Foxtons has announced that its commission revenue have dropped by 47% since the beginning of the Coronavirus crisis compared to the same time last year and that it is to raise money from the City to help finance the agency through the crisis.
The company has also revealed that it has furloughed some staff and that those who haven’t been part of this scheme and who earn a basic salary of over £40,000 have been asked to take a 20% pay cut for April and May, and hat approximately 80% accepted.
Also, all Executive Directors have volunteered to take a 20% reduction in base pay and all Non-Executive Directors a 20% reduction in fees for at least the two months of April and May.
CEO Nic Budden (left) says the London property market has been severely disrupted by the Coronavirus crisis, cutting short a strong start to the year for the company.
Until the lockdown, he say it started the year in a strong financial position, with a cash balance of over £15m and no external borrowings and a growing sales commission pipeline.
“We have since prioritised the safety of our people and customers with a range of actions, including closing all our branches. We also worked quickly to minimise cash outflow ahead of a period of significantly reduced revenues for an uncertain duration,” he says.
Foxtons has also decided to raise cash from the City in case of a ‘worst case scenario’ and to preserve it business capability so that it’s ready once the crisis ends.
“This is an extremely challenging period for everyone but our people have been amazing in responding and I am confident we have taken the right measures both for our stakeholders and the business so that we can emerge from this crisis with the capability and financial position to thrive,” says Budden.