Foxtons earnings, revenue drop amid 'challenging' market

Estate agent Foxtons said on Thursday that full-year earnings and revenue will down on the previous year amid “challenging” conditions, which are expected to continue throughout 2018.

In a trading update for the year to the end of December 2017, the company said adjusted earnings before interest, taxes, depreciation and amortisation are expected to drop to £15m from £24.6m in 2016, on revenue of £117m, down from £133m.

Foxtons said the drop in revenue was due to a “significant” fall in sales volumes in the first quarter of 2017, as the first quarter of the previous year benefited from a surge in transactions ahead of the introduction of the stamp duty premium for buy-to-let properties and second homes.

Sales revenue for 2017 came in at around £42m, down from £55m, while lettings revenue for the year fell to £66m from £68m, driven by the impact of downward pressure on rents across the market throughout the year.

Foxtons’ Alexander Hall mortgage broking revenue was broadly in line with 2016 at around £9m.

Chief executive officer Nic Budden said: "This was a solid performance in the context of ongoing challenging conditions in the London property market. We remain focused on achieving the best results for our customers and are pleased with the reaction to the recent growth initiatives in our lettings business.

“Looking ahead, we expect trading conditions to remain challenging throughout 2018. We are well placed to withstand these conditions due to our strong balance sheet with no debt, and we will provide an update on a number of strategic initiatives which we have been working on at our preliminary results presentation on 28 February 2018."

At 1015 GMT, the shares were up 3.8% to 76.70p.