Foxtons warns of 'very challenging' London market as revenue drops

Group revenue fell to £24.5m from £28.7m in the first quarter of the previous year, with revenue from sales down to £8.2m from £11.1m and lettings revenues down to £14.3m from £15.5m. Revenue from the company's mortgage broker, Alexander Hall, was a touch lower at £2m versus £2.1m.

In a brief trading update ahead of its annual general meeting, Foxtons said it entered 2018 with a lower sales pipeline compared to the same point last year, which resulted in lower levels of activity in the quarter.

The lettings division was hit by a slow start to January and the timing of Easter, which had a negative effect on revenue.

"Whilst the sales pipeline has begun to improve it remains below where it was this time last year. The performance of our lettings business improved towards the end of the quarter and throughout April.

"Foxtons remains in a strong financial position with a net cash balance."

Numis said the update has prompted it to reduce estimates again. It now forecasts only £4m of earnings before interest, tax, depreciation and amortisation in 2018.

"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," it said.

At 1100 BST, the shares were up 6.1% to 74.70p.