11th Mar 2015 11:47
LONDON (Alliance News) - Estate agency Foxtons Group PLC on Wednesday reported a rise in pretax profit and revenue for 2014, despite the company having suffered in the second half of 2014 amid a slowdown in the London property market.
Foxtons said its pretax profit rose 8.2% for the year to GBP42.1 million from GBP38.9 million last year. Revenue increased 3.4% to GBP143.9 million from GBP139.2 million, despite sales volumes falling by 3.7% due to the slowdown in the second half. Lettings volumes increased 1.7% and mortgage broking volumes rose 23%.
Revenue from Foxtons' sales business increased by 3.6% in the year, up to GBP69.8 million, with a 7.5% rise in average revenue per deal offsetting the volume decline. Lettings revenue rose 1.5% to GBP67.4 million, boosted by a strong fourth quarter following flat growth in the first nine months. Mortgage broking revenue rose 27% to GBP6.3 million, driven by the increase in volume.
The second half slowdown in London property sales hammered Foxtons shares in 2014, with the company dropping out of the FTSE 250 in December after it shares plunged on the back of a profit warning issued in October. Foxtons listed in September 2013 and had only just joined the FTSE 250 in December of that year.
Foxtons will pay a final dividend for 2014 of 3.17 pence per share, up from 1.7 pence a year earlier, along with a special dividend of 1.99 pence, down from the 3.74 pence it paid in 2013. Its total dividend payouts for the year will be 9.7 pence per share, up from 5.44 pence.
"2014 was a year of contrasting halves. The first half was characterised by a very strong property sales market with transactions reaching their highest levels since 2008. In the second half we saw a sharp downturn in property sales volumes, particularly in Central London," said Nic Budden, Chief Executive Officer of Foxtons.
"Despite these challenging conditions in property sales markets during the second half of 2014, our centralised business model, effective expansion strategy and strong position in lettings enabled us to grow revenues and maintain high EBITDA margins," Budden added.
Budden said the company expects property sales activity to remain subdued in early 2015 due to the increased uncertainty surrounding the UK General Election and the health of the UK economy. But he said the long-term fundamentals of the London market remain "sound and attractive".
Numis said the results were in line with its expectations, but said it has cut its earnings forecast for Foxtons in 2015 to reflect the ongoing uncertainty in the sales market.
Numis said revenue, EBITDA and dividend payouts for Foxtons were in line with its forecasts, but said it would cut its 2015 EBITDA forecast to GBP48 million from GBP50.4 million due to the continued uncertainty surrounding the London property market.
The broker added that while the volatility of the sales market means it cannot rule out any further forecast changes, it reckons Foxtons is currently operating in line with its assumptions and argues the company's cost base currently reflects the market conditions.
Shares in Foxtons were up 1.1% to 200.75 pence late Wednesday morning, one of the best performers in the FTSE All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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