(Bloomberg) -- Foxtons Group Plc, the London-focused property broker, fell to the lowest since its initial public offering in 2013 after reporting revenue for last year that fell below analyst estimates and warning that trading conditions will remain challenging in 2017.
The broker dropped as much as 12.4 percent after saying adjusted earnings before interest, tax, depreciation and amortization are expected to decline to about 25 million pounds ($30 million) for 2016 from 46 million pounds a year earlier. Analysts had expected about 28 million pounds. The shares were down 5 percent in London trading at 94 pence as of 10:32 a.m.
Tax increases and uncertainty over Britain’s vote to leave the European Union have reduced the number of property transactions in the U.K. capital, hurting Foxtons’s revenue. At the same time, the company has been opening new branches, and warned in July it may have to slow the pace of that expansion because of market conditions.
“The sales market in London is tough,” said Anthony Codling, an analyst at Jefferies Group with a hold recommendation on the the stock. “The group will do well to see profits flat in 2017.”
Foxtons reported revenue from home sales of about 12 million pounds in the final quarter of 2016, down from 20 million pounds a year earlier. Lettings revenue was largely unchanged at about 13 million pounds.
“We expect trading conditions to remain challenging in 2017,” Chief Executive Officer Nic Budden said in a statement Wednesday. “Should current levels of sales activity continue in the short term, it is likely that 2017 volumes will be below those in 2016.”
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