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Foxtons – full-year trading update, sales trend dire…

By Steve Moore | Wednesday 11 January 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Already down to sub 100p having commenced 2016 at 188p, has a full-year trading update helped shares in London estate agency Foxtons (FOXT) recover somewhat? Er, nope.

The update notes “total group revenue for the year was circa £133m (2015: £150m)”, though this somewhat reflects a first quarter where revenue was up more than 16% to £38.4 million.

There has since been a “significant fall in sales volumes” - in Q4 “sales revenues were circa £12m (2015: £20m)”. Lettings revenues in the quarter were little changed at £13 million, “benefitting from our high levels of renewals despite lower levels of new tenant activity and some downward pressure on rents arising from increased stock availability”.

The company argues “our balanced business model provides resilience against sales market cycles”, but the update then also includes that full-year bullshit earnings (Oops sorry, adjusted EBITDA) “is expected to be approximately £25m (2015: £46m)”.

Hmmm. Meanwhile “market conditions remain challenging” (a recent BearCast from Tom Winnifrith on this subject is HERE).

Foxtons' shares have currently responded further lower towards 95p, though still capitalising the company at more than £260 million. As such, I can understand the short interest (as of yesterday) from Ennismore (1.32%), Old Mutual Global Investors (0.97%), Polar Capital (0.74%) and BlackRock (0.70%).

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