Foxtons Slide Into the Red As Sales Tumble
Resilient lettings business avoids an even worse outcome
The latest trading statement from Chiswick-based estate agent Foxtons issued this Monday (30 July) has shown that the company was loss making in the first half of the year.
They turned a pre-tax profit of £3.8mn in the same period in 2017 into a £2.5mn loss with falling sales in the London area and ‘planned investments’ leading to the drop.
Sales commission fell by nearly a quarter to £17.2mn and that side of the business is now considerably smaller than the lettings operation which generated £31.7mn falling by just 1%. The company’s Alexander Hall mortgage business saw revenue down by 3% to £4.1mn.
The company is not planning to pay an interim dividend. Despite the poor results the share price rallied from the all-time low levels seen in recent weeks climbing back up to 50p indicating that short-sellers may have been clearing their positions. The stock peaked at nearly £4 in 2014.
Commenting on the results, Nic Budden, CEO, said, "The property sales market in London is undergoing a sustained period of very low activity levels with longer and less visible transaction outcomes, which clearly impacts our business. We continue, however, to achieve market leading share of listings giving us confidence that our service led, results based model remains highly relevant to consumers. Going forward we will continue to invest in our proposition to enable us to maintain our differentiation in the minds of buyers, sellers, landlords and tenants.”
The company has no net debt and a cash balance of £11.8mn at 30 June 2018 however the negative cash flow for the last six months has been £6mn.
July 30, 2018