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Foxtons Group Plc Jumps Despite Fall In Sales Income

Foxtons Group (LSE: FOXT) issued a trading update this morning, ahead of its full year results due in March, in which it reported that income from home sales had fallen significantly towards the end of last year. But the news must have been rather better than the market expected, as Foxtons’ share price is up by 8.5% so far this morning.

The London estate agent said that income from sales commission in Q4 was down 25.7% on the comparative period last year. Group turnover for Q4 fell 12.1% versus the comparative period last year, which it attributes to 7.7% growth in lettings commission revenue being more than offset by the fall in property sales commission. However, group turnover for the full year rose 3.4%.

The company says that while the long-term fundamentals of the London market remain sound, the central London residential property sales market continues to be “subdued“. It  also reiterated that it doesn’t expect sales volumes to recover until after the General Election, in May, as it has previously indicated in an interim management statement in October last year.

But despite the Q4 drop, Foxtons says that its full year sales commission was 3.6% up on the prior year, at £70m. Full year adjusted EBITDA is expected to be around £46m, which would be down 7.3% on 2013. Foxtons says that the adjusted EBITDA margin is expected to be above 30%.

The company says that it remains “highly profitable, cash generative and debt free“. Following the payment of a special dividend of 4.54p per share (net) in September 2014, Foxtons says it intends to pay a final and a further special dividend payment totalling 5.16p per share (net), bringing the full year total to 9.70p per share (net).

At 170p Foxtons’ share price is down almost 47% on this time last year, compared with a rise of 4.3% by the FTSE all Share in that time. And over five years, Foxtons is down 37%, versus the All Share’s 4.25% gain over the same period.

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Jon Wallis has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.