Foxtons share price under pressure amid London property market slowdown

on Jan 29, 2015
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The London property market remained subdued during the last quarter of 2014, Foxtons Group Plc’s (LON:FOXT) latest trading update has revealed. The company, which focuses on the higher-volume, higher-value property markets in the UK capital, saw its turnover dip 12.1 percent during the reported period.

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Foxtons’ share price has declined in today’s session, having shed 3.33 percent to 174.00p as of 09:35 GMT. The shares have lost nearly half of their value over the past year.
Foxtons this week updated investors on its fourth-quarter performance, reporting a 12.1 percent year-on-year drop in group turnover with reduced property sales commission more than offsetting growth in lettings commission. Commission on sales fell 25.7 percent compared with the prior-year period when activity in the London property market was at its highest level since 2008. The company explained that the residential property sales market continued to be subdued in central London, with volumes consistent with those seen in late 2012 and early 2013.

The Guardian this week quoted data from Property Vision, Lonres and Dataloft, as showing that central London faced a glut of expensive new homes with about 54,000 being built or planned.
Foxtons expects market conditions to remain subdued in the near-term, ahead of the outcome of this year’s general election.
“We do not anticipate a recovery in sales volumes until after the General Election in May,” the company noted in the statement, while adding that the longer-term fundamentals of the London property market remained sound.
The London real estate agent assured investors that it remained “highly profitable, cash generative and debt free”. The company expects to report full-year earnings in the region of £46 million, versus £49.6 million a year ago, and plans to pay a special dividend in May of £14.5 million, or 5.16p per share, subject to shareholder approval.

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