Fletcher King today reported a 50% interim profits slump and predicted trading would be even more difficult in the second half.
The quoted agent predicted that its full-year result would be in line with last year, when it reported a nosedive in pre-tax profits to £25,000 for the year to 30 April, down from £461,000 in 2001.
Fletcher Kings shares fell 4% to 24p this morning after it said it made pre-tax profits of £71,000 for the six months to 31 October (2001: £141,000).
The fall was mainly due to the significantly reduced level of London lettings, and the company said there was little sign of significant improvement in that market for at least 12 months.
Turnover for the six months was £2.28m, against £2.44m in the first half of 2001.
Chairman David Fletcher said: “Reduced activity in our letting activities in London has caused us to cut significantly our income expectations from that department in the second half of the year.
“All other departments and divisions of the group are expected to break even or make a reasonable contribution to profit.
“Whilst the economic outlook remains uncertain, our diverse client base continues to produce a reliable revenue stream which, together with our healthy pipeline of potential new business and strong cash balance, provides us with a degree of comfort.”
Fletcher maintained its interim dividend of 0.25p, and said that because of the groups overall strength, it intended to pay a final dividend of at least last years level.
Fletcher said demand from occupiers outside London remained firm despite a slowdown in the capital, and rental growth was still being achieved, particularly in the industrial market.
The investment market remained buoyant for debt-financed transactions, and was likely to remain strong while interest rates stayed around current levels.
EGi News 23/01/03
