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Ctd....
Affordability will be consigned to just a selected few in the UK and like Germany the country will become a nation of renters !
This is also a good video clip from last year :-
https://propertyindustryeye.com/private-equity-firms-target-dealmaking-opportunities-in-the-estate-agency-sector/#:~:text=Private%20equity%20firms%20are%20increasingly%20targeting%20estate%20and,to%20Jon%20Cooke%2C%20CEO%20of%20nurtur.group%2C%20formerly%20epropservices.
I mentioned my meeting up with some old friends last week and quelle surprise the main topic of conversation was money, retirement and pension funds, with the state of the property market being the main focus. I guess not too dissimilar with many group and household conversations up and down the country presently.
We all agreed that the BOE and the government are purposely colluding to make property ownership a pipe dream for the masses in the not too distant future and 'controlled' rents by the banks and government will be the norm in a few years time as they together with US hedge Funds/Private Equity groups will become the biggest landlords in the country.
So what does this mean for estate agents ?
Well, you will have noticed that in the last six months UK property sales have fallen off a cliff and this was further bourn out with the statement and results that the Company Savills published last week and I have said before on here, property sales is no longer the main driver now or in the future of a successful estate agent's business.
To have a successful Estate Agent business you will need a growing rental division as well as other areas of the business aside from sales and as per many on-line tweets, linkedin posts etc. Foxtons are ticking all the boxes and seem to be making money hand over fist in all areas of their business i.e. Alexander Hall, auction sales, rental book growth etc.
Over 70% of income generated in H1 for Foxtons was down to their rental division with this percentage increasing year on year and expect this figure to increase nearer the 80% mark come the end of the year.
I mentioned my meeting with friends last week and amongst many stories about the troubles of the economy and the BS that the government and BOE are telling the masses, one of the group mentioned that his son has decided to sell up after being a landlord of ten properties. He's decided to get out quick whilst still in profit and where is he going to market his portfolio of properties, yes the Auctions !!!
One of his rentals has seen the annual service charge go from £2500 in 2020 to £7000 this year alone, this being on top of his 'buy-to-let' finance exposure to increasing borrowing rates.
He has a few rentals in Canary Wharf and was expecting to see a flood of apartments come to the market this week, he wasn't disappointed. Over 100 apartments were newly listed on Friday alone on the Zoopla website :-
https://www.zoopla.co.uk/for-sale/property/london/e14/poplar-isle-of-dogs-millwall/
There now over 2000 apartments for sale in Canary Wharf alone !
Come September when families return from their holidays, kids back to school, credit card bills arriving some two weeks later and the BOE raising rates yet again despite no-one spending money on the high street, expect a flood of more properties to hit Estate Agent's windows.
Affordability will be consigned to just a selected few in the UK and like Germany the country will bec
So, Foxtons may be returning to Hong Kong as well as having its London presence. Must have escaped Mr. Gittins memory when he compiled the interims !
https://cy.linkedin.com/posts/foxtons_foxtons-foxtonsasiapacific-hongkong-activity-7042526968973533185-nmh7
Yep, even more evidence to support my case that Mr. Gittins has been very economical with the truth and Foxtons are doing a lot better than we are led to believe. There are countless linkedin posts with regards to the company posted by some of its staff, each one just as bullish as the next as I found out last night.
The race to recruit extra staff is also on, look at this link 63 job vacancies currently at Foxtons across ALL divisions, despite Mr Gittins telling us all that he was looking to streamline costs :-
https://uk.indeed.com/cmp/Foxtons
The more I look into this company and the dealings in the shares, the more I am convinced its deliberately being held back from the 40p level which I have mentioned a few times now.
There is book called 'Black Edge' written by Sheelah Kolhatkar written sometime ago now but well worth a read and in a nutshell its about how American Hedge Funds target Directors and CEOs of companies to get the 'inside' info before buying stock in Dark Pools as a prelude for stake building or bidding for a company, all perfectly legal of course in the eyes of American Law.
Has Mr. Gittins already been courted, I wonder ??
I am meeting with friends this week, we are a bunch of recently retirees and we all exchange investment ideas etc. as well as trying to put the world to right and one guy who worked as a VC still has many contacts in the industry, so I will put my findings as well as my thoughts to him this week.
Hopefully I can get more buyers of the stock over the next few weeks before everyone gets back from their Summer holidays and I will also subscribe to the Redditt site this week and put forward my thinking over there as well.
The more buyers of Foxtons stock we can generate the harder it will be for any potential bidder to succeed in any cheap offer for the company.
And if Mr. Gittins wants to continue to play down the fortunes of Foxtons to the city and the financial media then that's good for us, we'll be more than happy to buy stock at less than 40p.
5eights.
This is the Linkedin link from the Foxtons director in charge of auctions, Alex Isidro. Without quoting specific numbers It supports the belief that this arm of the business continues to grow every quarter, and they're keen to increase the resource behind it! :-
https://www.linkedin.com/posts/alexisidro93_property-auctions-broker-foxtons-activity-7092066093506162688-FIJQ?trk=public_profile_share_view
Thanks for the comments team and the respective replies.
Just another note about the Auctions team at Foxtons and their collaboration with BidX1 as I mentioned a few weeks back. As I said previously, nothing was mentioned in either the full year numbers in March nor the interims last month but the Foxton's website seems to be updated, here's an extract from the site about one of Foxtons Auction Sales team members :-
....'Ahmed started his career at Foxtons in 2019 as a Move Consultant. He was a member of the South East division and was responsible for bringing stock to market in the Greenwich, Blackheath and Dulwich areas. Having learned his trade on a fast paced and dynamic sales floor, he was given the opportunity to join the newly established Foxtons Auction team. In the years Ahmed has spent with Auctions, the department has gone from strength to strength - they had a record year in 2022, selling over 142 properties.'
Yep, 'selling 142 properties' in 2022 and remember my post about the Foxton's Auction reaching a 'milestone' in June this year ??
Here's the link to Foxtons Auctions and to add this is not solely London listings as the company states , 'Through our partnership with BidX1, the Foxtons Auction team have helped homeowners across the country fulfil their property aspirations, from detached family homes in Liverpool to luxury apartments in Chelsea.......'
https://www.foxtons.co.uk/auctions
I'll be doing more digging around later today !!
5eightsaccount
Great posts thanks.
I wonder why though, Gittins would want to hold back other than creating a buffer for himself in the FY forecast. At some point he needs to get the SP up and thats only going to be through good news so surely the sooner he can do that the better?
I find it quite comical how the SP seems to be tied to a piece of elastic which rebounds at 40p. MMs are trying hard to keep it there. For whoever who knows.
Thanks for taking the time to respond to me. It might not be crystal clear in the articles you have shared, but I’m sure the extra 35,000 new listings in June is for the London market overall….that’s not just Foxtons’ business. As you said, Foxtons lettings business seems to be stable at around 27,000 properties for let.
The sales business seems to be having a great time. Numbers under offer are higher than I’ve seen since I’ve been tracking this company. And numbers sstc and the highest they’ve been this year. So looking good. I guess the market is worried about the wider economic outlook
Just following up from yesterday and I'm looking into the 'working capital' expenditure figures that Gittins announced in the interims although to get a full and complete breakdown of the numbers will be extremely difficult as us shareholders are not privy to that sort of information sadly, no matter how hard we search !
The '£3.2m' returned to shareholders after just a 0.2p dividend announced will be a lot easier to decipher especially as there are just 320m shares odd in issue. Some £2.6m has allegedly been spent in share buybacks in the last six months according to these numbers, so that's around 7-8m shares would have been bought back in the last six months.
Just need to total the last six months of share buybacks announced in those RNS's , 7-8m shares bought back by the company ??
And finally, I mentioned the 27,000 rental clients on Foxtons books currently although this figure was challenged by the 4000 additional clients to last years numbers in June of this year and as per the Foxtons June rental newsletter, thus increasing the amount of rental clients to 31,000 at the very least.
Now take a look at this article published on the Property notify website, it states 'June 2023 saw almost 35,500 new listings which was over 4000 listings more than last June.......'
Yes, 35,500 !!
And whilst I'm very sceptical of many news publications on-line especially the financial ones, I tend to agree here, especially more so now as rental clients are now signing up for term extensions on existing rental agreements and 18-24 months are now more popular than short-term tenancies.
Here's the article in full and puts more on the bones to my thinking that Gittins is holding back with regards to the current performance of Foxtons and I will stand by my prediction that this will be Foxton's best ever year since they came back to the market in 2013 :-
https://www.propertynotify.co.uk/news/foxtons-lettings-market-index-applicant-demand-up-19-in-june/
Indeed, a lot better !
Here's a few pointers, in the linkedin article which I previously posted there must be around £1m worth of cars being awarded to staff (32 in total), add to that taxes, fleet insurance etc. This being on top of the 350 Mini Coopers that were awarded to staff at the beginning of the year.
Then scroll further down where it highlights the current success of the Auctions Division at Foxtons and it states .......
'Foxtons has a variety of ways to support the property owners of London to get the right deal done. Our modern Auctions Team are an increasingly popular choice for homeowners and a valued part of Foxtons, so we were delighted to celebrate an important milestone with them yesterday. Congratulations team, there’s still over five months of 2023 to go so we're excited to see how many more clients you can help this year'
What is that Milestone and why wasn't there any mention of the Auction sales in the interim statement ??
And in the interim report of last year, Foxtons reported approx. 27,000 rental clients were on their books and this figure was more or less reported again last week.
But now take a look at the latest Lettings report published by Foxtons in June just last month :-
https://www.foxtons.co.uk/reports/lettings-report/lettings-market-report-june-2023
and in particular on page 2 where it states :-
'London saw over 4000 more new listings than it did last June. However, demand is already on the rise - 19% on month in June- and August and September mark the traditional Summer peak.........'
We know Alexander Hall had its best ever month in June as well, again no mention of that either ??
And we also know that Foxtons generates the majority of its profits in cash, so how can it be in the red as per the latest interims and that its £2m in debt ??
The company puts it down to 'restructuring' and in addition once again Gittins highlights the uncertainty of the housing market going forward for the rest of the year but as I have mentioned before rentals will be the primary driver of profits for Foxtons for the future and quelle surprise just look what Gittins had to say back in January :-
'Foxtons has traditionally derived the bulk of its income from selling properties. But Gittins told the FT that the way to boost profits from the £5.6m before tax posted last year was to expand in letting sector.
“Our model is very much expansion through acquisition: there are 3,600 independent agents operating within the M25 who all have lettings incomes and clients,” he said.
The full article :-
https://propertyindustryeye.com/new-fleet-of-mini-cooper-cars-to-help-restore-pride-at-foxtons-says-guy-gittins/
I will look into the acquisition spend later today.
Hope this helps.
Could you elaborate a bit about how you think the wool is being pulled over our eyes? You think the business is performing a Lot better than the results showed?
I had another look at the interims over the weekend together with the statement put out by Guy Gittins and compared it with his narrative at the reporting of the final year figures announced in March and I can't help thinking that he down played the interims somewhat.
And just browsing through some of the linkedin posts over the last few days, I came across this. I know Foxtons gets a bad rap about their mini clubmans whizzing around London but scroll down and play the video in this link.
I think Mr Gittins is trying to pull the wool over our eyes :-
https://www.linkedin.com/posts/foxtons_from-all-at-foxtons-we-hope-you-have-a-lovely-activity-6880459685858693120-zuYL
Ah yes, 8x the volume of yesterday the day of the interims and 635,000 in the U/T of today to disguise all of today's trades.
Nothing to see here 😉
Usually I discard cries of manipulation, for every buyer there is a seller and vice versa, but, it's happening here. Look a the also trading sells as soon as there is the slightest move up. It's definetaly been held down. Somethings going on!
*10m a year interest costs, obvs
Certainly seems their is an effort to stop it from breaking through 40p which irratatingly is my b/e point.
Wouldn't be surprised at all to see a bid here in the coming months as the mortgage drama starts to abate. Looks cheap as chips on a forward PE basis and only going to look cheaper as time progresses.
At todays price an offer of 50% premium would be a take out 180m. lets say the buyer has to borrow 100 at 10% is 10m a year for a business that will soon be earning 30m or 20m net. On a PE of 15x gives you a value of 300m makeing you a return of 120m on your initial investment of 80.
PE?
120m market cap, no debt so they can load up, 20m profit per year easily next year, 30m in the next couple of years. Sounds like a PE wet dream...
Yep, another decent set of numbers reported in the interims this morning, here's the opening extract from a story published on the Negotiator website earlier ;-
'.........The bad old days of disastrous results for Foxtons are behind the company as both a super-hot lettings market and a revived sales team have pushed revenues up by 9% and profits by 10%, its latest results show.
Revenue increased by £5 million to £70 million year-on-year while operating profit increased by £600,000 to £6.8 million....'
And the article in full :-
https://thenegotiator.co.uk/foxtons-finally-feels-the-gittins-gold-as-profits-surge-10/
And again just like the reporting of those excellent full year numbers back in March, don't expect to see the stock go on a massive run upwards.
A lid at 40p or thereabouts will be the market price going forward that is until those waiting in the wings and keeping an eye on the fortunes of Foxtons finally decide to declare their hands.
Keep adding on those manipulated market dips !!!
Mr Market gives it a complete meh...
Great rns today hoping for an uplift
Not bad considering the current UK mess.
Looks to me like a £15m PBT on a FY basis and close to 5p eps. So even at a miserly 10x gets us to 50p and on a more positive forward outlook at ye would get you to 75p.
Just a follow up to Redwine's last post, here's an extract from Landlord Today on-line with regards to Foxtons :-
'.......June 2023 saw almost 35,500 new listings, which was over 4,000 listings more than last June, according to Foxtons’ analysis of Zoopla data. Over 20 per cent of new instructions, year to date, were within Westminster and Tower Hamlets.'
The article in full :-
https://www.landlordtoday.co.uk/breaking-news/2023/7/foxtons-figures-show-rents-and-demand-dip-slightly-in-london
Average asking rents for new tenants in London shot up to a new record in the second quarter as rampant demand and higher mortgage rates prompted landlords to hike prices. Tenants in the capital are now being asked to pay an average of £2,567 ($3,310) a month — up 13.7% from a year ago and by 28% from the same time in 2019 before the pandemic.
Remember these guys, well quite a few market commentators have either forgotten about these lot or maybe just haven't bothered to look into their latest offerings of late.
Over three years ago Foxtons announced a tie-up with this on-line auction company and whilst it helped sales initially albeit slightly there wasn't a great deal of coverage especially as the property market was pretty flat back then, interest rates were near rock bottom and it was only the first-time buyers were keen in the market hoping to take their first step onto the proverbial property ladder.
Here was the announcement :-
https://thenegotiator.co.uk/foxtons-online-property-auctions-bidx1/
Now fast forward to July 2023, there are currently over 70 properties listed for the next auction later this month so far, last month around 27 properties were listed with over half of them sold. And these properties are not your 'rack and ruin' properties of old that some people think of when you talk about property auctions and hoping to bag a bargain, these are 'quality' properties that you would normally see in an estate agents window.
Take a look :-
https://www.foxtons.co.uk/properties-for-auction/london#map=51.49504090104112,-0.15784800000000931,11|layers=|location_ids=1
Okay, so what does this tell us ?
Well firstly, there are now sellers out there that want a quick exit and are prepared to pay the hefty auction commissions rather than waiting for potential buyers trickling in one by one over the Summer months which is always a very quiet time for the market in general but also want out before the inevitable downturn come the Autumn and Winter months and the inevitable rush which we will see once people are back from their holidays.
Secondly, the amount of properties going to auction has more than tripled since last month and judging by some of the pictures on the Foxtons website, there are quite a few 'empty' looking properties being advertised to sell, which to me suggest that they could have been rental properties as I mentioned a few weeks back. I.e. Landlords looking to exit the rental market !
Again all good for Foxtons.
And as the Summer months are here once again there will be a new flock of overseas students looking for rental accommodation whilst they study in London from September/October onwards, expect more good news from Foxtons on the rental front as well.
Its ching, ching all the way !!
That was the old regime’s last gasp of a master plan, and got quietly dropped. You’re right tho, this is no longer a growth stock