Results round-up

Foxtons' annual profits fell by almost two-thirds as the estate agent suffered from the seizing up of transactions in the London property market.

The company said it expected tough conditions to continue this year.

Pre-tax profit for the year to the end of December dropped 65% to £6.5m from £18.8m a year earlier as revenue fell 11% to £117.6m. The company slashed the annual dividend to 0.7p from 2p.

Revenue fell across Foxtons’ business but the biggest drop was in sales where revenue fell 23% to £42.6m. Lettings revenue fell 3% to £66.3m and mortgage revenue was down 1% at £8.7m.

Foxtons blamed higher stamp duty for expensive homes, weak consumer confidence, economic and political uncertainty and the general election in June for declining transaction levels in London. New buyer enquiries in London fell for the ninth month running in January in London, according to figures from RICS.

Foxtons, known for hard-nosed sales tactics and its fleet of liveried Mini cars, reduced its costs by 2.5% to £111m during the year but it said there was limited scope to cut further, resulting in revenue declines feeding through to its bottom line.

Chief Executive Nic Budden said: “Sales activity in the London property market is near historic lows and this had a significant impact on our overall performance in 2017.”

Budden forecast difficult trading conditions during 2018 and said Foxtons’ sales pipeline was lower than a year earlier. The company's shares fell 2.6% to 81p at 11:31 GMT. The shares have lost almost two-thirds of their value since Foxtons floated at 230p a share in 2013.

Hot on the heels of a warning in December, AIM-listed windows and doors specialist Safestyle cautioned on Wednesday that revenues and underlying profit for 2018 will be "materially below" the previous year’s levels and current market expectations as the market continues to deteriorate.

The company had already said at the end of last year that it had seen a continuing deterioration in the market on the back of declining consumer confidence and that conditions in 2018 were likely to be continue to be "very challenging".

Safestyle said the activities of "an aggressive new market entrant" have added to an already competitive landscape and hit certain areas of the group’s operations. As a result, the order intake so far this year has been disappointing and below its expectations.

"The group has reviewed and reduced its cost base and carried out the planned restructuring of its sales and canvass functions. The group continues to invest in information technology to ensure it can deliver an enhanced end-to-end customer experience and improve operational efficiency."

Although guidance for the year to the end of December 2017 remains unchanged, Safestyle now expects revenues and underlying pre-tax profit for the year ending 31 December 2018 to be materially below 2017 levels and current market expectations.

"Safestyle remains very well invested for any upturn in demand and the board expects the benefits of its cost savings programme to take effect in 2018, particularly in the second half."

Neil Wilson, senior market analyst at ETX Capital, said: "With chief executive Steve Birmingham offloading 1.4m shares worth £2.2m in December, shortly after that third warning, the overall picture is hardly one that inspires confidence."

Meanwhile, Liberum cut its stance on Safestyle to ‘hold’ from ‘buy’ after the warning, reducing the target price to 130p from 200p.

"We expect the stock market to take a prudent view of valuation until the impact of the new entrant is digested and cost savings delivered successfully," it said.

“We understand that the new entrant has had a significant impact on Safestyle because it has started activities in Safestyle's northern heartland, and we also understand that it has attracted some self-employed sales and canvass representatives from Safestyle."