Eight-figure loss sees London estate agent Foxtons close six branches
London estate agent Foxtons Group plc has seen a decline in profitability following a series of planned investments in its business.
The company this morning (February 28) reported a pre-tax loss of £17.2m for the year to December 31 2018, down from a profit before tax of £6.5m in 2017.
Revenues for the 12 months fell from £117.6m to £111.5m, a year-on-year drop of just over 5%.
Foxtons attributed the dip to ongoing weakness in the London sales market, while profits were dented by additional planned investments in people, technology and the company’s brand.
The firm completed a branch rollout strategy in Q1 of last year and, after that, shifted its investment focus from capital expenditure to other areas of the business and its workforce, including the launch of a targeted brand advertising campaign.
But Foxtons has since taken action to better align its cost base with market conditions by closing six branches, largely in the periphery of its network.
These branch closures, alongside other cost saving initiatives, are expected to deliver savings of around £3m in 2019.
Foxtons CEO Nic Budden said: “Our performance in 2018 was impacted by a further deterioration in the sales market, with transaction levels falling for another year from their already low levels.
“We are pleased with the lettings business and the investment we made earlier in the year helped to drive a good second half performance.”
He continued: “We are managing the business for these conditions with a focus on cost control and appropriate investment to improve efficiency and reinforce our customer focused offering.
“Our brand and its associated characteristics of high service levels, professionalism and delivering for customers, resonates in the market as evidenced by the thousands of customers who continue to trust Foxtons to sell or let their property.”
Speaking further, Mr Budden said the firm will “continue to evolve and enhance our offer in a way that builds on this and maintains our differentiation”.
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