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Should Foxtons repay its furlough money?

Pressure is building on London agency Foxtons to repay its furlough funding.

The company issued an upbeat trading statement on Wednesday; while there were falls in revenue for the calendar year 2020, caused by lockdowns and the closure of the housing market, the agency was also boastful of how well it was doing since late last year and early in 2021.

Over the course of the past 14 months Foxtons has acquired four lettings books or agencies, costing almost £19m in total.


Chief executive Nic Budden told shareholders in Wednesday’s statement: “The sales commission pipeline started 2021 more than 30 per cent higher than prior year and has led to much improved revenue growth in the first two months of the year. Despite the significant increase in units sold to date, the value of the pipeline has remained stable over this period at levels last seen in early 2017."

And in December it announced a £3m share buyback, with £1.8m returned to date.

The company share price surged 10 per cent on Wednesday on the back of the announcement.

But now an MP says that if the company can afford these activities, it can repay its £4.4m furlough funding, as some other agencies and listed companies have done.

Darren Jones MP, chair of the Business Energy and Industrial Strategy Committee, has told Yahoo Finance that businesses like Foxtons should repay government cash before giving money to investors.

He told Yahoo Finance: “As the business committee has said time and time again, business leaders need to act in good faith when using taxpayers' money during the pandemic.

"We have called out businesses who have passed on taxpayers' money to shareholders, instead of using it to keep workers in their jobs or returning it to the Treasury if it’s no longer required."

In response, Foxtons has told Estate Agent Today: “Like many customer-facing businesses, 2020 was an extremely challenging year for Foxtons. We were required to close for months during the first lockdown which cut our annual revenue by £15m, equivalent to a fifth of the annual total. We made a statutory loss for the year and will not pay a dividend.

"We very gratefully received Government support via the furlough scheme and business rates relief. We used it as it was intended and for as shorter time as possible. Were it not for furlough we would have had to make lots of short-term redundancies because we were facing a revenue cliff edge. We ended up making no Covid-related redundancies in 2020. Our furloughed staff received money directly from Government during this period and as such there is no surplus to repay.

"We didn’t just rely on Government help to keep the business viable. We made our own cost savings of some £9m, including pay reductions for the highest paid in the business.

"We also raised more than £20m from shareholders to help us through lockdown and provide a cushion against further closures which fortunately did not materialise.

"We therefore had excess capital, so much later in the year, with the business trading again and with more confidence about the future, began returning some of this to our shareholders in the form of a £3m share buyback.”

  • C B
    • C B
    • 12 March 2021 06:38 AM

    Yes, they should pay it back. They’ve pretty much used furlough money to buy Douglas & Gordon. The same with Connells and Countrywide.

    Very poor form and lowers the reputation of the industry further. Furlough money should be for those that really need it, not opportunistic companies looking to seize a commercial edge from it.

    Stephen Lane

    ‘They’ve used furlough money to buy Douglas and Gordon’

    How is that possible? Furlough just claims back what you have paid non working staff.

    Unless you have proof that they were claiming furlough for working staff?

    C B
    • C B
    • 12 March 2021 15:14 PM

    @Stephen Lane

    If companies demonstrate they’ve had a good year financially speaking and they’re making multi million pound acquisitions, then they’re doing well enough to repay furlough money

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    What they have saved on staff wages whilst still generating good income is the reason they should pay it back. And so should Connells and Countrywide. There needs to be a serious audit of agency and furlough payments. All you need to do is look at the number of new instructions for these business during lockdown that claimed furlough payments!!!

  • icon

    Any estate agency business that has posted profits similar to last year should. After all it's one of the few industries that has seen an upward shift in sales.


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