Foxtons rules out new branch closures but suffers huge fall in transactions

Foxtons has ruled out further branch closures as it continues to struggle against what it calls “the continued weakness” of the London market.

Late last year the company closed offices at Beckenham, Enfield, Loughton, Ruislip, Park Lane and Barnes but it insists that is sufficient to meet its current targets - the firm continues to cover over 85 per cent of London postcodes from 61 branches.

It has "no current plans for further closures" according to a statement.

In its full year figures for 2018, revealed this morning, it says group revenue declines five per cent but the largest drop by far was in sales revenue - this plummeted 15 per cent from £42.6m in 2017 (already a weak figure) to just £36.2m last year.

This represented a drop in sales volumes from 2,962 to 2,529.

However, the company describes its lettings revenue as “resilient” - it actually rose marginally from £66.3m in 2017 to £67.0m in 2018 - it has 19,621 units under management, which is slightly below its 2017 figure.

The company’s Alexander Hall mortgage business also saw a six per cent decline in revenue to £8.3m last year, although Foxtons insists this was “a solid performance” given the state of the London market.

Overall, Foxtons' pre-tax losses were, as expected, some £17.2m last year contrasting with £6.5m profits in 2017; group revenue dipped from £117.6m to £111.5m, and adjusted EBITDA was down from £15.1m to £3.6m.

There will be no final dividend.

Garry Watts, Foxtons chairman, says: “The London sales market is in a prolonged downturn and the current uncertainty surrounding Brexit is clearly impacting consumer confidence. We are managing the business to reflect this and ensure we are well prepared for any change in market conditions. 

“Foxtons retains a strong balance sheet with no debt and has a powerful, high service model, which is increasingly relevant to our clients who want an agent that delivers results. Technology is improving our business both by making it more efficient and enabling clients to interact in a way that is most convenient for them.”  

And Nic Budden, chief executive, adds in this morning’s statement: “We are managing the business for these conditions with a focus on cost control and appropriate investment to improve efficiency and reinforce our customer focused offering.  

“Our brand and its associated characteristics of high service levels, professionalism and delivering for customers, resonates in the market as evidenced by the thousands of customers who continue to trust Foxtons to sell or let their property. We will continue to evolve and enhance our offer in a way that builds on this and maintains our differentiation.”