Foxtons has acquired two small lettings-focussed companies, both of them outside of London. 

The total for the purchases is £12.6m, of which £3.4m will be deferred pending the agencies hitting performance targets. 

One agency isHaslams, which operates from three branches and is primarily focussed on the commuter town of Reading, with additional coverage of the nearby towns of Wokingham and Crowthorne through its Michael Hardy brand.

The other is Imagine which also currently operates from three branches and is focussed on the commuter town of Watford and its surrounding areas.

A statement to shareholders by Foxtons says the acquisitions “reflect further progress against the strategy to acquire high quality, earnings accretive, lettings focused businesses, with synergistic growth opportunities which increase exposure to recurring lettings revenues (lettings revenue accounts for c.60% of total revenue for each acquisition).”

It says both the Reading and Watford markets are commuter towns with excellent transport links to London, with Reading forecast to become the UK’s fastest growing location by 2027.

Both acquisitions are the largest lettings and sales agents in their core markets and increase Foxtons branch footprint to 64 branches. 

The acquisitions will deliver a further 2,900 tenancies (Haslams: 1,700, Imagine: 1,200), increasing the size of Foxtons’ portfolio of tenancies by 10% to over 31,000 tenancies.

Haslams’ unaudited total revenue and operating profit for the 12 months ended 31 December 2023 was £6.5m and £0.8m respectively. Initial consideration for the acquisition, on a cash and debt free basis, is £7.6m, with £2.4m deferred and contingent on the delivery of performance targets.

Imagine’s unaudited total revenue and operating profit for the 12 months ended 31 March 2024 was £3.3m and £0.5m respectively. Initial consideration for the acquisition, on a cash and debt free basis, is £5.0m, with £1.0m deferred and contingent on the delivery of performance targets.

Both businesses are being bought from private individual shareholders.

Guy Gittins, Foxtons chief executive, says:“Our latest acquisitions add to our strong track record of identifying, acquiring, and integrating high quality lettings businesses to deliver attractive returns and are a key part of our strategy to deliver £25-30m adjusted operating profit in the medium term.

“We are delighted to have completed the acquisitions of Haslams and Imagine as we continue to pursue acquisitive lettings growth, to supplement our organic growth strategies. We have been impressed with the quality of both businesses which hold established leadership positions in their local markets and have built long-standing client relationships over many years, making them a great fit with Foxtons.

“Reading and Watford are new markets for Foxtons and reflects our confidence that the Foxtons Operating Platform, and in particular our technology, data and reach can unlock new growth opportunities in these new markets.”