Foxtons to pay special dividend to shareholders as profits jump 57%

Foxtons has announced a special dividend alongside its first annual results as a public company after the roaring property market sent profit up more than half at the London-focused estate agent.

The group said it would pay a total of £15.4m to shareholders, made up of a final regular dividend of 1.70p a share and 3.74p a share in special dividends.

Profit before tax jumped 57% to £39m from revenue up 16% to £139m in the year to 31 December. Sales volumes were up 23% and lettings volumes rose 6.7%.

Foxtons is known for its fleet of branded Minis, cafe-style branches in upmarket areas and aggressive sales tactics. Its founder Jon Hunt sold the company to private equity firm BC Partners for about £360m in 2007 two months before the financial crisis.

Foxtons had big debts and struggled to survive but, helped by the resurgent property market, it floated on the stock exchange last year in a deal valuing it at £649m.

Michael Brown, Foxtons' chief executive, said in a statement: "It's a pleasure for me to report a strong start to Foxtons life as a public company. Our successful IPO in September 2013 leaves the group debt free. We have a clear strategy and a great team dedicated to our overriding objective of delivering profitable growth by expanding our business model throughout the higher value, higher volume London property market.

"We have seen a good start to 2014 with a strong short term sales pipeline. We expect the availability of housing stock for sale to be a key determinant of the level of growth in property sales transactions during the remainder of the year."

Brown said Foxtons had outperformed the wider property sales market and increased average sale prices by £18,000 to £493,000 by concentrating on mid-market London property.

Foxtons is the latest property-related company to make bumper payments to shareholders from the booming housing market. Taylor Wimpey announced a special dividend and fellow housebuilder Persimmon said it would return cash more quickly than expected to shareholders after the government's Help to Buy scheme increased profits. Foxtons said in its results statement that the risk was increasing of the government changing policy or laws that reduce business volumes or increase costs.

Foxtons shares rose 1.1% to 378.5p in early trading.