Foxton's Revenues Slump in 'Very Challenging' Market
Chiswick-based estate agency warns shareholders about falling sales
Foxtons, the Chiswick-based estate agency chain, has issued a trading statement in which they have described the current London property market as ‘very challenging’ and warned investors of the negative effect this is having on revenues.
It the update issued to shareholders in advance of their annual general meeting they said that the company had entered 2018 with ‘a lower sales pipeline compared to the same point last year’ which had resulted in a relatively poor first quarter with sales down by 26% to £8.2.million. The lettings business which has been relatively good recently for other local estate agents has not been compensating for the fall in sales revenue with this division impacted by ‘a slow start to January and the timing of Easter’. Lettings remain a substantially larger proportion of revenue for the company than sales. The Alexander Hall mortgage business has also seen a decline in revenue.
The company claims that sales have been improving recently but remain below where they were this time last year and that the performance of their letting side has been getting better since April.
The stock market initially reacted badly to the statement marking the shares down by 10% but they subsequently bounced back and are now trading at above the pre-announcement levels at around 72p. This is well below the peak share price of just under £4 and the price of £2.30 at which the share were listed in 2013. The company says it remains in a strong financial position with a net cash balance.
The average price of a Chiswick property has fell by 12.3% in the first quarter compared with the level seen at the end of 2017 according to the data from the Land Registry and transaction volumes in the area remain at historically low levels.
May 18, 2018