Foxtons Group PLC higher as it cuts losses sharply in 2020
The estate agent highlighted a £15.9mln reduction in its operating costs during the year which it said had offset a decline in revenues
Group PLC () shares moved higher on Wednesday after the estate agent reported a sharp reduction in losses for 2020 as a result of a strong second half.
For the year to December 31, 2020, the group reported a statutory pre-tax loss of £1.4mln, narrowed from an £8.8mln loss in the prior year, despite revenues sliding to £93.5mln from £106.9mln in 2019.
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The company highlighted that it had achieved a £15.9mln reduction in its operating costs during the year which had offset the revenue decline, which may explain the narrower loss figure, while the firm also said it had seen a “recovery of profitability” in the second half and had continued to tightly control costs.
Into 2021, said its financial performance has continued to improve into the current year, with revenue for the first two months “well ahead” of the same period a year ago.
The group also said its sales commission pipeline began the year 30% higher year-on-year which has led to “much improved revenue growth”, while stock levels are also well ahead of 2020.
However, the firm cautioned that an excess supply of rental properties in London has driven down average rents by 12%, although it said this impact has been mitigated through greater tenant volumes.
The company also said mortgage broking had also started the year well with higher new purchase activity driven by the stronger sales market.
“Foxtons has showed itself to be a flexible and resilient business when faced with the unprecedented challenges presented by [coronavirus]…This allowed us to maintain essential services to priority customers when the property market was forced to close in March 2020 and rapidly build back capacity when it was re-opened in June 2020. As a result, we were pleased to deliver a strong second half performance and progress our strategic agenda, most notably through the acquisition of high-quality lettings books and growing our market share”, Foxton’s chief executive Nic Budden said in a statement.
“2021 has got off to a strong start, with further improvement in financial performance and the acquisition of Douglas & Gordon demonstrating the continued progress against our acquisition and growth strategy. The March 2021 budget announcement, which brought more certainty for our customers, and the rollout of the mass vaccination programme is expected to result in higher volumes in the residential sales market which, with our expertise and results focused proposition, we are well placed to benefit from,” the CEO added.
Foxton’s shares rose 1.7% to 60p in early deals.
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