Foxtons sees GBP3 million revenue reversal on early tenancy ends

Foxtons Group PLC on Thursday warned of a "challenging" sales market and said the Renters' Rights Act sparked a jump in tenancy terminations.

In response, the stock was down 9.1% at 39.58 pence around midday in London.

The London-based estate agency said it experienced elevated levels of tenancy terminations, particularly in student rentals, during May and June.

Foxtons said this caused the reversal of approximately £3 million in previously recognised revenue that had been contractually due.

Foxtons also said the sales market has become more challenging with transaction volumes decreasing, due to weaker consumer confidence and a higher-than-expected interest rate environment.

However, in the lettings market, Foxtons only expects "short-term volatility". It said it remains confident that the RRA will, over the medium term, increase demand for professional lettings and property management services.

Foxtons also said it has taken proactive steps to align its Sales business with market conditions, and that its Financial Services business delivered revenue growth due to stronger refinance volumes, increased ancillary cross-sell, and resilient new purchase mortgage revenues.

It also said it has delivered £4.5 million in annualised cost savings during the first half of this year.

The company added that the lettings market remains resilient, although it expects the sales market "to remain subdued amid ongoing political uncertainty and a challenging macroeconomic backdrop."

As for earnings, Foxtons expects to report first-half adjusted operating profit of approximately £8.5 million, down from £12.3 million the previous year, when it announces its interim results on July 30.

It also forecasts between £17 million and £19 million in full-year adjusted operating profit, which would be down from £22.2 million for 2025.

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