Foxtons will announce this week that its profits almost halved in the first six months of this year, it has been forecast.
Foxtons is due to report interim results for the six months to June 30 on Friday.
Broker Numis says the agent is likely to report profits down to as low as £12m, compared with £20.5m profits for the same period last year.
The first half of this year contained only just over a week when the Leave vote was known, but Foxtons swiftly issued a profits warning.
With the referendum result known on Friday, June 24, it issued a warning the following Monday morning, saying: “While it is too early to accurately predict how the London property sales market will respond, the upturn we were expecting during the second half of this year is now unlikely to materialise.”
The bank UBS expects housing transactions in London to be 6% down this year on last, and down a further 10% next year.
Foxtons shares have been down some 30% since the Leave vote was known. They sank a further 5% on Friday, finishing at 116.5p.
Meaning Countrywide shares start trading this morning after falling over 5% on Friday.
They closed at 240p having at one stage gone as low as 230.70p – a fall of 7.2%, making it one of the biggest fallers on the FTSE 250 in early trading on Friday.
As revealed in EYE on Friday, Countrywide is closing, merging and re-branding some branches. The extent is unknown, but is rumoured to involve the overall closure of 200 outlets.
Countrywide has totally denied the figure.
The story was not carried anywhere else and the media tied the fall in with LSL’s profit warning on Friday morning and Knight Frank’s house price sentiment index – see separate story.
Also hit on Friday were Zoopla shares, which finished the day down 4.82% at 272.40p.
Rightmove’s shares nudged only slightly down, just 0.76p, to end at 3,719.60p
LSL itself saw its shares go down 6.25%, ending the day at 272.40p.
Purplebricks’ shares also went down, by 3.28%, finishing the day at 140.25p.
Purplebricks may not have been helped by analyst Jefferies giving the firm an ‘underperform’ rating, criticising the length of time it is apparently taking to sell homes.
Jefferies gave it a target price of one-third of the current share price.
The broker said that only 14% of the properties listed as ‘sold’ between October 29, 2014, and March 2016 had converted to actual transactions in three of Purplebricks’ more mature markets – Birmingham, Bournemouth and Southampton.
Jefferies said: “The lucky 14% who have sold their homes waited on average around 4.5 months between selling subject to contract and actually selling. For the rest, the wait has been around 6.5 months so far and the clock is still sticking.
“For us the arithmetic for Purplebricks still does not add up.”
However, it did add in a note to investors: “Should the model bed down and sales accelerate ahead of our expectations, the shares may not currently reflect the true value of a disruptor.”
Jefferies’ analyst Anthony Codling had already challenged Purplebricks’ claim of a 77% conversion rate.
Land Registry data does not give information as to the identity of the agent that has transacted any house sale deal, and EYE is not aware that this information – for any agent, not just Purplebricks – is available anywhere else. There appears to be no way of independently verifying how many properties any agent has actually sold, including property listed with one agent but which may have been sold by another, or sold privately.
“Jefferies’ analyst Anthony Codling had already challenged Purplebricks’ claim of a 77% conversion rate.
Land Registry data does not give information as to the identity of the agent that has transacted any house sale deal, and EYE is not aware that this information – for any agent, not just Purplebricks – is available anywhere else. There appears to be no way of independently verifying how many properties any agent has actually sold, including property listed with one agent but which may have been sold by another, or sold privately.”
And therein lies a major problem for anyone wishing to question such a statement by any agent. However, the good News is, such a system has been built and is currently undergoing beta testing.
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Martin and Co in difficulties too rumour has it
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There is one firm that given £12 million would have broken even this past 12 months
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In fairness, Robert – ‘that’ firm being given £12m would equate to a £100k PROFIT.
But of course this is the real world…
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Hideous Estate Agent. These clowns are the reason we have such a bad name.
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Which ones? The articles named several.
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Sorry, Foxtons.
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Ahhh.
Wish I was £10 million behind the ‘clowns’ – don’t you?
I think you’ll find that Estate Agency landed it’s reputation waaay before Foxtons were founded.
And it will no doubt have elements within that will be living up to said reputation long after they (potentially – no prediction here…) cease to exist.
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Don’t just ‘Dislike’ the person’s post – DEBATE IT.
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