Financial Trading Blog

Stock of the day 27/02/2018 – Foxtons Group PLC



Can Foxtons continue its recent rebound following Wednesday’s annual results?

It’s been a truly miserable couple of years for the much-despised estate agency. The stock has almost not stopped falling since mid-2015, and 2017 wasn’t much different. Initially it looked like things might be picking up, Foxtons climbing from an opening price of £1.01 to a 6-ish month peak of £1.15 by the start of June.


(Source: Spreadex, 27/02/2018)

However from then the stock completely lost its head, eventually tumbling to an all-time closing low of just 64p by mid-October. And while it did rise to 81p by the end of 2017 – still a 20% decline year-on-year – it has been unable to escape a 67p to 85p trading bracket for the last few months. Foxtons Group PLC now finds itself at a current trading price of 82.55p (27/02/2018), a decent recovery from the sub-70p trading seen at the beginning of the month.

The company had to endure a pretty rough January. It fell 8% alone on the news that Countrywide, the UK’s largest estate agency group, had issued a profit warning, before suffering a further fall following its own New Year update. There Foxtons revealed a 12% decline in group revenue to £117 million; sales revenue fell nearly 24% to £42 million, while its lettings business saw a comparatively minor 3% dip to £66 million, with Alexander Hall mortgage broking revenue basically unchanged at £9 million.

In terms of Foxton’s full year figures on Wednesday, the company is expecting to post a 42% drop in adjusted EBITDA to £15 million, with analysts estimating pre-tax profit will more than halve, from £18.8 million to just £8.9 million year-on-year. It’ll be interesting to see whether these numbers undermine the rebound seen across February.

Foxtons Group PLC has a consensus rating of ‘Hold’ alongside an average target price of 80p.

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