Sluggish UK housing transactions continued to weigh on Foxtons (FOXT) house sale revenue during 2019, although cost-cutting efforts helped stem losses. Four under-performing branches were shut in the period, while the decline in operating costs outweighed the fall in revenue, meaning operating losses more than halved to £6.3m.
The estate agency services group suffered a 10 per cent fall in sales revenue against a weak London housing market, as average revenue per transaction also declined 6 per cent to £13,463. Management said that while a greater degree of political certainty could provide a fillip to transactions, stamp duty and affordability issues could still hold back activity.
Expanding lettings activity - which accounted for 62 per cent of revenue - has become the main focus for management in driving growth, although revenue declined 4 per cent last year after a £2.7m impact from the tenancy fee ban. Excluding the ban, revenue rose 2 per cent and lettings volumes edged up 1 per cent.
Despite a decline in new mortgages, the mortgage broking division enjoyed a 3 per cent rise in revenue to £8.5m, thanks to increased remortgaging activity.
Bloomberg consensus forecasts give an adjusted earnings loss of 0.1p in 2020.
| FOXTONS (FOXT) | ||||
| ORD PRICE: | 76p | MARKET VALUE: | £209m | |
| TOUCH: | 75-76p | 12-MONTH HIGH: | 98p | LOW: 48p |
| DIVIDEND YIELD: | NIL | PE RATIO: | N/A | |
| NET ASSET VALUE: | 42p* | NET DEBT: | 35%** | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 150 | 41.0 | 12.3 | 5.0 |
| 2016 | 133 | 18.8 | 5.7 | 2.0 |
| 2017 | 118 | 6.5 | 1.9 | 0.7 |
| 2018 | 112 | -17.2 | -6.3 | nil |
| 2019 | 107 | -8.8 | -2.8 | nil |
| % change | -4 | - | - | - |
| Ex-div: | n/a | |||
| Payment: | n/a | |||
| *Includes intangible assets of £110m, or 40p a share **Includes lease liabilities of £53m. | ||||
