Foxtons says it’s furloughed 750 staff and asked high paid staff earning over £40,000 to take a 20 per cent pay cut.
This is in a bid to slash its monthly cash outflow from £9m to £3m in a bid to shore up the company during the Coronavirus crisis.
However, it admits only four fifths of its higher paid staff “accepted” the 20 per cent pay cut.
Amongst other measures announced this morning by the agency, it says 350 of its remaining staff are now working from home while all executive directors have volunteered to take a 20 per cent reduction in base pay and all non-executive directors a 20 per cent reduction in fees for at least the two months of April and May.
Foxtons has also notified HMRC that it will be deferring the February PAYE and NIC payments - due in March - for at least one month.
It also says “temporary flexibility and payment deferral is being negotiated with some of the company's landlords and its vehicle leasing company, the majority of whom have accepted the need for flexibility.”
It says that as far as possible all other discretionary spend has been reduced to the minimum levels required “to maintain reasonable levels of service and operational effectiveness” while it has also discussed payment deferrals and discounts with external suppliers.
In a nod to a shareholder revolt over so-called fat cat bonuses to top Foxtons management in recent times - despite relatively poor financial performances in recent years - this morning’s statement from the company says: “Given recent volatility in the company's share price the Remuneration Committee intends to consider carefully the appropriateness of the share price used to calculate the quantum of the awards arising from the Restricted Share Plan in 2020, and to closely monitor the impact of Covid-19 on the company's remuneration policy (such plan and policy to be proposed to shareholders at the forthcoming AGM) and use its discretion to adjust vesting outcomes if it considers that ‘windfall’ gains have occurred.”
To shore up the company further - and rather than implement further cuts which the agency says “could damage the company's long term operational capacity” - Foxtons has announced a proposed placing to secure further equity capital, of up to 19.9 per cent of its issued share capital.
It wants to raise £22m by issuing 55m new shares.
Foxtons says that if secured, the additional investment will “provide sufficient liquidity and flexibility to support the business through our reasonable worst case scenario and to help it exit the anticipated period of disruption in a strong financial position in the event of less pessimistic outcomes.”