Foxtons Group - Live Discussion

oldjoe1 12 Mar 2015

Re: FOXT Profit Warning....... SUPPLY ISSUES>>>>>>The train crash waiting to happen in new-build propertyBy: Dominic Frisby29/01/2015 updated 17/02/2015I read a stat in the FT yesterday that absolutely blew my mind.There are now 54,000 homes planned or under construction “in the priciest areas of the capital”. Most will cost “close to or above the £1m mark” and most are two-bed flats.Here’s the mind-blowing bit: in the same areas last year, just 3,900 homes were sold for more than £1m.That would put potential supply at almost 14 times annual demand.Welcome to the train crash about to happen that is high-end, new-build property in London…Who’s going to buy these flats?I should say, not all of the 54,000 properties planned will necessarily be built, and not all will come to market in 2015. (The statistic comes from data company Lonres, researchers Dataloft and buying agents PropertyVision, by the way.)But there is still a surfeit of supply. What’s more, many of the 3,900 places that sold in 2014 for £1m or more were houses or had more than three bedrooms. What’s coming to market are two-bed flats.I’ve been wrong on London property before. In 2007, I thought it would take a much bigger hit than it did. So I’m cautious when it comes to making bearish pronouncements.But as I said in my New Year predictions piece, “high-end, new-build flats in London” – and I stress new builds, I’m not talking period properties – “have got bubble and pop written all over them.”In fact, I can see so many things going wrong here that keeping my thoughts organised made this Money Morning one of the most difficult I’ve ever had to write.Who is going to buy these properties, and who is going to live in them?Families don’t want two-bed flats. ‘Normal’ people can’t afford £1m-plus properties. Even buy-to-let won’t work – factoring in service charges, you’d have to be taking in £40,000 a year in rent to make a £1m property worthwhile. That’s a lot for a two-bedder.So you’re left with very successful, upwardly mobile young people in their 20s or 30s. But will that sort of person want to buy some bland new build that feels like living in a hotel? Of course not. He or she will want somewhere groovy in Shoreditch.And like most British people, Londoners prefer period properties. They’ll buy new builds if the price is right. But it isn’t. In many areas, new builds are at least as expensive as period homes per square foot – and they come with higher service charges.There’s only so much naive ‘foreign’ money to be hadSo who’s buying? Well, as Charlie Ellingworth of Property Vision puts it, many new builds are marketed at “unsophisticated” foreign investors.We all know how estate agents might describe a house as “spacious” (if you happen to be a mouse), or “conveniently located for the area’s boutique eateries” (above a kebab shop).So it is with ‘prime central London’ (PCL). What those familiar with the capital see as PCL and what an agent marketing a flat to Asian buyers, who’ve never been to the UK, sells as PCL, are two very different things.We’re talking about places like Old Oak Common on the Acton-Willesden borders, Vauxhall-Nine Elms and Stratford. These areas may have a lot going for them – but they are not PCL. Vauxhall is a convenient area – for getting to somewhere else. There are some groovy nightclubs under the railway arches, but it is not a place you go to – it is a place you go through.Yet flats are being marketed (and, in some cases, sold) there for millions and millions of pounds.Sorry if I’ve seemed a bit London-centric, but this is really no different to the pre-2008 buy-to-let bubbles we saw in Manchester, Birmingham and Leeds. For the most part, those ‘trendy’ city centre tower block flats weren’t bought by locals, but from investors elsewhere in the UK.The same happened in Dubai, Spain and even parts of the US. Locals weren’t buyi

oldjoe1 12 Mar 2015

Re: FOXT Profit Warning....... Luxury homes sales to stay low until after general election, says Foxtons as mansion tax weighs heavily on rich buyers minds Mail online updated 11/March 2015 Estate agent's annual sales fall 3.7 per cent after significant slowdown in central London property market Political uncertainty of election and Labour Party's proposed mansion tax has spooked wealthy buyers MARK SHAPLAND FOR THIS IS MONEYPolitical uncertainty caused by the upcoming election and talk of a mansion tax has scared rich property buyers into delaying buying houses in central London, estate agent Foxtons said today.Until the May general election is over and a new government's policies become clearer, sales in London's luxury housing market will continue to suffer, the group added. The warning came as the company posted a 8.2 per cent rise in profits to £42.1million for the year to December 31 2014 and a 3.4 per cent increase in revenues to £143.9million.But sales fell 3.7 per cent in the second half of the year after a significant slowdown in central London as the'general election' effect kicked in. Estate agents normally make most of their money in the second half of the year as people buy houses in the Spring, Summer and Autumn, so investors will be particularly concerned if this trend persists for Foxtons.Howard Seymour, analyst at Numis Securities, said: 'On average there is approximately a 2 month lag between mortgage approval and housing transaction in the UK, so with activity starting in earnest in March –April (which it always does), then this can push the completion into Q2/Q3. These do tend to be the busiest months for the agents.' Foxtons' chief executive, Nic Budden, said: '2014 was a year of contrasting halves. The first half was characterised by a very strong property sales market with transactions reaching their highest levels since 2008. In the second half we saw a sharp downturn in property sales volumes, particularly in central London. 'Whilst we expect property sales activity to remain subdued at levels comparable to those seen in late 2012 and early 2013 until greater political and economic certainty returns, the long term fundamentals of the London market remain sound and attractive.' Foxtons first warned about a slowdown in London's luxury property market back in October and as a result its shares fell 20 per cent at the time. Meanwhile in January it said fourth quarter sales had dropped by 26 per cent.The property market is also facing the prospect of an oversupply of luxury homes, with 54,000 planned or under construction, while just 3,900 were sold last yearRobin Savage, at Canaccord Genuity, said: 'We are encouraged to see the less cyclical lettings business being a significant contributor to overall revenues. It is still very early in the year to be making fine tuning changes to our forecasts or even setting out new forecasts for future years.'The Easter Bank Holiday weekend will provide an indication of activity in the 2Q; the results of the General Election will also provide the context against which may encourage house sales activity.'Foxtons, best known for the green and yellow minis driven by its estate agents, also increased its average fees from £12,200 to £13,119 over the course of 2014.It has 52 branches in the UK, mainly in central London and added that it is on track to open another seven branches this year.It was the darling of the stock market when it listed its shares at 230p back in September 2013 and they jumped to 399p by the end of February 2014. But since then they have more than halved.Hedge funds have recently been taking out short positions against Foxtons and other London housing market-focused stocks. The funds are circling in the belief that the London residential property market has peaked and is now headed for a downturn.The Centre for Economics and Business Research said it expects London property to fall 3.3 per cent this year

II Editor 11 Mar 2015

NEW ARTICLE: The Evidence That London Property Is On The Decline "Full-year results from Foxtons (LSE:FOXT) released today showed that 2014 was a tale of two halves for the London property market. While the first half of the year saw demand for London property soar, as the UK economy went from strength to ..."[link]

oldjoe1 11 Mar 2015

FOXT Profit Warning....... PROFIT WARNING........We expect property sales activity to remain subdued at levels comparable to those seen in late 2012 and early 2013 until greater political and economic certainty returnsGroup Adjusted EBITDA Margin reduced by 360 bps to 32.1% (2013: 35.7%)Sales volumes reduced 3.7% for the year due to a market decline in thesecond half of the year"In the second half we saw a sharp downturn in propertysales volumes, particularly in Central London.""Whilst we expect property sales activity to remain subdued at levelscomparable to those seen in late 2012 and early 2013 until greater politicaland economic certainty returns"

oldjoe1 26 Feb 2015

CWD Results Dont Bode Well For FOXT CWD results this morning........"We anticipate some sluggishness in market trends over the first half of 2015 in the lead up to the election. However, the resilience we derive from our broad-based business, our low leverage and our proven ability to deliver growth in a challenging market positions us well to take advantage of sustainable growth in our Lettings and Commercial businesses and capitalise quickly on the upturn as the residential sales market recovers in the medium to long term."............endsCWD a much more diversified business than FOXT so doesnt bode well.

Buffettsluvchild 25 Feb 2015

Market/London property caution Just released by Land Registry 'there were just 78,740 sales in the UK, well down from the figure of 105,400 for December and the 87,280 recorded by HMRC for January 2014. This is being seen acutely in london and in the short to medium term, there will be headwinds. On top of this the bods at Foxtons have just announced the intention of expanding further with five new offices to its current network of 56 branches.The new Barnes, Walthamstow, West Hampstead, Ruislip and Bromley offices will open in March and April.All will launch with Foxtons’ customary 0% commission!! Beware, loads of costs and no fees in a declining volumes market, sound like hedgefund owners are smoke screening.

oldjoe1 17 Feb 2015

Re: HEDGE FUNDS Shorting FOXT........ The train crash waiting to happen in new-build propertyBy: Dominic Frisby29/01/2015 updated 17/02/2015I read a stat in the FT yesterday that absolutely blew my mind.There are now 54,000 homes planned or under construction “in the priciest areas of the capital”. Most will cost “close to or above the £1m mark” and most are two-bed flats.Here’s the mind-blowing bit: in the same areas last year, just 3,900 homes were sold for more than £1m.That would put potential supply at almost 14 times annual demand.Welcome to the train crash about to happen that is high-end, new-build property in London…Who’s going to buy these flats?I should say, not all of the 54,000 properties planned will necessarily be built, and not all will come to market in 2015. (The statistic comes from data company Lonres, researchers Dataloft and buying agents PropertyVision, by the way.)But there is still a surfeit of supply. What’s more, many of the 3,900 places that sold in 2014 for £1m or more were houses or had more than three bedrooms. What’s coming to market are two-bed flats.I’ve been wrong on London property before. In 2007, I thought it would take a much bigger hit than it did. So I’m cautious when it comes to making bearish pronouncements.But as I said in my New Year predictions piece, “high-end, new-build flats in London” – and I stress new builds, I’m not talking period properties – “have got bubble and pop written all over them.”In fact, I can see so many things going wrong here that keeping my thoughts organised made this Money Morning one of the most difficult I’ve ever had to write.Who is going to buy these properties, and who is going to live in them?Families don’t want two-bed flats. ‘Normal’ people can’t afford £1m-plus properties. Even buy-to-let won’t work – factoring in service charges, you’d have to be taking in £40,000 a year in rent to make a £1m property worthwhile. That’s a lot for a two-bedder.So you’re left with very successful, upwardly mobile young people in their 20s or 30s. But will that sort of person want to buy some bland new build that feels like living in a hotel? Of course not. He or she will want somewhere groovy in Shoreditch.And like most British people, Londoners prefer period properties. They’ll buy new builds if the price is right. But it isn’t. In many areas, new builds are at least as expensive as period homes per square foot – and they come with higher service charges.There’s only so much naive ‘foreign’ money to be hadSo who’s buying? Well, as Charlie Ellingworth of Property Vision puts it, many new builds are marketed at “unsophisticated” foreign investors.We all know how estate agents might describe a house as “spacious” (if you happen to be a mouse), or “conveniently located for the area’s boutique eateries” (above a kebab shop).So it is with ‘prime central London’ (PCL). What those familiar with the capital see as PCL and what an agent marketing a flat to Asian buyers, who’ve never been to the UK, sells as PCL, are two very different things.We’re talking about places like Old Oak Common on the Acton-Willesden borders, Vauxhall-Nine Elms and Stratford. These areas may have a lot going for them – but they are not PCL. Vauxhall is a convenient area – for getting to somewhere else. There are some groovy nightclubs under the railway arches, but it is not a place you go to – it is a place you go through.Yet flats are being marketed (and, in some cases, sold) there for millions and millions of pounds.Sorry if I’ve seemed a bit London-centric, but this is really no different to the pre-2008 buy-to-let bubbles we saw in Manchester, Birmingham and Leeds. For the most part, those ‘trendy’ city centre tower block flats weren’t bought by locals, but from investors elsewhere in the UK.The same happened in Dubai, Spain and even parts of the US. Locals weren’t buying, foreign investors were. They didn’t have the ‘sophisti

oldjoe1 17 Feb 2015

Re: I missed out on this Yes I have onedb1, short from 394p just after the double top on the chart in April. Been a stonking short for me.

onedb1 12 Feb 2015

I missed out on this up trend of late . A bit annoyed about it . lol I kept my eyes off Foxtons and in moved up 30/40p nicely Anyone been trading this ?

oldjoe1 09 Feb 2015

Re: HEDGE FUNDS Shorting FOXT........ Ennsmore Fund Management and GLG Partners, owned by Man Group, are short 1.13 per cent of Zoopla, according to regulatory disclosures. Foxtons meanwhile is being sold short by Numeric and Altair Investment Management, which have built up a collective short position against 3.59 per cent of its shares.[link]

oldjoe1 09 Feb 2015

Re: HEDGE FUNDS Shorting FOXT........ Shorters piling on the pressure, another one added today.......FOXTONS GROUP PLC Numeric Investors LLC 0.74% ↑ 0.14% 2015-02-03hxxp://www.shorttracker.co.uk/daily/

oldjoe1 09 Feb 2015

HEDGE FUNDS Shorting FOXT........ From the Ft today:"Hedge funds have begun to take out bets against property businesses that are exposed to the downturn in London’s housing market, in the first sign that investors are tentatively seeking to profit from the slowdown.Several hedge funds have taken out short positions, essentially bets that a company’s share price will fall, against estate agents Foxtons and Savills, along with property portal Zoopla, and housebuilder Berkeley Group.The capital faces a surfeit of expensive new homes as developers rush to profit from foreign demand to buy in London.While the bets are still relatively small they represent the first sign that hedge funds have begun to move against the UK property market after several years of surging house prices, and the high-profile stock market listings of Foxtons and Zoopla."

oldjoe1 03 Feb 2015

Re: FOXT Profit Warning. Foxtons is a sellGary Newman | Monday 2 February 2015Current opinions on the direction of the UK property market over the coming year certainly wouldn’t send me rushing to invest in any estate agents. That is even more the case when you look at London, and especially high-end properties, and is why I currently see Foxtons Group (FOXT) as a sell and would expect the share price to drift during 2015.As to whether I would be rushing to short it heavily at the current price of 190p, possibly not as it might still have the legs to get up to around that 205p level, but I certainly think it will become a target for shorters if it does get there.If I was holding shares in Foxtons I’d be more inclined just to sell and look for opportunities in other sectors until the property market shows signs of recovery, which could be as soon as 2016 onwards if the predictions of bodies such as the Centre for Economics and Business Research (CEBR) are anything to go by.Current predictions from CEBR are for a 0.6% drop in house prices during 2015, and with London being hit especially hard with a 3.3% drop. A number of factors are contributing to this downwards pressure, including a reduction in foreign buyers (most notably Russians), an increase in properties on the market, possible political changes as a result of the General Election in May (‘mansion taxes’ or similar), and of course ongoing concerns that interest rates, which have been very low for some time, may be raised.This follows very good growth in 2014 where nationally prices rose by 8.8% - the biggest annual rise since 2007 – and in London they were up by a staggering 16.8%.Given that shares in the company have traded as low as 142p during the past year, in spite of that house price growth, it is hard to see them performing that well during a period of price contraction, even a fairly short-lived one.The latest trading update shows that Q4 2014 sales commissions were down by 25.7% compared to the same period in the previous year, and that total turnover was down by 12.1%. Full year figures were up 3.6% and 3.4% respectively, and when taken in combination with the Q4 figures, shows the direction that turnover is heading in currently.One positive though was that lettings, which account for around half of the group revenue, saw a 7.7% increase in revenue and are now stronger than during the early part of 2014.The market seemed to take this news, and the full year EBITDA figure of £46 million, well and the share price rose by nearly 20% over a few days – but it left me wondering if it was a convenient spike for shorts to open at a higher level!On a positive note the company is debt-free and paid a dividend of 9.7p per share for 2014 (to be approved and it goes ex-dividend on May 1 2015).For me though it is a sell as I see far more chance of downside than upside during the coming year.

onedb1 29 Jan 2015

Re: FOXT, Questor Says Avoid. these guys are so slow to the game though ! If you scroll down the posts i called the near top at 375p , even got some stick at the time . I was nearly spot on but happy obviously with that call . Am neither long or short at the moment the reason is that risk reward I like to trade the big reversals . Not sure what the bottom would be here . But if I see an opportunity I will post the trade as always

oldjoe1 28 Jan 2015

FOXT, Questor Says Avoid. Questor share tip: Shares in Foxtons are one to avoidShares have tumbled since the company floated in September 2013, says QuestorJohn Ficenec, Questor editor4:41PM GMT 27 Jan 2015Foxtons180+19pQuestor says AVOIDSHARES in Foxtons [LON:FOXT], the London-focused estate agent, were overpriced when it floated back in September 2013 and as the overheated London housing market seizes up they still don’t hold any attraction.The estate agent said the commission on house sales in the last three months of 2014 was 26pc down on the same period a year earlier. The company added that they don’t expect any recovery in house sales until after the General Elections in May.It is true that Foxtons is enjoying growth in the lettings business, with lettings revenue up 7.7pc in the last three months of the year. The lettings business contributes about half of the group revenue and 40pc of earnings.The glimmer of hope from lettings was enough to send the shares up more than 10pc on something of a relief rally yesterday.That said, the drying up of the London housing market has had a significant impact on Foxtons forecasts for revenue and profit. As recently as May of last year the broker Canaccord Genuity forecast adjusted earnings of £57.2m, on £162.2m in revenue, giving 14.6p in earnings per share (eps). Yesterday Canaccord Genuity said it now expected £46m in adjusted earnings, on £144m in revenue, giving 13p in eps for the year ended December 2014. Foxtons will report detailed annual results in March.Foxtons is a classic example of a company that came to the market at a well timed peak. Central government easy money had been sloshing round the system for a while. One of the key beneficiaries has been the London property market where prices have quite literally decimated those in the rest of the UK by soaring more than 10 times.The shares were priced at 230p in September 2013, the top of the range of expected prices, and trading on about 19 times earnings. The shares jumped more than 14pc on the first day’s trading and peaked at 398.8p in February last year, leaving them trading at about 27 times forecast earnings.[link] recommended investors avoid this overpriced float at 230p on September 21 and the shares have subsequently fallen 22pc to 180p.The shares are now trading on 12.7 times forecast earnings, which is more reasonable, but still not good value given the rapid slowdown in sales.

Foxtons Group Live Discussion

Nothing to display!