London-focused estate agent Foxtons Group PLC (LON:FOXT) saw its shares fall on Wednesday after it reported a 25% drop in first quarter revenue as sales commissions almost halved, reflecting a strong showing a year earlier and also illustrating the impact of the uncertainties over Brexit have had on the capital’s housing market,
In a brief trading update ahead of its AGM, the group revealed that revenue in the first three months of the year dropped to £28.7mln, down from £38.4mln a year earlier, but up from £26.4m in the fourth quarter of 2016.
READ: Brexit and stamp duty take their toll on headline figures at Foxtons
Foxtons noted that its property sales commissions fell to £11.1mln in the first-quarter, down from £20.0mln a year earlier, while lettings revenues slipped to £15.5mmln from £15.8mln, and mortgage broking fees were £2.1mln, down from £2.6mln.
The firm pointed out: “This quarterly performance is set against the record sales volumes in the first quarter last year when a number of transactions were brought forward ahead of the stamp duty surcharge on buy-to-let investments and second homes. “
The company, which floated near the peak of the property market in late 2013, has been warning since as early as 2014 that double-digit price rises and strong demand in London were cooling, hitting its profits.
Julie Palmer, partner at Begbies Traynor, said: “The Group’s slow progress is hardly surprising given the ongoing weakening of the UK housing market, with recent industry data showing declines in transactional volumes, new property listings and the rate of house price growth, combined with stagnant buyer demand stemming from rising economic and political uncertainty.”
She added: “With Foxtons’ share price down more than 30 percent over the past year and the Group facing fresh investor revolts over its generous bonus scheme, at a time when house prices in its London heartland are now also coming under pressure, it’s no surprise that shareholders in the company are now losing patience.”
In lunchtime trading, Foxton’s shares on the FTSE 250 index were down over 3% at 102.75p.
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