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Foxtons Share Price And The Housing Market - Merged


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Overview


Performance in Q3 2014 was negatively impacted by a sharp and recent slowing of volumes in London property sales markets following an exceptionally strong nine month period to 30 June 2014 in which volumes reached their highest levels since 2007.


· Q3 Group turnover was £39.9m (2013: £41.1m). Group turnover for the nine months to 30 September 2014 was £112.7m (2013: £103.7m).


· Q3 property sales commissions were £16.4m (2013: £17.8m), down 7.8%, as a reduction in sales volumes more than offset price increases. Property sales commissions for the nine months to 30 September 2014 were £54.1m (2013: £46.3m), up 16.9%.


· Q3 lettings revenue of £21.9m was flat (2013: £21.9m). Lettings revenue for the nine months to 30 September 2014 was £53.7m (2013: £53.7m).


· Q3 mortgage revenue of £1.6m grew by 13.8% (2013: £1.4m). Mortgage revenue for the nine months to 30 September 2014 was £4.6m (2013: £3.4m)


· Q3 Adjusted EBITDA1 was £14.2m (2013: £18.0m). Adjusted EBITDA for the nine months to 30 September 2014 was up 4.9% to £39.2m (2013: £37.3m).


· Q3 Adjusted EBITDA margin2 was 35.6% compared to 43.7% during the same period last year which had also been the highest quarterly margin ever achieved by the company. Adjusted EBITDA margin was 34.8% for the nine months to 30 September 2014 (2013: 36.0%).


· The Group remains debt free and generated £13.9m of adjusted operating cash3 during Q3 representing an operating cash conversion rate4 of 98%.


Outlook


Although the longer term outlook for London property markets remains positive, the market is expected to continue to be constrained for some time due to political and economic uncertainty within the UK and Europe, tighter mortgage lending markets and mismatches between the price expectations of buyers and sellers. These external headwinds have exacerbated the rate of slowdown in sales transactions we noted at the time of our H1 results. Market volumes in Q3 have been more in line with the first half of 2013 and we now believe that market volumes in H2 2014 overall will be significantly below levels during the same period last year. Consequently, we expect full year 2014 adjusted EBITDA to be below the prior year figure of £49.6m.



Nic Budden, CEO commented:


"Despite the impact that market uncertainty is having on transaction volumes, we are continuing with our clear strategy, centralised business model and steady roll out programme which is delivering higher market share. Our seven new branches opened this year bring our network to fifty one, with all our sites secured for 2015. Foxtons remains highly profitable, cash generative and debt free, and therefore well positioned to deliver further cash returns to shareholders, building on the £28.1m of ordinary and special dividends paid since our IPO."



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From the BBC!

Estate agents Foxtons' shares have fallen 18% after it said its earnings would fall due to a sharp drop in demand in the London property market. Foxtons said its third quarter sales fell 3% to £39.3m and said political and economic uncertainty in Britain and more restrictive rules on mortgage lending were the cause. This is the Foxtons who were told in 2009 their "renewal" commission from a landlord if a tenant stayed on past the initial tenancy period - even if the agency had played no further part in arranging or managing the extended tenancy - was unfair.

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latest from the BBC
"10:30: FOXTONS

Foxtons's shares are now below the price public investors first paid in their worst day of trading. The shares downsized 15%, or 30.8p, to the cosier price of 174.5p, well below the premium 230p investors paid in September 2013."

I can't tell the difference between an EA and a BBC journo nowadays.

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