Revenues have fallen at London’s best known agent Foxtons, with the tenancy fees ban costing it £1m in the first full quarter of trading since implementation on June 1.
In a trading update, the firm said revenue from both sales and lettings was down in the three months to the end of September.
Altogether group revenue for the third quarter was down 7% compared with the same period last year, from £35.1m to £32.5m.
This takes group revenue for the first nine months of this year to £83.6m, down 5% on the same period last year (£88.1m).
Sales revenue for the third quarter was down 15% to £8.4m, compared with £9.9m at the same time last year.
Foxtons said the fall was due to a combination of falling prices, fewer high value sales and lower transactions.
In lettings, where Foxtons has decided not to increase fees to landlords following the tenant fees ban, revenue was down 4% in the third quarter to £22.1m, compared with £23.1m for the same period last year.
However, Foxtons said that not raising its costs to landlords following the ban has enabled it to grow market share.
Revenue in its mortgage business, Alexander Hall, was £2.1m in the third quarter, the same as last year.
Foxtons said it remained focused on cost control, and emphasised that it is cash-healthy and has no external borrowings.
CEO Nic Budden said: “Overall, this was a resilient performance set against the London sales market which continues to deteriorate and the impact of the tenant fees ban on our lettings business.
“We are encouraged by landlords’ reaction to our improved lettings offer and are confident we can continue to gain share in the London lettings market.
“We continue to manage costs tightly to ensure the business is well placed to withstand this prolonged market downturn and are confident that this, coupled with our improved overall offer, positions us well for the future.”
The firm’s unscheduled trading update gave no guidance as to profits or full-year expectations.
Shares in Foxtons yesterday dropped 3% in early trading to 65p, but finished less than 1% down at around 67p.
Comments (6)
Test comment
An interesting comment
Because I’ve worked in central london Lettings for years and have a good insight into their business..
I suspect that the fall in revenue will have little impact on their share price, primarily because the fall was expected but most importantly the company remains debt free, unlike any of the other listed Property Companies.
Investors will feel that the company is in a better position to “Weather the storm” of a depressed housing market hence the continued resurgence of growth in its share price, having regained nearly all of the fall over the past 6 months.
Interesting that the market of capitalisation of Foxtons, a London based company versus Countrywide, is 2.39 times that of Countrywide.
They never used to drop their Lettings fees at all and now they are trying to lure back the business from multi landlords with a cheap fee structure. They’ve lost their core cultural values and I struggle to why anyone would work for them these days. Their business will stabilised as they’ve got the best Lettings business in london but that will be chipped away at and without acquisition they’ll never fully bounce back to their heights
And you know this how?