Foxtons Group PLC Trading Update (5908O)
January 31 2019 - 1:00AM
UK Regulatory
TIDMFOXT
RNS Number : 5908O
Foxtons Group PLC
31 January 2019
FOXTONS GROUP PLC
TRADING UPDATE
31 JANUARY 2019
Foxtons Group plc (LSE: FOXT) (the "Group"), London's leading
estate agency, issues its trading update for the year ended 31
December 2018 ahead of its preliminary results on 28 February
2019.
The Group's performance for the year was in line with the
Board's expectations. Group revenue for 2018 was circa GBP111m
(2017: GBP118m), with revenue for the quarter ended 31 December
2018 totalling circa GBP23m (2017: GBP24m).
Adjusted EBITDA(1) for the year is expected to be approximately
GBP3m (2017: GBP15m). The reduction in Adjusted EBITDA compared to
the prior year was driven mainly by the fall in sales volumes
alongside planned increases in operating expenses as we invested in
our people, technology and brand.
Cash flow was good in the period, supporting a strong balance
sheet with no debt. Year end cash was circa GBP17m (2017:
GBP19m).
Our Lettings business continues to deliver a consistent and
recurring revenue stream for the Group. Total Lettings revenue for
2018 was circa GBP67m (2017: GBP66m) with a good second half
performance. Lettings revenue in the final quarter of the year was
circa GBP12m, up 4% versus the prior year. As a result, Lettings
revenue in the second half was up 3% versus the prior year as our
enhanced offer and improved resourcing enabled us to capitalise on
demand in what remains an attractive market.
Sales revenue for 2018 was circa GBP36m (2017: GBP43m). Sales
revenue in the final quarter of 2018 was circa GBP9m (2017:
GBP10m), which was a solid performance amidst ongoing reduced
transaction levels.
Alexander Hall mortgage broking revenue for the year was circa
GBP8m (2017: GBP9m) reflecting the wider sales market.
In addition, we expect to recognise a non-recurring charge of
circa GBP16m in 2018 of which GBP13m is non-cash. The charge
comprises circa GBP6m relating to the branch closures undertaken in
the second half which were announced in November, and a further
circa GBP10m relating to goodwill in the sales segment. The Board
considers this write down to be an appropriate course of action
given the prolonged nature of the current downturn in the sales
market. The GBP3m of the non-recurring charge which is cash
related, all of which relates to branch closures, is expected to be
spent over a 3-year period. The branch closures and other cost
saving initiatives undertaken in the second half are expected to
deliver circa GBP3m of cost savings during 2019.
Nic Budden, CEO, said:
"2018 was one of the toughest sales markets we have ever had in
London with transactions falling from last year's historically low
levels. Considering this, we have delivered a solid performance and
taken steps to ensure the business is best prepared for these
conditions through prudent actions on cost and enhancements to our
proposition. We are confident in our model which provides high
levels of service to achieve the best results for our
customers.
Looking ahead, we expect trading conditions in the sales market
to remain challenging throughout 2019. We have become accustomed to
operating in these conditions and are well placed to withstand them
given our leaner cost base and continued strong balance sheet with
no debt."
For further information, please contact:
Foxtons Group plc
Mark Berry, Chief Financial +44 20 7893 6261
Officer investor@foxtonsgroup.co.uk
Muhammad Patel, Investor Relations
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Teneo
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Robert Morgan / Laura Stewart +44 20 7420 3194
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1. Adjusted EBITDA is defined as profit before tax, finance
costs, finance income, depreciation, amortisation, profit on
disposal of assets, share-based payments and Adjusted items
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END
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