Much like the UK property market over the past year, Foxtons Group PLC (LON:FOXT) shares eased lower on Thursday after the London-focused estate agent predicted an 80% drop in 2018 profits.
Brexit uncertainty and stagnating wage growth have hit the property market of late, especially in the Capital, which has long been the investment destination of choice for many foreign property buyers.
READ: Foxtons delivers flat Q3 performance as London market remains challenging
That has led to a slowdown in the market, with people either reluctant to move or priced out of doing so.
With fewer homes hitting the market, estate agents’ commissions have taken a hit and that was reflected in Foxtons’ performance last year.
Group revenue for the 12 months ended 31 December slipped to around £111mln from £118mln a year earlier, while the company also expects underlying earnings (adjusted EBITDA) to have slumped to £3mln (2017: £15mln).
2019 to be tough as well
“2018 was one of the toughest sales markets we have ever had in London with transactions falling from last year's historically low levels,” said chief executive Nic Budden.
“Considering this, we have delivered a solid performance and taken steps to ensure the business is best prepared for these conditions through prudent actions on cost and enhancements to our proposition.”
“Looking ahead, we expect trading conditions in the sales market to remain challenging throughout 2019.”
Foxtons shares were down 0.8% to 53.1p on Thursday afternoon, valuing the estate agent at £150mln.