FINANCE: Estate agent Foxtons has announced a 57% surge in pretax profit to £23.1m in its half-year results but warned of a slowdown in H2.
The strong profit performance was on the back of a much narrower revenue increase, which rose 16.2% to £72.8m driven by strong sales and mortgage broking growth.
Group adjusted EBITDA was up 28.7% to £24.9m.
The group opened five new branches during the period, bringing the total to 49, with two further branches scheduled to open in the second half of the year.
The business said all branches opened since 2010 were “performing in line with expectations” and it had “secured sufficient sites to satisfy our continued expansion programme into 2015”.
Chief executive Nic Budden said: “The combination of higher sales and mortgage volumes, together with the efficiency of our operating model has led to a significant increase in revenue and profits.
“This performance, together with our strong cash flow generation, has enabled us to declare a special dividend in addition to our maiden interim dividend.
“Looking ahead to the second half, we expect the growth in transaction volumes to slow from the rapid rate seen in the first half as the policy initiatives introduced in 2014 aimed at controlling mortgage lending, together with the expectation of increases in interest rates, are now having an impact on short term demand among buyers.
“We have a clear strategy focussed on the organic expansion of our branch network, increasing our market share and improving profitability as our larger network benefits from our centralised business model.”
bridget.o’connell@estatesgazette.com
