Foxtons Group (LON: FOXT), the London-focused estate agency, said pre-tax profit fell 57% to £4.4m in the six months to 30 June, hit by a weak sales market and tenants exiting rentals early. The shares were little changed on the news.
Foxtons shares were roughly flat to slightly higher today, trading around 40p against a previous close of 39.7p.
Earnings per share dropped 60% to 1.0p, while group revenue slipped 3% to £83.7m. Sales revenue fell 13% to £23.5m as transaction volumes dropped 11% amid weak buyer confidence and higher interest rates. Lettings revenue was broadly flat at £54.7m, but that figure masked a £3m reversal of previously recognised revenue after tenants used new early-exit rights under the Renters’ Rights Act to end tenancies early. Financial services revenue, from mortgage and refinancing referrals, rose 20% to £5.4m.
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Adjusted operating profit, which strips out one-off items, fell 29% to £8.9m, and adjusted EBITDA, earnings before interest, tax, depreciation and amortisation, dropped 25% to £10.4m. The interim dividend was held at 0.24p per share. Crucially, Foxtons reaffirmed full-year adjusted operating profit guidance of £17m-£19m, with earnings weighted to the second half, even as it warned that London sales conditions remain challenging. That reaffirmation appears to be the mechanism behind the muted share reaction: the market treated the profit hit as a known, largely temporary disruption rather than a fresh warning.
Chief executive Guy Gittins said: “Against a challenging backdrop of continued sales market weakness and short-term lettings volatility, we continued to execute on our strategy, with our long-term focus on accelerating growth in non-cyclical and recurring Lettings revenues underpinning performance through these headwinds.”
Management struck a similar tone, criticising the disruption caused by the Renters’ Rights Act while arguing its medium-term effect should be positive as landlords increasingly seek professional advice to navigate the new rules.
