Foxtons Group has announced its full year revenue was £107m, down 4% from the year prior (£111.5m in 2018).
Counterintuitively, the agency suggested this was a “robust” performance in “difficult market conditions”.
Including the impact of the tenant fee ban, lettings revenue fell 2% to £66m, driven by Foxton’s decision to not increase fees in response to the ban. Meanwhile, revenue from landlords “continued to benefit from the wide‐ranging improvements” made to the group’s lettings offer.
Mortgage revenue grew by 3%, with “strong growth” in re‐mortgages outweighing lower new mortgage volumes. Sales revenue fell by 10% to £33m, however, as transaction volumes were “impacted by ongoing political uncertainty”, particularly at the higher end of the market.
Foxtons said it closed four “underperforming” branches in December, and has taken an impairment charge on its low profitability branches. The group said this will result in a one‐off charge of £6m in 2019, the “vast majority” of which is non‐cash.
The “resilient” revenue performance, combined with the group’s “continued control of operating costs” means Adjusted EBITDA (post‐IFRS 16) is expected to be in the range £13m to £13.5m. The group’s cash balance at the end of the year was £15.5m.
Nic Budden, CEO, said: “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.”
He added: “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.”