Foxtons reports profit loss as London housing market slows

Foxtons (LON:FOXT) a pre-tax profit loss for the first-half the year, with ongoing weakness in the London property market impacting revenues.

The estate agency chain said losses for the periods stood were at £2.5 million, compared to a £3.8 million profit for the previous year.

The company attributed the poor performance to the increasingly subdued market in the capital, in particular. London was “undergoing a sustained period of very low activity”, and as a consequence sales were taking longer to reach competition.

The market in the capital was also impacted by a change to stamp duty, which in particular affected sales on more expensive properties.

Profits were also hit by costs relating to marketing and branding spending, alongside the introduction of a pay-scheme to ensure its agents were less affected by the difficult trading environment.

Group revenues in the first six months of 2018 fell 9 percent to £53 million, with revenue from its sales business down 23 percent to £17.2 million.

However, it was not all bad news, with its lettings business proving less affected. Revenues down by just 1 percent in the first half of the year to £31.7 million.

Chief executive Nic Budden commented on the results: “The property sales market in London is undergoing a sustained period of very low activity levels with longer and less visible transaction outcomes, which clearly impacts our business. We continue, however, to achieve market leading share of listings giving us confidence that our service led, results based model remains highly relevant to consumers. Going forward we will continue to invest in our proposition to enable us to maintain our differentiation in the minds of buyers, sellers, landlords and tenants.

“Looking ahead, availability of mortgage finance, absorption of stamp duty costs, and the return of confidence to the market will, amongst other factors, determine the timing and rate of increased activity levels.”

Shares in Foxtons are currently trading +7.13 percent as of 11.14AM (GMT), despite the mixed outlook.