Foxtons issues profits warning

London upmarket estate agency Foxtons has warned that profits would be hit this year after Britain’s shock referendum vote to quit the EU.
The grim news sent Foxtons’ share price tumbling by more than a fifth of its value and stoked worries that Brexit could spark a slump in the London’s property market, which has benefitted from record-low interest rates from the Bank of England for more than seven years.
However prior to Brexit, there were already signs that the high-end London property market was slowing after the government hiked taxes on transactions aimed at preventing a bubble.
Around 1100 GMT, Foxtons shares nosedived to a loss of almost 22 percent at 105.50 pence.
The broader London stock market also sank Monday on worries over fallout from Britain’s surprise vote on June 23 to leave the 28-nation European Union.
“The run up to the EU referendum led to significant uncertainty across London residential markets and the decision to leave Europe is expected to prolong that uncertainty,” Foxtons said in an official statement to the London Stock Exchange.
“Whilst it is too early to accurately predict how the London property sales market will respond, the upturn we were expecting during the second half of this year is now unlikely to materialize.”
Foxtons added that both its 2016 revenues and operating profit — as measured by earnings before interest, tax, depreciation and amortization (EBITDA) — would be “significantly lower” than in 2015.

Source: Arab News