With no repeat of last year’s stampede to beat the stamp duty deadline, London-focused estate agent Foxtons (FOXT) was always going to struggle against some pretty tough comparatives. In the first quarter to the end of March, sales revenue fell 44 per cent followed by a 3 per cent decline in the second quarter as transactional volume continued its downward spiral. This helped send the share price down 5 per cent on the morning of these results being announced.
The group’s mortgage broker, Alexander Hall, also saw revenue down by 9 per cent, with average revenue per broking transaction down by 2 per cent. Whereas the lettings side, which now accounts for 55 per cent of group revenue, delivered a more robust performance, with downward pressure on rents offset in part by an increase in volume, although lettings revenue was still down by 2 per cent.
Demand for rented properties is likely to remain relatively strong, given the fact that most aspiring home buyers cannot afford London prices, but Foxtons warned that trading conditions would remain challenging in the second half. There are further headwinds ahead, with a ban on letting fees at the consultation stage.
Analysts at Peel Hunt are forecasting adjusted pre-tax profit for the year to December 2017 of £13.4m and EPS of 3.9p (from £18.8m and 5.7p in 2016).
| FOXTONS (FOXT) | ||||
| ORD PRICE: | 91.25p | MARKET VALUE: | £251m | |
| TOUCH: | 91.25-91.75p | 12-MONTH HIGH: | 125p | LOW: 87p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 51p* | NET CASH: | £10.6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 68.8 | 10.5 | 3.0 | 1.67 |
| 2017 | 58.5 | 3.8 | 1.2 | 0.43 |
| % change | -15 | -64 | -60 | -74 |
| Ex-div: | 31 Aug | |||
| Payment: | 26 Sep | |||
| *Includes intangible assets of £120m or 44p a share | ||||
