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Why is Foxtons blaming Brexit for weak earnings in the first half of this year?


John Naronha

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UK real estate firm Foxtons Group Plc. (LON:FOXT) blamed Brexit-driven uncertainty for the sluggish demand in property prices in London and the rest of Britain as the key reason for the drop in revenues in the first half of 2019.

Foxtons reported revenue of £51.1m for the first half of 2019 compared to £53m in the first six months of last year, a drop of 3.5% year on year while the sales revenue from which it earns commission fell 10% to £15.4m in spite of flat volumes. The company’s adjusted EBITDA of £5.4m was mostly unchanged from last year. The firm, however, reported a statutory loss of £3.2m from the £2.5m last year.

Earlier in May, Foxtons issued a warning that property prices in Britain were sliding to record lows as Brexit worries and higher stamp duty property tax lowered demand for both residential and commercial properties. Although demand for lower-valued properties rose, the real estate firm was facing stiff competition from low-cost operators like Purplebricks.

Following the earnings announcement, Foxtons is trading with losses of 1.2% in London on Friday. Year to date, the stock has returned about 8.5%.

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