In a statement this morning, the estate agent said pre-tax profits had fallen 42 per cent to £10.5m in the six months to the end of June.
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“However, longer term, whilst recent political events have produced uncertainty for buyers and sellers, we expect London to remain a highly attractive property market”.
The London-focused real-estate broker on Friday reported pretax profit in the first half of 2016 of £10.5 million ($13.8 million), 42% lower than the same period previous year.
Chief executive Nic Budden said a “prolonged period of further uncertainty” awaits London’s biggest lettings and sales company, which recently spooked investors with a profit warning issued days after the European Union referendum result.
It was the same story with the rental business with average revenue from rents up 9.9% to £3,573 but an 11.5% fall in the number of properties let out. It earned £13,522 per sale (up from £13,057 last year) and earned £3,573 per letting (up from £3,252).
“Second quarter experienced a sharp contraction and we believe that the overall level of property sales transactions made in London during the first half of the year is substantially down on last year”.
Foxtons Group PLC (LON:FOXT) warned that the downturn in London’s housing market could last for at least the rest of 2016. Foxtons said property sales volumes “held up well against weak market conditions” by growth in new branches.
However, Budden assured investors that Foxtons remains well positioned with a strong balance sheet and significant cash generation. We previously suggested the company should make circa £30m EBITDA for the full-year, but taking into account cost trends and recognising the hard market backdrop post-Brexit, we now forecast £27.4m.
The estate agent opened five new branches in the first half of the year, in Loughton, Sutton, New Malden, Fulham and Maida Vale, taking its total to 63 branches.
The U.K. listed company has maintained its interim dividend at 1.67 pence per share and has decided not to pay a special dividend due to the uncertain economic environment.
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Foxtons’ shares crashed 7.5p, or 6%, to 116.5p on the gloom from the agent.
