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| Foxtons shares slump after significant fall in London property sales | Foxtons shares slump after significant fall in London property sales |
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| Shares in Foxtons have slumped to a record low after the estate agent unveiled a sharp dip in profits and warned that housing sales would fall in the year ahead if demand for properties remained at the current level. | Shares in Foxtons have slumped to a record low after the estate agent unveiled a sharp dip in profits and warned that housing sales would fall in the year ahead if demand for properties remained at the current level. |
| Traders were quick to offload shares in the London agent as investor fears mounted about the state of the housing market in the capital. Shares were down 12% at 87p as the update was released, and were trading down 6% at 93p by 9am. | Traders were quick to offload shares in the London agent as investor fears mounted about the state of the housing market in the capital. Shares were down 12% at 87p as the update was released, and were trading down 6% at 93p by 9am. |
| It marked a big change in fortunes for Foxtons, whose shares were valued at 230p when it floated in 2013 and hit 373p in early 2014. | It marked a big change in fortunes for Foxtons, whose shares were valued at 230p when it floated in 2013 and hit 373p in early 2014. |
| Nic Budden, the chief executive, said in a trading update that 2016 had been a challenging year, with revenue falling to £133m from £150m in 2015 following a significant drop in sales. Underlying earnings for the full year are expected to fall to £25m from £46m a year earlier. | |
| “Looking ahead, we expect trading conditions to remain challenging in 2017. Should current levels of sales activity continue in the short term, it is likely that 2017 volumes will be below those in 2016,” he said. | “Looking ahead, we expect trading conditions to remain challenging in 2017. Should current levels of sales activity continue in the short term, it is likely that 2017 volumes will be below those in 2016,” he said. |
| Figures published last month by mortgage lender Nationwide showed house prices in London grew at a slower rate than the national average in 2016 for the first time in eight years. | Figures published last month by mortgage lender Nationwide showed house prices in London grew at a slower rate than the national average in 2016 for the first time in eight years. |
| Budden said the company, known for its fleet of Minis and cafe-style offices, was resilient against market cycles and had a strong balance sheet with no debt. “As the most recognised residential brand in London, we are uniquely positioned to manage through the market uncertainties and take advantage of any change in conditions,” he added. | |
| The company’s lettings business performed better than sales in the fourth quarter, with revenue unchanged at about £13m as the number of new tenants fell but existing tenants renewed their contracts. | |
| Foxtons, which opened its first branch in Notting Hill Gate in 1981, now has 65 branches. It opened seven branches in 2016 and is planning to open two more in outer London in the first quarter of 2017. | |
| The company will publish its full results for 2016 on 8 March. | The company will publish its full results for 2016 on 8 March. |