Foxtons PLC (LON:FOXT) shares flopped on Friday as the estate agent saw its revenues and earnings hit by a ban on tenant fees and political uncertainty in the UK.
For the year ended 31 December, the company reported that its adjusted earnings (EBITDA) had fallen to £2.5mln from £3.6mln in the prior year, while revenues edged down to £106.9mln from £111.5mln.
READ: Foxtons sees better 2020 for London housing after year-end pick up
Revenues from the group’s lettings business fell 2% in the year, attributed to a £2.7mln hit from a ban on tenant fees in June, while sales revenues dropped 10% as transactions and prices were affected by what the company said was “ongoing political uncertainty, particularly towards the top end of the market”.
However, Foxtons’ chief executive Nic Budden said that with the uncertainty of the UK elections now removed, the “early signs are that the sales market may improve during 2020”.
“Our sales pipeline is currently ahead of last year, however we are well prepared for further challenging conditions in the sales market in the run up to Brexit and will continue to build our lettings business and manage our cost base in line with trading conditions”, he added.
In the long term, Foxtons said it maintained confidence in the “inherent attractiveness of the London market” and had built strong capabilities to “capitalise on future growth opportunities”, adding that with “limited housing stock” they expected transaction levels to improve in the medium term.
In a note, analysts at Peel Hunt, which rate the company at ‘sell’ with a 40p target price, said possible changes to stamp duty in the upcoming budget “may also provide some much needed stimulus to the second hand market”.
The shares fell 1.3% to 77.4p in early deals.