Foxtons upbeat about second half after pre-election jitters slowed property sales

Blood on the residential street? Revenues at London estate agent Foxtons have dropped in the first half, as property sales slide.

Group revenue at the agency fell 2.3 per cent to £71.1m for the six months to 30 June, while property sales fell 10.9 per cent against 2014, when the market was operating at a post-recession peak. 

 

Pre-tax profits have dropped 21 per cent to £18.1m. 

 

Adjusted EBITDA fell from £24.9m last year, representing a margin of 34.3 per cent –  to £20.5m, a margin of 28.9 per cent.

 

There was however continued momentum in lettings, with revenue up 5.4 per cent against last year. 

 

And its mortgage broking arm delivered a strong performance, with revenues up 21.7 per cent. 

 

The property market may be booming in some areas, but we have certainly seen some of the higher end of London cool down, and that appears to be reflected in Foxtons' results. 

 

However, some of this could have been pre-election jitters, with the estate agent saying there had been an “encouraging performance” since and there was a “positive outlook” for the second half, with sales stock levels up 12.1 per cent and a sales pipeline 12.5 per cent ahead of last year.  

 

Chief executive Nic Budden said: “Despite challenging market conditions, Foxtons has delivered a solid result against very tough comparables demonstrating the strength of our business model and our balanced approach to sales and lettings. 

 

“As we predicted earlier in the year, the sales market remained constrained during the months before the general election. With the election uncertainty now passed we have seen an increase in activity across our branch network. This is encouraging and we enter the second half of the year with stock levels up 12 per cent compared to last year, a £1bn sales pipeline and our recently opened branches continuing to mature in line with expectations. In addition we have seen a noticeable increase in buyer applicants. Our lettings business has maintained the positive momentum seen in the first quarter of 2015.

 

“Our expansion has continued as planned with five new branches opened since the beginning of the year with our future sites secured out to the end of 2016. The majority of these are focused in the fastest growing areas of Outer London.

 

“Based on current activity levels continuing, we expect to meet full year market expectations with a stronger property sales performance in the second half of the year from higher transaction volumes."

It may have been a challenging first half but Foxtons is still bullish about the London market in the short and medium term.