interestrateripoff Posted August 25, 2013 Share Posted August 25, 2013 http://www.theguardian.com/business/2013/aug/25/foxtons-estate-agent-stock-market Private equity owners expected to announce intention to float chain on stock exchange for up to £500mFoxtons bosses are in line for a £100m windfall as the notoriously aggressive estate agent prepares to float on the stock market. The chain, famous for its pushy salespeople and eyecatching fleet of almost 1,000 decorated Mini Coopers, is expected to announce its intention to float in a listing valuing the company at £400m-500m on Tuesday. Bosses could collect up to £100m from the near-20% stake they hold in the company. The chief executive, Michael Brown, a former Slaughter and May lawyer who collects pay and benefits of £1.3m a year from Foxtons, will be the largest single beneficiary after increasing his stake by beating a string of performance targets. It will be the second time Foxtons has made its bosses millionaires. Jon Hunt, who founded the chain in a former pasta bar in Notting Hill in 1981, sold the business to the private equity firm BC Partners for £360m in May 2007 just months before the credit crunch sent property prices into freefall. Hunt is now worth £925m, according to the Sunday Times Rich List, and owns a mansion on Kensington Palace Gardens, known as "Billionaires' Row", complete with a car museum for his collection of vintage Ferraris. So anyone on here planning on buying shares, you can't go wrong with property! Quote Link to comment Share on other sites More sharing options...
@contradevian Posted August 25, 2013 Share Posted August 25, 2013 http://www.theguardi...nt-stock-market So anyone on here planning on buying shares, you can't go wrong with property! Last time it sold, the market crashed. I'm calling the top! Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted August 25, 2013 Share Posted August 25, 2013 Last time it sold, the market crashed. I'm calling the top! does sound a bit like someone trying to get out with their shirt in tact. the investment is not for me....im out. Quote Link to comment Share on other sites More sharing options...
TwoWolves Posted August 25, 2013 Share Posted August 25, 2013 Last time it sold, the market crashed. I'm calling the top! Exactly! Proof if ever there was that the current bounce is fake and unstable. Quote Link to comment Share on other sites More sharing options...
gadget Posted August 25, 2013 Share Posted August 25, 2013 Last time it sold, the market crashed. I'm calling the top! Yup, definite top of the market signal. Cheered me up no end.... Quote Link to comment Share on other sites More sharing options...
thecrashingisles Posted August 25, 2013 Share Posted August 25, 2013 To be fair Foxtons have really innovated and created huge value for UK Plc. House price delusioneering is now a major export industry. Quote Link to comment Share on other sites More sharing options...
chronyx Posted August 25, 2013 Share Posted August 25, 2013 To be fair Foxtons have really innovated and created huge value for UK Plc. House price delusioneering is now a major export industry. Many a true word... It would NOT surprise me at all to hear a politician proudly proclaiming that the New British Economy was catching on overseas Quote Link to comment Share on other sites More sharing options...
billybong Posted August 25, 2013 Share Posted August 25, 2013 (edited) Estate agents are ten a penny and common as muck these days sprouting up like weeds all over the place - and they want £500 million for one of them. Incredible - you could start up thousands for that amount. Edited August 26, 2013 by billybong Quote Link to comment Share on other sites More sharing options...
GinAndPlatonic Posted August 26, 2013 Share Posted August 26, 2013 Nice find....you couldn`t have a better indicator of what is about to happen.?!...watch this space. Quote Link to comment Share on other sites More sharing options...
@contradevian Posted August 26, 2013 Share Posted August 26, 2013 Estate agents are ten a penny and common as muck these days sprouting up like weeds all over the place - and they want £500 million for one of them. Incredible - you could start up thousands for that amount. Yeh a Martin & C*** franchise is only £80k Cheap Matallan suite and hair gel extra http://www.whichfranchise.com/franchisorPage.cfm?CompanyID=991 Quote Link to comment Share on other sites More sharing options...
Georgia O'Keeffe Posted August 26, 2013 Share Posted August 26, 2013 (edited) . Edited August 26, 2013 by Maria Gorski Quote Link to comment Share on other sites More sharing options...
mjhodgson Posted August 26, 2013 Share Posted August 26, 2013 I think RBS should buy it. Ideal investment for them.... Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted August 26, 2013 Share Posted August 26, 2013 from the article In recent months, the company is said to have started to offer to sell homes without taking a fee to boost its books before the flotation. The tactic has been branded "suicide bidding" by other agents. I would be interested to know how they arrived at the 400mn valuation. I've lifted the above from the article. I do not trust estate agents. Quote Link to comment Share on other sites More sharing options...
Pro-crastinator Posted August 26, 2013 Share Posted August 26, 2013 Interesting to see so many here predicting a bubble burst off of this news. Not sure how to take it myself but naturally a business sells when they think things are going to go down. Or could just be thinking there are faster ways to make more money in other industries given the tighter margins they're working with. Makes me think to hold on to Jan 2014 to throw my pennies in the ring of home ownership... maybe a short term rent would be better after all. Quote Link to comment Share on other sites More sharing options...
happy_renting Posted August 26, 2013 Share Posted August 26, 2013 from the article I would be interested to know how they arrived at the 400mn valuation. I've lifted the above from the article. I do not trust estate agents. It's based on £450m with £50m cashback. Quote Link to comment Share on other sites More sharing options...
happy_renting Posted August 26, 2013 Share Posted August 26, 2013 Interesting to see so many here predicting a bubble burst off of this news. Not sure how to take it myself but naturally a business sells when they think things are going to go down. Or could just be thinking there are faster ways to make more money in other industries given the tighter margins they're working with. Makes me think to hold on to Jan 2014 to throw my pennies in the ring of home ownership... maybe a short term rent would be better after all. And for every seller there is a buyer thinking the opposite, so don't read too much into it. Just read what Foxtons think will happen into it. Quote Link to comment Share on other sites More sharing options...
billybong Posted August 27, 2013 Share Posted August 27, 2013 from the article I would be interested to know how they arrived at the 400mn valuation. I've lifted the above from the article. I do not trust estate agents. Apparently they have 42 branches so that would be getting on for about £10 million per branch. Seems a lot even for London and nearby. Maybe some overseas oligarch is going to snap them up. Quote Link to comment Share on other sites More sharing options...
MongerOfDoom Posted August 27, 2013 Share Posted August 27, 2013 http://www.theguardi...nt-stock-market So anyone on here planning on buying shares, you can't go wrong with property! What could possibly go wrong? http://www.bbc.co.uk/news/business-23839449 Quote Link to comment Share on other sites More sharing options...
THE BALD MAN Posted August 27, 2013 Share Posted August 27, 2013 What could possibly go wrong? http://www.bbc.co.uk/news/business-23839449 The usual will happen...the management will make money.the banks and advisors will make money ..then in a couple of years the remaining investors will take a bath... Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted September 20, 2013 Share Posted September 20, 2013 Bbc has an article for the valuation at £649mn ahead of float. Yes as other poster said they have 40 branches. It might be a laugh to go through the numbers later. The investors must be expecting them to sell bucket loads of high priced London properties? Quote Link to comment Share on other sites More sharing options...
koala_bear Posted September 20, 2013 Share Posted September 20, 2013 (edited) The Foxtons near me recently leafleted offering to sell for 0% commission - usually they only do this for the first 3months with new branches, but my local one is one of their oldest branches so are Foxtons: a ) nuts b ) suicidal c ) trying to put the other Local EAs out of business (in this case Winkworth, KFH, Hamptons...) d ) fiddle short term metrics fro the float e ) all of the above and more Foxtons valuation metric £649m/42 branches = £15.4m per branch Assuming 2.5% sole agency fees (and ignoring costs) they would have to sell £616m of property per branch to recover (the investment) Also total values of property sold would per equivalent to 1/56th of ALL the mortgage debt in the UK (inc MEWing)!!! How quick do investors want to get a return on their investment? i.e. does this work for few years (pay dividends) then fall apart??? Edited September 20, 2013 by koala_bear Quote Link to comment Share on other sites More sharing options...
blackgoose Posted September 20, 2013 Share Posted September 20, 2013 According to companies house, profits since 2005: 8 million, 16M, 16M, -1.3M, 12M, 25M, 25M, 23M. So, if we call that, 20 million profit per year average across the cycle. A fair valuation could be say 13 times earnings, which would value Foxtons at 260 million. Whoever is buying Foxtons at 650 million is going to be very disappointed, unless they a lot of further growth. Quote Link to comment Share on other sites More sharing options...
koala_bear Posted September 20, 2013 Share Posted September 20, 2013 According to companies house, profits since 2005: 8 million, 16M, 16M, -1.3M, 12M, 25M, 25M, 23M. So, if we call that, 20 million profit per year average across the cycle. A fair valuation could be say 13 times earnings, which would value Foxtons at 260 million. Whoever is buying Foxtons at 650 million is going to be very disappointed, unless they a lot of further growth. Agreed - but the potential for highly profitable growth isn't there. Strong parallels with Ocado i.e. large market share at the top of the high earners - the very large number of lower earners just aren't and won't be as profitable. If you go for the 13 times earning metric than they would need to grow to a double digit % share of UK property sales - the selling equivalent to Nationwide lending share??? Quote Link to comment Share on other sites More sharing options...
slacker Posted September 20, 2013 Share Posted September 20, 2013 Foxtons will profit - collapse or not. They just don't want stagnation. Quote Link to comment Share on other sites More sharing options...
manchester50 Posted September 20, 2013 Share Posted September 20, 2013 Not something I'll be buying into - the valuation looks high. I have some money in companies related to property including builders, as a (relatively minor) hedge against the fact I don't own a house. The only part of my investments which depress me when they go up... Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.