After cashing in on London’s blisteringly hot housing market over the past couple of years, Foxtons fortunes are not looking so rosy today. Last year it reported annual profit growth of 56.6%, but today it warned profits would be lower in 2014 as growing demand for property has slowed.
Its shares slumped more than 15% to 172p on the news, marking the company’s worst day on the stock market since floating back in September 2013.
Credit: Yahoo Finance
Third quarter turnover was down 3% on last year to £39.9m, after sales commissions fell 7.8%. Foxtons said that economic and political uncertainty, a less accessible mortgage market and ‘mismatches between the price expectations of buyers and sellers’ would constrain the property market ‘for some time’.
CEO Nic Budden remained upbeat despite the bad news, insisting Foxtons would continue its growth strategy, which he said was delivering a greater market share.
‘Foxtons remains highly profitable, cash generative and debt free, and therefore well positioned to deliver further cash returns to shareholders, building on the £28.1m of ordinary and special dividends paid since our IPO,’ he said.
You can always rely on an estate agent to put a positive spin on things.