Sign up Australia
Proactive Investors - Run By Investors For Investors

Foxtons still facing tough conditions in London despite recent pick-up in the sales pipeline

Foxtons is not a company that engenders a lot of sympathy but the shareholders, if no one else, will be heartened that early losses this morning have more or less been erased
Foxton's mini car
After a tough first quarter Foxtons is seeing a mini-revival

London estate agency Foxtons Group PLC (LON:FOX) said trading conditions in the nation’s capital remain “very challenging”.

The shares opened 4p lower at 66.4p on the trading statement before recovering to 70p, as the company said sales volumes this year have been lower than in the corresponding period of last year.

READ: Foxtons expects 2017 earnings and revenue to fall, current year to remain challenging​

Performance in lettings was affected by a slow start to January and the timing of Easter, which had a negative effect on revenue, Foxtons said.

In the first quarter of 2018 group revenue was £24.5mln compared to £28.7mln in the first quarter of last year. This comprised sales revenue of £8.2mln (2017: £11.1m), lettings revenues of £14.3mln (2017: £15.5m), and Alexander Hall mortgage revenue of £2.0m (2017: £2.1m).

The mid-morning share price rally may have been prompted by some of the more optimistic comments in the statement, including an assertion that the sales pipeline has started to improve, though it is still down year-on-year.

The lettings business also saw a pick-up towards the end of the first quarter and throughout April.

Broker Numis responded to the update by cutting its profit forecasts again; it is now predicting underlying earnings (Ebitda) for the current year of £4mln, down from £10mln, though it has retained its ‘buy’ recommendation.

“Whilst this is disappointing and there is little evidence of a pick-up in sales transactions in London, we take comfort from its strong listing volumes and its net cash position,” the broker said.

Neil Wilson at Markets.com said it was not a good start for the estate agent, particularly in lettings, which until now had held up reasonably well.

View full FOXT profile View Profile

Foxtons Timeline

Related Articles

1523450716_Belvoir_02.jpg
April 11 2018
Some 80% of Belvoir’s revenue comes from letting, which insulates it to a large degree from the ‘disruptors’

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use