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KFH reveals last year was its ‘annus horribilis’ for property sales

Kinleigh Folkard & Hayward says transaction levels dropped last year within London from already historic lows.

Nigel Lewis

kfh

Leading London estate agency chain Kinleigh Folkard & Hayward (KFH) has revealed that 2018 was one of the most difficult years the business has ever seen.

The company has released its annual accounts and report for the year and revealed that transaction numbers fell significantly during the period from already historic lows the year before.

KFH says the problems in the housing market have hit its sales and related professional services divisions hard.

Some of the lost ground has been made up by its lettings operation, which saw revenues increase by 12% last year.

Revenue drop

But this couldn’t offset the significant reductions in revenues overall. Income from all its activities reduced by £1.22 million to £69.85 million.

Its profits before tax have been hit the hardest by the slowdown, nose diving from £4.4 million to £1.74 million.

“The group continues to focus its operations within London, strengthening its market share and on expanding its non-residential sales operation through continues investment in brand awareness, customer service and its branch network,” the reports says.

But the year ahead looks so worrying for KFH that its directors have recommended the company does not pay a dividend this year and any profit is transferred to its reserves. Last year it paid a dividend of £1.5 million to its shareholders. Its cash at the bank is currently £4.5 million.

KFH has 62 branches across the capital which employ 493 sales and 303 sales staff, 16 more than last year, and its group wage bill during 2018 was £43.5 million.

Read more about KFH

October 11, 2019

One comment

  1. Are these figures correct – KFH are a stand out agency, but if each branch is only contributing £28,064 net profit a year, or £2,338 a month then something is badly wrong. Also, on the headcount if 796 people in the KFH business only generate on a personal level £2,185 of net profit a year, that is only £182 of profit a month per person.

    Typically the cost base of a property company is 60% being spent on wages, so maybe, if 43.5M was the wage bill in 2018, even with some trimming it might with new staff added in, still cost in 2019 72M to run KFH. If that is the case, then a net profit of 1.74M is a smidge over a 1% return on the business.

    Many successful estate agency companies have a 22% to 28% gross profit margin, with a net margin not so far behind, but a 1% net margin, if correct means that KFH have some serious choices to make and quickly.

    I admit I have not looked at the annual or any interim accounts of KFH and have done my figures based on the Nigel’s figures – but as he is usually on the button – well that clock is ticking.

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