(Alliance News) - Foxtons Group PLC on Thursday reported solid growth in profit following cost cutting and acquisitions; however, sales and financial services revenue faltered.
Shares in Foxtons were up 4.3% at 43.40 pence in London on Thursday
For the six months ended June 30, the London-based estate agency reported a 21% increase in pretax profit to GBP4.3 million from GBP3.6 million a year before, as a result of the company's profit conversion from letting revenue and cost savings of GBP900,000 for the period.
Foxtons's revenue from continuing operations increased 2.7% to GBP65.1 million from GBP63.4 million a year before. This includes a 20% growth in letting revenue, most of which can be attributed to the integration of the D&G lettings business. Douglas & Gordon Estate Agents was bought for GBP14.3 million early last year, with the loss-making D&G sales agency business later sold off and the lettings business retained.
Sales and financial services revenue declined by 17% and 8% respectively, due to the "tougher comparative period" created by a temporary UK stamp duty reduction. Both divisions are trading in line with expectations, Foxtons said.
The company acquired two estate agencies, Gordon & Co and Stones Residential, in May. According to Foxtons, these acquisitions contributed GBP500,000 of revenue in the first five weeks of ownership, and they are expected to be earnings enhancing towards the end of 2022.
Foxtons declared an interim dividend of 0.20p, up 11% from 0.18p in the previous year.
Back in May, Foxtons hired a new chief executive officer, Guy Gittins, who will step into the position in September.
Looking ahead, Foxtons expects annualised GBP3 million in savings from cost cutting, as well as growth in earnings from its recent acquisitions.
"We anticipate adjusted earnings for the full year to be at least in line with market expectations," said Foxtons.
Chair Nigel Rich said, "In the period, we successfully completed the integration of D&G lettings, as well as making a further two acquisitions in our lettings business to enhance earnings and market share. We enter the second half with a tightening grip on costs, a focus on sales intensity, and an improved ability to generate revenue from prudent investment in negotiators and financial services advisers."
By Dominique Pretorius; dominiquepretorius@alliancenews.com
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Foxtons (FOXT)