Its Q3 trading update revealed its revenue had dropped by 13 per cent to £2.4m year-on-year. For the year to date, Alexander Hall’s revenue amounted to £6.6m, which was 12 per cent lower than the previous year’s £7.6m.
Its parent company Foxtons said despite the reduced revenue, Alexander Hall outperformed the rest of the market as its investment in additional fee earner capacity supported a growth in market share.
The financial services business is still on course to deliver growth by increasing its adviser headcount, improving productivity and cross selling.
Lettings and sales on road to recovery
Foxtons’ lettings revenue rose by eight per cent annually in Q3 to £31.6m while its sales revenue declined by 17 per cent to £9.9m. It attributed the drop in sales revenue to a reduction in market exchange volumes. Its total revenue for Q3 rose from £43.8m to £43.9m year-on-year.
Looking ahead, the lettings and sales markets are expected to rebound.
Foxtons predicted that the lettings performance in Q4 would be “robust” as the supply of rental properties was set to increase which would lead to increased market share.
While sales are expected to be lower than 2022, Foxtons said its market share should reduce the variance.
The group also expects buyer demand to outstrip last year’s activity now that mortgage rates are beginning to stabilise.
It said by 31 December, the under-offer pipeline would be “significantly higher” than in 2022 which would support revenue growth in the first quarter of 2024.
Overall, Foxtons said its full year earnings would be in line with expectations. It said the acquisition of lettings businesses alongside lettings growth had protected its profitability.
Foxtons: ‘Yielding results sooner than expected’
Guy Gittins, chief executive of Foxtons, said: “We have delivered a third consecutive quarter of market outperformance as operational upgrades take effect. Our investment in fee earners, training, data and brand is yielding results sooner than I expected and is now delivering material benefits to our competitiveness and market positioning.
“Market share gains across lettings, sales and financial services have enabled us to grow revenue year-to-date despite reduced sales market transaction volumes, a result of the higher interest rate environment.”
He added: “The operational progress made to date, and our continued focus on growing non-cyclical and recurring revenues to decouple earnings from sales market volatility, gives me confidence that we will continue to deliver against our strategic priorities and medium-term profit ambitions.”
