There's no shortage of sellers at Foxtons (FOXT), although not on the property front, as anaemic volumes in London’s real estate market continue to erode its revenues and profitability. Shares in the company have fallen by around 45 per cent over the past 12 months, meaning that despite the insulation provided by a “strong balance sheet”, the agency’s market capitalisation is nearly on par with the value of its intangible assets.
By now, the narrative is well worn; lower sales transactions reflect vastly reduced churn, with sellers unwilling, or perhaps unable, to offload properties at existing prices, amid a cyclical downturn exacerbated by changes to tax regulations and beefed up mortgage eligibility rules. Add in uncertainties over the shape of the UK’s post-Brexit settlement and increased scrutiny on how overseas buyers are funding property acquisitions, and it’s not difficult to appreciate why half-year sales dropped 23 per cent to £17.2m. By contrast, the lettings business provides a degree of stability, with revenues there or thereabouts against the 2017 comparative, and picking up slightly in the second quarter.
Bloomberg consensus gives pre-tax profit of £0.46m for the December year-end, leading to EPS of 0.1p, against £6.5m and 1.9p in 2017.
| FOXTONS (FOXT) | ||||
| ORD PRICE: | 49.25p | MARKET VALUE: | £135m | |
| TOUCH: | 49.25-49.35p | 12-MONTH HIGH: | 100p | LOW: 44.7p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | na | |
| NET ASSET VALUE: | 50p* | NET CASH: | £11.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 58.5 | 3.77 | 1.2 | 0.43 |
| 2018 | 53.0 | -2.52 | -1.1 | nil |
| % change | -9 | - | - | - |
| Ex-div: | - | |||
| Payment: | - | |||
| *Includes intangible assets of £120m, or 44p a share | ||||
