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Good afternoon, and welcome to the Foxtons Group plc investor presentation. [Operator Instructions] The company may not be in a position to answer every question it received in the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand over to Guy Gittins, CEO. Good afternoon, sir.
Good afternoon, and thank you, everyone, for joining today's presentation. We're very excited to be able to explain about our journey and what we have ahead for us at Foxtons. I had the privilege of being able to say that I'm CEO of this business for the last 7 months, and it really has been a privilege to be able to come back and to join the business, where I actually started my career 20 years ago, and I [ family ] told that story to many started -- having started my career here, just as the business was really the original disruptor, the property market here in London.
And we've enjoyed the rise through the ranks is becoming the top salesperson and then running 1 of their largest origin the largest office in South Kensington. Really did define the rest of my career, just as Foxtons was really defining how London property would be operated for the next 20 years. And it's been a fantastic journey. And having come having left University, I came to London and have this wonderful experience for 4 or 5 years, where again, a huge amount of experience and really did understand from an operational standpoint, what made on so different to everybody else on the -- in the ground here in London. And during that journey, when I left Foxes my move team perhaps some experience working overseas through a property entrepreneurial bets. I worked with you [ Jermaine ] for 4 years as his sales director, selling mixed-use developments all across the Caribbean chain, which was an enormous benefit to my long-term career experience and also a time then to come back to London, where I worked at [ Sable], representing [indiscernible] Park in [indiscernible] Knightsbridge, where they were building most expensive development in the world. And then after that, I joined a business called Chesterton, originally starting as sales management and working my way up through the [indiscernible] at being the CEO of that business.
And actually, when I took over that business 4.5 years ago, Chesterson a very similar situation to Foxtons was 7 years ago where we actually -- there were a number of culture issues, the operational machine have had, I suppose, really not been optimized for delivering growth. And within that full year time frame, I took a business that was producing the loss shortly before I took it over to producing consecutive years of revenue and profit growth for the business, and I was proud to have left that business in a much better state from when we started -- an enormous privilege coming back to Foxtons. And I'll tell you a little bit more about that operational review as we get into the presentation. And as you can see, I'm also joined here by Chris Hough, our Chief Financial Operating Officer, and Chris has had a distinguished career not only here at Foxton's before becoming CFO was working for Deloitte as a director, but also companies ranked and Foxtons and having previously been the Director of Finance as well. So actually very privileged to be working along side. Chris has been a great help to me really understanding the business very, very quickly and helping me make some very strategic strong decisions early on and some of the results that we can share with you over the next few slides.
Thank you very much. Throughout this presentation, I hope that we can really highlights the opportunity that we have here with Foxtons and also share some of the genuine enthusiasm and excitement that we share for what the future looks like. And having returned back to this business to see these opportunities is really what is brought back and really I'm so excited about. And to give you an overview, if you've never heard of Foxtons if you don't really quite understand our operating model. Foxtons is a home service residential property agents operating across London -- and with plus 3 offices just outside of London going as far as [indiscernible]. Within that full service, we include lettings, we include sales and financial services through our financial services firm called Alexander [indiscernible], where we distribute mortgages using the leads that we create from the front offices sales. And then we obviously have the remortgaging business as well, which we don't -- noncyclical and recurring revenue for that part of the business. And then going up to the culture, our lettings business. This has transformed the business. And certainly, there's been a big move not only within the industry but certainly here at Foxtons for that change in focus moving from what was very, very heavily focused on being a sales machine -- and that sales revenue is a much larger part of group revenue, even just going back 6 or 7 years to today where we are proud to say that 62% of our revenue comes from this high-quality reoccuring revenue stream that we develop in lettings. And of course, because of the nature of lettings, not only is it high quality, but it's very, very sticky. And we often find that the life cycle of some of our lettings landlords is enormous. And the amount of value that we get both sites is very, very important is a very large part of our focus moving forward is to continue to turbocharge that group revenue in lettings so that we can compete to make the business much more resilient. And I think we only have to look of what's happened in the London market or in the global market coming out of the back of the pandemic. Our resilience within the business, but the resilience of that lettings income was incredible. And while I hate to want anything recession [indiscernible] pretty as good as and very this high-quality earnings that we're focused on. Lettings is a very manual process from where we almost 0.5 million tenants a year. We have to then register them. We have to carry out physical viewings. We don't want to be the great price. We then got a whole process that follows thereafter that previously has been very, very, very hands-on. And our medium-term focus now is to revolutionize that process and really digitalize that as much as we possibly can do, which is a very exciting journey, both within the industry particularly for Foxtons because we will be at the forefront of that with some of our met that we'll be bringing to market over the next 12 months.
Sales of of core sales is originally the cornerstone of Foxtons, it's what really we gained our reputation for delivering the best kind of results for sales to our clients when they were selling their properties. And really, we continue that march, but we have lost market share, particularly in sales over the last 7 years, which we'll share with you on a future slide. That represents 31% of our group revenue, and it's obviously very, very good cross-selling into lettings, what we sold an investment unit we can hand that over to letting a new long-term investment unit we're also obviously creating these financial service referrals, which feeds the [indiscernible] the whole business. We're approximate 1,250 employees. We are a growing business at the moment. We operate across 6 new offices. And as I've said, 3 of those are outside of London and then the rest are spread geographically across London, wherever we see volume and value opportunities and very much of a which is focused primarily on driving organic growth, particularly in the letting opportunity adding into that with acquisitions and then also growing that sticky revenue within our financial services, and we'll cover a little bit of that in the following slides. So highlights for 2022. It was a solid year of progress really. And we do identify significant unfulfilled potential within the group, but we are pleased that there has been continue to move forward with our project, albeit from a low base. But we do have absolute aspiration in the medium term of delivering this business back to circa GBP 25 million to GBP 30 million of operating profit. And I have asked what mediates -- we think that's within achievable within the next 4 years and then the spread of that operational target for profit really is depending upon what the sales market is doing, moving up and down, but we're absolutely building that reoccurring letting revenue to really underpin the business and make us very resilient moving into future markets. And our strategic priorities are absolutely focused on delivering this growth. And as I said numerous times on that lettings revenue and that lettings business for us. And I'm going to go into the next slide, which talks about the operational review, which is the key issues that we've identified talking about that rebuild. Before we do that, I'll hand over to Chris to talk about the numbers.
Yes. Thank you, Guy, and good afternoon, everyone. On Slide 6, I've set out some of the key financial metrics from the 2022 resource. It will provide some context for today's presentation and also demonstrate, as Guy mentioned, the financial progress we have been making. So starting with revenue in 2022, grew by GBP 13.8 million. That's around 11% -- 11% growth. That growth was predominantly driven by the lettings business. Revenues grew by GBP [ 12.6 ] million or 17% year-on-year. Another increase in lettings revenue was predominantly driven by 2 things. Firstly, a GBP 7.6 million of revenue growth from growth in the organic lettings portfolio and GBP 5 million of incremental revenues from the acquisitions we completed in 2021 and 2022, Guy will talk to the acquisition strategy a little bit more later on. We've got a good level of operating leverage in the business, which meant revenue growth drop through to a healthy profit. And as even after making various cost investments we made in 2022 to enhance our capabilities. Some of those in cost investments, we're focused on getting the right headcount of the business, driving marketing activity in the right areas and also overhauling the remuneration structures for our fees owners. So we're not in mine. Adjusted operating profit increased by 56% to GBP 13.9 million and adjusted operating profit margin increased to around 10%.
In 2022, the operating leverage in the business was certified, and that demonstrates the outsized returns, which business can enjoy from top line revenue growth. And finally, on the P&L, PBT grew by 115% to GBP 11.9 million. Cash generation in 2022 was strong. We delivered GBP 7.7 million of net free cash flow, and these results overall supports a good level of shareholder cash returns. Firstly, we had the full year dividend that was declared at GBP 0.49 per share. That's double what we had in 2021. And we also returned a further GBP 4.9 million through share buybacks. If there's any other questions on the financials, I'm very happy to have those later on in the session.
Thank you, Chris. So our investment case, we are a highly resilient business with a significant upside potential from the operational improvements that we're making and have been making a months ago. Primarily, we operate in a highly valuable markets and of course, being the state if you operate in the highest value markets, you will come out at some of the highest fees. And London has absolutely been the prime example of this with our average price in London being circa GBP 600,000.
Not only is that the opportunity very exciting for us. The volume of transactions that we see in London are extremely interesting, for both sales and lettings. We're also very proud of the fee earner that we're able to command here at Foxtons, which really is a [indiscernible] of commanding that incredibly high premium fee that we're able to hold right away across the market. And with that, with that fee, also the highest volume market for bringing to sale and lettings to the market through our business. The resilience of the business model I touched on earlier, the non-steering revenues that we find in lettings, we do move that up and down part of the sales market, and it's very, very attractive for us as a business moving forward. And ultimately, coming back to the business as I have the opportunity to do and to carry out my review and to stop the operational improvement opportunities has been enormous. Without exception, every department I sat with and looked at the -- the exact operation of that machine, we've been able to find many, many efficiencies and new ways of operating, particularly looking at tech and data, which we'll share with you shortly. The operational leverage, which Chris has touched on in the previous slide, once we've started to build our revenue, that will absolutely outstrip profit growth.
And I think the last year is actually a good indicator of that. And we now must just really need to focus on building that revenue for the business, particularly with the buy and build opportunity that we see ourselves to be able to go make acquisitions of a very highly fragmented market that we operate within London. And of course, the market has been very subdued since really -- since 2018, we've seen [indiscernible] of market decline for sales. There is a significant opportunity or any upside on that sales market recovery, which we have baked into the plan, but it's there absolutely is an upside. You can see our sad demise from the heady days of 2016 when Foxtons was circa GBP [ 1.80 ]a share. And following the decline of our businesses market share and ultimately, the revenues and, therefore, the profit that this business has been delivering. But we've seen that sat decline, which gave me the opportunity to come back to the business midway through last year. We do see that revenues and profit this year has given us a level that we've not seen since 2019, that isn't reflected in the share price. And that, again, we believe, is underpinning the opportunity that hopefully presents itself to you today. So my operational review. I've been very, very involved in every department of this business.
I sat with every office. I visited every office and spoke to pretty much every agent and every person you work through in this business. And I'm proud to report that actually, the fundamentals that once made Foxtons unbeatable in the early teens are still absolutely within this business. We've just got to evolve and modernize ourselves and perhaps evolve and get back to being the later within the industry that we will want to renounce for in order to deliver and get back to that leading position. If we look at a group particular operation, we think that there was very little investment in these growth drivers. We should have started acquisitions, 5 years ago like some of our competitors did, we would have been in a very different place if that had ever been the case. We were cutting costs in the long areas, for example, over 5 or 6 years, we continue each year to cut the number of fee earners in the front office, and that has really led that market share decline. If you don't have the fears on round cost deliver market share with them and you can't deliver results to clients. So certainly something that's been very, very apparent to me coming in. Over the last 7 months, we've also removed circa GBP 2.5 million of cost at CVM managing level at the C-suite level of this business. We've removed GBP 2.5 million, which has been reinvested back into those into those learning opportunities on the ground, and that's already started taking enormous improvement to the number of viewings that we're carrying out.
And therefore, the growth of our market share, therefore, as well, which we're very, very encouraged by. And this business was built upon being leaders of the industry in terms of technology. We were the first agent in the U.K. to develop and have a completely in-house built CRM, which was an end-to-end platform created by this business 20 years ago at huge expense, and that really was the start of the secret source that gained and drove the market share of Foxtons' in those early days. We've been collecting data for 20 years which is probably at least 10 years longer than our closest competitors. And our database here, our proprietary database at Foxtons is in the norms. The reality is we've been doing very, very little with it. And that, again, is going to be a very important part of that innovation and certainly that value being driven out of that historic database is extremely important. We need to continue to get back to being the innovators within the industry, and we've got some highly sophisticated innovation that we're bringing to the industry over the next 6 months, we're very excited about, particularly focused on lettings processes and therefore, growing that reoccurring revenue.
So big upside on that for us. Maybe [indiscernible], short to have discovered that really over the last 4 years, this business on an organic [indiscernible] -- If you look at the number of units that we had within our portfolio -- it's only growing organically by 1% per year, which is -- I'm sure you'll agree that it's an underwhelming number. We've got to get back to focusing on that organic growth. And I believe that, that organic rate completely come from our historic enormous database the past transactions in history that we dealt with any [indiscernible] in London, which is very, very exciting. Organic growth is difficult to deliver in lettings, but absolutely, given the power of what we have within our CRM and our database, I'm very, very positive that we can certainly charge that organic growth and get back to where we need to be. We talked about acquisitions. Foxtons only started bolting on lettings books and lettings businesses in 2020, circa 5 years or 3 years, 4 years, 5 years after some of our competitors here in London, we would have been in a very different situation when we started earlier instead of doing compensates in new locations, which is what the business was at how the business is expanding. But of course, that's become much more challenging as we didn't have the same volume of lettings in spite being purchased from the upside and that being handed over to lettings book. Now we're really focused on growing that business for us, which is a massive part of our efforts, and we'll deliver this uplift for us almost entirely on its own.
Sales -- we've been talking about diluting what was made Foxtons great, and that dilution both in cutting costs, but also not continuing to lead that innovation and cutting headcount in front offices. We've seen the market share decline from 4.5% in 2016, all the way down to 3.4% in 2022. Now we're still always marketing is at 3.4%, but that decline in market share doesn't actually tell the whole story because during that period of time, we also lost a disproportion amount of our market share within the private market. We've gone always completely disappear from the prime markets in the different areas where we operate. You might want to say that, that foots properties above GBP 1 [ billion ]. We're very strong below, but we really need to now start to build our way and earn on back into those high-value properties, just as we used to be 15 years ago, when I -- we're still instructing bodies at 2.5% and 3% as an office manager, albeit we do earn our way into that prime market, and that really is a focus for the business. But that's a long-term goal. That is not something that we can pick our figures and will be instantly back in there. We think that would be a result of getting everything right over the next [ few ] years, whether it be the marketing, the peace employed, the training, the accounts, et cetera, et cetera.
It's all got to be right for us to earn our way back in that, but what we can do, we feel very strongly is grow that market share rapidly in the market, the volume market where we already own operate within and dominate with many markets. And then we talk about our finance Financial Services machine Obviously, we're throwing off high volumes of financial services reforms from the sales side of business. It was a surprise to me that actually the number of deal owners within our Alexander Hall continue to be cut just as he as a big comp other parts of the business. And what that has meant was that we were actually throwing off too many financial services referrals for the Alexander Hall to be able to process and deliver a very nice problem, I'm sure we agreed to have that many financial services firms with [indiscernible], we're now building back the headcount for financial services, we're talking the headcount to lettings and definitely the same intent. And of course, this means that there is a lag because many of these sales is a great financial services, when we're on board somebody, who's never done the job before, realistically, just 6 to 9 months process to get that person up to speed so that we've trained them enough to become a consistent fee earners.
It's very much while we're growing our headcount this year. Chris and like been balancing very carefully to make sure that we can grow them and deliver the profit numbers that we discussed we're very confident in this year. Strategic priorities. You have heard me talk obviously, lettings being at the top here that this organic growth for lettings is very important. I believe given our database or new best approach to how we're going to be marketing, making sure that we're the most visible agents back on the streets of London again combined with delivering and growing in-house the best agents, that organic rate should be charged with being between 3% to 5% on an annualized rate. That's a high growth target. But if we get everything right, I'm confident that we can achieve it. And then we are also growing through acquisitions. You may have heard, we're very proud to have announced just before we announced our results this month. We've actually made -- concluded the acquisition of Atkinson [indiscernible], which was a full branch offering, a full branch lettings focus state agency in East London, a fantastic business, very well operated. And like many of these smaller independents across London, of which there are 3,600 of these independent businesses. And they are coming to a point where the owners have owned them for 15 to 20 years.
They've had a fantastic lifestyle of them. The changing nature of the lettings industry is making people decide that now might be a time to sell a new on the past is new, which is a fantastic opportunity for us. And actually, at [indiscernible] was identified engaged and closed entirely in-house team at Foxtons using our acquisitions. No external wages. No external interaction, and we have the hand of the owners of that business all the way through, but we'll be over the next few months integrating them. In fact, actually tomorrow, I'm going down to meet all with the team that where we have all of the employees, we didn't see coming to meet us and my team Foxtons as we then integrate them into the rest of the business. So hugely excited, but the returns on those types of opportunities are in excess of 20%. Some of our more recent acquisitions that actually has been closer to 20% to 30%, which is which has obviously been aided by some price grades within lettings. Then we talk about sales, the improvements within product sales, our strategic priorities to grow that market share back to the 2016 levels of 4.5%. In the medium term, we've got to slowly and carefully always have that target of getting back on the higher-value markets. But while retaining and protecting our premium fees within the market, which obviously deliver a much, much better margin, but a lot of our competitors do on their sales businesses.
And finally, Financial Services, we would like to target a revenue-grade of circa 7% to 10% per annum, but we really believe that we can do that given the volume of opportunity th at I see that's being given off from the sales side of this business, which is very exciting. Now for Financial Services, very much in a growth year this year, while we're growing our head count in the medium-term future. All of that means that we're very proud to date. For the first time, I think in recent momory to Foxtons, we're setting the store out at to say that we are aiming for GBP 25 million to GBP 30 million of operating profit, an 18% plus profit margin in the medium term in the next 4 years, but more as where we are today.
Okay. ultimately, I believe passionately about the opportunity that we have in front of us, I can overly say firsthand experience at coming back to this business after a 15-year hiatus, have been incredibly exciting for individually because I can see the opportunity that we have, knowing the journey that I've taken on the businesses on the opportunity to do that here, albeit on a slightly larger scale, it's hugely exciting.
The team that I am supported by without the doubt are the best individuals and the best in their departments across the industry. We have people who worked in this business for 20 years plus, who are at the absolutely top of the industry. But I believe that given now this new focus on operational improvement, and given now a new strategic priority set that we can absolutely deliver this medium-term grade ambition. As a base case, and actually we're looking forward to openly being able to show that over the next year or so that we've been able to open deliver this promising years and the plan to answering your questions, some of which I know will be coming in through the -- to the online portal, and I very much appreciate all of the time listening into today's presentation.
Guy, Chris thank you very much for your presentation. [Operator Instructions] But just for the company take a few moments for those questions submitted today, I'd like to remind you that a recording of this presentation along with a copy of the slides and the published Q&A can be accessed via Investor dashboard.
As you can see, we've received a number of questions throughout today's presentation, and thank you to all the investors for submitting those. Muhammad, could I just ask you to read out the questions where appropriate to do so, and then I'll pick up from you at the end.
Thank you. First question. Any plans to expand outside of London?
Well, that question, again. At the moment, there is such a huge opportunity for us still within the M25. As I said, that very fragmented nature of the market means that there are high-quality lettings books that we could be bolting straight into this machine in order to be able to grow the recurring revenue, which is a primary focus of ours. However, I absolutely recognize that there are high-value, high-volume locations, particularly within the commutables of London, where there are absolutely opportunities.
These expansions into new areas will absolutely be led by acquisitions. So it will be a case of finding and engaging with the correct leading lettings agents to buy that netting portfolio [indiscernible] and then fold into all of the efficiencies that we can build and bring through our highly efficient machine that has been developed. So I think absolutely, we are already in Gilford in some of those surrounding areas, and we've identified other lead commute [indiscernible], it could be complementary to that. But our primary focus is really fitting in those high-volume, high-value areas within that -- within the M25 where we know where those 3,600 independent agents, [indiscernible] where on an ongoing [indiscernible] in order to fall into our Foxtons [indiscernible], which is highly profitable, and then we'll deliver that they're very valuable reoccurring income in the medium term.
A couple of questions on acquisitions. The first one, do we have any more acquisitions in the 2023?
We are always talking to potential sellers. As I said, we have an external -- we have internal team who's solely focused on -- focusing on why this today 3,600, we've got them ranked in order of the number of [indiscernible] they bring to market in lettings, and we're out there talking and engaging with them. Obviously, there's some sensitive information surrounding that, but the better we have a very good reputation within the London estate agency well, for holding dependent owners' hands through what is actually a very comprehensive transaction and being good to our word that paying a fair price, but a price that we believe is fair for the market value. So yes, we're out there talking to people all the time.
And the third question around should you be paying for acquisitions and share how do you avoid a country in that situation?
Yes. It's a good question. In terms of how we structure these deals, historically, we've spent in the deal through free cash generation. The question may have been linked to us offering shares, offering paper, get better buying from the sellers Actually, when I look at these businesses, the most important people to retain in those businesses are those who are customer facing rather than the company directors -- and it's actually you know people who are customer-facing view we ensure we retain, we retain them through appropriate our retention bonuses and really to get that continuity service for the [indiscernible], which is so critical for us. Either way we structure is through retention money. So typically 12 months deferred based on compliance on the business also performance, revenue performance of that business. So that allows us to ensure that what we are paid for this business for cash. We get the [indiscernible] those all the business. But we would also look at other structures such as shares, if it were appropriate. In terms of the countrywide comment, I think 1 -- I'm not going to comment particularly on countrywide, but we've got to remember what we are buying our business which ahead is focused on lettings. It's highly sticky revenue, reoccurring contractual revenue when some historical deals than by other players in the market to a more transactional sales businesses. Good example would [indiscernible] cloud. That's a 90% lettings business. So it's very, very different -- so really some really resilient revenue that make retaining the right team in the business. And that's how we get those 20% plus returns you mentioned earlier.
Definitely, yes. Do you see regulation as a positive [indiscernible] to the lettings business?
Thank you, Chris, for that question. And there are absolutely some relations that we well and that should be in place. Some regulation that we've seen over the last year or 2, there's actually been an opportunity for Foxtons. [indiscernible] of this is change in IC regulations for animal fuse boxes and the electrical certificates that come with it. Foxtons has made GBP 750,000 of additional feeds that year because of this change in regulation that require many more [indiscernible] to having used certificate and even actually fit new [indiscernible]. Now obviously, on the horizon, we've got a number of changes that are possibly being moved changes and improvements to the energy performance of lettings properties and also changes within the industry of regulation and also making sure that we're continuing to become more professional as an output.
And I think if you look at Foxtons, particularly, we are highly professional operation. And I think some of those changes will only play into our hands, particularly when we're looking at that acquisition strategy as the smaller independent regions really struggle with that huge burden of regulation. It's fine for boxes because we've got 10 people sitting downstairs making sure that we are compliant and making sure that we're doing everything right, small independents that just cannot afford the manpower to be able to do that. And that for us is another reason why we're seeing this while we're seeing some automation going on in the industry.
What part does technology and data have in the deliberate strategy for Chris?
Chris, thanks for that. I mean fundamentally, I'm a data-driven leader, everything that we operate, everything we do has got to be led by data. That was 1 of the most exciting opportunities about coming back to Foxtons was knowing from my time here 20 years ago, the size of this database. I mean there is no doubt that it is not just a little bit bigger than our close competitors. It's in a different [indiscernible]. That opportunity to do the right things with that database presents huge opportunity. Now when I first came back to London, having led a data transformation in my previous business, I was excited, and I say great guys and stepping the log into the live dashboard, I can't wait to get into the data. I don't really look to be like I have 2 heads. And what I was said was basically old school Excel spreadsheets that most of the time didn't actually mirror up anyway. So the last 6 months, when data team downstairs a big real and building an entirely new data platform. The business is now using in order to be able to spot opportunities, spot under and over performance and ultimately, realign ourselves with understanding what parts of our business that we should be operating and optimizing in order to deliver the right types of results. And that's with our. The next stage of this is starting to apply data science the millions of transactional data history that we have locked within our CRM asset so that we can then start to machine learn the various processes to give us lead scoring on -- as 1 example, the 0.5 million lettings tenant leads that we receive each year is simply too many for an agent to be able to process.
But actually, when using actual historical transactional data with data science and some very, very small algorithms, we can then start to identify within the 0.5 million, who were the 50,000 that we already know could do a deal today based on their transaction history and all the other 1,000 data points that we can cover. So certainly very interesting and it will be a primary part of our progress moving forward about getting us back on that data journey. A good example of that, Chris, is that we've just spent a relatively small amount of money building an entirely new data suite and the data infrastructure. Within the next 2 months, we're very proud to be able to say that we will have the limited data link in the business, something that the CRM team we've been asking for, for about 5 to 6 years, just never been given the budget for it. So very excited because once we do that, not only will we be able to ingest and analyze our own data internally, but we'll also be able to look at the thousands of external sources that we can cross-reference to then generate more opportunities moving forward.
One for Chris, what's dividend as you share buybacks or [indiscernible] capital to grow the business organically or inorganically? How will you balance this and what takes preference? That's from James.
Yes. Thanks, James. I think as you're absolutely right, organic having to set out in the plan is absolutely critical. So we've got a well established [indiscernible] allocation policy. First 1 is obviously to maintain enough strength in the balance sheet. We have debt free today. We make a good strong balance sheet, so that's our #1 royalty. Number 2 is then to have sufficient capital and prioritize it in organic growth or some of the areas guys to what an earlier today. Number 3 is all about the dividend. And then we've got the dividend policy, 35% to 40% of profit after tax. Are we on to maintain our dividend at an appropriate level. And formally, the lettings acquisition, so identifying, targeting those high-quality lettings books, integrates come into our business and ultimately returning those returns on investments of 20% plus we talked about earlier.
And typically, it's the excess capital if there is an excess capital in the business, that return to shareholders, it in an appropriate form, historically as being I give you a bit color organic growth is absolutely up there and it is the highest priority for us.
And 1 from Andy, what can Foxtons do to turbo charge growth in lettings? And do we have an organic target growth rate?
Well, the biggest weather that we have in our organic growth is -- well, we've got [indiscernible] One is the people and the culture and the focus of what we're asking the business to do. And the second part of that is obviously, as I explained before, the opportunity that is bearing within our database is bigger than any other [indiscernible] within London. And if you think about trying to make sure that you are having the opportunity for lettings listing, you have to stay in contact with that landlord, let's say, is led by another agent.
You've got to stay in contact with that landlord all the way through that tenancy. And you just have to make sure that within that 2-month period that, that our current tenant might be moving out that property may be coming back to market. You've also got to make sure that you're on the phone, engaging with that landlord in an intelligent way and adding value to conversation. That's not but there's no easy formula to that. But obviously, using our data learning and a lot of those external sources, we know we can give ourselves a much higher priority chance of speaking to people at the right time within that journey. so that's very, very exciting for us. Another part of this was really within this business, there was no focus on volume. But when I arrived here 6 or 7 months ago, I had managers of lettings businesses and the lettings offices and the area directors and even the head of lettings coming up and always self-congratulating themselves in front of me because they've grown their revenue by 20%. And of course, we saw a 20% uplift in the lettings values last year, which essentially meant that everybody did 20% more on their revenue. The reality is now all of our front offices, our negotiators, our area directors, our Head of lettings, myself, Chris, we have split that remuneration instead of solely being focused on revenue, we're also charging people with growing their volume as well.
There's no good just knocking up your revenue at the target out of the park because the market's growing. You've also got to shares that you're growing units. And that cultural change within the business has been enormous. We have a famous Friday meeting here at Foxtons, where all of the salespeople come together, and they shout out their numbers. Well, up until 7 months ago, those numbers were always just the revenue number that you might have been able to close to the business. But now -- as a starting point of this change is a good example, we're now, first of all, the first number they call at the volume that they've done, and then it's the revenue number. And that change within the culture of the way that we do the business, I think is massively important. And then it's down to us operationally to make sure that we targeting this growth and helping use the data, the processes that we have to be the fastest to bring new units to the market. But then absolutely, our focus is thought to be the quickest to get that lettings contract concluded. So that means it got to be the quickest to do the feeling you got to be the quickest to agree the offers, and then we got be the quickest to get it legally within that long process.
So reducing the time of that process should put us at an advantage to improve our instruction to net ratio, which will automatically deliver organic growth.
And then 1 from Neil as you concerned about the government legislation on the rental market that it's now very unfordable.
I mean very unfoldable is it depends upon what you're looking at, the 0.5 million lettings stands that we register every year are all fighting for a very small proportion of stock. Now I recognize that within the whole of London, that the structure is broken from a government asset. What we definitely need on more lettings units. And the decision by the government 5 years ago to remove interest tax release, some of you may be landlords, you know exactly what I'm talking about, has meant that you're seeing a lot more tenet investors coming into market. The new investors coming in has started to slow down. And by capture attrition, the overall size of the portfolio is very, very fractionally each year getting slightly smaller, but that -- the size of that pie still [indiscernible].
Ultimately, what we've got to focus on is taking a larger percentage of that and bringing that on to the market. so that we can complete these deals. The market is intention of the matter, there is tension on the prices that are being achieved but we have so much demand that actually is purely a supply-demand led situation. And people, unfortunately, as I said on record, who were being priced out of a particular are exactly the same as when sale prices go up, might have to -- may have to compromise on their search criteria might have to be a slightly different area, launched slightly different property types in order to full fill that requirement. But the volume of people looking is so high, we don't this price increase is still justified and it's still absolutely being met by tenants at the moment. While we can say that the government may take a move as we've seen ex outside of funding to cap rental increases, it may well happen, but the reality for this business is that people will still need to use an agent in order to find and engage and let those qualities. And absolutely, we still manage that portfolio to that time frame. So if that happens, we might not see this continued price the price lines, but the values that are still being achieved today are what we're focused on.
Question [indiscernible] with the sales business? Why not just focus on lettings the market understand [indiscernible].
You're quite right. I agree that the market doesn't understand the lettings focus of this business, which is a shame because I think if it did, I think it would be reflected in our share price. The reality is that you can't count a successful lettings business in mining them unless you have sales arm. That sales arm is very often at different times in the sales market, sending over new opportunities to be able to feed that machine, that's where our organic growth comes from lettings as well as all of the other parts that we've been talking about. And at various points of the year or in the sales cycle or even in the letting cycle, it may be that, for example, [indiscernible] may come to us and say, oh, we're thinking of selling this investment unit, could you try it on the sales market?
Well, we didn't have a sales arm that would get handed over to a different agent. And of course, 2 months later when that property hasn't solved, guess, who would get that lettings instruction, it wouldn't be coming back to us. So it's very, very important that we are a full service operation. And I believe firmly that we can get back to producing consistent levels of profitability from the sales business, but we absolutely must focus on that on growing the lettings recurring revenue. I hope that answers you question.
One from James. Foxtons brands [indiscernible] lost GSP, which was the guaranteed strong sales effort. How do you rebuild this?
This is purely about culture. This is about how we believe sales teams shale operated and to have gone from circa 4.5 negotiated as an average per branch down to 2.5 or 3 per branch means that you lose that veracity and that momentum -- and that very, very important sales force, there was [indiscernible] who made Foxtons absolutely unbeatable.
Now we are growing these sales teams quickly. And we are going back to face-to-face training, all of the training of this business, which was once renowned across the industry as being industry-leading was turned digital. We're now bringing that back to be face-to-face being led by the best estate agents in the business. And that, again, is generating this longer-term customer of rebuilding back in those areas of USPs. Note that USP was obviously our visibility and our brand visibility in the areas that we operated. We've always just become a little bit gray in the ether and really now it's about pushing back into that making sure that we're visible making sure we've got the best people on the ground, making you got the best tech to give us that advantage and then ultimately delivering on the results. Our USP the thing that we want remind upon was for getting those results and sales. Well, we want to be known to getting results in sales and lettings. And leading into that, what of the leading away from it.
One from Ben. Chris, are the investor relations efforts to get new institutions strategic price interested in doing the statin process?
Yes, absolutely, we're very focused on getting new investors on the register. We are a quite intense couple of weeks since the results speaking to new institutions explaining the story. I think already fresh narrative and indeed, refreshed energy and really I don't let what's going wrong with this business, explaining how we're going to get -- we're going to get back on the front and it means the speed at which going on but I think there's been a lot of excitement in the investor base. So absolutely, we look forward to getting further investment, and I'm keeping a narrative over the course of 2023.
I think you've actually managed to address all of the questions from investors -- and of course, the company will review all the questions submitted today, and we'll publish those responses on the Investor Meet Company platform.
But just before redirect investors to provide you with their feedback, which knows particularly important to the company, Guy, could I just ask you for a few closing comments.
I hope we've given you a flavor both of the opportunity of the rebuild of Foxtons, but also of our intent in order to make it happen. And I just wanted to underline the fact that the quality that we have a latent, our quality within this business, it is very, very compelling. And there are many aspects where we lead the industry in many, many ways. And my initial focus really now is to make sure that we'll be building as quickly as we can to demonstrate that this opportunity is real, and we've got it. But actually in a very short space of time, we've already started to see very, very positive numbers on the market share delivery, which is just the first step on the rest of this plan being delivered. We're hugely excited and we're loving to be part of this journey with us. Guy, Chris, Muhammad, thanks once again for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few notes complete, potential will be greatly valued by the company. On behalf of the management team of Foxtons Group plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.