Foxtons reports strong trading but pay row looms

Foxtons said it made a strong start to 2021 as the estate agent chain became embroiled in a row about its chief executive's bonus.

The London-focused company reported a 24% increase in revenue in the first quarter to £28.5m from a year earlier. Sales revenue jumped 60% to £11.4m and lettings revenue rose 6% to £14.8m. Revenue from mortgage broking rose 20% to £2.3m.

As a result, first-half operating profit will be well above the figure for the year before, Foxtons said in a trading update. The company, known for its aggressive sales tactics and liveried Mini cars, said it expected strong trading to continue.

The update showed Foxtons recovering from the Covid-19 crisis, helped by a booming housing market supported by the Chancellor's stamp duty cut.

The company faces a potential shareholder revolt over a £1m bonus awarded to Chief Executive Nic Budden for a year in which it accepted government support and raised funds from shareholders. Investors have warned companies to be wary about paying bonuses if they have taken cash from taxpayers or shareholders.

Glass Lewis and ISS, two of the biggest investor advisers, urged shareholders to oppose Foxtons' pay report at its annual general meeting on 22 April. The Investment Association's Ivis service has given a "red top" judgement on Foxton's pay, its toughest warning, the Financial Times reported.

Foxtons furloughed most of its employees for several months in 2020 under the government's job support programme and accepted business rates relief. It also raised £22m in a rights issue early in the crisis.

Glass Lewis said: "There is no reason as to why the company could not reduce the bonus to nil, a common practice among FTSE-listed peers."

After slumping early in the pandemic the UK housing market is booming as buyers seek to lock in Chancellor Rishi Sunak's stamp duty cut, which he extended at his budget in February. Households in London have also been selling to move to more spacious property out of the city in the expectation of working from home after the pandemic.

Budden said: "I am delighted with the start we have made to the year, which is the best first quarter's trading in some time. As we look forward, the strong trading momentum is expected to continue through the second quarter and together with tight cost control gives us confidence that operating profit for the first half will be significantly higher than last year".

Douglas and Gordon, the London agent Foxtons bought in March, contributed £1.8m in sales and lettings revenue during the period.

Foxtons shares rose 0.7% to 67.45p at 08:51 GMT.