27th Aug 2014 08:07
LONDON (Alliance News) - London and Surrey estate agent Foxtons Group PLC Wednesday said it will once again reward shareholders with a special dividend, after a strong first half underpinned by recovery in the London housing market.
The newly-listed estate agent said it will pay an interim dividend of 1.77 pence and a special dividend of 2.77 pence. At the full-year the company paid a final dividend of 1.70 pence and a special dividend of 3.74 pence per share - a total of 5.44 pence per share.
The additional dividend comes amid a strong financial performance with pretax profit up 57% to GBP23.1 million for the six months ended June 30 from GBP14.7 million a year earlier, as revenue rose 16% to GBP72.8 million from GBP62.6 million, driven by strong sales and mortgage broking growth.
"The combination of higher sales and mortgage volumes, together with the efficiency of our operating model has led to a significant increase in revenue and profits," Chief Executive Nicholas Budden said in a statement. "This performance, together with our strong cash flow generation, has enabled us to declare a special dividend in addition to our maiden interim dividend."
The FTSE 250 constituent said it delivered adjusted earnings before interest, taxation, depreciation and amortisation margins of 34.3% compared with 31.0% a year earlier, despite a broadly flat lettings market and the additional on-going operating expenses of being a listed company. The company listed in September 2013.
At an operating level, Foxtons said sales volumes increased 20% year on year, with mortgage broking volumes up 40%. However, demand in the lettings market was damped by a particularly strong sales market, leading to broadly flat revenue versus the prior year. Lettings volumes fell 1% on a year earlier.
During the period the company opened five new branches. Foxtons said these branches are performing in line with expectations and, as they mature, it expects the financial contribution they make to grow and to improve further our overall operating margins.
"Looking ahead to the second half, we expect the growth in transaction volumes to slow from the rapid rate seen in the first half, as the policy initiatives introduced in 2014 aimed at controlling mortgage lending, together with the expectation of increases in interest rates, are now having an impact on short term demand among buyers," Budden said, referring to measures taken by the Bank of England to tighten scrutiny of borrowers.
Budden also said the company remains on track to open a further two branches this year.
The stock was quoted down 6.6% at 275.00 pence Wednesday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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