The share price of Foxtons 
(LSE: FOXT), the London and south-east estate agency, is currently down 5.4%, despite the company reporting increased revenue and profit in its interim results for the first half of 2104.
Pre-tax profit rose 57.1%, to £23.1m, on group revenue that was up 16.2%, to £72.8m, driven, the company says, by strong sales and mortgage-broking growth.
Adjusted earnings before interest, tax, debt and amortisation (EBITDA) increased 28.7%, to £24.9m, with the adjusted EBITDA margin widening by 330 basis points, to 34.3%, a beneficial result, Foxtons says, of branch expansion and centralised support.
The company also announced that its high level of cash generation has enabled it to recommend payment of its first interim dividend, of 1.77p per share, plus a special dividend of 2.77p per share,
Looking ahead, the company says it anticipates a slowing of the growth in transaction volumes, due to a combination of the introduction of measures designed to control mortgage lending and the general expectation that interest rates will rise in the near future.
Commenting on the interims, CEO Nic Budden said:
“I am pleased to report continued strong trading during the first half of 2014.
“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. Our five newly opened branches were delivered on time and to budget and are performing in line with expectations. We remain on track to open a further two branches this year and have secured sufficient sites to satisfy our continued expansion programme into 2015“.
Foxtons’ share price is now down 17% so far in 2014, compared with a FTSE 250 that’s risen, albeit only by 0.5%. But it has at least risen slightly, if only by 0.3%, since Foxtons listed in late September 2013, during which time the FTSE 250 has gained 6.5%.
