January 25, 2018 / 7:56 AM / a year ago

UPDATE 1-UK estate agent Foxtons expects challenging 2018 after earnings drop

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LONDON, Jan 25 (Reuters) - London-focused estate agent Foxtons expects a challenging 2018 after last year’s core earnings and revenue fell in line with market expectations, hit by a slump in sales.

The compay’s 2017 revenue was down 12 percent at 117 million pounds ($167 million) with adjusted core earnings sliding 40 percent to about 15 million pounds, Foxtons said on Thursday, adding that it will also take a one-off 2 million pound charge as it manages its cost base.

Foxtons, which had been a symbol of the British capital’s property boom, saw profits more than halve in 2016 and had said in as early as 2014 that the real estate market was cooling.

Known for its fleet of Mini cars and coffee shop-style outlets, Foxtons suffered a particularly heavy fall in sales during the first quarter of last year ahead of a property tax increase.

“We expect trading conditions to remain challenging throughout 2018,” Chief Executive Nic Budden said.

“We are well placed to withstand these conditions due to our strong balance sheet, with no debt, and will provide an update on a number of strategic initiatives we have been working on.”

The company said its lettings business, where revenue fell by 3 percent to about 66 million pounds, remained a “consistent and recurring revenue stream”.

However, government plans to ban lettings fees are likely to to hit a key income stream for Foxtons and its rivals. The proposed ban follows criticism that such fees give an unfair boost to the price of renting property, particular in London. ($1 = 0.7008 pounds) (Reporting by Costas Pitas; Editing by David Goodman)

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