Foxtons’ share price rose nearly 3% yesterday, despite releasing a trading update in the morning containing gloomy numbers covering last year.
The agent also warned of “challenging conditions” this year.
Yesterday, it posted a 12% slide in revenue and a 39% drop in adjusted EBITDA profits in 2017. Revenue from sales was down substantially, by over £10m.
Nonetheless, having closed on Wednesday at 73.9p, Foxtons shares enjoyed a rise of more than 3% to close yesterday at 76p, having hit a high of 79.1p earlier in the day. But this is well off the high of nearly 400p at which Foxtons shares were trading in early 2014.
The shares tumbled last week after dismal figures released by Countrywide sealed the fate of chief executive Alison Platt.
There were well-aired concerns that Foxtons’ numbers could be even more disappointing than Countrywide’s, given its far higher exposure to the struggling London property market.
But analysts put a relatively positive spin on the figures yesterday, despite the significant falls in revenue and profit that Foxtons expects to report next month.
Anthony Codling of Jefferies called the update, which was in line with expectations, “robust”.
Foxtons said revenue in 2017 was down to £117m from £133m the year before.
Adjusted EBITDA profits were down almost £10m, falling to £15m last year, from £24.6m in 2016.
It added that it would be recognising a £2m non-recurring charge as it continued to “manage its cost base”. It was not clear what this one-off charge is. However, EYE understands that it may be due to leases not taken up, which could suggest a slow-down in Foxtons’ high-street office expansion plans. Foxtons has yet to give any indication of any online strategy.
The firm had a particularly difficult time in its sales arm where revenue dropped by over £10m, down from £55m in 2016, according to yesterday’s update.
The lettings business was more consistent, with a slight drop in revenue from £68m in 2016 to £66m last year, which Foxtons blamed on falling rents.
Commenting on the figures, Codling said: “London has arguably the trickiest UK housing market conditions at the moment and yet with its focus on sales and lettings Foxtons has played its hand well.
“The market remains tough. However, Foxtons agents have kept their shiny shoes on the front foot and with £18m of cash on the balance sheet those agents are likely to keep that spring in their step.”
Foxtons chief executive Nic Budden said: “This was a solid performance in the context of ongoing challenging conditions in the London property market.
“We remain focused on achieving the best results for our customers and are pleased with the reaction to the recent growth initiatives in our lettings business.
“Looking ahead, we expect trading conditions to remain challenging throughout 2018.
“We are well placed to withstand these conditions due to our strong balance sheet with no debt, and we will provide an update on a number of strategic initiatives which we have been working on at our preliminary results presentation on February 28.
Meanwhile, Belvoir shares closed yesterday at a low of 95p. During the day the price went even lower, to 87.8p – a marked contrast to the high of 192.5p in September 2013.
LSL was down 4% at 274p, and Countrywide edged up 1.6% to finish at 102p – little changed from its all-time low of just under 100p earlier this week. With the disparity of share prices reported, EYE uses London Stock Exchange data.
The main difference of course with CWD is Foxtons have no borrowings with £17m sitting in the tommy tank and can muddle through . CWD are dancing to the beat of their bankers who have yet to receive an answer how they are going to retrieve their £195m owed to them .
It will be interesting to see where CWD ‘s SP is going next .Investors certainly want to see some new industry faces on the BODS rather than the existing cardboard cut outs
Long the chairman announced in his rallying call to the troops after Platt’s departure that they will now be seeing a lot more of him and need to refocus .That didn’t cut any ice with an existing manager whose terse response is particularly tellingl
MIDDLE MANAGER
“How very dare you Mr. Long! Most of the staff have never heard about you before today or indeed even met you, the moment AP has gone you now decide that CW need to re-focus, for your information we at the “coal face” have been nothing but focused it is the likes of you and the rest of the senior management that should have been focused some three years ago but no you did diddlysquat! Nobody can recall you or any other senior manager saying anything remotely like this before today! Staff at branch level having being saying this since the day AP was appointed (particularly after meeting her) and as a consequence were a) managed out b) told by senior management “yes you are quite right but we are going to have to be quiet, keep our own counsel and wait until AP has gone (which will be any day or the next day or…) as we are not prepared to speak out otherwise we will also lose our jobs” c) “Don’t be silly she knows what she is doing so let’s all believe the fake news and ridiculous rhetoric as it must make sense?”How can AP with a straight face or with any level of integrity take this money? This is just another example of what this country has become and the injustices we all see on a daily basis. Even now she can’t accept any responsibility, she is still coming out with “fake news “that we have all had to put up with for years, I have not met one other person within CW at ANY level that had ONE good word to say about her or her “strategy” after actually meeting her that understand the business, in her defence that were some within the company that would not agree this, which speaks volumes for the predicament we are now in. AP and the rest of the senior team have very nearly destroyed a once great company that was market leader in several sectors of the property business whilst the entire senior management sat there and nodded their heads at her, these same people have the audacity to think we are going to accept them as our new leaders? You’re now saying we need to re-focus! No what WE need is for you all to sod off and be replaced by people that we know of and can actually trust to lead us out of this mess YOU assisted in creating, take your fat cheques and the let real workers to get us out of this….”
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The writing’s on the wall for CWD if this is the general attitude at branches. They can’t afford to get rid of all the top management in one fell swoop and there appears to be no trust in them.
I notice there was no mention of PurpleBricks’ share price. Up nearly 50% in the last couple of months. Not that the share price is anything other than a measure of supply & demand for the shares.
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Cyberduck, I need some education in the stock market, please.
As you say PB’s share price has risen dramatically over the past couple of months and closed at £449.60 yesterday when their last year-end reporting showed a LOSS of around £8 million on a much smaller turnover of around £48 million for UK, Australia and USA.
So how come Foxtons – that turned over £117 million in LONDON and made a PROFIT of £15 million only have a share value ending yesterday at 76 pence?
I understand the ‘potential’ aspect but is that not like saying I have built a huge foundation for a very expensive palace that I would like other people to pay for based on an estimated value of £1.2 billion pounds when in fact all they have really built is a base for a very large warehouse worth nothing in comparison to Foxtons and Countrywide’s actual profits and trading figures?
The reason I ask is that these two companies at least have solid foundations whilst all it would take for PB’s share price to fall into the basement is for the Government or regulators to insist that PB prove accurately their instruction to completion ratio and insist that they market this in a bold and compelling way?
I know that you say that traditional agents do not promote these figures so why should PB…..because they do not charge for failure?
However, for your benefit after the market crash in 2008 I worked on a 50/50 ratio for a long time. I only got paid for 50% of the work I did.
The market can see from Foxtons and Countrywide’s returns that it is getting much tougher out there which ought to hammer PB’s ‘potential’ growth?
So please explain to me why PB’s share price has risen so dramatically in the past two months, particularly when the very successful Foxtons as a comparison failed so spectacularly in New York?
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Cyber, absolutely deplorable,
they are talking about high street agents share prices and comparing how each of those have fared and how CWD will face the challenge of change and survive how dare you throw in a quip about your pet onliner at this time, your arguments and defense of your pet alone, this was in bad taste.
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