adjustments to the level of vesting
if the Committee believes due to business
performance, individual performance
or wider Group considerations that the
vesting should be adjusted. This will
include consideration of all relevant
factors, including any windfall gains.
Chris Hough 467,386 75% £187,500 40.12p £nil
Salary Substitute Restricted Share Awards
Executive Directors were granted the following nil-cost option awards over the Group’s ordinary shares under The Foxtons Group plc 2020 RSP
in respect of their Salary Substitute Restricted Share Awards, granted on 1 April 2023.
The number of ordinary shares granted under the Salary Substitute Restricted Share Awards have been calculated using an ordinary share price
of 40.12 pence per share being the average of the closing share prices over the three Dealing Days preceding the date of grant.
The Salary Substitute Restricted Share Awards will ordinarily vest after three years subject to the grantee’s continued service.
Executive
Number of
Ordinary
Shares Face value
Share price
used for
calculation Option price Performance conditions
Guy Gittins 112,172 £45,000 40.12p £nil Awards will ordinarily vest after three
years subject to the grantee’s continued
service.
Chris Hough 124,636 £50,000 40.12p £nil
The normal vesting date for all RSP Awards granted in 2023 (both the RSP Share Awards, and the Salary Substitute Restricted Share Awards,
above) will be 1 April 2026, being the third anniversary of the award dates. Once vested, the RSP Awards will normally be exercisable until the
day before the tenth anniversary of the award date. The RSP Awards are subject to a two-year holding period commencing on vesting.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 117
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
BBP share awards
The following table sets out the BBP accounts for the Executive Directors as at the end of 2023 which shows the paying in of the third bonus
from 2022, the third payment from the bank in 2023, and subsequent deferral of notional shares over the remainder of 2023 and into the start
of 2024. The notional shares are subject to a discretionary underpin that allows the Remuneration Committee to make adjustments to the level
of vesting if the Committee believes due to business performance, individual performance or wider Group considerations that the vesting
should be adjusted. This will include consideration of all relevant factors, including any windfall gains.
Each year, subject to the achievement of annual BBP performance conditions, a contribution will be made into the participants’ plan accounts.
Following the contribution for amounts earned in respect of 2022 performance, 50% of the cumulative balance of each Executive Director’s
plan was paid in cash.
These notional shares are a mechanism that allows the deferred element of the award to be linked to the share price. The Committee confirms
that there is no intention to issue actual shares until the end of the fourth year of the cycle, when the full bank value will normally be settled in
the form of shares transferred or allotted to the participant.
CEO
Guy Gittins
CFO
Chris Hough
Number of deferred notional shares in account at the end of year three (31 December 2022)
1
n/a n/a
Value of deferred notional shares in account at the end of year three (31 December 2022)
1
n/a n/a
Bonus contribution in 2023 in respect of performance over 2022 (contribution into the account) £151,282 £161,250
Dividend equivalent contributed n/a n/a
Cumulative account following contribution £151,282 £161,250
Less: 2023 payment out of the account £(75,641) £(80,625)
Value of deferred notional shares carried forward over to 2023 £75,641 £80,625
Number of deferred notional shares carried forward at the end of year four (31 December 2023)
2
248,763 265,154
Value of deferred notional shares to be paid in shares in early 2024 (reflecting latest share price
and dividend equivalents)³
£112,956 £120,399
Number of deferred notional shares to be paid in shares in early 2024 (reflecting latest share price
and dividend equivalents) ³
253,793 270,516
1
Nil balance of deferred notional shares at 31 December 2022 reflecting Guy Gittins being appointed on 5 September 2022 and Chris Hough being appointed
on 1 April 2022 and not being eligible for deferred notional share awards prior to or as at 31 December 2022.
2
The share price used to calculate the number of shares carried forward at the end of year four was the mid-market value of a share for the 30-day period to
31 December 2022, which was 30.4 pence per share.
3
The price used to calculate the number of shares to be paid in early 2024 is the mid-market value of a share for the 30-day period to 31 December 2023, which
was 44.5 pence per share.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023118
DIRECTORS’ REMUNERATION REPORT CONTINUED
Statement of Directors’ shareholding and share interests (audited)
The table below shows the interests of the Directors and connected persons in shares (owned outright or vested) as at 31 December 2023.
There have been no changes in Directors’ interests in the period between 31 December 2023 and 4 March 2024.
Outstanding scheme interests
6
Shares owned
outright
Unvested
shares not
subject to
performance
1
Unvested
share options
subject to
performance
2
Notional
shares
held
3
Total
scheme
interests
Shareholding
guideline
(% of salary
Current
shareholding
(% of salary)
4
Guideline
met
Executive Directors
Guy Gittins 60,000 1,699,654 6,883,891 248,763 8,832,308 250% 98% No
Chris Hough 200,000 1,049,156 – 265,154 1,314,310 200% 139% No
Non-Executive Directors
Nigel Rich 1,528,849 – – – – – – –
Annette Andrews 47,242 – – – – – – –
Jack Callaway 100,000 – – – – – – –
Peter Rollings 183,105 – – – – – – –
Rosie Shapland 20,000 – – – – – – –
Former Non-Executive Directors
Alan Giles
5
150,000 – – – – – – –
Sheena Mackay
5
90,000 – – – – – – –
1
Unvested shares not subject to performance are shares granted under the RSP and Salary Substitute Restricted Shares.
2
No unvested share options subject to performance remain outstanding except for a buyout award to compensate Guy Gittins for the forfeiture of incentive arrangements
held with his previous employer, Chesterton UK Services Limited (previously known as ‘Chesterton Global Limited'). The LTIP buyout award has a face value of
£2.5 million and is subject to a performance requirement for the share price of an Ordinary Share to be at least 70 pence for any 30 consecutive days during the vesting
period. The number of Ordinary Shares granted equivalent to £2.5 million has been calculated using an Ordinary Share price of 36.32 pence per share being the average
of the closing Ordinary Share prices over the three Dealing Days preceding 30 May 2022, the date that it was announced that Guy Gittins would be the incoming
Chief Executive Officer.
3
Notional shares held are the number of deferred notional shares carried forward at the end of year three of the BBP scheme (31 December 2023).
4
Based on the share price on 31 December 2023 of 46.0 pence. Includes shares owned outright, shares which have vested but which remain subject to a holding period
and/or clawback, unvested Salary Substitute Restricted Share awards (on a net of tax basis) and unvested RSP awards (on a net of tax basis).
5
Shares owned outright as at the date of stepping down from the Board.
6
No options were exercised by Directors in the year. There are no vested but unexercised options as at 31 December 2023.
External appointments
No Executive Directors hold any external appointments.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 119
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
Relative importance of spend on pay
The chart below shows the Group’s actual expenditure on shareholder distributions (including dividends and share buybacks) and total
employee pay expenditure for the financial years ended 31 December 2022 and 31 December 2023.
Relative importance of spend on pay (£m)
0
10
20
30
40
50
60
70
80
90
2023
2022 2022
Relative Importance of spend on pay (£m)
Total staff remuneration
80.5
2023
74.6
3.8
6.4
Distribution to shareholders
1
1
Distribution to shareholders: £2.7 million through dividends
paid (2022: £1.5 million) and £1.1 million through share
buybacks (2022: £4.9 million).
0
10
20
30
40
50
60
70
80
2022
2021
Relative Importance of spend on pay (£m)
Total staff remuneration
74.6
2020
6.4
72.5
6.3
60.6
0.3
Distribution to shareholders
1
Additional information
The following table sets out the other elements of the Annual Report on Remuneration and where in the Directors’ remuneration report they
can be found (where relevant).
Element Page
No long-term incentive plan award vested for incumbent Executive Directors for performance ending
in the 2023 financial year (audited)
PAGE 97
How we will apply the Policy in 2024
PAGES 100 TO 104
No payments for loss of office (audited)
n/a
Payments to former Directors during the 2023 financial year (audited)
PAGES 119 AND 120
Payments to former Directors during the 2023 financial year
As set out in last year’s remuneration report, Nic Budden and Patrick Franco (the Former CEO and Former COO) had value in their BBP on
departure from the Company. On the basis that the plan account balance reflects prior years achievement, the Committee determined that the
plan accounts continue to be payable according to the original payout profile, subject to malus or clawback for up to two years post payment.
As such, the following table sets out the BBP accounts for the Former CEO and Former COO as at the end of 2023 which shows the paying
in of the third bonus from 2022, the third payment from the bank in 2023, and subsequent deferral of notional shares over the remainder
of 2023 and into the start of 2024. The notional shares are subject to a discretionary underpin that allows the Remuneration Committee to
make adjustments to the level of vesting if the Committee believes due to business performance, individual performance or wider Group
considerations that the vesting should be adjusted. This will include consideration of all relevant factors, including any windfall gains.
These notional shares are a mechanism that allows the deferred element of the award to be linked to the share price. The Committee confirms
that there is no intention to issue actual shares until the end of the fourth year of the cycle, when the full bank value will normally be settled in
the form of shares transferred or allotted to the participant. This will be in early 2024.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023120
DIRECTORS’ REMUNERATION REPORT CONTINUED
BBP year three – notional shares invested into participants’ bonus bank during 2023 (in respect of 2022 performance outcome)
Former CEO
Nic Budden
Former COO
Patrick Franco
2
Number of deferred notional shares in account at the end of year three (31 December 2022) 537,481 236,002
Value of deferred notional shares in account at the end of year three (31 December 2022)
1
£163,431 £71,761
Bonus contribution in 2023 in respect of performance over 2022 (contribution into the account) £249,228 £87,548
Dividend equivalent contributed £2,536 £1,109
Cumulative account following contribution £415,185 £160,418
Less: 2023 payment out of the account £(207,593) £(80,209)
Value of deferred notional shares carried forward over to 2023 £207,593 £80,209
Number of deferred notional shares carried forward at the end of year four (31 December 2023)
1
682,717 263,786
Value of deferred notional shares to be paid in shares in early 2024 (reflecting latest share price
and dividend equivalents)
3
£310,002 £119,778
Number of deferred notional shares to be paid in shares in early 2024 (reflecting latest share price
and dividend equivalents)
3
696,523 269,120
1
The price used to calculate the number of shares carried forward at the end of year four was the mid-market value of a share for the 30-day period to 31 December 2022,
which was 30.4 pence per share.
To reflect the full amount of bonus earned in 2022, the bonus contribution amount shown for Patrick Franco is for the full four months that he was employed at the
Company. As per the regulations, only three months of this value was included in the single figure table in last year’s report and the 2022 Annual BBP outcome table
(£65,661), reflecting the time that Patrick Franco was an Executive Director.
3
The price used to calculate the number of shares to be paid in early 2024 is the mid-market value of a share for the 30-day period to 31 December 2023, which was
44.5 pence per share.
2024 Non-Executive Director fees
Details of the Policy on Non-Executive Director fees are set out in the table below:
Implementation in 2024
Chairman and Non-Executive Director fees are as follows:
• Chairman fee: £150,000 (paid £100,000 in cash and £50,000 in shares at the prevailing market price) (2023: £150,000 with £50,000 paid
in shares at the prevailing market price)
• Senior Independent Director fee: £5,000
• Non-Executive Director base fee: £63,000 (0% increase)
• Chair of Audit Committee incremental fee: £10,000 (0% increase)
• Chair of Remuneration Committee incremental fee: £10,000 (0% increase)
• Chair of ESG Committee incremental fee: £5,000 (0% increase)
Service contracts
The Executive Directors are employed under contracts of employment with Foxtons Group plc. The principal terms of the Executive
Directors’ service contracts are as follows. The service contracts of the Executive Directors are not of a fixed duration and therefore have
no unexpired terms.
Notice period
Executive Director Position
Effective date
of contract From Company From Director
Guy Gittins CEO 5 September 2022 12 months 12 months
Chris Hough CFO 1 April 2022 12 months 12 months
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 121
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
The Chairman and Non-Executive Directors have letters of appointment. Dates of the Directors’ letters of appointment are set out below:
Name
Date of original
appointment
Date of most recent
appointment letter
Date of appointment/
last reappointment
at AGM Notice period
Nigel Rich 1 October 2021 22 September 2021 9 May 2023 3 months
Annette Andrews 1 February 2023 26 January 2023 9 May 2023 3 months
Jack Callaway 1 February 2023 26 January 2023 9 May 2023 3 months
Peter Rollings 1 December 2021 26 November 2021 9 May 2023 3 months
Rosie Shapland 5 February 2020 9 May 2023 9 May 2023 3 months
Remuneration Committee advisers
The Remuneration Committee received advice on Executive remuneration from PwC, following appointment by the Remuneration Committee
as independent adviser in 2019. PwC is a founding member of the Remuneration Consultants Group and voluntarily operates under its Code
of Conduct in its dealings with the Committee. PwC’s fees charged for the provision of independent advice to the Committee during the year
were £72,775 (2022: £91,715). Other than in relation to advice on remuneration, PwC provides support to the Company in relation to tax
compliance, internal audit and ad-hoc tax and accounting advice. The Committee is satisfied that PwC engagement partners and teams which
provided remuneration advice to the Committee, do not have connections with the Group that may impair their objectivity and independence.
Shareholder voting at the Group’s AGM
The table below sets out the results of the most recent shareholder votes on the Directors’ Remuneration Policy (2023 AGM) and the advisory
vote on the 2023 Annual Statement from the Remuneration Committee Chairman and the Annual Report on Remuneration at the 2023 AGM
on 9 May 2023.
Percentage of votes cast Number of votes cast
Resolution
For and
Discretion Against
For and
Discretion Against Withheld
1
Approve the Directors’ Remuneration Policy 97.45% 2.55% 194,494,392 5,096,407 15,868
Annual Statement from the Remuneration Committee
Chairman and the Annual Report on Remuneration
99.88% 0.12% 199,306,717 232,381 11,569
1
A withheld vote is not a vote in law and is not counted in the calculation of the proportion of votes cast for and against a resolution.
The Directors’ Remuneration Report was approved by the Board and signed on its behalf by:
Annette Andrews
Chair of the Remuneration Committee
4 March 2024
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023122
DIRECTORS’ REPORT
Corporate governance
A report on corporate governance and the Group’s compliance with
the UK Corporate Governance Code is set out on
PAGES 69 TO 77
and forms part of this report by reference.
The Board of Directors
The members of the Board of Directors and their biographical details
are shown on
PAGES 69 TO 77 and are incorporated into this report
by reference. On 27 January 2023 it was announced that Annette
Andrews and Jack Callaway would be appointed as Non-Executive
Directors with effect from 1 February 2023, with Annette Andrews
appointed as Chair of both the Remuneration and ESG Committees
at the 2023 AGM.
As previously advised both Alan Giles and Sheena Mackay decided
not to stand for re-election at the 2023 AGM.
Appointment and replacement of Directors
The appointment and replacement of Directors is governed by the
Company’s Articles of Association (the ‘Articles’), the Companies
Act 2006 and related legislation. The Articles provide that the
Company may by ordinary resolution appoint Directors to the Board.
The Articles also provide that the Board may appoint Directors to
the Board. The Company must have not less than two, or more than
12 Directors. Where Directors are appointed by the Board, they may
only hold office until the next AGM of the Company where they will
be eligible for election. Each Director must then retire from office at
the third AGM after the AGM at which he was last elected. However,
the Board has decided that all Directors will seek re-election at each
AGM in accordance with the Code. The Company may remove a
Director by special resolution or by ordinary resolution where special
notice has been given and the necessary statutory procedures are
complied with.
Directors’ indemnity and compensation
for loss of office
The Company has granted a third party indemnity to each of its
Directors against any liability that attaches to them in defending
proceedings brought against them, to the extent permitted by English
law, in connection with the discharge of their duties as a Director of
the Company and its subsidiaries. In addition, Directors and Officers
of the Company and its subsidiaries are covered by Directors’ and
Officers’ liability insurance, which gives appropriate cover for legal
action brought against the Directors.
The Company does not have arrangements with any Director that
would provide compensation for loss of office or employment
resulting from a takeover, except that provisions of the Company’s
share plans may cause options and awards granted under such plans
to vest on a takeover. Further information is provided in the Directors’
Remuneration Report on
PAGES 92 TO 121.
Engagement with stakeholders
The long-term success of the Company is dependent on its
relationships with its stakeholders. In accordance with Section 172 of
the Companies Act 2006, the Company’s statement on engagement
with its suppliers, customers, the community and others can be found
on
PAGES 18 TO 21.
Employee engagement and equal opportunities policy
The Company provides employees with information on the Group’s
performance and on matters concerning them on a regular basis.
The Board engages with employees through formal and informal
channels including the Employee Engagement Committee (EEC), as
set out on
PAGE 56.
Considerable value is placed on the involvement of employees,
which is reflected in the principles of Foxtons’ corporate practices
and related guidance, which require regular, open, fair and
respectful communication, zero tolerance for human rights violations,
fair remuneration and, above all, a safe working environment.
Foxtons operates an equal opportunities policy that aims to ensure
that all employees are treated fairly and without favour or prejudice
throughout selection, recruitment, training, development and
promotion. The Group’s policies and procedures are designed to
provide for full and fair consideration and selection of disabled
applicants, to ensure they are properly trained to perform safely and
effectively and to provide career opportunities that allow them to
fulfil their potential. Where an employee becomes disabled in the
course of their employment, the Group will actively seek to retain
them wherever possible by making adjustments to their work content
and environment or by retraining them to undertake new roles.
The details of the wider workforce pay policies and the alignment of
incentives operated by the Group are set out on
PAGE 108.
Further information on the Group’s approach to diversity, inclusion
and career progression are contained in the Strategic Report on
PAGES 52 TO 58. Refer to PAGE 109 for details of how the Board
engages with employees.
Share capital
At 31 December 2023, there were 330,097,758 ordinary shares of
£0.01 each in issue. 28,802,778 ordinary shares were held in Treasury.
Each ordinary share carries one vote; therefore, the total voting rights
in issue at 31 December 2023 were 301,294,980. As at 4 March 2024,
the date of this report, the Company held 28,802,778 shares in
Treasury and the total voting rights in issue were 301,294,980.
Details of the Company’s issued share capital and shares issued
during the year can be found in Note 21 of the financial statements.
The Company was granted a general authority by its shareholders at
the 2023 AGM to allot shares up to 33.33% of the Company’s issued
share capital. The Company also received authority to allot shares for
cash on a non-pre-emptive basis up to 10% of the Company’s issued
share capital. These authorities will expire at the conclusion of the
2024 AGM or 30 June 2024.
A resolution will be proposed at the 2024 AGM to renew the general
authority to allot shares up to 33.33% of the Company’s issued share
capital. In addition, as recommended by the Pre-Emption Group’s
revised Statement of Pre-emption Principles (as published in
November 2022), the Company will propose Special Resolutions at
the 2024 AGM to seek shareholder authority to disapply pre-emption
rights of up to 10% of issued share capital and a further 10% of issued
share capital in relation to the financing of a share issue in connection
with an acquisition or specified capital investment.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 123
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
The Company was granted authority by its shareholders at the 2023
AGM to purchase up to 30,322,518 of its ordinary shares, being 10%
of the issued share capital. This authority will expire at the conclusion
of the 2024 AGM or 30 June 2024.
On 2 November 2022, the Company announced the commencement
of up to £3 million share buyback and purchased 8,897,597 of its
ordinary shares, having an aggregate nominal value of £88,976, for
a total consideration of £3 million.
The total number of shares purchased and held in treasury represented
8.73% of the Company’s issued share capital as at 31 December 2023.
These shares were purchased through Numis Securities Limited at an
average price of 0.42p. All the shares purchased under the share
buyback programmes are held in treasury. Since the first share
buyback on 11 December 2020 to 4 March 2024, the date of this
report, the Company has purchased a total of 28,802,778 of its
ordinary shares, having an aggregate nominal value of £288,028,
for a total consideration of £17,129,951. The total number of shares
purchased and held in treasury (as at 4 March 2024) represented
8.73% of the Company’s issued share capital as at as at 4 March 2024.
In order to retain flexibility, the Company will propose a resolution at
the 2024 AGM to renew the Company’s authority to purchase up to
10% of its ordinary shares at the Directors’ discretion. If the resolution
is passed, the new authority will replace the existing authority, which
will lapse at the conclusion of the AGM on 7 May 2024.
Dividends
In line with the Company’s policy, the Directors are recommending the
payment of a final dividend on its ordinary shares for the year ended
31 December 2023 of 0.7p per share (2022: 0.7p). Subject to the
approval of shareholders at the forthcoming AGM, the proposed final
ordinary dividend will be payable on 28 May 2024 to shareholders on
the register at the close of business on 12 April 2024. The ex-dividend
date will be 11 April 2024.
Major shareholdings
The table below shows notifications received by the Company in
accordance with DTR 5 during financial year ended 31 December
2023. This information was correct at the date of notification.
It should be noted that these holdings may have changed since
notified to the Company. However, notification of any change is
not required until the next applicable threshold is crossed.
Institution
Voting
rights at
31 Dec 2023
% of
capital at
31 Dec 2023
Platinum Investment
Management Limited
30,441,089 10.00%
3G Capital Management LLC 28,717,285 9.53%
Converium Capital Master Fund LP 15,100,000 5.01%
Lombard Odier Asset Man
(Europe) Limited
14,638,923 4.86%
Australian Retirement Trust 12,890,132 4.28%
Hosking Partners LLP 11,541,774 3.81%
Azvalor Asset Management 9,513,579 3.13%
Rights and obligations attaching to shares
The Company has a single class of ordinary shares in issue. Holders of
the ordinary shares are entitled to receive dividends (when declared)
and a copy of the Company’s Annual Report and Accounts, attend
and speak at general meetings of the Company and appoint proxies
and exercise voting rights or the transfer of voting rights. At any
general meeting, on a show of hands, every shareholder present
in person or by proxy shall have one vote and, on a poll, every
shareholder present in person or by proxy, shall have one vote
for every share of which they are the holder. Subject to certain
thresholds being met, holders of ordinary shares may requisition
the Board to convene a general meeting or propose resolutions at
AGMs. On liquidation, holders of ordinary shares may share in the
assets of the Company.
None of the ordinary shares carry any special rights with regard to
control of the Company and there are no restrictions on voting rights
or the transfer of voting rights. Major shareholders have the same
voting rights per share as all other shareholders. The Company is not
aware of any arrangements under which financial rights are held by
a person other than the holder of the shares.
The Foxtons Group Employee Benefit Trust is an Employee Benefit
Trust which holds ordinary shares in the Company in trust for
employees within the Group. The Trustee of the Trust has the power
to exercise the rights and powers incidental to, and to act in relation
to, the ordinary shares subject to the Trust in such manner as the
Trustee in its absolute discretion thinks fit. The Trustee of the
Employee Benefit Trust has waived its rights to dividends on ordinary
shares held by the Trust as these have not yet vested unconditionally
in employees. Details of the ordinary shares held by the Trust can be
found in Note 23 of the financial statements.
There are no restrictions on the transfer of securities in the Company
and no requirement for any person to obtain the approval of the
Company, or other holders of the Company’s securities, in order to
transfer securities. The Company is not aware of any agreements
between shareholders that may result in restrictions on the transfer
of securities or on voting rights.
Significant agreements
With the exception of the revolving credit facility agreement with
Barclays Bank plc, which may be terminated by Barclays and all
outstanding loans declared immediately due and payable following
a change of control, the Group is not a party to any significant
agreements that would take effect, alter or terminate on a change
of control of the Group.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023124
DIRECTORS’ REPORT CONTINUED
Streamlined Energy and Carbon Reporting and Task
Force on Climate-Related Financial Disclosures
Information on the Group’s Streamlined Energy and Carbon
Reporting and Task Force on Climate-Related Financial Disclosures
is set out in the Strategic Report on
PAGES 44 TO 51 and forms
part of this report by reference.
Risk management and internal controls
The Board has carried out a robust assessment of the Group’s
principal and emerging risks as set out on
PAGES 32 TO 37 of
the Strategic Report.
The Group’s financial risk management objectives and policies,
including its use of financial instruments, are set out in Note 24
of the financial statements.
Going concern
The financial position of the Group, its cash flows and liquidity
position are set out in the consolidated financial statements.
Furthermore, Note 24 of the financial statements includes the
Group’s objectives and policies for managing its capital, its financial
risk management objectives, details of its financial instruments and
its exposure to credit and liquidity risk.
• The Directors believe 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 due to its
existing, and forecast, availability of cash resources. For this
reason, they continue to adopt the going concern basis in
preparing the financial statements. The Directors have made
this assessment after consideration of forecast cash flows,
specifically uncertainties in relation to the macroeconomic
outlook, the reverse stress scenario sensitivity and the Group’s
liquidity over the relevant forecast period.
Auditor
The Directors holding office at the date of this annual report
confirm that, so far as they are each aware, there is no relevant audit
information of which the Group’s auditor is unaware. Each Director
has taken all the steps that they ought to have taken as a Director
to make themselves aware of any relevant audit information and to
establish that the Group’s auditor is aware of that information.
BDO LLP, the external auditor of the Group, has advised of its
willingness to continue in office and a resolution to reappoint
them as auditor and the authority for their remuneration to be
determined by the Audit Committee will be proposed at the 2024
AGM. Further details on how the objectivity and independence of
the auditor is safeguarded and assessed can be found in the report
of the Audit Committee on
PAGE 90.
Information presented in other sections of this report
Certain information is required to be included in the Annual Report
and Accounts by Listing Rule 9.8.4. The following table provides
references to where this information can be found. If a requirement
is not shown, it is not applicable to the Group.
Section Listing Rule Requirement Location Page
12 and 13 Shareholder waivers of
dividends and future
dividends
Directors’
Report
PAGE 123
Political Donations
No political donations were made or political expenditure incurred
for 2023 (2022: £nil).
AGM
The Company’s AGM will take place at 10.00 am on 7 May 2024 at
the Company’s registered office at Building One, Chiswick Park,
566 Chiswick High Road, London W4 5BE. The Notice of Meeting,
which sets out the resolutions to be proposed at the forthcoming
AGM and attendance arrangements, accompanies the Annual Report
and Accounts and can also be found on the Group’s website at
www.foxtonsgroup.co.uk/investor-relations/agm.
Post balance sheet events and future developments
Refer to Note 29 of the financial statements for details of post
balance sheet events.
Details of the Group’s business activities and the factors likely to
affect its future development, performance and position are set out
in the Strategic Report on
PAGES 1 TO 63 and form part of this
report by reference.
On behalf of the Board
Guy Gittins Chris Hough
Chief Executive Officer Chief Financial Officer
4 March 2024
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 125
FINANCIAL STATEMENTSCORPORATE GOVERNANCE REPORTSTRATEGIC REPORT
DIRECTORS’ RESPONSIBILITIES STATEMENT
The Directors are responsible for preparing the Annual Report and the
Group and Parent Company financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law, the Directors are required to
prepare the Group financial statements in accordance with applicable
law and UK adopted international accounting standards. The Directors
have elected to prepare the Parent Company financial statements in
accordance with Financial Reporting Standard 101 ‘Reduced Disclosure
Framework’. Under company law, the Directors must not approve the
financial statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and Parent Company of
the profit or loss of the Group for that period.
In preparing the Parent Company financial statements, the Directors
are required to:
• Select suitable accounting policies and then apply
them consistently.
• Make judgements and accounting estimates that are reasonable
and prudent.
• State whether Financial Reporting Standard 101 ‘Reduced
Disclosure Framework’ has been followed, subject
to any material departures disclosed and explained in the
financial statements.
• Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Parent Company
will continue in business.
In preparing the Group’s financial statements, International
Accounting Standard 1 requires that Directors:
• Properly select and apply accounting policies.
• Present information, including accounting policies,
in a manner that provides relevant, reliable, comparable
and understandable information.
• Provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable users
to understand the impact of particular transactions, other
events and conditions on the entity’s financial position and
financial performance.
• Make an assessment of the Group’s ability to continue as a
going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s
transactions and disclose with reasonable accuracy at any time the
financial position of the Group and enable them to ensure that the
financial statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Group and hence
for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors are responsible for preparing the Directors’ Report,
the Strategic Report, the Directors’ Remuneration Report and the
Corporate Governance Report in accordance with the Companies Act
2006 and applicable regulations, including the requirements of the
Listing Rules and the Disclosure Guidance and Transparency Rules of
the FCA.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Group’s website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
Responsibility statement
We confirm that to the best of our knowledge:
• The consolidated and Parent Company 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 Company and the
undertakings included in the consolidation taken as a whole.
• 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.
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
position, performance, business model and strategy.
This responsibility statement was approved by the Board of Directors
and was signed on its behalf by:
Guy Gittins Chris Hough
Chief Executive Officer Chief Financial Officer
4 March 2024
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023126
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2023
and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;
• the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Foxtons Group plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended
31 December 2023 which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated
Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated Cash Flow Statement, notes to the financial
statements, Parent Company Statement of Financial Position, Parent Company Statement of Changes in Equity and notes to the Parent
Company financial statements, including a summary of material accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and UK adopted
international accounting standards. The financial reporting framework that has been applied in the preparation of the Parent Company financial
statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure
Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the
findings included in our Completion Report reported to the Audit Committee.
Independence
Following the recommendation of the Audit Committee, we were appointed by the Directors on 13 May 2020 to audit the financial statements
for the year ending 31 December 2020 and subsequent financial periods. The period of total uninterrupted engagement including retenders and
reappointments is four years, covering the years ending 31 December 2020 to 31 December 2023. We remain independent of the Group and
the Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. The non-audit services prohibited by that standard were not provided to the Group or the Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of
the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to continue
to adopt the going concern basis of accounting included:
• An assessment of the appropriateness of the approach and model used by the Directors when performing their going concern assessment,
including the following procedures:
• Subjected the going concern model to checks of the mechanical accuracy of the underlying formulae in both the base case and
reverse stress test case.
• Challenged the Directors on the accuracy of substantial non-profit cash flows and regular operating profit derived cash movements
within the going concern model (including working capital, capital expenditure, taxes and acquisition consideration, and unwinding
of accumulated contract assets for lettings revenue) by agreement to supporting documentation where available.
• Checked the basis of the covenants and definition of those within the revolving credit facility agreement. Further, we checked the
covenant compliance calculations built into the going concern assessment model to determine whether this was calculated
accurately and complied with the financial covenants included within the revolving credit facility agreement.
• Tested the underlying figures of the forecast by agreeing the opening cash and borrowings balances for 2024 to the current tested
balances as at 31 December 2023 .
• Considered the adequacy of disclosures made in respect of going concern in light of the Directors’ going concern assessment (Note 1.7).
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF FOXTONS GROUP PLC
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 127
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
• An evaluation and challenge of the underlying data and key assumptions used to make the assessment (focussing on revenue growth rates,
Group profitability and the timing and quantum of significant future cash flows). Challenge over assumptions included:
• Key assumptions (being; revenue growth, costs and profitability) were challenged to supporting evidence and initiatives with business
segment leaders within the Group.
• Comparison of the revenue growth estimates noted above against market research (both corroborative and contradictory) to
determine the reasonableness of the estimates made and the likelihood of the reverse stress test output occurring.
• Evaluation of the Directors’ historic forecasts against the achieved actuals for the year ended 31 December 2023 to establish the
accuracy with which cash flows have been budgeted (together with assessment of previous years).
• We challenged the Directors on the net current liability position recorded by the Group as at 31 December 2023 understanding the reason
for this position having been realised at this date. We subsequently tested the reversal of the net current liability position through our audit
work performed on the reverse stress test scenario, the assumptions and calculations of which have been tested as noted above.
• We considered the availability of the revolving credit facility within the reverse stress test scenario as noted above based on covenant
compliance calculations.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group and the Parent Company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Overview
Coverage 100% (2022: 100%) of Group profit before tax
99% (2022: 98%) of Group revenue
98% (2022: 97%) of Group total assets
2023 2022
Key audit matters 1. Impairment risk due to potential non-achievability of cash flows
underlying the brand asset value in use.
2. Impairment risk due to the use of inaccurate assumptions included
within the weighted average cost of capital (‘WACC’) used in the brand
asset value in use.
X
Key Audit Matter 2 (2022) was not considered to be a Key Audit Matter for the year ended 31 December 2023.
This is on the grounds of its relative insensitivity when taken against the first Key Audit Matter (achievability
of cash flows), together with the reasonably non-complex methodology of its calculation which does not vary
significantly year-on-year, thus warranting less auditor attention in the year ended 31 December 2023.
Materiality Group financial statements as a whole – £1.090m (2022: £1.0m) based on 0.75% (2022: 0.75%) of forecast
revenue for the year.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023128
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal control,
and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal
controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.
Significant components:
Component Nature of entity Type of work performed
Foxtons Limited Estate Agency services (Sales and Lettings) Full scope audit
Foxtons Group plc Parent Entity (including consolidation journals) Full scope audit
Non-significant components:
Other than the two significant components noted above, there were 18 (2022: 14) other components within the Group which formed part of
our Group audit.
The following three non-significant components were subjected to a full scope audit on account of them being part of a non-small Group and
being entities that do not avail themselves of a parental guarantee from audit under s479A of the Companies Act 2006:
Component Nature of entity Type of work performed
Foxtons Intermediate Holdings Limited Intermediate Holding entity Full scope audit
Foxtons Operational Holdings Limited Intermediate Holding entity Full scope audit
Alexander Hall Associates Limited Mortgage Broking services Full scope audit
All 15 (2022: 11) of the remaining non-significant components were subjected to desktop review procedures. All audit work on all entities
(significant and non-significant) was undertaken by the Group audit team.
Climate change
Our work on the assessment of potential impacts of climate-related risks on the Group’s operations and financial statements included:
• Enquiries and challenge of management to understand the actions they have taken to identify climate-related risks and their potential
impacts on the financial statements and adequately disclose climate-related risks within the Annual Report;
• Our own qualitative risk assessment taking into consideration the sector in which the Group operates and how climate change affects this
particular sector; and
• Review of the minutes of Board and Audit Committee meetings and other papers related to climate change and performed a risk
assessment as to how the impact of the Group’s commitment as set out on
PAGE 84 may affect the financial statements and our audit.
We challenged the extent to which climate-related considerations, including the expected cash flows from the initiatives and commitments
have been reflected, where appropriate, in management’s going concern assessment and viability assessment and in management’s judgements
and estimates in relation to the cash flows attributable to the value in use assessment of the indefinite life brand asset (Note 1.21).
We also assessed the consistency of management’s disclosures included as ‘Other Information’/'Statutory Other Information’ within the
Group’s ‘Task force on climate-related financial disclosures’ report on
PAGE 46 with the financial statements and with our knowledge
obtained from the audit.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FOXTONS GROUP PLC CONTINUED
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 129
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of
the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How the scope of our audit addressed the key audit matter
Impairment risk due to
potential non-achievability
of cash flows underlying the
brand asset value in use.
The Group has a historical brand asset
of £99 million (2022: £99 million)
which has an indefinite useful
economic life and is therefore subject
to a mandatory annual impairment
review under IAS 36 (accounting policy
1.14 and Note 10).
The audit of the cash flow assumptions
included within the impairment review
of the indefinite life brand asset is
considered to be a significant risk as it
requires consideration of value in use
of the business as a whole and includes
a high level of management estimation
uncertainty in relation to the two
following (key) areas:
• Management’s assessment of
future cash flows from the estate
agency business, which include
assessment of revenue growth
across the two business segments
and business profitability
(incorporating both short term
movements in 2024 and mid-term
movements in 2025-2028).
• Management’s assessment of the
long-term growth rate applied to
the cash flows into perpetuity.
The level of audit work required
on the challenge of management’s
judgements over future growth make
this a key audit matter.
Our audit work on the challenge of achievability of cash flows included
within the indefinite life brand asset included the following procedures:
• Reconciled the cash flows from the impairment review model to
internal strategic plans approved by the Board.
• Challenged the key revenue assumptions within the model to
supporting evidence, including, inspection of support for internal
growth-driving actions, and benchmarking the achievability of
key growth metrics (including expected market volumes and unit
pricing in both the lettings and sales market) to both
corroborative and contradictory external market intelligence.
• Challenged management’s assumptions around the future costs
within the model, including the inflation rates applied to cost
budgets for future years together with reconciling to growth
forecast in costs from 2024 to 2025. We also reconciled the
model to confirm that future (uncommitted) cost savings had
not been incorporated into the model since these are prohibited
by IAS 36.
• Assessed management’s budgeting reliability and Board plans
by comparing past budgets to in year trading results and current
budgets to actual Q4 trading results and post year end trading.
• Reconciled the rental cash flows to the gross lease liabilities
audited as part of our audit work on leases.
• Reconciled the long-term growth rate used to discount the cash
flows into perpetuity back to external sources of long term
growth indices expected within the UK residential housing sector.
Key observations:
Based on our audit work performed, we consider management’s
judgements made around the cash flows to be reasonable
and achievable.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023130
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that
are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence,
when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:
Group financial statements Parent Company financial statements
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Materiality 1,090 1,000 981 900
Basis for determining
materiality
0.75% of forecast revenues
(equating to 0.74% of final
audited revenues).
0.75% of forecast revenues
(equating to 0.71% of final
audited revenues).
90% of Group materiality 90% of Group materiality
Rationale for the
benchmark applied
We consider revenue to be the most appropriate
materiality benchmark as it provides a more stable
measure of year-on-year performance and is a key
performance indicator for the Group.
The Parent Company does not trade. Materiality was set
at a percentage of Group materiality given the assessment
of aggregation risk.
Performance materiality 760 700 686 630
Basis for determining
performance materiality
70% of Group materiality 70% of Group materiality 70% of Parent Company
materiality
70% of Parent Company
materiality
Rationale for the
percentage applied for
performance materiality
Continued low level of historic and
anticipated misstatements and brought
forward uncorrected misstatements.
Continued rationalisation in complex estimates in
the Group, reflecting a lower level of management
judgement across the Group financial statements.
Continued low level of historic and
anticipated misstatements and brought
forward uncorrected misstatements.
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the Group, based on a percentage of
between 75% and 90% (2022: 90%) of Group materiality dependent on the size and our assessment of the risk of material misstatement of
that component. Significant component materiality ranged from £825,000 to £981,000 (2022: £900,000). In the audit of each significant
component, we further applied performance materiality levels of 70% (2022: 70%) of the significant component materiality to our testing
to ensure that the risk of errors exceeding significant component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £44,000 (2022: £40,000).
We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the Annual Report and
Accounts other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FOXTONS GROUP PLC CONTINUED
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 131
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Corporate Governance Statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Parent Company’s compliance with the provisions of the UK Corporate Governance Code specified for
our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit.
Going concern and longer-term viability • The Directors’ statement with regards to the appropriateness of adopting the going
concern basis of accounting and any material uncertainties identified as set out on
PAGE 124.
• The Directors’ explanation as to their assessment of the Group’s prospects, the period this
assessment covers and why the period is appropriate as set out on
PAGE 88.
Other Code provisions • Directors’ statement on fair, balanced and understandable as set out on
PAGE 90.
• Board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks as set out on
PAGE 124.
• The section of the Annual Report that describes the review of effectiveness of risk
management and internal control systems as set out on
PAGE 32.
• The section describing the work of the Audit Committee as set out on
PAGE 86.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act
2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic Report and Directors’ report In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the financial
year for which the financial statements are prepared is consistent with the financial
statements; and
• the Strategic Report and the Directors’ Report have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements
in the Strategic Report or the Directors’ Report.
Directors’ remuneration In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Matters on which we are required to report
by exception
We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ Remuneration
Report to be audited are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement on PAGE 125, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors
either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023132
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which it operates;
• Discussion with management and those charged with governance, those responsible for legal and compliance procedures, and the
Company Secretary; and
• Obtaining an understanding of the Group’s policies and procedures regarding compliance with laws and regulations.
We considered the significant laws and regulations to be:
• Those that relate to the reporting framework (UK adopted international accounting standards);
• The Companies Act 2006 and UK Corporate Governance Code;
• Accounting Rule 1 of the Conduct and Membership Rules of Propertymark;
• FCA regulations; and
• Relevant tax compliance.
The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or
disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be.
• The health and safety legislation; and
• Estate Agents Act 1979, the Money Laundering Regulations 2007, the Proceeds of Crime Act, and the Data Protection Act.
Our procedures in respect of the above included:
• Enquiries with Alexander Hall Associates Limited’s Risk Compliance and Technology Director (to ascertain the extent of any potential
compliance breaches or potential claims lodged by customers of the FCA regulated mortgage broking business), the Legal and Compliance
Director, and Group Management.
• Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations;
• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and regulations;
• Review of financial statement disclosures and agreeing to supporting documentation;
• Involvement of tax specialists in the audit;
• Assessing the provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with
which may be fundamental to the Group’s and components’ ability to operate. These include compliance with the Estate Agents Act 1979,
the Money Laundering Regulations 2007, the Proceeds of Crime Act, and the Data Protection Act;
• Third-party confirmations were obtained directly from the Group’s external legal counsel to assess the completeness of claims and legal
matters made available to us; and
• Review of legal expenditure accounts to understand the nature of expenditure incurred.
The engagement partner assessed the audit team as collectively holding the appropriate competence and capabilities to identify and/or
recognise non-compliance with laws and regulations. Where appropriate, additional specialists were involved as members of engagement team
discussions to direct the audit procedures toward identifying irregularities as above.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FOXTONS GROUP PLC CONTINUED
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 133
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:
• Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to: detecting and responding to the risks of fraud; and Internal
controls established to mitigate risks related to fraud.
• Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement
due to fraud; and
• Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be;
• Impairment review of brand assets (specifically the achievability of forecast cash flows) given significant judgement involved in their
forecasting and a resultant bias to prevent an impairment being recognised (refer to the Key Audit Matter 1 above).
• Fraudulent journals posted to manipulate revenue and profit through the recording of manual IFRS 15 adjustments directly to the
accounting system.
• Management override of controls.
Our procedures in respect of the above included:
• Checked the accuracy of the lettings revenue reconciliation for the year between the Group’s business operating system and the
Group’s accounting system. We corroborated reconciling items back to movements in audited balance sheet areas ( including the
lettings contract assets and contract liabilities and the rental collection deferral). Where the reconciling items related to revenue codes
either not included in the business operating system or not included within the accounting system, a sample of these items were agreed
to further supporting documentation.
• Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation.
• Assessing significant estimates made by management for bias including but not limited to impairment reviews (refer to key audit matters
for further detail) and purchase price allocation in respect to acquisitions in the period.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all
deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed
and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements,
the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we are required to state to them
in an auditor’s 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Tim Neathercoat (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
55 Baker Street, London, W1U 7EU
4 March 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023134
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31DECEMBER2023
| 2023 | 2022 | ||
Continuing operations | Notes | £’000 | £’000 |
Revenue | 2 | ||
Direct operating costs | ( | ( | |
Other operating costs | ( | ( | |
Operating profit | |||
Other losses | ( | ||
Finance income | 5 | ||
Finance costs | 5 | ( | ( |
Profit before tax from continuing operations | |||
Tax charge | 6 | ( | ( |
Profit for the year from continuing operations | |||
| Discontinued operations | |||
Loss after tax for the year from discontinued operations | 7 | ( | |
Profit for the year attributable to shareholders of the Company | |||
| Earnings per share | |||
| From continuing operations | |||
Basic earnings per share | 9 | ||
Diluted earnings per share | 9 | ||
| From continuing and discontinued operations | |||
Basic earnings per share | 9 | ||
Diluted earnings per share | 9 | ||
| Adjusted measures | |||
| From continuing operations | |||
Adjusted EBITDA 1,4 | 28 | ||
| Adjusted operating profit | 2 | ||
| Adjusted profit before tax | 28 | ||
| Adjusted basic earnings per share | 9 |
2,4
1,4
3,4
1
Adjusted EBITDA and Adjusted profit before tax are APMs and are reconciled to the nearest statutory measure in Note 28. Both measures exclude £4.47 million of
adjusted items (2022: £0.07 million) which are detailed in Note 4.
2
Adjusted operating profit is an APM and is reconciled to statutory profit before tax in Note 2. The measure excludes £4.47 million of adjusted items (2022: £0.07 million)
which are detailed in Note 4.
3
Adjusted basic earnings per share from continuing operations is an APM and is reconciled to statutory earnings per share in Note 9.
4
Further details of the APMs are provided in Note 28.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 135
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
| 2023 | 2022 | ||
| Notes | £’000 | £’000 | |
Profit for the year attributable to shareholders of the Company | |||
| Other comprehensive loss: | |||
| Items that will not be reclassified to profit or loss (net of tax): | |||
Changes in fair value of equity instruments at FVOCI | 14 | ( | |
Other comprehensive loss for the period | ( | ||
Total comprehensive income for the period | |||
| Total comprehensive profit attributable to shareholders of the Company arising from: | |||
Continuing operations | |||
Discontinued operations | ( | ||
Total |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31DECEMBER2023
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023136
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31DECEMBER2023
| 2023 | 2022 | ||
| Notes | £’000 | £’000 | |
| Non-current assets | |||
Goodwill | 10 | ||
Other intangible assets | 10 | ||
Property, plant and equipment | 11 | ||
Right-of-use assets | 12 | ||
Contract assets | 19 | ||
Investments | 14 | ||
Deferred tax assets | 6 | ||
| Current assets | |||
Trade and other receivables | 16 | ||
Contract assets | 19 | ||
Current tax assets | |||
Cash and cash equivalents | |||
Assets classified as held for sale | 7 | ||
Total assets | |||
| Current liabilities | |||
Trade and other payables | 17 | ( | ( |
Current tax liabilities | ( | ||
Borrowings | 18 | ( | |
Lease liabilities | 12 | ( | ( |
Contract liabilities | 19 | ( | ( |
Provisions | 20 | ( | ( |
( | ( | ||
Net current liabilities | ( | ( | |
| Non-current liabilities | |||
Lease liabilities | 12 | ( | ( |
Borrowings | 18 | ( | |
Contract liabilities | 19 | ( | ( |
Provisions | 20 | ( | ( |
Deferred tax liabilities | 6 | ( | ( |
( | ( | ||
Total liabilities | ( | ( | |
Net assets | |||
| Equity | |||
Share capital | 21 | ||
Merger reserve | 22 | ||
Other reserves | 22 | ||
Own shares reserve | 23 | ( | ( |
Retained earnings | |||
Total equity |
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 137
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
| Own | |||||||
| Share | Merger | Other | shares | Retained | Total | ||
| capital | reserve | reserves | reserve | earnings | equity | ||
| Notes | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Balance at 1 January 2023 | ( | ||||||
Profit for the year attributable to shareholders of the Company | |||||||
| Changes in fair value of equity instruments | 14 | ||||||
| at FVOCI | |||||||
Total comprehensive income for the year | |||||||
Dividends | 8 | ( | ( | ||||
Own shares acquired in the period | 23 | ( | ( | ||||
Credit to equity for share-based payments | 27 | ||||||
Settlement of share incentive plan | ( | ||||||
Balance at 31 December 2023 | ( |
| Own | |||||||
| Share | Merger | Other | shares | Retained | Total | ||
| capital | reserve | reserves | reserve | earnings | equity | ||
| Notes | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Balance at 1 January 2022 | ( | ||||||
Profit for the year attributable to shareholders of the Company | |||||||
| Changes in fair value of equity instruments | 14 | ( | ( | ||||
| at FVOCI | |||||||
Total comprehensive income for the year | |||||||
Dividends | 8 | ( | ( | ||||
Own shares acquired in the period | 23 | ( | ( | ||||
Credit to equity for share-based payments | 27 | ||||||
Settlement of share incentive plan | ( | ||||||
Balance at 31 December 2022 | ( |
CONSOLIDATED STATEMENT OF CHANGES OF EQUITY
FOR THE YEAR ENDED 31DECEMBER2023
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023138
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31DECEMBER2023
| 2023 | 2022 | ||
| Notes | £’000 | £’000 | |
| Operating activities | |||
Operating profit from continuing operations | 2 | ||
Operating loss from discontinued operations | 7 | ( | |
Operating profit from continuing and discontinued operations | |||
| Adjustments for: | |||
Depreciation of property, plant and equipment and right-of-use assets | 11, 12 | ||
Amortisation of intangible assets | 10 | ||
Gain on disposal of discontinued operations | 7 | ( | |
Net impairment/(reversal of impairment) of plant and equipment and right-of-use assets | 4 | ( | |
Loss on disposal of property, plant and equipment and intangibles | |||
Gain on lease surrenders and lease modifications | ( | ||
Sub-lease asset impairment/(net gain on recognition of sub-lease asset) | ( | ||
Increase in provisions | |||
Cash settlement of share incentive plan | ( | ||
Share-based payment charges | 27 | ||
Operating cash flows before movements in working capital | |||
Increase in receivables | ( | ( | |
Increase in payables | |||
Cash generated by operations | |||
Income taxes paid | ( | ( | |
Net cash from operating activities | |||
| Investing activities | |||
Interest received | |||
Proceeds on disposal of property, plant and equipment | 11 | ||
Purchases of property, plant and equipment | 11 | ( | ( |
Purchases of intangibles | 10 | ( | ( |
Purchases of investments | 14 | ( | ( |
Acquisition of subsidiaries (net of cash acquired) | 13 | ( | ( |
Disposal of discontinued operations | 7 | ( | |
Net cash used in investing activities | ( | ( | |
| Financing activities | |||
Proceeds from borrowings | |||
Repayment of borrowings | ( | ||
Dividends paid | 8 | ( | ( |
Interest on borrowings | ( | ( | |
Interest on lease liabilities | 12 | ( | ( |
Repayment of lease liabilities | ( | ( | |
Sub-lease receipts | |||
Purchase of own shares | 23 | ( | ( |
Net cash used in financing activities | ( | ( | |
Net decrease in cash and cash equivalents | ( | ( | |
Total cash and cash equivalents at beginning of year 1 , comprising: | |||
Cash and cash equivalents relating to continuing operations: | |||
Cash and cash equivalents held for sale (discontinued operations): | 7 | ||
Total cash and cash equivalents at end of year, comprising: | |||
Cash and cash equivalents relating to continuing operations |
1
Total Group balances, which include cash related to continuing and discontinued operations.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 139
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES, JUDGEMENTS AND ESTIMATES
NOTES TO THE FINANCIAL STATEMENTS
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023140
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 141
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023142
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 143
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023144
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 145
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023146
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 147
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023148
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| Financial | Corporate | Group | ||||
| Lettings | Sales | Services | costs | total | ||
| Notes | £’000 | £’000 | £’000 | £’000 | £’000 | |
Revenue | 101,188 | 37,158 | 8,781 | n/a | 147,127 | |
Contribution | 28 | 75,381 | 14,455 | 3,410 | n/a | 93,246 |
Contribution margin | 28 | 74.5% | 38.9% | 38.8% | n/a | 63.4% |
Adjusted operating profit/(loss) | 28 | 25,838 | (9,974) | 654 | (2,262) | 14,256 |
Adjusted operating profit/(loss) margin | 28 | 25.5% | (26.8%) | 7.4% | n/a | 9.7% |
Adjusted items | 4 | (4,466) | ||||
Operating profit | 9,790 | |||||
Finance income | 5 | 381 | ||||
Finance cost | 5 | (2,277) | ||||
Profit before tax | 7,894 |
| Financial | Corporate | Group | |||
| Lettings | Sales | Services | costs | total | |
| Depreciation and amortisation | £’000 | £’000 | £’000 | £’000 | £’000 |
Depreciation 1 | (8,080) | (4,815) | (15) | – | (12,910) |
Amortisation from non-acquired intangibles | (205) | (130) | (60) | – | (395) |
Amortisation from acquired intangibles | (1,315) | (81) | – | – | (1,396) |
Total | (9,600) | (5,026) | (75) | (14,701) |
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 149
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
| Financial | Corporate | Group | ||||
| Lettings | Sales | Services | costs | total | ||
| Notes | £’000 | £’000 | £’000 | £’000 | £’000 | |
Revenue | 86,918 | 43,182 | 10,222 | n/a | 140,322 | |
Contribution | 28 | 64,788 | 22,040 | 4,483 | n/a | 91,311 |
Contribution margin | 28 | 74.5% | 51.0% | 43.9% | n/a | 65.1% |
Adjusted operating profit/(loss) | 28 | 17,989 | (3,231) | 1,767 | (2,616) | 13,909 |
Adjusted operating profit/(loss) margin | 28 | 20.7% | (7.5%) | 17.3% | n/a | 9.9% |
Adjusted items | 4 | (69) | ||||
Operating profit | 13,840 | |||||
Other losses | (35) | |||||
Finance income | 5 | 137 | ||||
Finance cost | 5 | (2,003) | ||||
Profit before tax | 11,939 |
| Financial | Corporate | Group | |||
| Lettings | Sales | Services | costs | total | |
| Depreciation and amortisation | £’000 | £’000 | £’000 | £’000 | £’000 |
Depreciation 1 | (7,517) | (4,664) | (16) | – | (12,197) |
Amortisation from non-acquired intangibles | (230) | (195) | (85) | – | (510) |
Amortisation from acquired intangibles | (913) | (128) | – | – | (1,041) |
Total | (8,660) | (4,987) | (101) | – | (13,748) |
| 2023 | 2022 | ||
| Notes | £’000 | £’000 | |
Short-term leases | 12 | 1,438 | 1,503 |
Depreciation of property, plant and equipment | 11 | 2,399 | 2,063 |
Depreciation of right-of-use assets | 12 | 10,511 | 10,134 |
Amortisation (excluding acquired intangibles) | 10 | 395 | 510 |
Amortisation of acquired intangibles | 10 | 1,396 | 1,041 |
Adjusted items | 4 | 4,466 | 69 |
Loss/(gain) on disposal of property, plant and equipment, right-of-use assets and intangibles | 17 | (90) | |
Impairment loss on trade receivables and contract assets | 570 | 933 | |
Employee costs | 81,924 | 74,841 |
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023150
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| 2023 | 2022 | |
| £’000 | £’000 | |
The audit of the Company | 355 | 275 |
The audit of the Company’s subsidiaries | 120 | 100 |
Total audit fees | 475 | 375 |
Audit-related assurance services | 42 | 40 |
Other assurance services | 5 | 5 |
Total non-audit fees | 47 | 45 |
| 2023 | 2022 | |
| Number of | Number of | |
| employees | employees | |
Fee earning staff | 829 | 746 |
Administrative and support staff | 525 | 455 |
1,354 | 1,201 |
| 2023 | 2022 | ||
| Notes | £’000 | £’000 | |
Wages and salaries | 71,712 | 65,802 | |
Social security costs | 8,153 | 7,835 | |
Share-based payments | 27 | 1,036 | 329 |
Defined contribution pension costs | 1,023 | 875 | |
81,924 | 74,841 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Wages and salaries | 1,983 | 1,903 |
Short-term non-monetary benefits | 38 | 43 |
Share-based payments | 878 | 210 |
Pension benefits | 21 | 40 |
2,920 | 2,196 |
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 151
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
4. 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 28. The following items have been classified as adjusted items attributable to continuing operations
in the period.
| 2023 | 2022 | |
| £’000 | £’000 | |
Branch asset impairment charge/(reversal) 1 | 3,410 | (310) |
| Net property related charge/(reversal) | 671 | (439) |
| Transaction related costs | 385 | 199 |
| Reorganisation costs | – | 619 |
Total net adjusted items charge | 4,466 | 69 |
2
3
4
1
The branch impairment charge mainly relates to plant, property and equipment £1,037k (2022: impairment reversal of £181k) and right-of-use assets
£2,373k (2022: reversal of £129k) as disclosed in Note 11 and 12, respectively.
2
Net property related charge/(reversal) include dilapidations, rates, service charges and other unavoidable costs under onerous leases, net sub-lease
impairment offset by a net gain on the disposal of IFRS 16 balances.
3
Transaction related costs relate to costs involved with the acquisition of Atkinson McLeod and Ludlow Thompson (2022: for the acquisition of IMM
Properties Limited).
4
Net cost of Executive reorganisation that was completed in 2022.
£4.3 million of the total net adjusted items charge relates to the following items, of which £3.3 million is cash related and
£1.0 million is non-cash related:
• £3.6 million relates to the decision to integrate Ludlow Thompson into the Foxtons network to deliver cost synergies; and
• £0.7 million relates to the closure of three Foxtons branches as the Group consolidates branches to deliver cost savings.
Net cash outflow from adjusted items during the year totalled £0.6 million (2022: £1.4 million).
| 2023 | 2022 | |
| £’000 | £’000 | |
| Finance income | ||
Interest income on cash and cash equivalents | 340 | 85 |
Interest income on leasing arrangements | 41 | 52 |
Total finance income | 381 | 137 |
| Finance costs | ||
Interest on borrowings | (306) | (38) |
Interest on lease liabilities | (1,971) | (1,965) |
Total finance costs | (2,277) | (2,003) |
Net finance cost | (1,896) | (1,866) |
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023152
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| 2023 | 2022 | |
| £’000 | £’000 | |
| Current tax | ||
Current period UK corporation tax | 2,684 | 2,078 |
Adjustment in respect of prior periods | 160 | 82 |
Total current tax charge | 2,844 | 2,160 |
| Deferred tax | ||
Origination and reversal of temporary differences | (471) | 376 |
Impact of change in tax rate | (24) | (12) |
Adjustment in respect of prior periods | 55 | (147) |
Total deferred tax (credit)/charge | (440) | 217 |
Tax charge on profit on ordinary activities from continuing operations | 2,404 | 2,377 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Profit before tax from continuing operations | 7,894 | 11,939 |
Tax at the UK corporation tax rate (see above) | 1,855 | 2,268 |
Tax effect of expenses that are not deductible | 483 | 354 |
Tax effect of non-taxable income | (12) | – |
Other differences – share options | (51) | 242 |
Adjustment in respect of previous periods | 215 | (65) |
Impact on deferred tax of change in tax rate | (24) | (12) |
Recognition of a deferred tax asset | (62) | (410) |
Tax charge on profit on ordinary activities | 2,404 | 2,377 |
Effective tax rate | 30.5% | 19.9% |
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 153
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
| 2023 | 2022 | |
| £’000 | £’000 | |
Deferred tax assets | 1,905 | 1,386 |
Deferred tax liabilities | (28,153) | (27,049) |
Net deferred tax | (26,248) | (25,663) |
| Other | Tax losses | ||||
| Fixed | temporary | carried | Intangible | ||
| assets | differences | forward | assets | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | |
At 31 December 2021 | 210 | (126) | 1,660 | (26,504) | (24,760) |
(Charge)/credit to profit or loss | (205) | 301 | (452) | 139 | (217) |
Charge to equity | – | 8 | – | – | 8 |
Additions through business combinations | (10) | – | – | (684) | (694) |
At 31 December 2022 | (5) | 183 | 1,208 | (27,049) | (25,663) |
Credit/(charge) to profit or loss | 110 | 210 | (238) | 358 | 440 |
Charge to equity | – | 248 | – | – | 248 |
Additions through business combinations | – | 189 | – | (1,462) | (1,273) |
At 31 December 2023 | 105 | 830 | 970 | (28,153) | (26,248) |
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023154
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| 2023 | 2022 | |
| £’000 | £’000 | |
Net cash outflow from operating activities | – | (458) |
Net cash outflow from investing activities | – | (3,715) |
Net cash outflow from financing activities | – | (18) |
– | (4,191) |
8. DIVIDENDS
| 2023 | 2022 | |
| £’000 | £’000 | |
Final dividend for the year ended 31 December 2022: | 2,122 | 856 |
| Interim dividend for the year ended 31 December 2023: 0.20p (31 December 2022: 0.20p) per | 603 | 631 |
| ordinary share | 2,725 | 1,487 |
For 2023, the Board has proposed a final dividend of 0.70 p per ordinary share (£2.1 million) to be paid on 28 May 2024.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 155
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
9. 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.
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.
| Total Group | ||||
| (continuing and | ||||
| Continuing operations | discontinued operations) | |||
| 2023 | 2022 | 2023 | 2022 | |
| £’000 | £’000 | £’000 | £’000 | |
| Profit for the purposes of basic and diluted earnings | 5,490 | 9,562 | 5,490 | 9,127 |
| per share | ||||
| Adjusted for: | ||||
Adjusted items (including associated taxation) 1 | 3,585 | 47 | 3,585 | (133) |
| Adjusted earnings for the purposes of adjusted earnings | 9,075 | 9,609 | 9,075 | 8,994 |
| per share | ||||
Number of shares | 2023 | 2022 | 2023 | 2022 |
| Weighted average number of ordinary shares for the purposes | 302,039,983 | 314,818,812 | 302,039,983 | 314,818,812 |
| of basic earnings per share | ||||
Effect of potentially dilutive ordinary shares | 12,877,904 | 5,824,398 | 12,877,904 | 5,824,398 |
| Weighted average number of ordinary shares for the purpose | 314,917,887 | 320,643,210 | 319,447,348 | 320,643,210 |
| of diluted earnings per share | ||||
Earnings per share (basic) | 1.8p | 3.0p | 1.8p | 2.9p |
Earnings per share (diluted) | 1.7p | 3.0p | 1.7p | 2.8p |
Adjusted earnings per share (basic) | 3.0p | 3.1p | 3.0p | 2.9p |
Adjusted earnings per share (diluted) | 2.9p | 3.0p | 2.9p | 2.8p |
1
Adjusted items relating to continuing operations of £4,466k (2022: £69k) per Note 4, and associated tax credit of £881k (2022: £22k charge), resulting in
an after tax charge of £3,585k (2022: £47k). Adjusted items relating to discontinued operations of £nil (2022: £180k charge), less £nil associated tax charge
(2022: £nil), resulting in an after tax credit of £nil (2022: £180k charge).
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023156
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| Customer | ||||||
| Assets | contracts | |||||
| under | and | |||||
| Goodwill | Brand | Software | construction | relationships | Total | |
| 2023 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
| Cost | ||||||
At 1 January 2023 | 35,869 | 99,000 | 2,244 | 755 | 12,041 | 149,909 |
Additions | – | – | 763 | 732 | – | 1,495 |
| Acquired through business combinations | 14,659 | – | – | – | 5,884 | 20,543 |
| (refer to Note 13) | ||||||
At 31 December 2023 | 50,528 | 99,000 | 3,007 | 1,487 | 17, 925 | 171,947 |
Accumulated amortisation and impairment losses | ||||||
At 1 January 2023 | 9,819 | – | 1,798 | – | 2,933 | 14,550 |
Amortisation | – | – | 395 | – | 1,396 | 1,791 |
At 31 December 2023 | 9,819 | – | 2,193 | – | 4,329 | 16,341 |
| Net carrying value | ||||||
At 31 December 2023 | 40,709 | 99,000 | 814 | 1,487 | 13,596 | 155,606 |
At 1 January 2023 | 26,050 | 99,000 | 446 | 755 | 9,108 | 135,359 |
| Customer | ||||||
| Assets | contracts | |||||
| under | and | |||||
| Goodwill | Brand | Software | construction | relationships | Total | |
| 2022 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
| Cost | ||||||
At 1 January 2022 | 27,535 | 99,000 | 2,607 | – | 9,143 | 138,285 |
Additions | – | – | – | 755 | – | 755 |
Disposals | – | – | (363) | – | – | (363) |
Acquired through business combinations | 8,334 | – | – | – | 2,898 | 11,232 |
At 31 December 2022 | 35,869 | 99,000 | 2,244 | 755 | 12,041 | 149,909 |
Accumulated amortisation and impairment losses | ||||||
At 1 January 2022 | 9,819 | – | 1,589 | – | 1,892 | 13,300 |
Amortisation | – | – | 510 | – | 1,041 | 1,551 |
Disposals | – | – | (301) | – | – | (301) |
At 31 December 2022 | 9,819 | – | 1,798 | – | 2,933 | 14,550 |
| Net carrying value | ||||||
At 31 December 2022 | 26,050 | 99,000 | 446 | 755 | 9,108 | 135,359 |
At 1 January 2022 | 17,716 | 99,000 | 1,018 | – | 7,251 | 124,985 |
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 157
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
| 2023 | 2022 | |
| £’000 | £’000 | |
Lettings goodwill | 40,709 | 26,050 |
Brand asset – Sales and Lettings | 99,000 | 99,000 |
139,709 | 125,050 |
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023158
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
11. PROPERTY, PLANT AND EQUIPMENT
| Fixtures, | Assets | ||||
| Leasehold | fittings and | Motor | under | ||
| improvements | equipment | vehicles | construction | Total | |
| 2023 | £’000 | £’000 | £’000 | £’000 | £’000 |
| Cost | |||||
At 1 January 2023 | 35,666 | 11,221 | 14 | 1,213 | 48,114 |
Additions | 372 | 1,033 | – | 716 | 2,121 |
| Acquired through business combinations | 549 | – | – | – | 549 |
| (refer to Note 13) | |||||
Disposals | (1,689) | (583) | (14) | – | (2,286) |
Reclassified as assets held for sale (refer to Note 7) | (450) | – | – | – | (450) |
Transferred into use | 635 | 1,294 | – | (1,929) | – |
At 31 December 2023 | 35,083 | 12,965 | – | – | 48,048 |
Accumulated depreciation and impairment losses | |||||
At 1 January 2023 | 27,788 | 9,620 | 14 | – | 37,422 |
Depreciation | 1,622 | 777 | – | – | 2,399 |
Disposals | (1,676) | (579) | (14) | – | (2,269) |
Impairment | 1,033 | 4 | – | 1,037 | |
At 31 December 2023 | 28,767 | 9,822 | – | – | 38,589 |
| Net carrying value | |||||
At 31 December 2023 | 6,316 | 3,143 | – | – | 9,459 |
At 1 January 2023 | 7,878 | 1,601 | – | 1,213 | 10,692 |
Assets with a net book value of £17k (2022: £88k) were disposed of during the year. Nil proceeds (2022: £53k) gave rise to a loss on
disposal of £17k (2022: £35k).
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 159
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
| Fixtures, | Assets | ||||
| Leasehold | fittings and | Motor | under | ||
| improvements | equipment | vehicles | construction | Total | |
| 2022 | £’000 | £’000 | £’000 | £’000 | £’000 |
| Cost | |||||
At 1 January 2022 | 35,061 | 11,335 | 38 | 17 | 46,451 |
Additions | 998 | 759 | – | 1,196 | 2,953 |
Acquired through business combinations | 52 | 22 | – | – | 74 |
Lease modifications | (445) | (895) | (24) | – | (1,364) |
At 31 December 2022 | 35,666 | 11,221 | 14 | 1,213 | 48,114 |
| Accumulated depreciation and impairment losses | |||||
At 1 January 2022 | 26,781 | 9,986 | 32 | – | 36,799 |
Depreciation | 1,599 | 460 | 4 | – | 2,063 |
Disposals | (411) | (826) | (22) | – | (1,259) |
Reversal of impairment | (181) | – | – | – | (181) |
At 31 December 2022 | 27,788 | 9,620 | 14 | – | 37,422 |
| Net carrying value | |||||
At 31 December 2022 | 7,878 | 1,601 | – | 1,213 | 10,692 |
At 1 January 2022 | 8,280 | 1,349 | 6 | 17 | 9,652 |
12. LEASES
Group as a lessee
The Group has lease contracts for its head office, branches and for motor vehicles used in its operations. With the exception of
short-term leases, each lease is recognised on the balance sheet with a right-of-use asset and a lease liability. The Group classifies
its right-of-use assets in a consistent manner to its property, plant and equipment (see Note 11).
Generally, the right-of-use assets can only be used by the Group, unless there is a contractual right for the Group to sub-lease the
asset to another party. The Group is also prohibited from selling or pledging the leased assets as security.
Right-of-use assets
The carrying amounts of the right-of-use assets recognised and the movements during the year are outlined below:
| Motor | |||
| Property | vehicles | Total | |
| £’000 | £’000 | £’000 | |
At 1 January 2022 | 38,409 | 5,423 | 43,832 |
Additions | 6,346 | 2,218 | 8,564 |
Acquired through business combinations | 569 | 30 | 599 |
Lease modifications | 138 | – | 138 |
Disposals | (154) | (404) | (558) |
Depreciation | (7,018) | (3,116) | (10,134) |
Impairment reversal/(charge) | 163 | (34) | 129 |
At 31 December 2022 | 38,453 | 4,117 | 42,570 |
Additions | 5,701 | 7,831 | 13,532 |
Acquired through business combinations (refer to Note 13) | 1,891 | – | 1,891 |
Lease modifications | (298) | – | (298) |
Disposals | (1,845) | (495) | (2,340) |
Depreciation | (7,012) | (3,499) | (10,511) |
Impairment charge | (2,373) | – | (2,373) |
At 31 December 2023 | 34,517 | 7,954 | 42,471 |
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023160
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Lease liabilities
The carrying amounts of lease liabilities recognised and the movements during the year are outlined below:
| Motor | |||
| Property | vehicles | Total | |
| £’000 | £’000 | £’000 | |
At 1 January 2022 | 42,608 | 5,475 | 48,083 |
Additions | 6,279 | 2,218 | 8,497 |
Acquired through business combinations | 777 | 103 | 880 |
Lease modifications | 138 | – | 138 |
Disposals | – | (416) | (416) |
Interest charge | 1,839 | 126 | 1,965 |
Payments | (9,452) | (3,234) | (12,686) |
At 31 December 2022 | 42,189 | 4,272 | 46,461 |
Additions | 5,609 | 7,831 | 13,440 |
Acquired through business combinations (refer to Note 13) | 1,891 | – | 1,891 |
Lease modifications | (574) | – | (574) |
Disposals | (2,577) | (486) | (3,063) |
Interest charge | 1,771 | 200 | 1,971 |
Payments | (8,832) | (3,693) | (12,525) |
At 31 December 2023 | 39,477 | 8,124 | 47,601 |
Current | 7, 394 | 3,292 | 10,686 |
Non-current | 32,083 | 4,832 | 36,915 |
During the year ended 31 December 2023, the difference in lease modifications movements recognised within right-of-use assets and
lease liabilities, totalling £0.3 million, is recognised as an adjusted item and included in the net property related charge within Note 4.
Of the movements in the year, cash payments in respect to principal lease instalments totalling £12.5 million were made
(2022: £12.7 million) and the remaining net movement of £13.7 million (2022: £11.1 million) was non-cash in nature.
At the balance sheet date, continuing operations had outstanding commitments for future minimum lease payments which fall due
as follows:
| 2023 | 2022 | |
| £’000 | £’000 | |
| Maturity analysis – contractual undiscounted cash flows from continuing operations | ||
Within one year | 12,488 | 11,671 |
In the second to fifth years inclusively | 31,007 | 30,147 |
After five years | 14,739 | 10,598 |
58,234 | 52,416 |
The Group has elected not to recognise a lease liability for short-term leases (expected lease term is 12 months or less), in
line with the IFRS 16 short-term lease exemption. Payments made under such leases are expensed on a straight-line basis.
At 31 December 2023, the Group had a commitment of less than £0.1 million in relation to short-term leases.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 161
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Amounts recognised in profit or loss
The following are the amounts recognised in profit or loss during the year, in respect of the leases held by the Group as a lessee:
| 2023 | 2022 | |||||
| £’000 | £’000 | |||||
| Continuing | Discontinued | Total | Continuing | Discontinued | Total | |
| operations | operations | Group | operations | operations | Group | |
Depreciation of right-of-use assets | 10,511 | – | 10,511 | 10,134 | – | 10,134 |
| Net impairment of right-of-use assets/ | 2,373 | – | 2,373 | (129) | – | (129) |
| (reversal of impairment) | ||||||
Interest expense on lease liabilities | 1,971 | – | 1,971 | 1,965 | 21 | 1,986 |
Expenses relating to short-term leases | 1,438 | – | 1,438 | 1,503 | – | 1,503 |
Total amount recognised in profit or loss | 16,293 | – | 16,293 | 13,473 | 21 | 13,494 |
1
1
Net impairment of right-of-use assets/(reversal of impairment) is classified as an adjusted item due to the one-off nature and is included in the branch asset
impairment charge/(reversal) within Note 4.
The group as an intermediate lessor
Finance lease receivables
The Group is an intermediate lessor for various lease arrangements considered to be finance sub-leases. The amounts recognised in
the profit or loss during the year are outlined below:
| 2023 | 2022 | |
| £’000 | £’000 | |
Finance income under finance sub-leases recognised in the period | 41 | 52 |
As at 31 December 2023 and 2022, third parties had outstanding commitments due to the Group for future undiscounted minimum
lease payments, which fall due as follows:
| 2023 | 2022 | |
| £’000 | £’000 | |
Within one year | 210 | 320 |
In the second to fifth years inclusive | 606 | 890 |
After five years | 351 | 470 |
1,167 | 1,680 |
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023162
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| Atkinson | Ludlow | ||
| McLeod | Thompson | Total | |
| £’000 | £’000 | £’000 | |
| Assets | |||
Acquired intangible assets recognised on acquisition | 2,651 | 3,233 | 5,884 |
Property, plant and equipment | 450 | 99 | 549 |
Right-of use assets | – | 1,891 | 1,891 |
Cash and cash equivalents | 1,301 | 5 | 1,306 |
Trade and other receivables | 68 | 358 | 426 |
Contract assets | 185 | 876 | 1,061 |
4,655 | 6,462 | 11,117 | |
| Liabilities | |||
Trade and other payables | 304 | 2,031 | 2,335 |
Contract liabilities | 794 | 1,105 | 1,899 |
Lease liabilities | – | 1,891 | 1,891 |
Current tax liability | 154 | 18 | 172 |
Deferred tax liability (net) | 510 | 763 | 1,273 |
Borrowings | 161 | 658 | 819 |
Provisions | 178 | 746 | 924 |
2,101 | 7, 212 | 9,313 | |
Total identifiable net assets/(liabilities) at fair value | 2,554 | (750) | 1,804 |
Goodwill arising on acquisition | 5,643 | 9,016 | 14,659 |
Fair value of consideration | 8,197 | 8,266 | 16,463 |
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 163
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
| Atkinson | Ludlow | ||
| McLeod | Thompson | Total | |
| £’000 | £’000 | £’000 | |
Amount settled in cash | 7,457 | 6,312 | 13,769 |
Deferred/contingent cash consideration | 740 | 1,954 | 2,694 |
Fair value of consideration | 8,197 | 8,266 | 16,463 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Cash consideration | (13,769) | (8,221) |
Cash acquired in subsidiaries | 1,306 | 231 |
Current year acquisitions of subsidiaries, net of cash acquired | (12,463) | (7,990) |
Deferred consideration paid in relation to prior year acquisitions | (1,472) | (500) |
Acquisitions of subsidiaries, net of cash acquired (included in cash flows from investing activities) | (13,935) | (8,490) |
Transaction costs of the acquisitions paid in the year (included in cash flows from operating activities) 1 | (285) | (301) |
Net cash flow on acquisitions | (14,220) | (8,791) |
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023164
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| 2023 | 2022 | |
| £’000 | £’000 | |
At 1 January | 6 | 3,317 |
Additions | 25 | 400 |
Movement in fair value | – | (3,711) |
At 31 December | 31 | 6 |
| Proportion of | ||||
| ownership | ||||
| interest held | Proportion of | |||
| Place of incorporation | in ordinary | voting power | ||
| Name | and operation | Principal activity | shares % | held % |
Foxtons Intermediate Holdings Limited 1 | United Kingdom | Holding company | 100% | 100% |
Foxtons Operational Holdings Limited | United Kingdom | Holding company | 100% | 100% |
Foxtons Limited | United Kingdom | Estate agency | 100% | 100% |
Alexander Hall Associates Limited | United Kingdom | Financial services | 100% | 100% |
Alexander Hall Direct Limited | United Kingdom | Dormant | 100% | 100% |
London Stone Properties Limited | United Kingdom | Estate agency | 100% | 100% |
London Stone Property Sales Limited | United Kingdom | Estate agency | 100% | 100% |
Pillars Estates Limited | United Kingdom | Estate agency | 100% | 100% |
Aston Rowe Holdings Limited | United Kingdom | Holding company | 100% | 100% |
Aston Rowe Limited | United Kingdom | Estate agency | 100% | 100% |
| Foxtons Ruby Limited | United Kingdom | Holding company | 100% | 100% |
Stones Residential Holdings Limited | United Kingdom | Holding company | 100% | 100% |
Stones Residential (Stanmore) Limited | United Kingdom | Estate agency | 100% | 100% |
IMM Properties Limited | United Kingdom | Estate agency | 100% | 100% |
IMM Properties Investment Limited | United Kingdom | Dormant | 100% | 100% |
Atkinson McLeod Limited | United Kingdom | Estate agency | 100% | 100% |
Ludlow Thompson Holdings Limited | United Kingdom | Holding company | 100% | 100% |
Ludlowthompson SLM Ltd | United Kingdom | Estate agency | 100% | 100% |
Ludlowthompson.com Limited | United Kingdom | Estate agency | 100% | 100% |
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 165
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
| Company | |
| Name | number |
London Stone Properties Limited | 06431946 |
London Stone Property Sales Limited | 09653811 |
Pillars Estates Limited | 09181847 |
Aston Rowe Holdings Limited | 13016901 |
Aston Rowe Limited | 07734524 |
Foxtons Ruby Limited | 09903325 |
Stones Residential Holdings Limited | 08823115 |
Stones Residential (Stanmore) Limited | 04141139 |
IMM Properties Limited | 04078132 |
IMM Properties Investment Limited | 05070828 |
Atkinson McLeod Limited | 04242670 |
Ludlow Thompson Holdings Limited | 07369596 |
Ludlowthompson SLM Ltd | 05955309 |
Ludlowthompson.com Limited | 06959011 |
| Company | |
| Name | number |
Alexander Hall Direct Limited | 03790471 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Trade receivables | 12,526 | 11,708 |
Less: Expected credit loss allowance | (3,103) | (3,019) |
Net trade receivables | 9,423 | 8,689 |
Prepayments | 5,132 | 4,742 |
Other receivables | 2,877 | 2,585 |
17,432 | 16,016 |
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023166
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| More than | More than | More than | More than | |||
| 30 days | 60 days | 90 days | 120 days | |||
31 December 2023 | Current | past due | past due | past due | past due | Total |
Gross carrying amount (£’000) | 5,636 | 1,523 | 857 | 594 | 3,916 | 12,526 |
Expected credit loss rate | 3% | 7% | 10% | 24% | 67% | 25% |
Expected credit loss allowance (£’000) | (151) | (103) | (88) | (141) | (2,620) | (3,103) |
| More than | More than | More than | More than | |||
| 30 days | 60 days | 90 days | 120 days | |||
31 December 2022 | Current | past due | past due | past due | past due | Total |
Gross carrying amount (£’000) | 4,524 | 1,668 | 899 | 807 | 3,810 | 11,708 |
Expected credit loss rate | 2% | 8% | 12% | 16% | 68% | 26% |
Expected credit loss allowance (£’000) | (72) | (127) | (111) | (133) | (2,576) | (3,019) |
| Expected | |
| credit loss | |
| allowance | |
| £’000 | |
At 31 December 2021 | (2,053) |
Amounts provided for during the period | (1,027) |
Amounts utilised during the period | 61 |
At 31 December 2022 | (3,019) |
Amounts provided for during the period | (235) |
Amounts utilised during the period | 151 |
At 31 December 2023 | (3,103) |
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 167
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
| 2023 | 2022 | |
| £’000 | £’000 | |
Trade creditors | 4,884 | 4,017 |
Social security and other taxes | 3,026 | 2,915 |
VAT payable | 1,368 | 401 |
Contingent and deferred consideration | 2,739 | 1,516 |
Accruals | 7,333 | 6,181 |
Other creditors | 1,953 | 1,664 |
21,303 | 16,694 |
| 2023 | 2022 | |
| £’000 | £’000 | |
| Current: | ||
Revolving credit facility | 11,769 | – |
Freehold mortgage | 40 | – |
Transaction costs | (127) | – |
Total borrowings due within one year | 11,682 | – |
| Non-current: | ||
Freehold mortgage | 98 | – |
Total borrowings due in more than one year | 98 | – |
Total borrowings | 11,780 | – |
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023168
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| 2023 | 2022 | |
| £’000 | £’000 | |
Lettings: Unbilled commission | 18,818 | 7, 241 |
Sales: Off plan new homes commission | 186 | 135 |
19,004 | 7, 376 |
| 2023 | 2022 | |
| £’000 | £’000 | |
At 1 January | 7,376 | 4,556 |
Contract assets recognised in revenue | 17,711 | 7,151 |
Contract assets invoiced | (6,096) | (4,403) |
Acquired through business combination | 1,061 | 143 |
Reclassification of expected credit loss provision | (713) | – |
Movement in expected credit loss provision | (335) | (71) |
At 31 December | 19,004 | 7,376 |
Contract liabilities
At 31 December 2023, the Group recognised contract liabilities of £12.2 million (2022: £10.0 million) as summarised and explained below.
| 2023 | 2022 | |
| £’000 | £’000 | |
Lettings: Securing a tenancy for the landlord | 9,169 | 7,934 |
Lettings: Rent collection service | 2,006 | 1,448 |
Other amounts deferred | 1,034 | 652 |
12,209 | 10,034 |
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 169
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
A contract liability is created when charges are raised for future periods during which either the landlord or tenant will have the ability
to cancel the contract. During the cancellable period, the liability is reduced and revenue is realised for the duration that the deal
remains uncancelled. If the deal is cancelled, the liability reduces to zero and the deferred revenue is reversed to commission refunds.
• Lettings: Securing a tenancy for the landlord
As explained in Note 1.9, the contracts the Group holds with landlords are considered to be ‘cancellable contracts’ under IFRS
15, due to the landlord having the ability to cancel the contract at any time once the non-cancellable period has passed. If the
contract is cancelled, the landlord is refunded any initial amounts paid to the Group on a pro-rata basis.
The contract liabilities relate to contracts where charges have been raised for future periods where the landlord has the ability
to cancel the contracts.
• Lettings: Rent collection service
The contract liabilities relate to charges raised in advance of rent collection performance obligations being satisfied. The remaining
performance obligations will be performed over the course of the remaining tenancy period which is estimated to be 11 months.
• Other amounts deferred
‘Other amounts deferred’ relate to the Group’s obligation to transfer goods or services to a customer for which the entity has
received consideration (or an amount of consideration is due) from the customer or where the Group has a constructive
obligation to a customer.
The table below splits the current and non-current classification of contract assets and contract liabilities with reference to when the
asset or liability is expected to crystallise.
| 2023 | 2022 | |
| £’000 | £’000 | |
Current contract assets | 14,256 | 5,688 |
Non-current contract assets | 4,748 | 1,688 |
Total contract assets | 19,004 | 7, 376 |
Current contract liabilities | 11,770 | 9,745 |
Non-current contract liabilities | 439 | 289 |
Total contract liabilities | 12,209 | 10,034 |
| Provision | |||
| for adjusted | Other | ||
| items | provisions | Total | |
| £’000 | £’000 | £’000 | |
At 1 January 2023 | 1,414 | 1,857 | 3,271 |
Increase in provision | 1,431 | 486 | 1,917 |
Acquired through business combinations (refer to Note 13) | 610 | 314 | 924 |
Reversal of provision | (183) | (367) | (550) |
Utilisation of provision | (643) | (302) | (945) |
At 31 December 2023 | 2,629 | 1,988 | 4,617 |
| Provision | |||
| for adjusted | Other | ||
| items | provisions | Total | |
| £’000 | £’000 | £’000 | |
At 1 January 2022 | 1,793 | 35 | 1,828 |
Increase in provision | 1,136 | 1,441 | 2,577 |
Acquired through business combinations | – | 388 | 388 |
Reversal of provision | (291) | – | (291) |
Utilisation of provision | (1,224) | (7) | (1,231) |
At 31 December 2022 | 1,414 | 1,857 | 3,271 |
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023170
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
| 2023 | 2022 | |
| £’000 | £’000 | |
Current | 1,609 | 1,506 |
Non-current | 3,008 | 1,765 |
4,617 | 3,271 |
| 2023 | 2022 | |
| £’000 | £’000 | |
| Authorised, allotted, issued and fully paid: | ||
Ordinary shares of £0.01 each At 1 January and 31 December | 3,301 | 3,301 |
| 2023 | 2022 | |
| £’000 | £’000 | |
Merger reserve | 20,568 | 20,568 |
Capital redemption reserve | 71 | 71 |
Other capital reserve | 2,582 | 2,582 |
23,221 | 23,221 |
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 171
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
| 2023 | 2022 | |
| £’000 | £’000 | |
Balance at 1 January | 10,993 | 6,059 |
Acquired during the year | 1,112 | 4,941 |
Utilised during the year | (13) | (7) |
Balance at 31 December | 12,092 | 10,993 |
| 2023 | 2022 | |
| £’000 | £’000 | |
| Financial assets | ||
FVOCI financial assets | 31 | 6 |
Cash and cash equivalents | 4,989 | 12,027 |
Financial assets recorded at amortised cost | 31,304 | 18,650 |
| Financial liabilities | ||
Financial liabilities recorded at amortised cost | (27,112) | (21,967) |
Lease liabilities | (47,601) | (46,461) |
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023172
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Gearing ratio
The Group’s gearing ratio, calculated as net debt divided by equity, at each period end is as follows:
| 2023 | 2022 | |
| £’000 | £’000 | |
Net debt 1 | (6,791) | – |
Equity | 125,605 | 122,668 |
Gearing ratio 2 | 5.4% | – |
1
As defined in Note 28, net debt is defined as cash and cash equivalents less external borrowings and excludes IFRS 16 lease liabilities.
2
At 31 December 2022 the Group was in a net cash position and therefore a nil position is reflected for the purposes of calculating the gearing ratio.
Equity includes all capital and reserves of the Group that are managed as capital.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 173
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
| Carrying | Contractual | Within | After | ||||
| amounts | cash flows | 1 year | 1- 2 years | 2-3 years | 3-4 years | 4 years | |
| 31 December 2023 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
Trade and other payables | (16,909) | (16,909) | (16,909) | – | – | – | – |
Borrowings | (11,780) | (12,143) | (12,035) | (67) | (41) | – | – |
| Contract liabilities | (10,203) | (10,203) | (9,764) | (439) | – | – | – |
Lease liabilities | (47,601) | (58,235) | (12,488) | (11,595) | (9,308) | (6,278) | (18,566) |
(86,493) | (97,490) | (51,196) | (12,101) | (9,349) | (6,278) | (18,566) |
| Carrying | Contractual | Within | After | ||||
| amounts | cash flows | 1 year | 1- 2 years | 2-3 years | 3-4 years | 4 years | |
| 31 December 2022 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
Trade and other payables | (13,378) | (13,378) | (13,378) | – | – | – | – |
Contract liabilities 1 | (8,589) | (8,589) | (8,189) | (385) | (14) | (1) | – |
Lease liabilities | (46,461) | (52,416) | (11,671) | (9,522) | (8,514) | (6,918) | (15,791) |
(68,428) | (74,383) | (33,238) | (9,907) | (8,528) | (6,919) | (15,791) |
| 2023 | 2022 | |
| £’000 | £’000 | |
Short-term employee benefits | 2,021 | 1,946 |
Post-employment benefits | 21 | 40 |
Share-based payments | 878 | 210 |
2,920 | 2,196 |
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023174
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
26. CLIENT MONIES
At 31 December 2023, client monies held within the Group in approved bank accounts amounted to £122.4 million
(31 December 2022: £112.4 million). Neither this amount, nor the matching liabilities to the clients concerned, are included
in the consolidated statement of financial position since these funds belong to clients. Foxtons Limited’s terms and conditions
provide that any interest income received on these deposits accrues to the Company and is recognised in line with the accounting
policy set out in Note 1.9.
Client funds are protected by the FSCS under which the government guarantees amounts up to £85,000 each. This guarantee
applies to each individual client deposit, not the sum total on deposit.
27. SHAREBA -BASED PAYMENTS
A net income statement charge of £1.0 million (2022: £0.3 million) has been incurred in relation to the Group’s equity-settled share
option schemes and the equity element of the Bonus Banking Plan. The 2022 net income statement charge consisted of £0.6 million
of adjusted item credits, relating to reorganisation (refer to Note 4), and £0.9 million of underlying charges. In 2023, no adjusted
share-based payment charges/credits were incurred. National Insurance contributions payable in connection with the schemes
granted is treated as a cash-settled transaction.
Equity-settled share option schemes
The Group had three equity-settled share option schemes in operation during the period.
a) Restricted Share Plan (RSP) Awards
The Company introduced the RSP awards in 2020 for Executive Directors and Senior Management. The awards have been
made in the form of an option with a nil option price. The awards are subject to service conditions, vest over a three year
period, and the holding period subsequent to the vesting date is two years. If the options remain unexercised after a period
of 10 years from the date of grant the options expire. The treatment of leavers before options vest is determined by good
leaver/bad leaver provisions. A net income statement charge of £0.3 million has been incurred in relation to this scheme
(2022: £0.4 million credit).
During the year, 1,589,114 share awards (2022: 1,775,417) with a fair value of £0.6 million (2022: £0.7 million) were awarded.
b) Salary Substitute Restricted Share Awards
The Company introduced salary substitute restricted share awards in 2022 for Executive Directors and Senior Management.
The awards have been made in the form of an option with a nil option price. The awards are subject to service conditions, vest
over a three year period for Executive Directors and two years for Senior Management, with a two year holding period for
Executive Directors. If the options remain unexercised after a period of 10 years from the date of grant the options expire.
The treatment of leavers before options vest is determined by good leaver/bad leaver provisions. A net income statement
charge of £0.3 million has been incurred in relation to this scheme (2022: £0.1 million).
During the year, 1,593,751 share awards (2022: 1,169,028) with a fair value of £0.5 million (2022: £0.5 million) were awarded.
c) LTIP Buyout Award
Upon joining the business Guy Gittins, CEO, was awarded an LTIP buyout award to compensate for the forfeiture of incentive
arrangements from his previous employer. The awards were granted on appointment as nil cost options that vest three years
after the grant date in September 2025. The vesting of the award is subject to a performance requirement for the Foxtons
share price to be at least 70p for any 30 consecutive days during the vesting period. If this condition is not met, the award will
lapse in full. A net income statement charge of £0.3 million has been incurred in relation to this scheme (2022: £0.1 million).
The inputs into the Monte Carlo models used in determining the fair value of the LTIP buyout award were as follows:
| 2022 | |
| award | |
Weighted average share price | 35.40p |
Weighted average exercise price | 52.38p |
Expected volatility | 54.02% |
Expected life | 3 years |
Risk-free rate | 3.00% |
Expected dividend yield | 1.33% |
Expected volatility was determined by calculating the historical volatility of the share price of comparable listed companies over the
previous three years.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 175
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
2023 | 2022 | |||
| Weighted | ||||
| Number of | average | Weighted | ||
| share | exercise | Number of | average | |
| options | price | share options | exercise price | |
Outstanding at beginning of period | 9,464,881 | nil | 17,196,760 | 69.98p |
Granted during the period | 3,182,865 | nil | 9,828,336 | nil |
Forfeited during the period | (84,129) | nil | (6,005,747) | nil |
Lapsed during the period | – | – | (11,540,120) | 104.28 |
Exercised during the period | (30,960) | nil | (14,348) | nil |
Outstanding at the end of the period | 12,532,657 | nil | 9,464,881 | nil |
Exercisable at the end of the period | 938,243 | nil | 114,528 | nil |
The options outstanding at 31 December 2023 had a weighted average remaining contractual life of nine years (2022: nine years).
The entire balance of share options outstanding at the end of the period have a nil cost exercise price (2022: nil).
Employer’s National Insurance contributions are accrued, where applicable, at the rate of 13.8% (2022: 13.8%) which management
expects to be the prevailing rate at the time the options are exercised.
Equity-settled share bonus payment schemes
Bonus Banking Plan (BBP)
In 2020 the Company introduced a performance-related bonus scheme, BBP, for Executive Directors whereby the bonus amount
paid is based on a percentage of salary and is paid partly in cash and partly in shares. Bonuses are awarded in cash annually
depending on the achievement of performance measures that are also determined annually. An income statement charge of
£0.1 million has been incurred in relation to this scheme (2022: £0.2 million).
The BBP scheme runs in three year performance cycles, with each cycle vesting over a four-year period in shares. A contribution
will be made by the Company into the participant’s plan account following the end of each plan year. The scheme pays out 50%
of the cumulative balance annually for the first three years of the plan, with 100% of the residual value paid out at the end of the
four-year period.
The fair value of shares awarded under these schemes is based on the Group’s 30-day average share price in the period up to the end
of the financial year in which the shares were granted.
| 2023 | |
| Number of | |
| awards | |
Outstanding at beginning of period | 773,482 |
Granted during the period | 686,937 |
Forfeited during the period | – |
Exercised during the period | – |
Outstanding at the end of the period | 1,460,421 |
At 31 December 2023 the awards had an average remaining life of less than a year (2022: one year). There is no exercise price for
these awards. The weighted average fair value of awards at 31 December 2023 was £0.45 per share (2022: £0.30). Of the awards
outstanding at the end of the period, nil were exercisable.
d) Share Option Plan (SOP)
The Company introduced a SOP in 2017 for Executive Directors and Senior Management. The awards were made in three
tranches in 2017 and 2019 in the form of an option with an option price of 105.67p and 52.38p respectively. The awards were
subject to a total shareholder return (TSR) performance condition and vest over a five-year period.
The performance period for the awards granted in 2017 ended in May 2022, the TSR vesting conditions were not met and
therefore none of the awards vested. The 2019 award was forfeited due to the Director leaving office. At the end of the period
there are no outstanding share options in relation to the SOP. An income statement charge of £0.3 million has been incurred in
relation to this scheme in 2022.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023176
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
28. ALTERNATIVE PERFORMANCE MEASURES
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 helpful information on the performance
of the business, but does not consider them to be a substitute for or superior to IFRS measures.
The Group’s APMs are aligned to the Group’s strategy and together are used to measure the performance of the business with
certain APMs forming the basis of remuneration performance measures. Adjusted results exclude certain items, because if included,
these could distort the understanding of our performance for the period and the comparability between periods. The definition,
purpose and how the measures are reconciled to statutory measures are set out below.
Additional APMs have been disclosed in the 2023 financial statements, along with a comparator, in order provide readers with
additional information beyond statutory disclosures to provide increased visibility of underlying results excluding one-off items.
The additional measures, which are defined in the section below, are as follows:
• Adjusted EBITDA and EBITDA margin (item (b) below)
• Adjusted profit before tax (item (d) below)
a) Contribution and contribution margin
Contribution is defined as revenue less direct salary costs of front office staff and costs of bad debt. Contribution margin is
defined as contribution divided by revenue. Contribution and contribution margin are key metrics for management since both
are measures of the profitability and efficiency before the allocation of shared costs. A reconciliation between continuing
operations revenue and contribution is presented below.
| Financial | ||||
| Lettings | Sales | Services | Consolidated | |
| 31 December 2023 | £’000 | £’000 | £’000 | £’000 |
Revenue | 101,188 | 37,158 | 8,781 | 147,127 |
Less: Direct operating costs | (25,807) | (22,703) | (5,371) | (53,881) |
Contribution | 75,381 | 14,455 | 3,410 | 93,246 |
Contribution margin | 74.5% | 38.9% | 38.8% | 63.4% |
| Financial | ||||
| Lettings | Sales | Services | Consolidated | |
| 31 December 2022 | £’000 | £’000 | £’000 | £’000 |
Revenue | 86,918 | 43,182 | 10,222 | 140,322 |
Less: Direct operating costs | (22,130) | (21,142) | (5,739) | (49,011) |
Contribution | 64,788 | 22,040 | 4,483 | 91,311 |
Contribution margin | 74.5% | 51.0% | 43.9% | 65.1% |
b) Adjusted EBITDA and adjusted EBITDA margin
Adjusted EBITDA represents the profit before tax before finance income, non-IFRS 16 finance costs, other gains/(losses),
depreciation of property, plant and equipment (but after IFRS 16 depreciation), amortisation, share-based payment charges
and adjusted items. Since the measure includes IFRS 16 lease depreciation and IFRS 16 lease finance cost, adjusted EBITDA
includes all elements of the Group’s leasing costs and therefore fully reflects the Group’s lease cost base. Adjusted EBITDA
margin is defined as adjusted EBITDA divided by revenue. These measures are frequently used by investors, securities analysts
and other interested parties to evaluate financial performance and compare performance of sector peers. Furthermore,
adjusted EBITDA is used to calculate the leverage and interest cover ratios for the purposes of the Group’s RCF covenants.
A reconciliation between continuing operations operating profit and adjusted EBITDA is presented below.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 177
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
| 2023 | 2022 | ||
| Notes | £’000 | £’000 | |
Operating profit | 9,790 | 13,840 | |
Add back: adjusted items | 4 | 4,466 | 69 |
Adjusted operating profit | 14,256 | 13,909 | |
Add back: Amortisation of non-acquired intangibles | 10 | 395 | 510 |
Add back: Amortisation of acquired intangibles | 10 | 1,396 | 1,041 |
| Add back: Depreciation of property, plant and equipment | 11 | 2,399 | 2,063 |
| Add back: Share-based payment charges | 3 | 1,036 | 931 |
| Deduct: Interest on IFRS 16 leases | 12 | (1,971) | (1,965) |
Adjusted EBITDA | 17,511 | 16,489 | |
Adjusted EBITDA margin | 11.9% | 11.8% |
1
2
3
1
Depreciation of IFRS 16 right-of-use assets is not added back so that adjusted EBITDA includes the non-financing element of property and vehicle leases.
2
Only underlying share-based payment charges are included in the reconciliation. As explained in Note 27, in 2022 the Group’s total net share-based
payment charge consisted of £0.6 million of adjusted item credits and £0.9 million of underlying charges.
3
Interest on IFRS 16 leases is deducted so that adjusted EBITDA includes the financing cost of property and vehicle leases.
c) Adjusted operating profit and adjusted operating profit margin
Adjusted operating profit represents the profit before tax for the period before finance income, finance cost, other gains/
(losses) and adjusted items (defined within Note 1.20). This measure is reported to the Board for the purpose of resource
allocation and assessment of segment performance. The closest equivalent IFRS measure to adjusted operating profit is profit
before tax.
Adjusted operating profit margin is defined as adjusted operating profit divided by revenue. This APM is a key performance
indicator of the Group and is used to measure the delivery of the Group’s strategic priorities.
Refer to Note 2 for a reconciliation between profit before tax and adjusted operating profit and for the inputs used to derive
adjusted operating profit margin.
d) Adjusted profit before tax
Adjusted profit before tax represents profit before tax before adjusted items and provides a view of the underlying profit before
tax and aids comparability of performance from one period to another. A reconciliation between profit before tax and adjusted
profit before tax is presented below.
| 2023 | 2022 | ||
| Notes | £’000 | £’000 | |
Profit before tax | 7,894 | 11,939 | |
Add back: adjusted items | 4 | 4,466 | 69 |
Adjusted profit before tax | 12,360 | 12,008 |
e) Adjusted earnings per share
Adjusted earnings per share is defined as earnings per share excluding adjusted items.
The measure is derived by dividing profit after tax, adjusted for post-tax adjusted items, by the weighted average number of
ordinary shares in issue during the financial period, excluding own shares held. This APM is a measure of management’s view of
the Group’s underlying earnings per share.
The closest equivalent IFRS measure is earnings per share. Refer to Note 9 for a reconciliation between earnings per share and
adjusted earnings per share.
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023178
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
f) Net free cash flow
Net free cash flow is defined as net cash from operating activities less repayment of IFRS 16 lease liabilities and net cash
used in investing activities, excluding the acquisition of subsidiaries (net of any cash acquired), divestments and purchase of
investments. This measure is used to monitor cash generation. A reconciliation between net cash from operating activities
and net free cash flow is presented below.
| 2023 | 2022 | |
| £’000 | £’000 | |
Net cash from operating activities | 15,672 | 23,932 |
Less: Repayment of IFRS 16 lease liabilities | (12,525) | (12,686) |
Net cash from operating activities, after repayment of IFRS 16 lease liabilities | 3,147 | 11,246 |
| Investing activities: | ||
Interest received | 381 | 137 |
Proceeds on disposal of property, plant and equipment | – | 53 |
Purchases of property, plant and equipment | (2,121) | (2,953) |
Purchases of intangibles | (1,495) | (755) |
Net cash used in investing activities | (3,235) | (3,518) |
Net free cash flow | (88) | 7,728 |
g) Net (debt)/cash
Net (debt)/cash is defined as cash and cash equivalents less external borrowings and excludes IFRS 16 lease liabilities.
The measure is monitored internally for the purposes of assessing the availability of capital and balance sheet strength.
A reconciliation of the measure is presented below.
| 2023 | 2022 | |
| £’000 | £’000 | |
Cash and cash equivalents | 4,989 | 12,027 |
Less: External borrowings | (11,780) | – |
Net (debt)/cash | (6,791) | 12,027 |
h) Other performance measure definitions
Definitions of other performance measures presented in the Group’s Annual Report and Accounts are summarised below.
Volumes
• Sales volumes: Total number of property sales transactions which have exchanged during the period.
• Lettings volumes: Total of the number of long and short lets entered into by tenants and the number of renewals
agreed between tenants and landlords during the period.
• Financial Services volumes: Total number of mortgages arranged during the period (purchase and refinance units).
Revenue per transaction
• Revenue per Sales transaction: Sales revenue during the period divided by Sales volumes during the period.
• Revenue per Lettings transaction: Lettings revenue during the period divided Lettings volumes during the period.
• Revenue per Financial Services transaction: Financial Services revenue during the period divided by Financial Services
volumes during the period.
29. EVENTS AFTER THE REPORTING PERIOD
There are no post balance sheet events to report.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 179
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Notes
2023
£’000
2022
£’000
Non-current assets
Investment in subsidiaries 32 39,238 38,354
Other receivables 33 16,557 –
Deferred tax asset 113 38
55,908 38,392
Current assets
Trade and other receivables 34 25,184 40,094
Cash and cash equivalents 3 1,999
25,187 42,093
Current liabilities
Trade and other payables 35 (3,981) (11,451)
Borrowings 18 (11,642) –
(15,623) (11,451)
Net current assets 9,564 30,642
Net assets 65,472 69,034
Equity
Share capital 21 3,301 3,301
Merger reserve 36 20,568 20,568
Other reserves 36 2,653 2,653
Own shares reserve 23 (12,092) (10,993)
Retained earnings 51,042 53,505
Equity attributable to owners of the Company 65,472 69,034
The Company reported a loss for the financial year ended 31 December 2023 of £0.8 million (2022: profit of £3.5 million).
The financial statements of Foxtons Group plc, registered number 07108742, were approved by the Board of Directors on 4 March 2024.
Signed on behalf of the Board of Directors
Chris Hough
Chief Financial Officer
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31DECEMBER2023
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023180
Notes
Share
capital
£’000
Own
shares
reserve
£’000
Merger
reserve
£’000
Other
reserves
£’000
Retained
earnings
£’000
Total
equity
£’000
Balance at 1 January 2023 3,301 (10,993) 20,568 2,653 53,505 69,034
Loss and total comprehensive loss
for the year
– – – – (761) (761)
Dividends 8 – – – – (2,725) (2,725)
Own shares acquired in the period 23 – (1,112) – – – (1,112)
Credit to equity for share-based payments – – – – 152 152
Capital contribution given relating to
share-based payments
– – – – 884 884
Settlement of share incentive plan – 13 – – (13) –
Balance at 31 December 2023 3,301 (12,092) 20,568 2,653 51,042 65,472
Notes
Share
capital
£’000
Own
shares
reserve
£’000
Merger
reserve
£’000
Other
reserves
£’000
Retained
earnings
£’000
Total
equity
£’000
Balance at 1 January 2021 3,301 (6,059) 20,568 2,653 51,349 71,812
Profit and total comprehensive income
for the year
– – – – 3,480 3,480
Dividends 8 – – – – (1,487) (1,487)
Own shares acquired in the period 23 – (4,941) – – – (4,941)
Credit to equity for share-based payments – – – – 82 82
Capital contribution given relating to share-
based payments
– – – – 88 88
Settlement of share incentive plan – 7 – – (7) –
Balance at 31 December 2022 3,301 (10,993) 20,568 2,653 53,505 69,034
At 31 December 2023, retained earnings were fully distributable.
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31DECEMBER2023
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 181
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
30. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied in preparing the financial statements for the years ended 31 December 2022
and 2023. The principal accounting policies adopted are the same as those set out in Note 1 to the consolidated financial statements
except as noted below.
Basis of preparation
The Company’s financial statements are prepared in accordance with the Companies Act 2006 and FRS 101 Reduced Disclosure
Framework as issued by the Financial Reporting Council. The 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.
As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to
share-based payments, financial instruments, compensation of key management personnel, capital management, presentation of a
cash flow statement, standards not yet effective and related party transactions.
Investments in subsidiary companies
Investments in subsidiaries are recognised at cost less provisions for impairment.
Going concern
The Directors have a reasonable expectation that the Company has adequate resources to continue in operation for a period of at
least 12 months from the date of approval of the financial statements. The assessment has taken into consideration the Company’s
financial position, liquidity requirements and reasonably possible changes in performance and outlook. Accordingly, the going
concern basis has been adopted in preparing the financial statements. Refer to Note 1.7 for a full description of the Directors’
considerations made in respect to the Group’s going concern assessment.
31. LOSS/PROFIT FOR THE YEAR
As permitted by Section 408 of the Companies Act 2006, the Company has elected not to present its own income statement for the
financial year. The Company’s loss for the year was £0.8 million (2022: profit of £3.5 million).
The Company has two employees at 31 December 2023 (2022: two).
The auditor’s remuneration for audit and other services is disclosed in Note 3 to the consolidated financial statements.
32. INVESTMENT IN SUBSIDIARY UNDERTAKINGS
Investments in subsidiary undertakings were as follows:
£’000
At 31 December 2021 38,266
Capital contribution arising from share-based payments 88
At 31 December 2022 38,354
Capital contribution arising from share-based payments 884
At 31 December 2023 39,238
Investments in subsidiaries are stated at cost, less any provision for impairment.
The subsidiary undertakings, all of which are wholly owned and included in the consolidated accounts, are shown in Note 15 of the
consolidated financial statements.
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023182
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
33. OTHER RECEIVABLES
Amounts falling due after one year:
2023
£’000
2022
£’000
Amounts owed by subsidiary undertakings 16,557 –
16,557 –
The loan was extended effective as of 27 February 2023 and matures at the end of a two-year period. The facility incurs interest at
1.5% per annum above base rate of the Bank of England.
34. TRADE AND OTHER RECEIVABLES
Amounts falling due within one year:
2023
£’000
2022
£’000
Amounts owed by subsidiary undertakings 25,179 40,023
Prepayments and accrued income 5 71
25,184 40,094
Amounts owed by subsidiary undertakings are unsecured, interest free and repayable on demand except the loan receivable of
£16.6 million extended effective as of 27 February 2023 (refer to Note 33).
35. TRADE AND OTHER PAYABLES
Amounts falling due within one year:
2023
£’000
2022
£’000
Amounts owed to subsidiary undertakings (2,782) (10,034)
Accruals (1,199) (1,417)
(3,981) (11,451)
Amounts owed to subsidiary undertakings are unsecured, interest free and repayable on demand.
36. MERGER RESERVE AND OTHER RESERVES
Balance at 1 January and 31 December:
2023
£’000
2022
£’000
Merger reserve 20,568 20,568
Other capital reserve 2,582 2,582
Capital redemption reserve 71 71
23,221 23,221
Prior to the Company’s initial public offering, a ratchet mechanism reduced the number of shares in issue resulting in a reduction in
share capital and transfer to the other capital reserve.
ANNUAL REPORT AND ACCOUNTS 2023 FOXTONS GROUP PLC 183
CORPORATE GOVERNANCE REPORTSTRATEGIC REPORT FINANCIAL STATEMENTS
Company registration number
07108742
Registered and head office
Foxtons Group plc, Building One, Chiswick Park, 566 Chiswick High Road, London W4 5BE
2024 Financial calendar
2023 financial year end 31 December 2023
Year end trading update 25 January 2024
Preliminary announcement 5 March 2024
Publish Annual Report and Accounts March 2024
First quarter trading update 18 April 2024
Annual General Meeting 7 May 2024
Interim period end 30 June 2024
Announcement of interim results 30 July 2024
Third quarter trading update 24 October 2024
Corporate website
You can access the corporate website at www.foxtonsgroup.co.uk. The Foxtons Group plc website provides useful information including annual
and half year reports, results announcements and presentations, share price data and financial news.
Shareholder enquires
For shareholder enquiries please contact our Registrars, Link Group. For general enquiries please call Link Group’s Customer Support Centre on:
0371 664 0300 (lines are open between 09:00 – 17:30, Monday to Friday excluding public holidays in England and Wales), or alternatively
email: shareholderenquiries@linkgroup.co.uk.
Electronic communications
Help us to save paper and get your shareholder information quickly and securely by signing up to receive your shareholder communications by
email. To register for electronic communications, visit www.foxtonsshares.co.uk. Please note, you will need your investor code, which can be
found on your share certificate or your dividend tax voucher.
Useful contacts
Company secretary
Link Company Matters Limited
6th Floor
65 Gresham Street
London
EC2V 7NQ
Registrar
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Legal adviser
Dickson Minto
Broadgate Tower
20 Primrose Street
London
EC2A 2EW
Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Stockbrokers
Deutsche Numis
45 Gresham Street,
London
EC2V 7BF
Singer Capital Markets
1 Bartholomew Lane
London
EC2N 2AX
Financial PR adviser
TB Cardew
29 Lincoln’s Inn Fields
London
WC2A 3EG
Financial adviser
Rothschild & Co
New Court, St Swithin's Lane
London
EC4N 8AL
Principal bankers
Barclays Bank plc
Churchill Place
Canary Wharf
London
E14 5HP
INFORMATION FOR SHAREHOLDERS
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023184
This report is printed on paper certified in accordance with the FSC® (Forest Stewardship Council®)
and is recyclable and acid-free.
Pureprint Ltd is FSC certified and ISO 14001 certified showing that it is committed to all round
excellence and improving environmental performance is an important part of this strategy.
Pureprint Ltd aims to reduce at source the effect its operations have on the environment and is
committed to continual improvement, prevention of pollution and compliance with any legislation
or industry standards.
Pureprint Ltd is a Carbon / Neutral® Printing Company.
Designed and produced by MAGEE
www.magee.co.uk
FOXTONS GROUP PLC
Building One
Chiswick Park
566 Chiswick High Road
London W4 5BE
FOXTONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023