Investors in estate agent group Foxtons have been vocal in seeking board-level changes to address issues with a long-term share price decline and concerns around executive performance.
Hosking Partners, which holds 11 per cent of the company’s shares, demanded “radical change” to the board in the summer and 40 per cent of shareholders voted against approval of its remuneration report at its AGM in April.
A one-year rise in the share price of 30 per cent masks long-term decline. In the halcyon pre-lockdown days of February 2020 shares were at 94p, while in 2017 they traded hands for over 100p.
They are now down at the 50p mark and haven’t breached 75p in 2021 despite the chancellor’s stamp duty holiday boosting the market. Investor dissatisfaction was compounded when chief executive Nic Budden was awarded a bonus of almost £1m in cash and shares.
Shareholders hope the appointment of Nigel Rich as chair will be a turning point. Rich, who replaces Ian Barlow on Friday, is a former chair of peer Hamptons International. He has bought 300,000 Foxton shares at an aggregate price of 52.41p per share. There is no disclosed internal shareholding guidance for the chair but the shareholdings of the chief executive, chief operating officer and chief financial officer are currently below the remuneration committee’s expectations.
Foxtons has high operating costs due to its physical presence on UK high streets. It is at risk of being left behind by online platforms such as Rightmove, which have much lower cost bases. In its latest interim results, Foxtons recorded an operating margin of 7 per cent against Rightmove’s 76 per cent.
Law firms are discovering the value of flexible working. The pandemic showed many city lawyers that by discarding the culture of presenteeism they can be more engaged with their family while still delivering the same quality of service to clients.
This was a revelation for many, but not for Keystone Law chief executive James Knight. His firm has operated as a decentralised homeworking operation since its inception.
All of its lawyers work from home and none are paid a fixed salary. Instead, they are responsible for bringing in their own work and then pay Keystone 25 per cent of their billings. In exchange, the lawyers get to use the Keystone office in London for meetings and get admin support from its central teams.
This structure makes the business easily scalable because it has low fixed salary costs and a small property footprint. The firm’s interim results, published last week, show the strength of its performance during the pandemic. In the six months to July 31, revenue was up 37.6 per cent on the same period last year to £33.7m and its profit before tax jumped 118 per cent to £4.3m.
There were fears that the wider adoption of homeworking by the industry might make it harder for Keystone to recruit the best talent. However, Knight sees the switch as an opportunity for his business. “Other firms are unlikely to adopt flexible working fully and now lawyers have tasted it they will be more intrigued in the proposition we can offer,” he said. Keystone had 136 applicants in the first half of the year, 28 more than in the second half of 2020.
On September 20, Knight sold £1.64m worth of shares in the business. This leaves him with 28 per cent of the company after he also sold £9.45m of shares in May.
Spotting the appetite for homeworking before a pandemic forced it on the world has paid off.
