Foxtons says Q4 sales could miss expectations, cites slowdown ahead of Budget

(Sharecast News) - London estate agent Foxtons warned on Thursday that fourth-quarter sales could miss management expectations, with sales likely to remain subdued in the run-up to the Autumn Budget. In a third-quarter update, Foxtons said revenue rose 3% to £49m, with year-to-date revenue up 7% to £135.1m, driven by "continued strength and resilience" in the lettings segment, which saw revenue rise 5% to £33.4m.

However, sales revenue fell 7% to £12.5m as exchange volumes declined, mainly due to lower market transactions.

The estate agent said third-quarter buyer activity in London was slower year-on-year, impacted by deals pulled forward to the first quarter ahead of the stamp duty deadline, limited interest rate reductions, and uncertainty around the Autumn Budget.

While Lettings is expected to trade broadly in line with year-to-date trends for the rest of the year, the sales division is likely to remain "subdued", Foxtons said, in particular in the lead-up to the Autumn Budget "which is creating additional market uncertainty and making it more challenging than usual to accurately predict Q4 sales revenue".

As a result, the company said "there is a risk" that Q4 sales revenue will fall below management's expectations.

Foxtons said full-year adjusted operating profit is expected to be between £21.5m and £23.2m, compared to £21.6m in 2024. Consensus expectations were for £23.7m.

It said the range primarily reflects uncertainty over the conversion rate of the sales under-offer pipeline.

Chief executive Guy Gittins said: "We have delivered another quarter of growth driven by our strategic focus on Lettings and its recurring revenues, which helped offset a softer Sales environment. Lettings remains the central part of our growth strategy, underpinned by our leading market position and strong landlord proposition. Recent acquisitions in Reading and Watford are performing well, and we continue to build a pipeline of Lettings focused acquisitions.

"Macroeconomic uncertainty and speculation surrounding the delayed Autumn Budget has resulted in a subdued sales market as some buyers adopt a 'wait and see' attitude to purchases. There remains significant pent-up demand in the London volume market and we believe market conditions will improve once there is better clarity following the Budget, providing a more positive backdrop as we execute against our growth strategy."

At 1240 BST, the shares were down 4% at 54.06p.