Foxtons swings to a loss as London sales market struggles

Foxtons said on Thursday that it swung to a loss in 2018 as it warned that the London sales market is in "a prolonged downturn".

In the 12 months to 31 December 2018, the company suffered a pre-tax loss of £17.2m compared to a £6.5m profit the year before, with revenue down 5% to £111.5m as a resilient performance from the lettings business was offset by ongoing weakness in the London sales market.

Revenue from the lettings business nudged up 1% to £67m, but revenue from the sales segment slid 15% to £36.2m amid continued market weakness due to lower sales transactions.

In Foxtons' mortgage broking business, Alexander Hall, revenue was down 6% to £8.3m, which the company said was a "solid" performance in the context of the wider London sales market, driven by re-mortgages.

The group said it incurred one-off charges of £15.7m related to the closure of six branches in the fourth quarter.

Chief executive officer Nic Budden said: "Our performance in 2018 was impacted by a further deterioration in the sales market, with transaction levels falling for another year from their already low levels. We are pleased with the lettings business and the investment we made earlier in the year helped to drive a good second half performance.

"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."

Foxtons said the outlook for sales remains unchanged, with a range of factors, including political uncertainty, likely to contribute to ongoing low transaction levels in the short to medium term. In the longer term, however, it expects London to remain a "highly attractive" property market for sales and lettings.

At 1345 GMT, the shares were down 1.8% to 60.13p.