Foxtons shares fell yesterday as it announced a £1.1m drop in sales revenue during the first three months of this year – and the unexplained departure of its chief financial officer.
Mark Berry, also an executive director, had been in post for only two and a half years, having joined from a long stint at business group Hays.
He will be leaving Foxtons “by mutual agreement” at the end of July and will step down from the board next month.
The announcement to the stock market said he will receive three months’ salary “as a notice period payment and in lieu of any bonus” for this year.
It is not altogether clear what will happen to the share options awarded to him in 2017, but these will be “pro-rated for time, subject to existing performance tests on the normal vesting date”.
His replacement as chief financial officer is Richard Harris, who joins on June 24, the day Berry steps down from the board.
Harris was previously group financial controller at Lairs and before that spent over 11 years at Marks & Spencer in various roles.
Foxtons chairman Garry Watts said: “On behalf of the board and everyone at Foxtons, I would like to thank Mark for his substantial contribution over the past two and a half years, during which time the business has undergone a period of rapid change and development. We wish Mark every success in his future new challenges.
“We are delighted to welcome Richard to our team. His skills and experience are a great fit for the group and will be invaluable as we continue to pursue our strategic objectives.”
At yesterday’s Foxtons’ AGM, shareholders were not altogether happy with the remuneration packages for the firm’s bosses.
The remuneration report, awarding chief executive Nick Budden and Mark Berry £389,000 in bonuses for last year, was passed – but by 78% of shareholders.
The bonus money was up from £371,000 the previous year despite the company making an annual loss and a 30% fall in the share price.
Overall, Budden was paid £910,000 and Berry £480,000.
In a statement after the vote Foxtons said it acknowledged that a “notable” number of shareholders had opposed the resolution. Foxtons said it will now conduct a detailed review of its remuneration policy.
Foxtons also yesterday announced a new non-executive director, Alan Files, a previous non-executive director at the Office of Fair Trading and the Competition and Markets Authority.
Foxtons’ shares yesterday went down 6.5% during the day but picked up slightly to finish ar around 5% down at about 57p, after warning that transactions in London are at a record low.
Comments (9)
How come the CFO has gone? £3m more in the bank despite sales being 17% down and letting’s income remaining level. This would tell me cost cutting has been effective?
Sales is clearly the problem in the company.
IMO The market is a lot more savvy, and there is a lot more information resources available about what property’s should be selling for so buyers aren’t getting railroaded as they were 15 /10 /20 years ago.
PURPLE BRICKS IS DOWN 8% TODAY …………………………….
Still a company to admire, but you can only over price a property so much before it becomes too much for a market to stand.
Without doubt the prime market has cooled in recent months but things are selling, you can no longer add 20% onto a price and hope the market rises or the seller reduces. Over valued by such a figure the vendor would rather relist with another agent as they feel they have been duped.
Its the same with corporates and PB – List at any cost does not work in a static market.
Not enough focus on developing and training their people away from the “Get it on, get it down, get it gone” ethos that worked for the brand in the London markets of the past.
Foxtons expanded into markets where they are getting slaughtered by good local Independents.
They should have stuck to Zones 1, 2 and 3.
Bit like Purplebricks. I think the USA is in Zone 2 and Australia is in Zone 3?
The observations taken to monitor #portaljuggling provided an insight into agent performance; who sells what, in what time frame, with what % change in asking price.
One of the things noted is how the stereotypical Foxtons listings wasn’t selling, it wasn’t that Foxtons were suddenly rubbish but that demand for the properties they are good at winning instructions for had collapsed. The market that had served Foxtons so well was suddenly gone. It has been interesting to see how their main sector competitors have adapted their strategies and faired better.
I have never understood why the City is so keen to get rid of FDs when the market hits a low point. They do not drive revenue; they should control costs and manage cashflow & finanacing. So if the income is the problem why get rid of this guy? What about the head of sales?
Plus if you buy Foxtons stock you know you are buying into the London resi market which has peaks and troughs, so dont be surprised about the latter.
‘We wish Mark every success in his future new challenges.’
What’s the betting that Mr Berry was the last one to know that he has ‘new challenges’?