Foxtons Group PLC's (LON:FOXT) revenues slid once again in the third quarter, but talk of a “resilient” and “relentless” performance despite the challenging conditions was well-received by the markets.
Total revenues for the three months ended September 30 came in a £35.1mln, down from the £37.5mln the estate agent recorded last year as it continues the feel the effects of a declining London property market.
READ: Profits slump at estate agents Foxtons and Countrywide as house sales in London dry up
Foxtons has had to try and drive volume growth in its lettings business with rents on a downward trend and those initiatives seemed to pay off in the quarter, with lettings revenues only marginally lower at £22.5mln (Q3 2016: £22.9mln).
Mortgages were also steady at £2.3mln in the Alexander Hall business.
Sales revenues – the commission Foxtons pockets from selling properties – sustained the heaviest blow though, falling to £10.3mln – £2mln less than it raked in last year.
Costs during the quarter were kept “in line” with plans, while the company added that cash focus flow remained strong, supporting a debt-free balance sheet.
"This was a resilient third quarter performance when set against the challenging conditions in the London property market,” said chief executive Nic Budden.
“We have maintained our relentless focus on delivering a leading proposition for our customers and in our lettings business we are pleased with the reaction to our recent growth initiatives."
Foxtons riding out the storm
“The downturn in the London property market was never going to be pleasant for Foxtons, and property sales have been particularly vulnerable to a less buoyant market,” said Hargreaves Lansdown equity analyst Nicholas Hyett.
“However, the more service orientated divisions are proving more resilient, with letting revenues holding up well.
“Those more predictable revenue streams will be particularly welcome if the current housing slump were to turn into a full blown rout – house buying might stall but people still need to live somewhere. “
He added: “Longer-term an increasingly competitive environment, including the emergence of online estate agents, could damage the group’s ability to charge its premium fees to customers.
“There’s no evidence of that today though, and with no debt on the balance sheet and various self-help initiatives underway, Foxtons looks like it can ride out the storm for now.”
Shares in the estate agent jumped 6.5% to 77.7p on Wednesday morning.