Foxtons tumbles on Brexit-related profit warning
Estate agent Foxtons warned on Monday that full-year revenue and adjusted earnings will be “significantly lower” than the previous year due to uncertainty caused by the EU referendum.
In a trading statement ahead of the company’s interim results on 29 July, it said the run- up to the EU referendum led to significant uncertainty across London residential markets and the decision to leave Europe is expected to prolong that uncertainty.
Foxtons now expects first-half 2016 revenue to be slightly below the previous year with a lower adjusted earnings before interest, taxes, depreciation and amortisation margin around 20%, mostly due to subdued sales volumes and the costs associated with recent investment in its branch network.
Chief executive officer Nic Budden said: “Whilst we had a strong start to the year, we said in our Q1 update that we expected the first half to be challenging ahead of the EU referendum. Since then recent sales volumes have been slow as uncertainty and higher stamp duty has led many buyers and sellers to sit on their hands. The result of the referendum has increased uncertainty and is likely to mean that these trends continue for at least the remainder of the year.
The company said it remains confident of the attractiveness of London property sales markets and its strategy to focus on the outer London mid-market segment.
In addition, it pointed out that its lettings business provides “strong downside protection”.
At 0833 BST, Foxtons shares were down 18% to 110p.