Foxtons: another big sales slump revealed in trading statement

Foxtons's trading statement this morning reveals another huge slump in sales - but no new announcement about future branch closures after a spate of offices were shut last year.

Looking at 2019 as a whole, the London-focussed agency says its group revenue was four per cent down at £107m - what it describes as “a robust performance” helped mostly by lettings, while sales struggled in the capital.

The company calculates the impact of the tenant fee ban was £2.7m; lettings revenue for the group dropped two per cent to £66m for the year “driven by our decision not to increase fees in response to the ban.”

Sales revenue plummeted another 10 per cent to £33m “as transaction volumes were impacted by ongoing political uncertainty, particularly at the higher end of the market.”

In a specific reference to branch closures, the firm tells its shareholders this morning: “During December, Foxtons closed four underperforming branches whose territories can be well served by other branches in the Foxtons network; additionally, Foxtons has taken an impairment charge on a number of low profitability branches. Together these will result in a one-off charge of around £6m in 2019.”

In the statement Nic Budden, chief executive, adds: "Our team should feel pleased to have delivered a solid performance in difficult market conditions as political uncertainty played a significant role in suppressing an already weak sales market. 

“Looking forward, with the uncertainty of the general election removed, early signs are that the sales market may improve during 2020 and our sales pipeline is ahead of last year. It is, however, too early to predict how the market will behave during the year with structural issues like affordability and stamp duty continuing to act as a brake on sales volumes.  

“Competition in the lettings market remains fierce. Overall though Foxtons has successfully navigated a very difficult period and is well placed to benefit from any lasting improvement in market conditions."