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Foxtons profit plunges as London property transactions seize up
Foxtons' annual profit fell by almost two-thirds as the estate agent suffered from the seizing up of transactions in the London property market.
The company said it expected tough conditions to continue this year.
Pre-tax profit for the year to the end of December dropped 65% to £6.5m from £18.8m a year earlier as revenue fell 11% to £117.6m. The company slashed the annual dividend to 0.7p from 2p.
Revenue fell across Foxtons' business but the biggest drop was in sales where revenue fell 23% to £42.6m. Lettings revenue fell 3% to £66.3m and mortgage revenue was down 1% at £8.7m.
Foxtons blamed higher stamp duty for expensive homes, weak consumer confidence, economic and political uncertainty and the general election in June for declining transaction levels in London. New buyer enquiries in London fell for the ninth month running in January in London, according to figures from RICS.
Foxtons, known for hard-nosed sales tactics and its fleet of liveried Mini cars, reduced its costs by 2.5% to £111m during the year but it said there was limited scope to cut further, resulting in revenue declines feeding through to its bottom line.
Chief Executive Nic Budden said: "Sales activity in the London property market is near historic lows and this had a significant impact on our overall performance in 2017."
Budden forecast difficult trading conditions during 2018 and said Foxtons' sales pipeline was lower than a year earlier. The company's shares fell 2.6% to 81p at 11:31 GMT. The shares have lost almost two-thirds of their value since Foxtons floated at 230p a share in 2013.