Foxtons Expects 2014 Profit Decline as London Home SalesNeil Callanan
Foxtons Group Plc, the property broker focused on London and southeast England, expects full-year earnings to fall on a “significant” drop in transactions in the second half.
Adjusted earnings before interest, tax, depreciation and amortization for 2014 will be lower than the 49.6 million pounds ($79.6 million) that Foxtons reported last year, the broker said in a statement today. Revenue from sales commissions fell 7.8 percent in the third quarter from a year earlier to 16.4 million pounds.
“The market is expected to continue to be constrained for some time due to political and economic uncertainty within the U.K .and Europe, tighter mortgage lending markets and mismatches between the price expectations of buyers and sellers,” Foxtons said in the statement.
Foxtons shares have fallen 37 percent from January, cutting the London-based company’s market value to 579 million pounds. On Aug. 27, the stock fell the most since the company’s September 2013 initial public offering when Chief Executive Officer Nic Budden said London’s property market may slow in the second half.
U.K. financial officials have damped demand for homes by limiting high loan-to-income mortgages and introducing new checks to make sure borrowers can make their payments if interest rates rise. London home prices stopped rising in August and are 39.5 percent above the previous peak in January 2008, the Office for National Statistics said Oct. 14.