Foxtons shares slip after profit takes Brexit blow
Estate agent Foxtons has posted a 30 per cent drop in annual profit against the backdrop of last year’s Brexit uncertainty.
Earnings before interest, tax, depreciation and amortisation (Ebitda) fell to £2.5m during 2019, a year-on-year decrease of 30 per cent from 2018’s £3.6m.
The estate agent narrowed its loss before tax from £17.2m last year to £8.8m for 2019.
Foxtons’ revenue fell four per cent to £106.9m in 2019, compared to £111.5m in 2018. Lettings revenue slipped two per cent to £65.7m while sales revenue slumped 10 per cent to £32.6m.
Its cash balance also fell 13 per cent year on year to £15.5m.
With the continuing uncertainty over when or if the UK would leave the EU last year, Foxtons reported a drop in buying and selling activity.
Foxtons also blamed a ban on tenant fees for hurting its lettings business, amounting to a £2.7m hit.
However, the company today gave a positive assessment for the year ahead on the back of December’s decisive General Election result.
“Our sales pipeline is currently ahead of last year, however we are well prepared for further challenging conditions in the sales market in the run up to Brexit,” chief executive Nic Budden said.
In line with the struggling estate agent’s current policy, no dividend will be awarded as the company tries to get back on its feet amid a weak housing market.
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Investors sent Foxtons’ shares down 5.4 per cent to 74.2p, as they looked ahead to the UK’s tricky Brexit trade talks with the EU.
However, they later recovered four per cent, rising to 81.50p.
Budden added: “Overall, we are pleased with our resilience in this prolonged downturn.
“The business and our people have proved adaptable and reslient, delivering stable results.”
“We continue to maintain a strong balance sheet with no external borrowings.”
Uncertainty remains over whether new chancellor Rishi Sunak will make any changes to stamp duty in his March budget.
Housing remains high on the political agenda with a shortage of affordable homes to buy and rent.
This problem is particularly acute in London and the south east.
Broker Peel Hunt urged investors to sell their shares, saying: “The outlook remains tricky given ongoing Brexit-related uncertainty and the lack of liquidity in the second hand housing market.”
UK house prices enjoyed their fastest rise in 18 months in February, Nationwide said today.