You are here: Home - News -

Foxtons profits expected to halve

  • 26/02/2018
  • 0
Foxtons profits expected to halve
With its exposure to a cooling London housing market, analysts are warning that estate agent Foxtons is expected to see further profit falls in its upcoming annual results.


Founded in 1981, Foxtons currently has 67 branches across London and Surrey and covers more than 80% of Greater London.

But its focus on the English capital has opened the estate agency to vulnerabilities as the London market delivers lukewarm growth.

Anthony Codling, property analyst at investment banking firm Jefferies, said the higher end of the market is predicting Foxtons to post £9m profit before tax in 2017 – meaning profits at least halving for the second consecutive year.

Codling added that volumes are expected to be down 13% in 2017, following from the 28% fall in 2016.

The group’s earnings plunged in 2016, with adjusted EBITDA – earnings before tax and exceptional costs – profits dropping 46.5% from £46m to £24.6m.

Pre-tax profits for the year also showed steep drops, declining from £41m in 2015 to £18.8m in 2016.


Tough market

Indeed, a trading update released last month ahead of the full year results showed consistent falls across headline figures.

Adjusted EBITDA profits – earnings before tax and exceptional costs – are expected to be around £15m in 2017, against £24.6m in 2016.

Revenues for 2017 were declared at £117m, against £133m in 2016. A one-off £2m charge was also put aside for restructuring purposes.

“The central London market has obviously been struggling over the past few years,” said Neal Hudson of Residential Analysts.

“We’re seeing static or falling houses prices, with no one really wanting to bring their property to the market unless they absolutely have to,” Hudson continued.

“There has been some talk about transactions picking up but so far, that seems minimal and transactions have been continuing at a very low level.

“It’s a challenging environment for any business engaged in transactional activity,” he added.



And Codling was more upbeat, although he stressed that the declining profits were unsurprising given the current housing climate.

“Transactions have been coming down and there are some pricing pressures in parts of London. But against that tough market backdrop, the fact is that they are profitable and have cash on the balance sheet.

“Given the challenging conditions in London and fall in volumes, they’re performing well against a tough situation,” he added.

In the trading update, Foxtons attributed the dropping profits to the “significant fall in sales volumes in the first quarter of 2017”, and noted that its lettings arm remains strong.

The lettings business saw £68m revenue in 2016, which is expected to fall to £66m in 2017.

Nic Budden, chief executive officer of Foxtons, said at the trading update that the business we expected trading conditions to remain challenging throughout 2018.

However, he added that the group was “well placed to withstand these conditions” owing to a strong balance sheet with no debt, and that an update will be given on “a number of strategic initiatives” which Foxtons has been working on.

Foxtons’ full year results for 2017 are expect to be announced on the morning of 28 February 2018.

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
Cluster of arrows with one large red one
Bridging lending soars 25% to pass £3.5bn

Bridging lending passed £3.5bn last year according to the Association of Short Term Lenders (ASTL), as Q4 saw its members...