Foxtons property sales hampered by decreased buyer confidence

on Mar 11, 2015
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With the release of Foxtons Group Plc’s (LON:FOXT) financial results for the year ended 31 December 2014, the real estate company is looking “forward with confidence to the future”. The report suggests that the looming general elections and current economic uncertainty have both contributed towards a decrease in buyer confidence, sending real estate investments into a sharp decline during the second half of last year. Chief Executive Officer Nic Budden stated that property sales activity is expected to remain subdued until the period of unrest is over.

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Company chairman, Garry Watts echoed this sentiment whilst also feeling positive about the expansion of Foxtons, having opened seven new branches across London last year, all of which are performing as expected. Watts also stated that cash generation remains healthy which “allows the Company to propose a final and special dividend of 5.16p per share in total”. Foxtons’ share price opened at 195.76p today before tumbling to 184.30p. However, as of 09:24 GMT, the price has seen an increase of 10 percent to 208.50p. And while this may pale in comparison to their peak of 375.20p around this time last year, the company remains hopeful that once the general election is out of the way, property sales figures should start to see an increase. The company also announced a dividend of 5.16p per share, to be paid on 29 May 2015, subject to shareholder approval.
As noted in the report, property sales commission saw a year-on-year increase of 3.6 percent, while lettings commission was 1.5 percent higher than a year earlier. The lettings increase was only achieved in the final quarter of 2014 due to the sales figures being stronger in the first half of the year. Due to the decline of property sales in the latter half of 2014, group revenue came in at £46.2m, a fall of 6.9 percent from the £49.6 million reported in the previous year.

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