Foxtons Group PLC updates
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London-focused estate agent Foxtons has swung to profitability thanks to the very busy housing market, selling and letting homes at the fastest rate for five years.
In results published on Thursday, the group reported a pre-tax profit of £3.3m for the six months to June 30, compared with a £4.3m loss in the same period a year earlier.
“The combination of political stability and easing restrictions has seen positive momentum return in the market,” said Nic Budden, Foxtons’ chief executive.
Revenues of £67m are two-thirds higher than the equivalent period of 2020 and up 29 per cent on the first half of 2019, partly thanks to the £14m acquisition of lettings business Douglas & Gordon in March.
The company is “clearly benefiting from much stronger trading conditions. The question really is: what is the stamp duty holiday and what is underlying growth?” said Peel Hunt analyst Samuel Cullen.
The tax holiday was introduced last July to help the market and earlier this year was extended so buyers could continue to save up to £15,000 on a property purchase until the end of June.
In the run-up to that date, there was “a rush to beat the closing of the stamp duty window,” according to Budden, who added that the second half of the year would be quieter.
There are already signs of the market cooling following the tapering of the stamp duty holiday, which will remain in place but with a much lower maximum saving of £2,500, until the end of September.
Foxtons will restart dividend payments at 0.18p per share and also announced a £3m share buyback plan on Thursday.
The results are a boost to the company’s efforts to address criticism from activist investors Hosking Partners and Catalist Partners, which have urged the company to look for growth outside London.
Foxtons shares are trading around 52p, 43 per cent down on pre-pandemic levels and only a fifth of their 2013 IPO value.
Earlier this month, group chair Ian Barlow announced he would retire after the activist shareholders lobbied for board changes, but Cullen said he believes the activist pressure will remain “until they see some fruits of the labour of the regional strategy. At the moment that’s just a plan, it’s not been executed yet.”