Foxtons’ results for 2017 are out and the company says its group turnover, profits and both sales and lettings revenues were down year-on-year but that it has some “strategic initiatives” up its sleeves due to be revealed next week.
The company’s profits took the hardest knock. They dropped from £24.6 million in 2016 to £15 million last year, or 43%, as sales within London’s multi-million pound streets remain quiet despite hopes that the exchange rate would persaude more foreigners to buy into the capital’s bricks and mortar.
Revenues from its sales operation dropped by nearly 24% year-on-year from £55 million to £42 million, although the crash in volumes within the capital appears to have eased during the final three months of year. But the company says it expects the pain in London to continue.
Unlike last week’s Countrywide results which saw disappointing figures for both sides of its core business, Foxtons’ lettings operation continues to deliver at least only moderate revenue reductions – down last year by just 3%.
But, despite the weak business performance, CEO Nic Budden appears to be dodging City, investor and board calls for fresh leadership. The company blames its struggling performance on the government’s recent Stamp Duty changes, which impact London’s market more than other areas of the UK.
It also says its sales figures would look better if the surge in landlord buying during 2016 prior to the Stamp Duty increase for second homes buyers hadn’t empty the market of demand.
“This was a solid performance in the context of ongoing challenging conditions in the London property market,” says Nic Budden (pictured, left)
“We remain focused on achieving the best results for our customers and are pleased with the reaction to the recent growth initiatives in our lettings business. Looking ahead, we expect trading conditions to remain challenging throughout 2018.
“We are well placed to withstand these conditions due to our strong balance sheet with no debt, and we will provide an update on a number of strategic initiatives which we have been working on at our preliminary results presentation on 28 February 2018.”
Foxtons also revealed that it spent £2 million to “manage the cost-base for the future benefits of the business”, which is often a veiled way directors like to suggest they have been cutting jobs within a business.
Read our report on Foxtons’ previous trading statement.