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Foxtons shares dive as it warns on profits after Brexit vote

Published: 08:28 27 Jun 2016 BST

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Foxtons said the second-half upturn it had foreseen was now unlikely to materialise

Shares in estate agent Foxtons Group PLC (LON:FOXT) dived nearly a fifth after it blamed the EU referendum for a profit warning.

Foxtons stock fell 26.25p, or more than 19%, to 108.75p as it said the run-up to the EU referendum led to significant uncertainty across London housing markets.

It said the decision to leave Europe was expected to prolong that uncertainty and the second-half upturn it had foreseen was now unlikely to materialise.

The group said it anticipated full-year 2016 group revenues and adjusted pre-tax earnings before interest, depreciation and amortisation (EBITDA) to be significantly lower than a year earlier.

Tough markets that hit recent property sales volumes were now likely to continue for at least the rest of the year.

It sees first-half group revenue this year slightly below a year ago, with a lower adjusted EBITDA margin in the region of 20%, due mainly to subdued sales volumes and costs of investment in branches.

Chief executive Nic Budden said: "Whilst we had a strong start to the year, we said in our first quarter update that we expected the first half to be challenging ahead of the EU referendum.

"Since then, recent sales volumes have been slow as uncertainty and higher stamp duty has led many buyers and sellers to sit on their hands.

"The result of the referendum has increased uncertainty and is likely to mean these trends continue for at least the remainder of the year.

"Looking further ahead, we remain confident of the attractiveness of London property sales markets and our strategy to focus on the outer London mid-market segment. Furthermore, our strong lettings business provides strong downside protection."

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