London-focused estate agent Foxtons' (FOXT) diverse revenue stream helped to partly offset weaker house sales revenue in the run-up to the general election. So while sales revenue in the first half fell by 11 per cent to £33.7m, its lettings business saw revenue up by 5 per cent at £33.5m. Income generated from mortgage broking was also higher, up 22 per cent at £3.6m.
However, confidence is starting to improve, and stock levels - houses to sell - are up 12 per cent from a year earlier, generating a £1bn sales pipeline. Profits are also expected to strengthen as newly opened branches start to generate capital, and five further outlets cut the ribbon this half. Foxtons also continued its move into the market outside central London, with growth in volume and prices expected to be higher in the outer regions. Inevitably, the cost of expanding the network pushed administrative expenses up nearly 7 per cent to £53m.
The business model throws off a lot of cash, with net free cash conversion up from 57.4 per cent to 62.7 per cent. While the interim dividend was a little lower, the total payout was boosted by an increased special dividend.
Analysts at Numis forecast full-year pre-tax profits of £43.2m and EPS of 12.2p (from £42.1m and 11.9p in 2014).
| FOXTONS (FOXT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 237.9p | MARKET VALUE: | £670m | |
| TOUCH: | 237.4-238.8p | 12-MONTH HIGH: | 290p | LOW: 141p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 52p** | NET CASH: | £20.9m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 72.8 | 23.1 | 6.4 | 1.77* |
| 2015 | 71.1 | 18.1 | 5.1 | 1.67* |
| % change | -2 | -21 | -20 | -6 |
Ex-div: 3 Sep Payment: 25 Sep *Not including special dividend of 3.1p per share in 2015, and 2.77p in 2014 | ||||
