Foxtons swings to a loss amid London property slump
Chief executive Nic Budden said transaction levels in the capital had been ‘very subdued’.
Foxtons has swung to a loss amid a slowdown in the London housing market.
The London-focused estate agent reported group revenues fell to £53 million for the half-year ended 30 June, down 9% year-on-year from £58.5 million.
The firm swung to a £2.5 million loss for the period, as compared to a pre-tax profit of £3.8 million for the same six months in 2017.
Foxtons has been hit by a softening in London’s property market, with the company’s chief executive Nic Budden warning that homes sales in the capital had been “very subdued”.
Mr Budden said: “This is due to a number of factors including higher stamp duty affecting buyers of more expensive properties, second home owners, and buy to let investors; plus ongoing affordability concerns which are particularly acute in London.”
However, he said the business would benefit from strong growth in the lettings markets, with demand for rental properties remaining high.
Foxtons has scrapped its interim dividend, having handed investors 0.43p per share at the same point last year.
The figures come after Foxtons revealed that revenue dropped nearly 15% to £24.5 million in the first quarter, with the company bemoaning “very challenging” trading.
At time of writing, Foxtons’ share price was up 2.94% or 1.4p to 49p.
“The one saving grace for Foxtons is a very solid balance sheet, which provides the capacity to ride out the soft market conditions, at least for a time,” said AJ Bell investment director Russ Mould.
“However, the losses the company is beginning to rack up are having an impact. The net cash position fell from nearly £19 million at the beginning of the year to just short of £12 million as at the end of June. Foxtons needs market conditions to improve, and soon.”