Foxtons boosted by lettings while sales revenues slide
The boss of the London estate agents Foxtons, Guy Gittins, hailed a “transformational year” following a turnaround plan, as it reported higher overall revenues and profits, although revenues in its sales business continued to slide.
Sales revenues fell by 14% last year from 2022 while the market slumped by 22%, according to Foxtons. It said it has gone into 2024 with an under-offer pipeline far ahead of last year and expects year-on-year sales revenue growth in the first quarter, and further growth through the year.
Things have improved in recent weeks. The firm explained:
Buyer demand has grown as mortgage rates have begun to normalise, with good levels of growth seen in recent weeks as the first mortgage products are released with rates below 4% since the September 2022 mini-budget. Any sustained reduction in interest rates is expected to spur significant further growth in buyer demand.
Total revenues rose 5% to £147m last year while adjusted operating profit edged higher to £14m from £13.9m.
Gittins, the chief executive, has invested in the lettings business, which makes up 70% of group revenues and grew by 16%, delivering more than £100m revenue for the first time. In bad news for tenants, “rents are expected to stabilise and remain at historically elevated levels.”
Gittins, who returned to Foxtons (where he started his career) in September 2022 after running rival Chestertons, said:
2023 has been a transformational year for Foxtons, following the implementation of a refreshed strategy and operational turnaround plan.
We have delivered a year of market share growth and have ended the year with revenue and adjusted operating profit ahead of market expectations; our operational upgrades and investment in fee earners, training, data and brand, coupled with a return to driving innovation in the industry, are now consistently delivering material benefits to our competitiveness and market positioning, helping us to end 2023 as the UK’s fastest growing large lettings and sales agency brand.
Dr Martens hit by lower US sales
Dr Martens has been hit by lower sales in the US, as cash-strapped consumers refused to splash out for Christmas.
The British bootmaker said sales made directly to customers fell 3% in the three months to the end of December, its third quarter, and wholesale revenues tumbled 46%. Overall group revenues were down 18%.
The company, which was founded in 1960 in Northamptonshire, is still expecting a decline of nearly 10% over the full year (“high single-digit percentage”).
Kenny Wilson, the chief executive, said:
This was driven by a weak USA performance, as expected. Trading in the quarter was volatile and we saw a softer December in line with trends across the industry. Whilst the consumer environment remains challenging, we are taking action to continue to grow our iconic brand and invest in our business.
Labour to unveil plans for City at forthcoming business conference
Labour will use its sold-out business conference next week to unveil the party’s City policy plans, the Guardian can reveal, as it tries to win over hundreds of UK executives before a general election.
More than 500 bosses from across British finance will gather in London on 1 February for the event, where opposition leaders including Sir Keir Starmer, his shadow chancellor, Rachel Reeves, and the shadow business secretary, Jonathan Reynolds, plan to “showcase Labour’s offer to business”.
The party is hoping that the conference – which sold out within two hours in the autumn – will demonstrate its “commitment to work hand in glove with the business community” and will use it as an opportunity to reveal its business policy plans after two major industry reviews.
The Guardian understands that will include Labour’s much-anticipated strategy for the City and will detail how the party plans to harness the strength of the UK’s £275bn financial and professional services sector.
Introduction: IFS says next UK government faces worst fiscal inheritance in 70 years; markets eye ECB rates decision
Good morning, and welcome to our rolling coverage of business, the financial market and the world economy.
The next UK government will face the toughest tax and spending decisions in 70 years, according to a leading think tank.
The Institute for Fiscal Studies said a combination of high interest rates and weak growth means whoever wins the general election later this year will find it “more difficult to reduce debt as a fraction of national income than in any parliament since at least the 1950s.”
It warned that Jeremy Hunt’s much-predicted budget tax cuts – he will unveil the budget on 6 March – risk being reversed or paid for by spending cuts, and urged the Conservative and Labour parties to “level” with voters before polling day.
Chinese stocks rallied after a cut in Chinese bank reserve requirements, releasing about a trillian yuan for lending. The Shanghai Composite rose 3%, after hitting a four-year low on Monday, and Hong Kong’s Hang Seng was up 2% while Japan’s Nikkei was little changed. Investors have been selling Chinese equities for months, amid worries about the sluggish economy and the country’s property crisis.
The European Central Bank is meeting today and will announce its interest rate decision at lunchtime. It is not expected to change its main interest rate of 4.5%. Minutes from the December meeting showed policymakers were pushing back on aggressive market expectations for rate cuts, and ECB president Christine Lagarde is likely to face questions on their timing during the press conference.
Last week, she said the central bank could cut rates in the summer, during an interview with Bloomberg at the World Economic Forum in Davos.
9am GMT: Germany Ifo business confidence for January
11am GMT: UK CBI retail sales survey for January
1.15pm GMT: ECB interest rate decision (forecast: no change)
1.30pm GMT: US Durable goods for December (forecast: 1.1%)