29th Oct 2020 10:20
(Alliance News) - Estate agent Foxtons Group PLC on Thursday said economic uncertainty is causing more sales transactions to fall through and is putting downward pressure on rents.
The London-focused company said it made good progress in the third quarter by capitalising on increased levels of market activity, but it remains cautious for the future.
Chief Executive Officer Nick Budden said: "We have successfully re-built the sales commission pipeline to its highest level in 3 years, delivered a resilient lettings performance, and progressed our lettings book acquisition strategy."
For the three months to September 30, the company's revenue fell 10% year-on-year to GBP28.5 million from GBP31.7 million. Year-to-date revenue fell 18% to GBP68.9 million.
The Lettings business saw a 8% drop in quarterly revenue to GBP19.5 million due to a decline in average revenue per tenancy and a significant reduction in the number of overseas student tenants and corporate relocations.
Sales revenue for the quarter was down 18% to GBP6.9 million due to depressed levels of exchanges, a hangover from the Covid-19 lockdown in the UK in the spring.
"However, sales activity, including the number of instructions and number of offers accepted, has been significantly higher than the same period last year, driven by pent-up demand post lockdown and stampduty relief. This started to convert into revenues in September, which were up 9% on prior year," Foxtons said.
Mortgage revenue increased 4% year-on-year in the quarter to GBP2.2 million, reflecting increased levels of re-mortgage activity.
Foxtons ended the quarter with cash balance of GBP43.2 million, benefiting from value added tax deferral of GBP3.5 million and lease deferrals of GBP3.2 million.
Shares in Foxtons were down 5.0% at 32.60 pence each in London on Thursday morning.
By Tapan Panchal; [email protected]
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