Foxtons is reviewing its programme of branch openings in London because of the slowdown in the capital's housing market.
In figures released to the City this morning, the firm's pre-tax profits for the first half of 2016 are seen to have dropped to £10.5m - well down on the £18.1m reported for the first half of last year.
Group revenue dipped to £68.8m for the half - down slightly from £71.1m in the same period of 2015.
However, some good news for the company came from earnings per sale and per letting. It earned £13,522 per sale (up from £13,057 last year) and earned £3,573 per letting (up from £3,252).
Five new branches opened in London in the first half of the year and - in theory - two more are scheduled to open before Christmas.
"Uncertainty surrounding the EU referendum led to slow residential property markets in London. ... Although we achieved a first quarter revenue record due to a surge in property sales transactions in March ahead of the introduction of the stamp duty premium for buy to let properties and second homes, Q2 experienced a sharp contraction" admits chief executive Nic Budden.
He insists Foxtons is well positioned "as London’s most recognised brand" in the property sector with a strong balance sheet and significant cash generation.
But Budden admits: "We are reviewing the pace of our branch openings over the short-term and may slow the pace of expansion in response to market conditions. However, longer term, whilst recent political events have produced uncertainty for buyers and sellers, we expect London to remain a highly attractive property market."
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Interesting times lay ahead. That's a massive dip in profits. Maybe not opening two more branches may actually do them some good as they can focus on maximising what they've already got (which is a hell of a lot).
Even before Brexit, they seemed to be less prominent and bullish. Maybe that was part of a new PR charm offensive - one that this time didn't involve annoying residents across the whole of London and beyond - or it was to do with the fact that they no longer had as much to shout about any more.
This slump in profits is certainly shocking, but it might actually make them take stock and realise that endless expansion is not always the best idea, especially if it means getting into fights with local residents and being seen as the ugly face of gentrification.
Foxtons has always had the reputation for overvaluing properties to get business. I don't think that will work in a falling/collapsing market as the London property bubble bursts.
Not dis-similar results to CW with turnover up but profits down interesting to see how this pans out. London is in for a very tough 12 months as the fact there is no reral 1st time buyer market n London any more destabilises prices. Transactions have almost ground to a halt and pirces will soon come down.
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